SEC Filings

10-12G/A
AMSURG CORP filed this Form 10-12G/A on 11/03/1997
Entire Document
 
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GOVERNMENT REGULATION
 
     The healthcare industry is subject to extensive regulation by a number of
governmental entities at the federal, state and local level. Regulatory
activities affect the business activities of AmSurg, by controlling AmSurg's
growth, requiring licensure and certification for its facilities, regulating the
use of AmSurg's properties, and controlling reimbursement to AmSurg for the
services AmSurg provides.
 
     CONs and State Licensing.  CON regulations control the development of
ambulatory surgery centers in certain states. CONs generally provide that prior
to the expansion of existing centers, the construction of new centers, the
acquisition of major items of equipment or the introduction of certain new
services, approval must be obtained from the designated state health planning
agency. State CON statutes generally provide that, prior to the construction of
new facilities or the introduction of new services, a designated state health
planning agency must determine that a need exists for those facilities or
services. AmSurg's development of ambulatory surgery centers generally focuses
on states that do not require CONs. However, acquisitions of existing surgery
centers, even in states that require CONs for new centers, generally do not
require CON regulatory approval.
 
     State licensing of ambulatory surgery centers is generally a prerequisite
to the operation of each center and to participation in federally funded
programs, such as Medicare and Medicaid. Once a center becomes licensed and
operational, it must continue to comply with federal, state and local licensing
and certification requirements in addition to local building and life safety
codes. In addition, every state imposes licensing requirements on individual
physicians, and facilities and services operated and owned by physicians.
Physician practices are also subject to federal, state and local laws dealing
with issues such as occupational safety, employment, medical leave, insurance
regulations, civil rights and discrimination, and medical waste and other
environmental issues.
 
   
     Corporate Practice of Medicine.  AmSurg is not required to obtain a license
to practice medicine in any jurisdiction in which it owns and operates an
ambulatory surgery center, because the surgery centers are not engaged in the
practice of medicine. The physicians are licensed to practice medicine through
their group practices, which with the exception of the two physician practices
majority owned by AmSurg, are not affiliated with AmSurg other than through the
physicians' ownership in the partnerships and limited liability companies that
own the surgery centers. AmSurg owns a majority interest in two group practices
in Florida, a state which permits physicians to practice medicine through an
entity that is not wholly owned by physicians. All third party payor contracts
are in the name of the group practice entities in which AmSurg owns a majority
interest. The physicians associated with these group practices provide medical
services to the patients of the practice entities and are compensated for these
services pursuant to either an employment contract or an independent contractor
arrangement with the practice entity. AmSurg's operations do not require AmSurg
to otherwise obtain any license to practice medicine in any other jurisdiction.
A recent ruling by the Florida Board of Medicine that an agreement between a
physician practice and a practice management company constituted impermissible
fee-splitting, if upheld on judicial appeal, would cause AmSurg to restructure
its relationship with one of the two group practices. AmSurg does not believe
that any such restructuring would have a material adverse effect on AmSurg. See
"RISK FACTORS -- Risks Related to Laws Governing Corporate Practice of
Medicine."
    
 
     Insurance Laws.  Laws in all states regulate the business of insurance and
the operation of HMOs. Many states also regulate the establishment and operation
of networks of healthcare providers. AmSurg believes that its operations are in
compliance with these laws in the states in which it currently does business.
The NAIC recently endorsed a policy proposing the state regulation of risk
assumption by healthcare providers. The policy proposes prohibiting providers
from entering into capitated payment or other risk sharing contracts except
through HMOs or insurance companies. Several states have adopted regulations
implementing the NAIC policy in some form. In states where such regulations have
been adopted practices affiliated with AmSurg will be precluded from entering
into capitated contracts directly with employers, individuals and benefit plans
unless they qualify to do business as HMOs or insurance companies.
 
     AmSurg and its affiliated groups may in the future enter into contracts
with managed care organizations, such as HMOs, whereby AmSurg and its affiliated
groups would assume risk in connection with providing healthcare services under
capitation arrangements. If AmSurg or its affiliated groups are considered to be
in
 
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