At the ASOA meeting during ASCRS 2026, Isabelle Bibet-Kalinyak, JD, MBA, of Pullman and Comey, and Rajesh U. Kothari, MBA, of Cascade Partners, presented "Ambulatory Surgery Centers: Governance, Compliance, and Growth Strategies." Here, they discuss with Ophthalmology Management key takeaways from the presentation. The below transcript has been edited for clarity.

Rajesh U. Kothari, MBA: So we had a great presentation earlier, Isabelle, when we were talking about ASCs and how important they are to practices. I know one of the key things we talked about is how it's a real driver for practices and their growth as folks are looking for that ancillary benefit, from capturing patients to driving increased revenue and capturing more of that revenue that practices are generating. Seems like that is of growing importance for practices that want to grow or even sustain what they're doing in the marketplace today.

Isabelle Bibet-Kalinyak, JD, MBA: Most definitely, Raj. As a matter of fact, having an ambulatory surgery center is the single most important growth factor for an ophthalmology practice. There's nothing that can make up for that type of revenue. It's also where the rates are the best right now, as opposed to doing procedures in the hospital. So, you're not only capturing extra revenue [but] also having the benefit of doing this in your own house, in a sense. You're also riding the wave that the payers have decided. It's where the rates are going. Even CMS is improving payments for ASCs and decreasing it for the hospitals. So it's really the single most growth factor you can implement for your practice. As a matter of fact, ophthalmologists have already caught onto the trend. They're the no. 1 owners in surgical specialty there. So, during our session, we [also] discussed how it's important to structure this from a strategic standpoint and to prepare, if you have not already done so, when you want to implement an ASC. What did you remember was the best criteria?

Mr. Kothari: We talked about it as a great tool for helping engage partnerships. So whether it's bringing physicians into the practice or creating upside opportunity for those physicians that may not have started out, but are growing and becoming that next generation of partners in a practice. And then the other part we talked about is how the market's getting more competitive and a way to capture and maintain that patient care inside your own ecosystem was an element. But we talked a lot about the big decision of do you build your own ASC or do you buy into an existing ASC and some of the challenges and the opportunities that that presents.

Ms. Bibet-Kalinyak: But with 30% to 50% of the entire fee riding on the facility fee, really the math is easy. We're saying net revenue per climb up to $1,730 for a cataract. And so that's very, very important. But there are other considerations, I think, in terms of quality of patient care. And that's really also where we're seeing a lot of data come that for patients, they prefer to go to the same facility possibly where the physician is located, they know the staff, they're familiar, they know how to park, etc, as opposed to going to some gigantic parking lot to a health system and all that. So it's the balance between the revenue and enhancing patient care and enhancing the experience.

Mr. Kothari: And as we said, it's easier for the docs. When we talked about it, one of the things that improves productivity for the physicians [is that] they're not driving across town with less time. They're able to flex back and forth to drive their clinic practice. And it's built when they own it or they're driving it; it's built the way they operate, as opposed to in a multi-specialty center or when someone else is owning the center. It might not be tailored to how that group of providers practices and that throughput and efficiency really makes a difference. And as people are considering, "Hey, do I go and start a new ASC, or do I go and join and partner with somebody else's ASC?" That operational component becomes really important.

Ms. Bibet-Kalinyak: I think for ophthalmologists, also, the choice of equipment is very important, as opposed to some other surgical specialties, because the equipment does matter and what you're used to, what you're trained on, and what your preference is. It definitely makes a difference there.

Mr. Kothari: Well, we often get, "This is great, but how do I structure it? How do I do this? " And everybody tries to be creative and there are a lot of rules around how to do this, but the economic, you said, the economic driver and creating the right incentives that align the providers with the right success so that they're supporting the execution of the ASC becomes critical. But there are a lot of rules there and a lot of elements that we talked about that often trip up practices. And we've worked through practices that are trying to grow or thinking about doing a transaction and they've been stymied because they made these arrangements that weren't compliant. And I think this is a legal element and the compliance element that you talked a lot about during our presentation that's critical for everybody to remember.

Ms. Bibet-Kalinyak: Compliance is a big part of it. And once the providers have gone over the hurdle of deciding, yes, I'm going to invest in this hesitancy to get more debt maybe to finance this, you have to make sure that you're investing in a place (if it's already in existence) that’s in compliance. Don't assume that because it's been in existence and perhaps there's even an operator in there, that when you're buying in, you're buying into a compliant place. You still need to do some homework there. We're seeing some ambulatory surgery centers who are not properly set up, and they keep operating until there's a trigger event and then an investigation, and things are discovered. So we're dealing with multiple levels of compliance there. First, of course, it's everything at the federal level. We have a lot of fraud and abuse issues in the field. And basically, the premise is if you are a physician and you own an entity, you're not supposed to benefit from your own referrals to that entity.

And then the current federal framework has some exceptions or safe harbors that do permit ownership in surgery centers so that physicians can benefit. But the overall premise is that you're not supposed to benefit from your own referrals. So if that's set up properly as an extension of your own practice and the people from around the test called the one third test, which has a different set of criteria in there, you want to try to be as close as possible to that safe harbor. And one thing we hear also about, and somebody I think brought this up during our session, is how the Stark Law is involved with ambulatory surgical centers. Stark Law is not involved with ambulatory surgery centers, only the Anti-Kickback Statute. Stark Law is important for physicians, but not in that environment. But compliance also goes way beyond the fraud and abuse. Raj, you can talk also about security issues with IT and how you need to button this up nowadays with artificial intelligence as well.

Mr. Kothari: I mean, as you've talked about, when you're buying into an existing ASC, in many cases, if you don't document it right, you're buying into all the historical problems. Increasingly, IT, IT security, HIPAA compliance, and now the developing use of AI, [are all] focusing everybody to think about what are the security elements to be compliant with HIPAA and be compliant with privacy information. And oftentimes when we're helping practices look at and evaluate a transaction, this is a whole diligent stream just trying to validate and understand and capture that risk within IT and IT security, as we talked about. And the other area that we talked a lot about, Isabelle, is just the economics of a transaction and folks not understanding that. You can't finance a partner's buying into the existing shareholders and the existing entity can't finance the buy-in into an ASC like you can in a private practice or other entities, and that price has to reflect fair market value. Now, there's a lot of flex there, but it does have to be reasonable in fair market value. And oftentimes practices are not paying attention to those rules as they look at the ebb and flow of their ownership, not necessarily being compliant just when they did the deal, but as the years progress, staying in compliance. So those are a couple of the things that we talked a lot about in terms of helping those.

Ms. Bibet-Kalinyak: I'm glad you bring this up about valuation because it is directly linked with compliance. It is a requirement that buying into an ASC as a physician is at fair market value and commercial reasonableness, but that's not a prix fixe, if you want. It's a range of fair market value and people often don't understand that, but it's important to surround yourself with a third-party evaluator that knows what they're doing and that can review the books and prices at a fair price and also something that is compliant and that can withstand scrutiny from the government if there's ever investigation. And I think that takes us to the other topic that's important, which is governance. What does it really mean to be a partner in an ASC? You have some responsibility to bring enough cases so that it is an extension of your practice and satisfies the one-third test, but there's a lot of other components as we discussed.

Mr. Kothari: Yeah. I mean, again, you're partnering into a business enterprise. If it's an internal and a captive ASC, it's a lot different like we talked about because it can fit within many of the existing governance structures. But oftentimes, increasingly, folks are partnering with ASC partners or ASC operators. So the physicians might own a minority or even a majority, but there's a real operator there. And then what's the relationship? How are the parties incentivized? How am I incentivizing the other docs that have ownership and making sure that that's being done on a pro rata ownership basis and not on performance or number of cases or volumes, all which will bump into the compliance issues that you talked about during our presentation, but it is entering a business partnership. What do we know? What's their reputation? And an important part of knowing how to enter any relationship is how do you know how to exit it? And that those processes are defined. You understand what the implications of the non-compete language are because they tend to be broad with those. And that affects how people execute and think about the other things they'll do in and around their practice.

Ms. Bibet-Kalinyak: The operating agreement of an ASC is usually where you will find all that fine print. And the non-competes are definitely still enforceable in the US and they will probably remain across state lines. There's a lot of talk out there about getting rid of non-compete agreements, but these kinds of talks at the state level pertain to employment relationship. When we are talking about business ownership relationships, non-competes are still going to be valid for a foreseeable future for certain. There was a push at the federal level at one point to eradicate non-competes across the board, but again, that was only an employment relationship, and that even went away with the current administration. So, when you buy into an ASC, you really also have to think [about] what the future looks like. Because if you are going to be trying to sell your business, for example, your medical practice to maybe a private equity group or a hospital, you also want to take these competing interests into consideration because having entered into a non-compete agreement just to join an ASC may preclude you from participating in another type of transaction at the practice level later.

So, I think also the governance is about your financial responsibilities. Most ASCs are profitable, but there are some that are not. And it's especially true when the case volume goes down and some partners start to leave and have to be bought out. So the operating agreement needs to describe both how you buy in, but also how you buy out. And you need to understand who else is involved because you may have to write checks to buy out your partners that decide to retire or leave. So all this needs to be taken into account. It's not just, "Oh yeah, let's do it." Of course, it's going to be a good investment. It's not always a good investment. You have to look at it on a case by case basis. So what else did you think was one of the most important things when we talked about governance?

Mr. Kothari: I think we touched on the major elements and hopefully it could provide an insight and we're obviously happy to share the information that we shared during the presentation and make it available. And I really appreciate the time to give everybody a quick snapshot on what we covered.