SEC Filings

AMSURG CORP filed this Form 10-12G on 03/11/1997
Entire Document
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     RELATIONSHIPS WITH PHYSICIAN PARTNERS.  AmSurg's ownership interests in
practice-based ambulatory surgery centers and specialty physician networks
generally are structured through limited and general partnerships or limited
liability companies. AmSurg typically maintains a majority interest in each
partnership or limited liability company, with physicians or physician practice
groups holding minority limited partnership interests or serving as minority
members. AmSurg, as owner of majority interests in such partnerships and limited
liability companies, owes a fiduciary duty to the minority interest holders in
such entities and may encounter conflicts between the respective interests of
AmSurg and the minority holders. In such cases, AmSurg's directors are obligated
to exercise reasonable, good-faith judgment to resolve the conflicts and may not
be free to act solely in the best interest of AmSurg. The success of AmSurg's
business is dependent upon maintaining relationships with the physicians who
provide medical services at the centers, many of whom are limited partners or
members of the limited liability companies that own the AmSurg centers.
     In addition, upon the occurrence of certain fundamental regulatory changes,
AmSurg will be obligated to purchase some or all of the minority interests of
the physicians affiliated with AmSurg in the partnerships or limited liability
companies which own and operate AmSurg's surgery centers. The regulatory changes
that could trigger such an obligation include changes that: (i) make the
referral of Medicare and other patients to AmSurg's surgery centers by
physicians affiliated with AmSurg illegal; (ii) create the substantial
likelihood that cash distributions from the partnership or limited liability
company to the physicians associated therewith will be illegal; or (iii) cause
the ownership by the physicians of interests in the partnerships or limited
liability companies to be illegal. There can be no assurance that AmSurg's
existing capital resources would be sufficient for it to meet the obligation, if
it arises, to purchase minority interests held by physicians in the partnerships
or limited liability companies which own and operate AmSurg's surgery centers.
The determination of whether a triggering event has occurred is made by the
concurrence of counsel for AmSurg and the physician partners or, in the absence
of such concurrence, by independent counsel having an expertise in healthcare
law and who is chosen by both parties. Determination is therefore not within the
control of AmSurg. While AmSurg has structured the repurchase obligations to be
as favorable as possible to AmSurg, the triggering of these obligations could
have a material adverse effect on the financial condition and results of
operations of AmSurg. See "BUSINESS OF AMSURG -- Acquisition and Development of
Surgery Centers; and -- Government Regulation."
     DEPENDENCE ON THIRD-PARTY REIMBURSEMENT.  AmSurg is dependent upon private
and governmental third-party sources of reimbursement for services provided to
patients in AmSurg's centers and physician practices. In addition to market and
cost factors affecting the fee structure implemented by centers and practices
operated by AmSurg, numerous Medicare and Medicaid regulations, cost containment
and utilization decisions of third-party payors and other payment factors over
which AmSurg has no control may adversely affect the amount of payment a center
or practice may receive for its services. The market share growth of managed
care has resulted in some locations in substantial competition among providers
of services for inclusion in managed care contracting. Exclusion from
participation in a managed care contract in a specific location can result in
material reductions in patient volume and reimbursement to a physician practice
or to a practice-based ambulatory surgery center. AmSurg's financial condition
and results of operations may be adversely affected by fixed fee schedules,
capitation payment arrangements, reduced payments to physicians generally,
exclusion from participation in managed care programs or other changes in
payments for healthcare services. See "BUSINESS OF AMSURG -- Government
Regulation -- Reimbursement."
"anti-kickback" laws prohibit the offer, payment, solicitation or receipt of any
form of remuneration in return for the referral of Medicare or state health
program patients or patient care opportunities, or in return for the purchase,
lease or order of items or services that are covered by Medicare or state health
programs. The anti-kickback statute is very broad in scope and its provisions
are not well defined by existing case law or regulation. Violations of the
anti-kickback laws may result in substantial civil or criminal penalties for
individuals or entities, including large civil monetary penalties and exclusion
from participation in the Medicare and Medicaid programs. Such exclusion, if
applied to AmSurg's surgery centers or networks, could result in significant
loss of reimbursement and could have a material adverse effect on AmSurg. In
July 1991 and September 1993, the Department of Health and Human Services
("DHHS") Inspector General issued final regulations identifying various "safe