SEC Filings

10-12G
AMSURG CORP filed this Form 10-12G on 03/11/1997
Entire Document
 
<PAGE>   49
 
     In a development project, AmSurg, among other things, provides the
following services:
 
     - Financial feasibility pro forma analysis;
     - Assistance in state CON approval process;
     - Site selection;
     - Assistance in space analysis and schematic floor plan design;
     - Analysis of local, state, and federal building codes;
     - Negotiation of equipment financing with lenders;
     - Equipment budgeting, specification, bidding, and purchasing;
     - Construction financing;
     - Architectural oversight;
     - Contractor bidding;
     - Construction management; and
     - Assistance with licensing, Medicare certification and third party payor
      contracts.
 
     AmSurg acquires its interest in ambulatory surgery centers through
development of new centers and acquisition of existing centers. AmSurg's
ownership interests in practice-based ambulatory surgery centers generally are
structured through limited and general partnerships or limited liability
companies. AmSurg generally owns 51% to 70% of the partnerships or limited
liability companies and acts as the general partner in each limited partnership.
In development transactions, capital contributed by the physicians and AmSurg
plus bank financing provides the partnership or limited liability company with
the funds necessary to construct and equip a new surgery center and to provide
initial working capital.
 
     As part of each development and acquisition transaction, AmSurg enters into
a partnership agreement or an operating agreement with its physician partner.
Distributions of available cash flow are made monthly to the partners pro rata
in proportion to their respective percentage ownership interest in the limited
partnership or limited liability company. These agreements generally provide
that AmSurg will oversee the business and administrative operations of the
surgery center, and that the physician partner will provide the center with a
medical director, and with certain specified services such as billing and
collections, transcription, and accounts payable processing. In addition, these
agreements provide that the limited partnership or limited liability company
will lease certain non-physician personnel from the physician practice, who will
provide services at the center. The cost of the salary and benefits of these
personnel are reimbursed to the practice by the limited partnership or limited
liability company. Certain aspects of the limited partnership's or limited
liability company's operations are overseen by an operating board, which is
comprised of representatives of AmSurg and the physician partners.
 
     In connection with AmSurg's management of the business operations at each
center, AmSurg historically received a management fee paid by the partnership or
limited liability company. The partnership or limited liability company also
paid a physician partner a medical director fee and a fee for providing certain
administrative services to the center. Because the management fee usually equals
the value of services provided to the center by the physician practice, AmSurg
has structured its agreements so that AmSurg generally no longer provides for
any of such fees in its partnerships or limited liability companies. For
start-up centers that are being developed, a fee is generally paid by the
partnership or limited liability company to AmSurg for management of the
planning, construction and opening of the center.
 
     The partnership and operating agreements provide that 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
determina-
 
                                       42