SEC Filings

AMSURG CORP filed this Form 10-12G/A on 05/09/1997
Entire Document
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adversely affect the amount of payment a center or practice may receive for its
services. AmSurg derived approximately 39%, 37% and 36% of its revenues in 1994,
1995 and 1996, respectively, from governmental healthcare programs, including
Medicare and Medicaid. 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. A violation of the anti-kickback law is a felony
punishable by a fine of up to $25,000 or imprisonment for up to five years, or
both. A violation may also result in civil penalties of up to $10,000 for each
violation, plus three times the amount claimed, 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 harbors," including two
related to investment interests, which offer exemption from the anti-kickback
laws. The structure of the partnerships and limited liability companies
operating AmSurg centers and physician networks do not satisfy all of the
requirements of either of the "investment interest" safe harbors and therefore
are not immune from government review or prosecution. However, AmSurg believes
that it conducts the operations of the networks and the centers in compliance
with applicable law. Moreover, neither AmSurg nor any affiliated physician
intends for the compensation arrangements or return on investment to constitute
remuneration in exchange for or to induce the referral of business or patients
between or among the parties. Notwithstanding AmSurg's belief that the
relationship of physician partners to the AmSurg surgery centers should not
constitute illegal remuneration under the anti-kickback laws, no assurances can
be given that a federal or state agency charged with enforcement of the
anti-kickback laws and similar laws or a private party might not assert a
contrary position or that new federal or state laws might not be enacted that
would cause the physician partners' relationships with the AmSurg centers to
become illegal, or result in the imposition of penalties on AmSurg or certain of
its facilities. Even the assertion of a violation could have a material adverse
effect upon the financial condition and results of operations of AmSurg. See
"BUSINESS OF AMSURG -- Government Regulation -- Medicare-Medicaid Illegal
Remuneration Provisions."
     PHYSICIAN SELF-REFERRAL LAWS.  At both the state and federal level, there
are legislative restrictions on the ability of a physician to refer patients to
healthcare entities when the physician (or immediate family member) has a
financial relationship, directly or indirectly, with the entity receiving the
referral. The financial relationship giving rise to prohibition on referrals may
be either an ownership or investment interest or a compensatory arrangement. At
the federal level, this legislation (42 USC sec. 1395nn) is known as the "Stark
bill" because of its sponsor, Representative Pete Stark. Originally, the Stark
bill applied only to entities providing clinical laboratory services. However,
as of January 1, 1995, the ban on physician financial relationships with
healthcare entities extended to entities providing certain defined "designated
health services" ("Stark II"). AmSurg believes physician ownership of
practice-based ambulatory surgery centers to which they refer patients and
physician networks is not prohibited under Stark II or other similar statutes
recently enacted at the state level. However, these statutes are not clearly
written and are therefore subject to different interpretations with respect to
many important provisions. Violations of these "self-referral" 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, could result in significant loss of reimbursement and could have a