Employer/Employee Model. In the Employer/Employee Model, the GI practice entity hires the anesthesiologists as direct employees. This differs from the Company Model by having the anesthesiology services and the GI services performed and billed through the same entity. As with the Company Model, the employment agreement between the practice entity and the anesthesiologist(s) can be structured so as to comply with the bona fide employee safe harbor regulations, as well as the New York law permitting “fee-splitting” with employees. It also has the ability, not present in the Company Model, to be structured to comply with the requirements of the group practice investment safe harbor. As noted above, in order for profits distributed to owners to be covered by that safe harbor, the owners must practice through the group practice entity. However, there are several legal and practical concerns raised by this structure that would need to be addressed in order for it to succeed in any given situation. First, the business motive for entering into an arrangement is to permit the members of the ASC to benefit from the income generated by the anesthesiologists. Unless all of the members of the ASC are also members of the same GI group practice, having one GI group practice employ the anesthesiologists would not permit all of the members of the ASC to benefit from the arrangement. Second, anesthesiologists are often out-of-network providers, while the GI physicians are in-network providers. Having both services provided through the same group practice could therefore create problems with third-party payors. Either the anesthesiologists would have to become in-network providers, thus reducing their reimbursement rates, or they would have to bill for their services under a separate billing number, which could result in their not being considered to be practicing in the same group for purposes of the safe harbor rules. As noted above, if the GI physicians are not practicing through the same group as the anesthesiologists, the safe harbor for investment interests in a group practice is no longer available. The same concerns would apply if the anesthesiologists were made equity owners or independent contractors of the GI practice.
