SEC Filings

10-12G/A
AMSURG CORP filed this Form 10-12G/A on 11/03/1997
Entire Document
 
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the business of insurance as a result of entering into such risk sharing
arrangements, they could become subject to a variety of regulatory and licensing
requirements applicable to insurance companies or HMOs, which could have a
material adverse effect upon AmSurg's ability to enter into such contracts. See
"RISK FACTORS -- Risk of Potential Applicability of Insurance Regulations."
 
     Reimbursement.  AmSurg depends upon third-party programs, including
governmental and private health insurance programs, to reimburse it for services
rendered to patients in its ambulatory surgery centers. In order to receive
Medicare reimbursement, each ambulatory surgery center must meet the applicable
conditions of participation set forth by the Department of Health and Human
Services ("DHHS") relating to the type of facility, its equipment, personnel and
standard of medical care, as well as compliance with state and local laws and
regulations, all of which are subject to change from time to time. Ambulatory
surgery centers undergo periodic on-site Medicare certification surveys. Each of
the existing AmSurg centers is certified as a Medicare provider. Although AmSurg
intends for its centers to participate in Medicare and other government
reimbursement programs, there can be no assurance that these centers will
continue to qualify for participation.
 
     Medicare-Medicaid Illegal Remuneration Provisions.  The anti-kickback
statute makes unlawful knowingly and willfully soliciting, receiving, offering
or paying any remuneration (including any kickback, bribe, or rebate) directly
or indirectly to induce or in return for referring an individual to a person for
the furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part under Medicare or Medicaid. Violation is
a felony punishable by a fine of up to $25,000 or imprisonment for up to five
years, or both. The Medicare and Medicaid Patient Program Protection Act of 1987
(the "1987 Act") provides administrative penalties for healthcare practices
which encourage overutilization or illegal remuneration when the costs of
services are reimbursed under the Medicare program. Loss of Medicare
certification and severe financial penalties are included among the 1987 Act's
sanctions. The 1987 Act, which adds to the criminal penalties under preexisting
law, also directs the Inspector General of the DHHS to investigate practices
which may constitute overutilization, including investments by healthcare
providers in medical diagnostic facilities, and to promulgate regulations
establishing exemptions or "safe harbors" for investments by medical service
providers in legitimate business ventures that will be deemed not to violate the
law even though those providers may also refer patients to such a venture.
Regulations identifying safe harbors were published in final form in July 1991
(the "Regulations").
 
     The Regulations set forth two specific exemptions or "safe harbors" related
to "investment interests": the first concerning investment interests in large
publicly traded companies ($50,000,000 in net tangible assets) and the second
for investments in smaller entities. The partnerships and limited liability
companies that own the AmSurg centers do not meet all of the criteria of either
existing "investment interests" safe harbor as announced in the Regulations.
 
     While several federal court decisions have aggressively applied the
restrictions of the anti-kickback statute, they provide little guidance as to
the application of the anti-kickback statute to AmSurg's partnerships and
limited liability companies. AmSurg believes that it is in compliance with the
current requirements of applicable federal and state law because among other
factors:
 
          i. the partnerships and limited liability companies exist to effect
     legitimate business purposes, including the ownership, operation and
     continued improvement of quality, cost effective and efficient services to
     their patients;
 
          ii. the partnerships and limited liability companies function as an
     extension of the group practices of physicians who are affiliated with the
     surgery centers and the surgical procedures are performed personally by
     these physicians without referring the patients outside of their practice;
 
          iii. the physician partners have a substantial investment at risk in
     the partnership or limited liability company;
 
          iv. terms of the investment do not take into account volume of the
     physician partner's past or anticipated future services provided to
     patients of the centers;
 
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