As reimbursement from third-party payors shrunk, the uninsured accident victim emerged as a financially attractive patient. Surgeons, surgery centers, and therapists became armchair personal injury attorneys. They learned to identify and sign-up uninsured patients who had been injured as the result of negligence, and who were likely to be successful in the lawsuits arising from their accidents.

A popular model evolved in which a surgery practice leases an ambulatory surgery center for a very competitive rate, performs the surgery, charges the patient a reasonable and customary fee for the technical and professional component of the surgery, and agrees not to seek payment from the patient if his attorney and he agree, through a "Letter of Protection," that the surgery practice will be paid from the proceeds of the negligence lawsuit. These days, ASCs are leasing themselves out for very competitive rates because the surgery practice guarantees payment immediately upon completing the surgery, or even in advance of the surgery, and because many ASCs currently have excess capacity. The surgery practice often has to wait twelve to thirty-six months to be paid for its services; but when the lawsuit is resolved and they are paid, there is a healthy margin between the surgery practice's cost for the ASC and the amount the practice is paid as technical component. Remember, other than reasonable and customary, there is no fee schedule applicable in this context. The model is currently so lucrative, that it has attracted lenders who help finance the surgery practices while they await payment on the Letters of Protection. Not incidentally, this model may become less lucrative as more and more people are covered by health insurance as a result of the Patient Protection and Affordable Care Act.

Story Continues After Sponsor Message.  

_______________________________