Surgical Practices Must Now Be Licensed as Ambulatory Surgical Centers in New Jersey

Surgical practices in New Jersey will now be required to become licensed by the New Jersey Department of Health (“DOH”) as ambulatory surgical centers, with existing ones required to do so by January 16, 2019.  Previously, surgical practices had to be registered with the DOH, and oversight was jointly shared by the DOH and the New Jersey Board of Medical Examiners.  Now, oversight will be the sole province of the DOH.

Surgical practices that are certified by the Centers for Medicare and Medicaid Services (“CMS”) will be exempt from the physical plant and functional requirements set forth in the New Jersey licensing regulations for ambulatory surgical centers.  Existing surgical practices not certified as such, but which are accredited by an accrediting body recognized by CMS, will also be exempt.  Those surgical practices that do not fall in one of the foregoing categories will have to comply with the requirements.

Surgical practices will also be exempt from the New Jersey ambulatory care facility assessments unless they expand to include any additional room dedicated for use as an operating room.

Surgical practices may now also combine with each other or with ambulatory surgical centers to form a larger licensed ambulatory surgical center consisting of an aggregate number of operating rooms up to the total number of operating rooms that both facilities contained prior to the combination.

These changes mean more for surgical practices than the mere language of the law would suggest.  As licensed facilities, anyone, not just New Jersey licensed physicians, can now be an owner of a one room facility.  This will make it easier for outside investment directly in one room centers.  Those who are not New Jersey licensed physicians and who are currently managing one room facilities can now seek to become direct owners of those facilities, which was previously prohibited.  Additionally, any New Jersey licensed physician will now be able to perform a procedure at a one room center, not just owners of the center.

Outside investment and mergers and acquisitions in the New Jersey ambulatory surgical center market have been active for years, with recent increased movement due to the influx of private equity dollars into health care.  The level of activity will now increase even more.