Policyholder Services

Outpatient Surgical Facilities

By Kimberly Wynkoop, OMIC Legal Counsel

Digest, Fall 2011

In 2005, a task force of OMIC Board and staff members examined and revised OMIC’s underwriting requirements and risk management guidelines for coverage of outpatient surgical facilities (OSFs). The task force produced a rewritten and reformatted “Outpatient Surgical Facility Application” (OSFA) that was adopted by the OMIC Board of Directors and updated several times since with minor changes. All ambulatory surgery centers, laser surgery centers, and in-office surgical suites used by physicians other than the owners and their employees are required to complete the OSFA, which contains detailed information about OMIC’s underwriting requirements. It is important that insureds abide by all underwriting and notification requirements specified in the OSFA, as failure to do so could result in uninsured risk or termination of coverage.

If approved, the OSF is generally included as an additional insured under the owner physicians’ or owner entity’s policy at shared limits of liability with the primary insured. Separate limits may be purchased for an additional premium. Coverage extends to the OSF and to each person affiliated with the OSF as a member, officer, director, partner, or shareholder for (1) direct patient treatment provided by the entity, (2) vicarious liability arising from direct patient treatment provided by any other person rendering services on behalf of the entity, and (3) liability arising from professional committee activities conducted by the OSF-affiliated persons described above on behalf of the OSF. Coverage also extends to non-physician employees of the facility (except ODs and CRNAs) for liability arising from their direct patient treatment rendered on behalf of the facility or the direct patient treatment of someone under their supervision, direction, or control.

Two changes of note were made to the OSFA in 2007. First, it was modified to allow anesthesia providers to carry limits of at least $1M per claim if the OSF is insured at limits of $1M or greater, rather than requiring the anesthesia providers to carry the same liability limits as the OSF. This was done because some carriers were reluctant to offer higher limits to certain specialties such as anesthesiology, and when higher limits were available, they tended to be cost prohibitive.

Second, OMIC decreased the emergency response equipment requirements applicable to laser refractive surgery centers in which only a single oral sedative is given to the patient. This was done because such procedures generally are performed on relatively young, healthy patients. The OSF requirements were modified such that oxygen, suction, pulse oximeter, and an emergency power source were recommended, but not required, for facilities in which the only procedures performed are laser refractive surgery.

The full list of underwriting requirements is listed in the OSFA; the following is an overview and summary. If you have questions about these requirements, contact your underwriter. If you need help implementing any changes, OMIC’s risk management staff can provide resources and advice.

Since OSFs do not usually have critical care specialists to respond to emergencies, patients must be carefully selected for outpatient procedures. OMIC uses the American Society of Anesthesiologists physical status classification system plus age to determine which patients are eligible for surgery at OMIC-insured OSFs. Persons 15 or older must be ASA class 1, 2, or 3. Persons 6 months to 14 years must be class 1 or 2. Infants under 6 months and those between 6 months and 14 years who are class 3 must receive care only in centers specifically designated for such patients. OMIC will consider exceptions to these selection requirements on a case-by-case basis.

Sedation risks for ophthalmic patients in OSFs can be high because such patients may be older and have comorbid diseases that complicate anesthesia care. Children pose additional risk, as well, as they can slip into deeper levels of sedation, which compromise their protective reflexes. If anesthesia providers are present, health care providers must have at least Basic Life Support for Healthcare Providers certification; advanced certification is recommended (ACLS or PALS). Non-anesthesia providers who prescribe, administer, or monitor effects of moderate sedation or any pediatric sedation must demonstrate an understanding of pharmacological agents/reversal agents and recognize associated complications of each, be able to rescue patients who enter deeper sedation, be capable of establishing an airway or providing positive pressure ventilation, and have advanced age-specific cardiopulmonary resuscitation skills (ACLS or PALS). The OSF cannot employ anesthesiologists, but may contract with them and may employ CRNAs.

Due to sterility issues, intraocular procedures should be performed only in facilities approved for cataract surgery by Medicare or accredited by one of the recognized accreditation organizations. Gastrointestinal procedures may be performed at OMIC-insured OSFs if they have separate rooms and equipment dedicated for GI surgical/endoscopy procedures. Separate and appropriate infection control guidelines must be established for the GI unit. OMIC may permit other non-ophthalmic procedures, subject to underwriting review and approval. Others are specifically not permitted, such as obstetric, cardiac, pain management, and surgical weight control procedures.

There are also underwriting requirements that address assessment and monitoring, licensure, organized risk management programs, structured peer review processes, appropriate advertising, documentation of care, and insurance and regulatory compliance.