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Bcbsm Recognizes The Aaahcs Early Option Survey For Asf Participation

Earlier this year, Blue Cross Blue Shield of Michigan ("BCBSM") published its amendment to the BCBSM Evidence-of-Need ("EON") requirements for ambulatory surgery facilities ("ASFs"). These changes, in pertinent part:

1. Correlated the EON surgical volume standard with the Michigan Certificate of Need standard for a new facility, which currently is 1,128 cases per operating room ("OR"( per year.

2. Changed the ASF review period (for EON compliance) from every other year to approximately every three years.

3. Extended the grace period for facilities that do not meet the full EON volume requirement from two years to three years. The grace period will apply to facilities within 80% of the minimum volume.

4. Modified the calculation of BCBSM market share, resulting in a market-share adjustment of 30% in the lower-peninsula, and 40% in the upper-peninsula.

5. Reduced the minimum volume reporting period from six months to four months.

6. Eliminated the need for multi-specialty ASFs to have a minimum of 3 ORs. As revised, the new minimum standard for all facilities (single- and multi-specialty) located in non-rural areas is two ORs and one OR for all rural-based facilities.

These changes were reflected in the BCBSM Ambulatory Surgery Facility Participation Agreement.

A related ASF development with BCBSM, which potentially might be of significant benefit to new facilities in Michigan, will not be formally published by BSBSM. Specifically, until August 2008, BCBSM declined to recognize the Accreditation Association for Ambulatory Health Care ("AAAHC") New Facility/Medicare Deemed Status Survey (Early Option with Medicare) (the "EOS"). As a result, but for the policy change regarding the EOS, any ASF that had relied upon AAAHC (the preeminent accreditation body for ASFs) for its initial Medicare certification would have been unable to apply for BCBSM participation until such time as that facility was to become eligible for a full (i.e., a one- or three-year) accreditation survey from AAHC; for most ASFs, this typically would occur at or shortly before the one-year anniversary of the facility performing its first case.