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ASC Transactions: Difference Between In-Network and Out-of-Network
June 2, 2014
Published by Becker's Hospital Review
In markets where favorable managed care contracts are difficult to secure, ASCs have turned to an out-of-network primary billing strategy over the past decade. While an out-of-network strategy may be a lucrative alternative to less preferable contract reimbursement rates for some ASCs, the strategy often presents both buyers and sellers of ASCs with several challenges.
To better understand the market for out-of-network surgery centers, we examined valuation multiples on both the minority and control levels for out-of-network ASCs. We then compared these multiples to in-network ASC multiples over the past five years. For our dataset, we examined the price paid for a surgery center relative to its total earnings before interest, taxes, depreciation, and amortization (“EBITDA”).