Developing an OBL: Key Considerations Before Spending a Dime Or Too Much Time

Abstract

The office-based laboratory (OBL) industry has proliferated over the past decade as surgical cases have increasingly migrated from inpatient to outpatient surgical settings, including OBLs, ambulatory surgery centers and infusion centers. Although many physicians and patients prefer to provide and receive care in an OBL setting because it provides a high quality, lower cost and convenient alternative to receiving care in a hospital, the OBL industry is nonetheless under attack on a variety of fronts. Governmental and commercial payor reimbursement for OBL procedures has declined substantially over time, and there have been lawsuits, governmental investigations and news articles that have been critical of care provided in OBLs. These issues have generated headwinds for this young but growing industry. It is therefore important for physicians and investors alike interested in developing an OBL to be aware of the complex landscape of laws and regulations that apply to OBLs. This article provides an overview of key legal, corporate, tax, financial and structural considerations for operators to be aware of before opening an OBL.