Most people involved in ambulatory service center (ASC) transactions understand that you can transfer a license or a licensed facility can relocate within 20 miles with Department of Health (DOH) approval. What gets less attention is what happens at an earlier stage: the registration, specifically whether a registered surgical practice (RSP) can be transferred to a new owner before it transitions to full licensure.
In New Jersey, that question has real financial implications.
The registration-to-licensure backstory
Before 2018, one-room surgical practices in NJ operated under a registration issued by the state DOH and were regulated by the Board of Medical Examiners, not the DOH. Multi-room ambulatory surgery centers were required to obtain a license and undergo New Jersey’s application process for licensed facilities. Single-room, physician-based surgical practices could instead register with the DOH.
That system changed when Governor Christie signed amendments to the Healthcare Facilities Planning Act in January 2018. Under the amended law, RSPs were required to file an application for licensure with the DOH as an ASC (ambulatory care facility) by January 15, 2019.
The DOH also stopped issuing new registrations from that point onward. Any surgical practice in operation on the effective date of P.L.2017, c.283 that proposes to relocate on or after that date is required to be licensed by the DOH as an ambulatory care facility providing surgical and related services.
The practical effect? A shrinking pool of RSP registrations still exists, and some of those facilities have not yet completed the transition to licensure, creating a transactional question for buyers and sellers.
The value of a license — and why registration matters, too
Once a facility completes the licensure process, the license itself carries market value. Licensed ASCs in NJ can bill a facility fee; registered practices can’t. That license is a transferable asset that has traded for hundreds of thousands of dollars in some transactions.
What’s less commonly known is that some healthcare attorneys have structured transactions involving the transfer of the registration itself before the facility converted to a license. The logic? If the registration is transferable, a buyer can acquire it, complete the licensure transition, and end up with a licensed facility without having to go through the moratorium restrictions that prevent issuing new licenses from scratch.
A caveat: Although one healthcare attorney has described using this registration-transfer approach more than once, anyone considering this structure should obtain written confirmation from a qualified NJ healthcare attorney and ideally seek guidance directly from the DOH’s Office of Certificate of Need and Healthcare Facility Licensure.
Why it matters? The moratorium
No new registrations or licenses will be issued for surgical practice or ambulatory care facilities unless:
- In the case of an ownership change, the Commissioner of the DOH reviews the new owner’s qualifications and approves the transfer;
- There’s a relocation within 20 miles of the current location with no increase in scope of services and prior commissioner approval; or
- One of several other specified exceptions applies.
That moratorium, in place since 2009, explains why existing registrations and licenses have value in the first place. You can’t simply get a new one — the supply is capped. Anyone wanting to enter the NJ ASC market must either acquire an existing licensed facility, acquire a registration and complete the transition to licensure, or qualify for one of the narrow statutory exceptions.
The transfer process & what DOH requires
The process for licensed ASCs is well-documented. The DOH requires a Transfer of Owner application when a new individual or entity will own 10% or more of the licensed operator or when an existing owner increases ownership from less than 10% to more than 10%.
The DOH must review and approve this application before closing. Only after the Office of Certificate of Need and Healthcare Facility Licensure reviews a transfer-of-ownership application and deems it acceptable will it grant the new owner approval to complete the transfer. The penalty for completing a transfer before getting that approval is high: $500 per day from the date of the transfer of interest to the date of discovery by the Department, assessed against each of the parties at interest.
In addition to the ownership transfer application, a facility also has an ongoing reporting obligation. A licensed ambulatory care facility that provides surgical and related services must report any change in ownership to the Department within 30 days of the change.
What buyers often miss when purchasing real estate
One of the most common mistakes in this space happens before anyone asks the regulatory questions. A group purchases a building that previously housed a surgery center, assumes it can reconstitute the operation, and only later discovers there’s no active license or registration attached to the property.
Healthcare licenses and registrations aren’t tied to real estate. They follow the entity holding them. Buying the building doesn’t give you the license.
This misunderstanding creates a problem that’s expensive to fix after the fact. If the previous license or registration has lapsed, expired, or wasn’t transferred to the new buyer, you may need to go through the full application process. Given the moratorium, you may not have that option.
Bring a healthcare attorney and a healthcare architect onto your project before executing a purchase agreement. Many attorneys who handle real estate transactions aren’t familiar with the regulatory and compliance issues associated with purchasing healthcare real estate. They might treat it as a conventional deal and not be aware of the licensing complexity.
Physician syndication and why deals fall apart
Even with a clear regulatory path, these projects can stall at the physician syndication stage. The economics look straightforward on paper — licensed ASCs generate facility fees that can substantially increase revenue. Getting physicians to commit capital, however, may prove challenging. While they often express interest early, they may withdraw when they see the upfront investment, construction timeline, and months before revenue generation begins. It’s not unusual for projects that started with 10 interested physicians on day one to close with just two or three.
This scenario isn’t unique to ASC transactions, but the regulatory complexity amplifies it. A deal that takes 18 months to close due to licensure, construction, and DOH approval leaves a long window for partners to reconsider.
Credentialling after transfer
Don’t make the mistake of skipping this step. Once a facility changes ownership and completes the licensure process, provider credentialing restarts. ASC credentialing is the process of verifying healthcare providers’ educational backgrounds, licenses, and certifications to confirm they meet industry, state, and federal policy requirements.
The facility also requires separate applications for Medicare enrollment, commercial payer contracts, and clinical privileges. Without proper enrollment, ASCs face:
- Credentialing risk
- Claim denials
- Payment delays
Credentialing timelines typically range from 60 to 120 days — depending on the provider’s background and responsiveness of primary sources like licensing boards — and can sometimes extend beyond 180 days. You must plan for that gap, because even a facility that’s completed the transfer and construction and passed the DOH inspection can sit dark for months while credentialing works its way through the system.
The bottom line on sunsets
Registrations that haven’t converted to licensure carry a practical urgency. The DOH is pushing remaining RSPs through the licensure process. Registrations have sunset provisions that can render them worthless if the timeline lapses.
If you’re considering a transaction involving an unconverted RSP registration, it’s incumbent to know where that registration stands. Is it still valid? What conditions apply? Will the DOH permit a transfer of it before licensure conversion?
That’s a question for healthcare attorneys who’ve done this before, not a general CRE or corporate attorney who handles the transaction as a standard asset purchase.
For regulatory details specific to New Jersey, verify current rules with the NJ DOH Office of Certificate of Need and Healthcare Facility Licensing.
Additional sources: Beckers ASC (June 2018), Holland & Knight (September 2025), NJ DOH FAQ Memo (Aug 2025), NJ Revised Statutes §26:2H-12 (via Justia, 2025 version), NJ DOH enforcement notice re: University Center for Ambulatory Surgery (November 2025), Health Quest Billing/ ASC credentialing overveiw (2025), Cohen Healthcare Law Group/ licensingi and accreditation guide (2025).
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