Medicare and Medicaid service centers may slow down payment reforms designed to transition certain procedures from an inpatient setting to an outpatient setting, but this has not diminished confidence in Tenet Healthcare’s investment in outpatient surgery centers.

Tenet’s latest move, Announced on Monday, Which acquired SurgCenter Development and the company’s ownership shares in 92 outpatient surgery centers for US$1.2 billion.

The content management system has Put aside Regarding the phasing out of Medicare’s so-called inpatient-only list, and allowing reimbursement for certain services performed in an outpatient setting. Obviously, Tenet, based in Dallas, was not deterred.

“I still think growth exists,” said Mike Holland, a senior credit analyst at Bloomberg Intelligence. “You look at the amount of surgery that has been done in outpatient clinics-musculoskeletal, aerobic exercises-for Tenet, it still makes sense to reduce its inpatient portfolio and increase its outpatient portfolio for a variety of reasons.”

The for-profit health system said in a statement that Tenet is committed to providing healthcare services in the most suitable environment. “We and our doctor partners believe that outpatient services will grow over time, and we are committed to designing plans that comply with CMS guidelines,” the company said.

Once the transaction is completed, Tenet’s United Surgical Partners International division will own at least a portion of more than 440 outpatient surgery centers in 35 states. The SurgCenter Development transaction includes ownership interests in 76 facilities and another 16 in the planning stage. Doctor investors hold large shares in almost all of these centers. The acquisition is expected to be completed in the fourth quarter.

Even if there is no CMS action that allows outpatient institutions to charge Medicare for more types of surgery, outpatient surgery centers still provide sufficient profitable services, and Tenet will benefit from it, especially since Medicare has paid for hip and knee replacements since 2018 cost.

The SurgCenter Development facility acquired by Tenet has a musculoskeletal case mix of approximately 80%, including hip and knee replacements and spinal surgery.

Roger Strode, M&A partner of Foley & Lardner’s national healthcare business, said: “This is a livelihood for plastic surgeons and centers.” He said that the SurgCenter Development deal is a “scale game”. “It can enhance Tenet’s position as a health insurance company in the market where the surgery center is located.

According to data from the Association of Outpatient Surgery Centers, there are currently more than 6,000 medical insurance-certified outpatient surgery centers in the United States, and many more do not do business with medical insurance. According to an agreement with SurgCenter Development and investors who own the remaining shares in the facility, Tenet plans to open at least 50 more facilities in the next five years. This will give the health system at least partial ownership of more than 500 outpatient surgery centers.

“They do seem to surpass the competition,” Holland said.

Operation of HCA Healthcare, a for-profit chain hospital 123 independent outpatient surgery centers As of the end of the third quarter.Operated by Surgical Care Affiliates, an Optum subsidiary of UnitedHealth Group 250+ facilities. AmSurg is part of Envision Healthcare and also operates More than 250 sites.

Tenet intends to acquire at least some doctor investors who continue to hold shares in the outpatient surgery center from SurgCenter Development. But companies should be careful not to completely strip the doctor of ownership, Strode said. “When there are no doctors to invest, you really don’t see too many super, super successful ASCs.”

According to the latest data from the Association of Outpatient Surgery Centers, doctors own at least 95% of outpatient surgery centers. The doctor wholly owns 52%, the doctor and the hospital jointly own 21%, the doctor and the company jointly own 15%, and the doctor, the doctor and the hospital jointly own 7%. The company is the full owner of 3% and the hospital is the sole owner of 2%.

Dr. Neil Badlani, a plastic surgeon at the Plastic Surgery Sports Clinic in Houston, Texas, said that if Tenet holds a majority stake in the outpatient surgery center, it may face the risk of losing patients and income. This may stimulate doctors to transfer business to hospitals. Publish journal articles about the industry.

“If most are owned by doctors, it will lead to a more productive environment,” Badlani said. “This has caused doctors to feel closer to the center to help complete administrative tasks and recruit other doctors and all the things that make doctor ownership critical to the success of the surgery center.”