The Ultimate Guide to Building an Ambulatory Surgery Center

Janet L. Carlson, MSN, RN, FACHE, has spent her career inside ambulatory surgery centers, first as a nurse and then as a clinical, operational, and financial leader, including as CEO of The Surgery Center at Midlands Orthopaedics & Neurosurgery, a Newsweek top-ranked Ambulatory Surgery Center (ASC). Now founder and CEO of Vertex Surgical Solutions, she helps surgeons and health systems design, build, and scale new centers. She sat down with Athena Doshi, Exactrx cofounder and CEO, to talk through how to build an ASC the right way, from when to design revenue cycle to the decisions that quietly sink year-one cash flow.

Athena Doshi: Janet, thank you for taking the time today. To start, why don't you give a brief overview of who you are and what you do?

Janet Carlson: My name is Janet Carlson. I'm a registered nurse, and my company is Vertex Surgical Solutions. We provide an end-to-end solution for physicians looking to design, develop, clinically operationalize, and open a new ASC, and we help existing centers add strategic service lines like total joints, high acuity spine, or cardiovascular. What makes us unique is that we don't take a position in the ownership structure. We keep those shares available for independent surgeons to recruit new talent, and we're clinicians serving clinicians.

Athena Doshi: A lot of people don't know what an ASC is. I was never told what one was on my path to becoming a clinician. What made you want to focus on the ASC landscape rather than inpatient or hospital-focused work?

Janet Carlson: The ambulatory setting is kind of like the little engine that could. It's often not recognized or appreciated, especially in the shadow of a big health system. But what surgery centers offer communities is elective, outpatient, ambulatory care. Nothing emergent or urgent. I need to make that distinction, because that's what the hospital and the ER are for. When that level of acuity arises, the hospital is in a position to take care of it.

The benefit in the ASC space is that when you take the cases that could and should be done there, you create capacity in the large health system. You allow the higher acuity patients, the ones with comorbidities who wouldn't be a safe selection for an ASC under our anesthesia selection criteria, to be cared for in the right place. There's a win-win. The hospitals have more capacity in their ORs for the sicker patients, and the ASCs can take care of the lower acuity, high volume procedures that traditionally cause a traffic jam in a hospital OR setting.

Step 1: Design Your Revenue Cycle During Construction

Athena Doshi: When you're building an ASC from scratch, at what point should revenue cycle be designed, and when do people leave it too late?

Janet Carlson: When you're starting a new ASC, you have to make a lot of decisions about where, who, when, and how. Once those are hammered out, literally and figuratively, when you have a design and a location and you begin to swing hammers and get building permits, that is the time to look at all the other initiatives that will drive your business success once you're operational.

In tandem, on parallel timelines, while you're building the physical structure, you need to be building the business structure. A large part of that is choosing the best RCM partner possible if you're not planning to do it yourself. A lot of folks employ coders and billers in-house, and that's perfectly acceptable. But if you don't have the bandwidth or the FTE allotment, it makes more sense to have a partner. Then you come to terms on the percentage. Traditionally it's a percentage of cash collected, not cash allowable or cash billable.

That's where there's an opportunity for RCM companies to partner with the ASC industry. We all need the help, admittedly. There's only so many things we can do very well day to day in a clinically focused operation. When it comes to going after the reimbursement that is rightfully yours, you want a strong, solid RCM partner that understands the tenacity needed to go after the money you're owed.

Athena Doshi: What's the cost of leaving RCM setup too late? What happens to a center that waits?

Janet Carlson: You're focused on all the immediate deliverables. The building, the permitting, getting the certificate of occupancy, passing the surveys. Then you're focused on getting credentialed and having your certifying entity walk through the facility. If it's a new entity, you also need CMS to do a survey, because that's the only thing that triggers a new PTAN number. That's so important, because you can't even contract or agree to participate with payers until you have a PTAN. They won't talk to you.

I use that as an illustration to say there are so many things people are focused on that the long-term business decisions sneak up on you. You realize, oh my gosh, we're ready to open, but we don't have a solution for this, and we probably should have had one a little bit sooner.

Athena Doshi: How should a new ASC decide between billing in-house versus outsourcing, and what are the tradeoffs?

Janet Carlson: The pro of doing it in-house is that the coders and billers know the surgeon. They know how they dictate and what procedures they do, so they have a lot of repetitive experience with the case mix. If they have a clarifying question, it's very easy to go find the physician, the APP, the clinic nurse, or the OR manager who can answer it. With that said, turnover is definitely an issue.

When you have it offsite, oftentimes it's offshore, you have people operating in a vacuum. They aren't affiliated with your business. They don't know what you do or how you do it. The risk is, are you allowing that RCM partner to adjudicate your aging AR? Are you allowing them to write off, or are they coming to you for input first? There's a risk of someone who doesn't know the business making decisions that impact your P&L and your net revenue.

Athena Doshi: What's the most expensive RCM decision a de novo ASC makes before it ever sees a patient?

Janet Carlson: A lot of people want an EHR solution for the ASC. EHR vendors offer RCM as part of their service, taking a percentage in exchange for billing and coding your claims, but typically not charging for the charting software itself. You need to decide this route ahead of time.

If you already have in-house billing and coding, or you're happy with your existing RCM partner, that's fine if you have your own central business office to manage it. Then the software company just gives you a monthly bill for using their software. It's important to set it up up front and be clear about the objectives.

Step 2: Plan for Credentialing, Cash Flow, and Regulation

Athena Doshi: When you were running ASCs yourself, was there something you look back on and wish you'd handled differently? What's something you wish you'd known the first time?

Janet Carlson: There are hundreds of answers to that question. What I wish I'd known when I took over ASCs is who all the partnered vendors were. What do they do for you, who's the point of contact, how do you reach them, and what are they responsible for? You end up learning it organically, but that's usually through the tincture of time.

It would be nice to have that full disclosure up front, especially if you're assuming a role from someone else. You'd like that pass down, the communication and the wisdom of the person who's leaving, to help you start anew and drive the business forward. Instead I'd find out about them by rifling through a file cabinet to find an agreement and see who was even responsible for a given contract or account.

Athena Doshi: How do credentialing and payer contracting timelines affect a new center's cash flow, especially in year one?

Janet Carlson: You have to spend money to earn it. You have to see that the ROI will be there, but you have to pay off all the costs of establishing the business first. That's the thing to level set on. It will cash flow, but you have to pay for these things first.

I'm entertained by people who think the minute you open the door, it's just sunshine and roses. It will be, but it needs a little bit of rain and fertilization to grow into its new self. First you have to have all the regulatory and compliance pieces, and it's very longitudinal. These things are like dominoes. They have to fall in a certain pattern.

Athena Doshi: What's changing in how new ASCs get built today versus five years ago?

Janet Carlson: A while back, a lot of ASCs were designed with a single specialty in mind. The one thing I know for sure, because I've designed and built them myself, is that I now look at every de novo project from a multi-specialty angle. I want the size, the storage, the capacity, the PACU real estate, and the sterile processing footprint to handle higher acuity cases and new strategic service lines. But the bigger driver of change is each state's certificate of need law, and whether it's being repealed or reformed. Your CON laws dictate the accessibility of a project. States without a certificate of need can have the growth and economic development of adding multi-specialty ASCs and offering that lower cost site of service. States with CON traditionally have more control, almost like an antitrust control, over who gets to build, because they're viewing you as competition. So the CON laws are a big thing to understand, especially knowing where you're trying to work.

Athena Doshi: What resources can ASC operators lean on to understand these policies and CON laws? Do you go to CMS's website?

Janet Carlson: I stay abreast of it, especially when there are proposed changes or CPT codes coming off the inpatient only list. Those are the things to be on top of, because if you know that's happening in January 2027 and you want to capture those cases, you need to start working now. Get the surgeon preference cards ready, make sure you have the supplies, the instrumentation, the capital equipment, the training, and that you've done mock run-throughs before actual patients. You work out any hiccup ahead of time so it can be done safely, efficiently, and smoothly.

ASCA is a great organization. They put out all kinds of resources, and I highly suggest people participate, listen to the webinars and trainings, read the newsletters, go to the conferences, even get involved lobbying on Capitol Hill, which I've done multiple times on behalf of ASCs. Your state and regional organizations are also really good resources, and they're more intimate than a large ASCA conference. You find out who your peers are and what their challenges are.

Can you support one another in an emergency? If you have a weather or electrical event and your sterilizer isn't working but you need to process trays, could you use a fellow ASC's SPD overnight so you don't have to cancel cases? That support matters, because when you leave an ASC you often feel like you're the only independent out there. You're the decision maker, but you don't feel like you have peers. There's a huge community of ASC administrators and leaders available to support you, but you have to put time and energy into cultivating those relationships.

I tell people you're really not in competition. You're in different markets, with different surgeons offering different solutions. I don't think you're as competitive with one another as you could be collaborative and supportive.

Step 3: Build Your Team and Case Mix Strategy

Athena Doshi: How does succession planning factor in for in-house billing staff?

Janet Carlson: That's difficult, because revenue cycle is a never-ending job. The minute you're successful with one thing, you have another challenge or a potential clawback to address. So it's important to have a solid plan, especially with an in-house central billing office. You want whoever's leading it to know exactly how to do everyone's role. That's usually a sign of a very good leader. But you also want to spread the risk by making sure people can fill in for one another, so you don't have a void if someone is on vacation, sick, or decides to leave. You need redundancy in your central business office, and if you don't have it, your balance book is going to show it pretty quickly.

Athena Doshi: How does specialty and case mix change how you open a new ASC and design the revenue cycle?

Janet Carlson: No matter what the service line is, I recommend people open with lower acuity cases. Let everybody get into a comfortable, compliant operational workflow and hammer out any kinks. There's always going to be something. That's just the daily operations of an ASC.

Start with lower acuity, get good at it, make sure everybody has the training and support they need so they feel comfortable before you bring the higher acuity cases. You don't want to intimidate your staff. You need them on your side, advocating for you and the patient. Repeat it, recognize it, reward it, then try something new and celebrate it again. You add the acuity and the more complex cases when your team is positioned, poised, and trained. You can't open the doors and drop that in everybody's lap when they're still trying to figure out where the fire extinguishers are.

Step 4: Decide Where Automation Fits

Athena Doshi: For a de novo center with no legacy billing process to unwind, how do you weigh building automation and a tech-enabled solution from day one versus letting the center grow and then doing the change management later?

Janet Carlson: It's easier to start from the get-go than to change mid-stride. If you switch later, there's a potential gap and money left on the table that you rightfully earned. The challenge is who's responsible for which aging AR bucket and who gets the credit for monies received. There's a lot of that tension you could avoid by starting with an established system up front.

Athena Doshi: And what's the risk of starting with automation up front?

Janet Carlson: There's always a risk, no matter what you choose. The risk is making sure the entity you've aligned with strategically fully understands the services you offer. They may think you're doing a little knee scope when you're actually doing a total knee replacement. They may think you're doing a rotator cuff repair when you're actually doing a total reverse shoulder replacement. So make sure your vendor partner knows exactly the case, the acuity, and how to bill and code it.

Athena Doshi: What do you think AI’s role is in the ambulatory surgery setting, and where is the potential to optimize?

Janet Carlson: AI is going to impact so many things, and a lot of people shouldn't be afraid of it. It's a positive thing as long as someone is checking it and there are backstops to prevent unintended errors, mostly errors of omission rather than commission.

I see it in the OR, where there are solutions for products used intraoperatively. You can have an iPhone or iPad take a picture of everything on the nurse's tray, and it populates automatically to your implant log. There are also solutions where the surgeon dictates while operating and the AI agent listens, so by the time the surgery is over they pretty much have a templated H&P and post-op note created in real time. If it's accurate, that helps throughput. If you're already a well-run organization and you streamline the surgeon's dictation time, you could add more cases, because the surgeon is ready to turn and start another case instead of stopping to sit down and write their note.

There's obviously a need in revenue cycle too. If the surgeon books the surgery at the clinic site, your revenue cycle partner should start working that CPT code on the back end the minute it's scheduled, so you can anticipate any pushback.

Athena Doshi: What advice would you give operators who are nervous about AI in revenue cycle, where it's more of a technology platform than a traditional billing team?

Janet Carlson: It's best practice to have a standing call with your RCM leader or account manager. Set up that operational vigor so you can get on a call and discuss problems, clawbacks, aging buckets, and commercial payer changes, which happen all the time. All of a sudden something's covered, then it's not, then it's covered but only in the OBL and no longer in the ASC.

Nobody should be afraid of AI, but make sure somebody understands the business, and if they don't, that they learn to and ask for insights. So many people think they know what revenue cycle is until they actually do it, and then they realize they don't know the whole process or how it impacts their P&L. Learn the industry, ask questions, no shame in wanting to learn. Having a person who manages your account, even if they leverage AI on your behalf, is going to be a better outcome. Just stay synced up so you're communicating clearly and there's no finger pointing.

Overall, Why Build an ASC?

Athena Doshi: Is there anything else you'd like to share with our readership of financial leaders at surgery centers, hospitals, and innovation groups?

Janet Carlson: People looking to invest or participate in the ASC space should consider it, because there's such a positive outlook, trend, and growth. It's a wonderful space to be in, and it's not going away. It's going to increase every year. As we get more technology, we have the ability to do so many more minimally invasive surgeries and procedures that not long ago would have been a big open incision in the hospital. The things we can do now are mind-blowing when you step back.

It's an exhilarating time to be in the ASC space. I wouldn't work in any other. It's great to see physicians regaining and maintaining their autonomy and independence, which they often achieve when they have shares in an ASC and guaranteed block time. They're very much incentivized and aligned for any initiative to save on spend, agreeing as partners on instruments and supplies. The main drivers of your P&L are your implant cost, your disposable medical supply spend, and your labor. I tell people the thing I love to have as a problem is having to pay overtime. That just means we're busy, and I'm happy to do so. I'd encourage anyone contemplating the ASC space to take a harder look, because it has a lot of upside.