SEC Filings

10-12G/A
AMSURG CORP filed this Form 10-12G/A on 11/03/1997
Entire Document
 
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which is located in or adjacent to the group practice, provides a more
convenient setting for the patient and for the physician performing the
procedure. Improvements in technology are also enabling additional types of
procedures to be performed in the practice-based setting.
 
     The AmSurg development staff identifies existing centers that are potential
acquisition candidates and identifies physician practices that are potential
partners for new center development in the medical specialties which AmSurg has
targeted for development. These candidates are then evaluated against AmSurg's
project criteria which include several factors such as number of procedures
currently being performed by the practice, competition from and the fees being
charged by other surgical providers, relative competitive market position of the
physician practice under consideration, and state certificate of need ("CON")
requirements for development of a new center.
 
     In presenting the advantages to physicians of developing a new
practice-based ambulatory surgery center in partnership with AmSurg, the AmSurg
development staff emphasizes the proximity of a practice-based surgery center to
a physician's office, the simplified administrative procedures, the ability to
schedule consecutive cases without preemption by inpatient or emergency
procedures, the rapid turnaround time between cases, the high technical
competency of the center's clinical staff that performs only a limited number of
specialized procedures, and state-of-the-art surgical equipment. AmSurg also
focuses on its expertise in developing and operating centers. In addition, as
part of AmSurg's role as the general partner or manager of the partnerships and
limited liability companies, AmSurg markets the centers to third party payors.
 
     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'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, in the case of a limited liability company, an
operating agreement with its physician group partner. Under these agreements,
AmSurg receives a percentage of the net income and cash distributions of the
entity equal to its percentage interest in the entity and has the right to the
same percentage of the proceeds of a sale or liquidation of the entity. As sole
general partner, AmSurg is generally liable for the debts of the partnership.
 
     These agreements generally provide that AmSurg will oversee the business
and administrative operations of the surgery center, and that the physician
group 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 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 group partner a medical director fee and
a fee for providing certain administrative services to the center. Because the
management fee usually approximates the value of services
 
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