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Icd 10 and emr impacts on an organization Icd 10 and emr impacts on an organization Document Transcript

  • new jersey chapterMarch/April 2012 • vol 58 • num 5 H SCHEDULE • American Hospital Association Releases Results of 2009 Schedule H Project see page 7 • Keys to Effective Denial Management see page 15 • Trends in Healthcare Philanthropy and the Use of Separate Foundations see page 38
  • Scott Mariani, Partner and healthcare industry expert, knows how critical it is for hospitalsand healthcare delivery systems to implement the right strategies for financial survival. Hishealthcare clients trust his advice and guidance, enabling them to focus on what matters most—providing quality patient care. Whether with tax, audit or consulting, helping his clients avoidfiscal trauma is Scott’s specialty.Scott Mariani, Partner, JDPractice Leader, Healthcare Services Groupsmariani@withum.com • 973.898.9494
  • March/April 2 0 1 2 focus •advertisers• focus features • • American Hospital Association Releases Besler Results of the 2009 Schedule H Project by Scott J. Mariani, JD and Allison S. Kimowitz, CPA ………………………………………… 7 CBIZ KA Consulting ICD-10 and EMR Impacts on an Organization Fox Rothschild LLP by Keith Fulmer, MHSA, PMP ……………………………………………………………… 2 1 Liberty Billing Keys to Effective Denial Management by Michael Sowinski……………………………………………………………………… 5 1 McBee Associates, Inc. Time is Money: CMS Proposes 10-Year Look-Back Period for Returning Overpayments NJ Smart Start Buildings by Cecylia K. Hahn………………………………………………………………………… 7 1Norris, McLaughin & Marcus, P.A. Mission Possible: Finding Capital for Stand-Alone Hospitals by Anthony J. Taddey and Jason Beakas…………………………………………………… 0 2 Panacea Healthcare Solutions What’s New With Stark Law Enforcement? by Gary W. Herschman, Anjana D. Patel and Matthew J. McKennan…………………………… 3 2 ParenteBeard, LLC Patient’s “Meaningful Use” of Electronic Health Information Sun National Bank Proposed as Core Measure for Provider Incentive Vie Healthcare Payments from Feds by Elizabeth G. Litten……………………………………………………………………… 25 William H. Connolly & Assoc. Making Sense of it All: Seeing though the Transparency by Julie Kay……………………………………………………………………………… 7 2 WithumSmith+Brown Your Healthcare Facility Can Benefit from Energy Deregulation Two Ways: “Reverse Auctions” and “Name Your Electricity Price” by John A. Smith…………………………………………………………………………… 9 2 Who Are the Industry’s Rising Star Leaders?…………………………… 7 3 Trends in Healthcare Philanthropy and the Use of Separate Foundations by Walter J. Dillingham, Jr., Leigh W. Weiss and John M. Lawson……………………………… 8 3 The Parade of Major Reported PHI Breaches Hits 400 – Theft is the Primary Type of Breach by Michael J. Kline, Esq.…………………………………………………………………… 4 4 focus points • •Who’s Who in the Chapter…………… 2 Focus on Finance………………… 31The President’s View by Michael Alwell, FHFMA, MPA ………… 3 Mark Your Calendar………………… Job Bank Summary……………… 32 33 focus cover • • Cover courtesyFrom the Editor Your Personal Finances…………… 34 of Hermitage Press by Elizabeth G. Litten, Esq.……………… 4 Who’s Who in NJ Certification Corner………………… 22 Chapter Committees…………… 36New Members……………………… 26 Focus 1 View slide
  • March/April 2 0 1 2 focus/hfma Who’s Who in the Chapter 2011-2012 Chapter Website……………………………………..www.hfmanj.org Communications Committee NJ HFMA Board Members Anthony F. Consoli, Director.......................................................CBIZ Benefits & Insurance Anthony F. Consoli…………………………………………… CBIZ Benefits & Insurance Elizabeth G. Litten, Esq., Chair............................................................ Fox Rothschild LLP Laurie Grey……………………………………………… Princeton Healthcare System Al Rottkamp, MBA, Vice Chair............................... Princeton Healthcare System/Aramark Scott Mariani………………………………………………WithumSmith + Brown, P.C. Steve Aaron.....................................................................................ARC Group Associates Darlene Mitchell………………………………………… Hunterdon Healthcare System Mark Dougherty, FACHE......................................................... Energy Systems Group, LLC Michael Ruiz De Somocurcio – Associate Board Member………………… Amerihealth Laura Hess, FHFMA ............................................................................................. NJHFMA Roger Sarao, CHFP – Ex-Officio………………………… New Jersey Hospital Association John Manzi................................................................. Panacea Healthcare Solutions, LLC Diana Sessions – Associate Board Member………………………………… Accenture Rhonda Maraziti......................................................................WithumSmith + Brown, P.C. Nicole K. Martin, MPH, Esq........................................................ Somerset Medical Center Deborah E. Shapiro, MBA………………………………………………… WFS Services William McCann................................................................................................. Healthfirst Stella Visaggio, FHFMA, CPA………………………………… Hackettstown Regional MC David A. Mills....................................................................................... Deloitte Consulting Heather Weber…………………………………………………………… ParenteBeard Amina Razanica..............................................................New Jersey Hospital Association Dan Willis ……………………………………………… Children’s Specialized Hospital James A. Robertson, Esq............................McElroy, Deutsch, Mulvaney & Carpenter, LLP Roger D. Sarao, CHFP.................................................... New Jersey Hospital Association NJ HFMA Chapter Officers NJ HFMA Advisory Council President, Michael Alwell, FHFMA ................................... Saint Michael’s Medical Center Mary T. Taylor, MBA, FHFMA ............................................ Southern Ocean Medical Center President-Elect, John Brault, FHFMA ....................................................McBee Associates Brian P. Sherin, MBA, FHFMA………………………………………… Besler Consulting Treasurer, David J. Wiessel................................................................... Ernst & Young, LLP Joseph J. Dobosh, Jr., MBA …………………………… Children’s Specialized Hospital Secretary, Tracy Davison-DiCanto, FHFMA, MBA....................Princeton Healthcare System Cheryl H. Cohen, MBA, FHFMA…………………………………………Pantheon Capital Advertising Policy/Annual Rates The Garden State “FOCUS” reaches over 1,000 healthcare professionals in various fields. If you have a product or service you would like the healthcare financial industry to know about, please take advantage of this great opportunity! Contact Laura Hess at 888-652-4362 to place your ad or receive a copy of the Chapter’s advertising policy. The Publications Committee reserves the right to refuse any ad not consistent with the overall mission of the Chapter. Inclusion of an ad in this Newsmagazine does not infer endorsement of the product or service by the Healthcare Financial Management Association or the Publications Committee. Neither the Healthcare Financial Management Association nor the Publications Committee shall be responsible for slight variations in production quality of published advertisements. Effective July 2006 Rates for 6 bi-monthly issues are as follows: Display Full Page Half Page Quarter Page Back Cover – Full Page Color $4,600 NA NA Inside Back & Front Covers – Full Page, Color $4,350 NA NA First Inside Ad – Full Page, Color $4,250 NA NA First Inside Ad – Full Page, Black & White $3,450 NA NA Inside Ad – Color $3,450 $2,600 NA Inside Ad – Black & White $2,150 $1,450 $875 Center Spread – 2 Full Pages, Color $5,900 NA NA Center Spread – 2 Full Pages, Black & White $3,800 NA NA NEW! Web Ads are available to our FOCUS advertisers – $250 for 3 months Ads should be submitted as print ready (CMYK) PDF files along with hard copy. Payment must accompany the ad. Deadline dates are published for the Newsmagazine. Checks must be payable to the New Jersey Chapter - Healthcare Financial Management Association. EDITORIAL POLICY DEADLINE FOR SUBMISSION OF MATERIAL Opinions expressed in articles or features are those of the author(s) and do not necessarily reflect Issue Date Submission Deadline the view of the New Jersey Chapter of the Healthcare Financial Management Association, or the January/February December 15 Communications Committee. Questions regarding articles or features should be addressed to the author(s). The Healthcare Financial Management Association and Communications Committee March/ April February 15 assume no responsibility for the accuracy or content of any articles or features published in the May/June April 15 Newsmagazine. July/August June 15 The Communications Committee reserves the right to accept or reject contributions whether September/October August 15 solicited or not. All correspondence is assumed to be a release for publication unless otherwise indi- November/December October 15 cated. All article submissions must be typed, double-spaced, and submitted as a Microsoft Word document. Please email your submission to:IDENTIFICATION STATEMENT Elizabeth G. Litten, Esq. elitten@foxrothschild.com Garden State “FOCUS” (ISSN#1078-7038; USPS #003-208) is published bimonthly by the New JerseyChapter of the Healthcare Financial Management Association, c/o Elizabeth G. Litten, Esq., Fox Rothschild, REPRINT POLICYLLP, 997 Lenox Drive, Building 3, Lawrenceville, NJ 08648-2311 The New Jersey Chapter of the HFMA will not reprint articles published in Garden State FOCUS Periodical postage paid at Trenton, NJ 08650. POSTMASTER: Send address change to Garden State Newsmagazine. Individuals wishing to obtain reprint authorization must obtain it directly from the“FOCUS” c/o Laura A. Hess, FHFMA, Chapter Administrator, Healthcare Financial Management Association, author(s) of the article. The cover of the FOCUS may not be used in the reprint; however, the reprintNJ Chapter, P.O. Box 6422, Bridgewater, NJ 08807 may note that the article was published in a specific issue. The reprint may not imply endorsementOBJECTIVE by the HFMA, directly or indirectly. Our objective is to provide members with information regarding Chapter and national activities,with current and useful news of both national and local significance to healthcare financial profes-sionals and as to serve as a forum for the exchange of ideas and information. 2 F o c u s View slide
  • March/April 2 0 1 2 The President’s View . . . There has certainly been quite a lot of activity within the chapter over the past couple ofmonths. January saw the beginning of the Basic Financial Management Series. This six week,evening program was designed to provide members with a deeper understanding of variousaspects of healthcare finance (Contract Management, Disbursements, Budgeting and Fore-casting, and Revenue Cycle) while at the same time preparing the attendees to sit for theHFMA Certification exam. What made this program truly unique was the fact that attendeeswere given the opportunity to attend the sessions at their choice of a northern or southern NewJersey facility with the locations connected via video-conference thanks to ARMDS. On February 21st the New Jersey chapter sponsored a webinar entitled Keys to anEffective Denial Management Strategy. This program was presented in collaboration withthe Pennsylvania HFMA Chapters as part of a regional webinar series. The program was very Mike Alwellwell received and was attended by more than 175 people in New Jersey and Pennsylvania. February was also the month for our annual Medicare Cost Report Preparation Course and Medicare Hot Topics Update.This was another very successful program that received high ratings from all who attended. In collaboration with the Health Information Management Association, the CARE (Compliance, Audit, Risk, and Ethics)Forum presented their annual educational session, Compliance Challenges for Today, Tomorrow and Beyond: Staying AheadWhile Implementing Reform, on March 13th. This program drew close to 200 people, the largest attendance in at least the lastfour years. I have to give all of the credit for the tremendous success of this program to the quality of the agenda and all of the hardwork and planning that went into it on the parts of Mike McKeever, Nadinia Davis and the entire CARE Committee with EllenShakespeare, Mary Sottile, and NJHIMA. I’m also very happy to report that a recent HFMA member satisfaction survey showed that 69% of the respondents were highlysatisfied with the value of their membership. The survey did identify that there is a need to provide additional programs and activitiesin south New Jersey, provide some additional focus on Revenue Cycle, and make some improvements to Chapter communications. I had mentioned in my first President’s View letter that “…to show excellence to the membership the chapter must listen to itsmembers and respond to their needs…” I can promise that the board began to address all of these recommendations as soon as thesurvey results became available. The FACT (Finance, Accounting, Capital, and Tax) Forum has already planned two half day education sessions for the end ofApril focusing on HealthCare Reform and Other Hot Topics. One session will be presented at the Barnabas Health CorporateOffices in West Orange, and the second will be in south Jersey at AtlantiCare in Egg Harbor Township. The new Revenue Integrity Forum will be holding a day long education session on revenue cycle management issues in June.The program will address topics such as ICD-10 implementation, facility E&M charging, Cardiology and Interventional RadiologyCost, Quality & Reimbursement, and much more. The day will end with a quiz show complete with prizes for the lucky winners. In response to feedback from the survey, the Board is also already looking into possible improvements to the Chapter’s websiteand the on-line version of the Garden State Focus as well as increasing the use of social networking (yes, the chapter already has aLinkedIn Group and a FaceBook page). Enjoy the spring. I hope to see everyone on May 10th at the NJ HFMA Golf Outing.Michael Alwell Focus 3
  • March/APril 2 0 1 2 From The Editor . . .Dear Readers: New Jersey and most of the northeast has experienced a mild winter, but the longer daysand flowering trees are just as welcome as they are after a cold, snowy winter. The arrival ofspring reminds me that a new Chapter year will soon be upon us, providing us with anotheropportunity to celebrate Chapter successes and assess opportunities for improvement.In particular, Chapter President Mike Alwell’s letter notes that we are looking to makeimprovements to our Chapter communications and website. Please know that the Communications Committee reviews the results of the membersatisfaction survey very closely, and we want to make sure our readers (some of you – andyou know who you are – did not respond to the survey) have the opportunity to provide Elizabeth G. Littenfeedback as to how we can improve our communications with you. Of the 154 Chaptermembers who responded to the survey, 35 members submitted specific comments as to how the Chapter can improve. Severalof the commenters submitted multiple comments, such that there were approximately 45 or so individual suggestions related topossible improvements. Only 1 of these comments related to the website (a commenter stated it is not as user-friendly as it couldbe), and only 1 related to FOCUS (the comment was that it should be sent electronically). An additional 17 commenters offered “other” comments for the Chapter. Only 3 of these “other” comments were negativeor suggested improvements, and the other 14 comments were positive or very positive. Two of the positive comments relatedspecifically to communications: one member noted that “the chapter is doing a great job communicating”, and another stated,“I do like to get the e-mails that keep me aware of what is going on in health care. Thank you for that.” Still, the Communications Committee is constantly looking into ways to improve, and we welcome your feedback on thefollowing specific questions: 1. Do you view the mailed copy of the FOCUS magazine as: (i) a key member benefit; (ii) an incidental (nice or OK, but not necessary) member benefit; (iii) of no benefit to you as a member; or (iv) an annoyance. 2. Should the Chapter make the magazine available only on the Chapter website, and discontinue sending printed copies ofthe magazine? Should the Chapter email digital copies of the magazine? Please email Laura Hess at hfmanj@aol.com with your answers and any other comments you may have regarding FOCUSand our website.Regards,Elizabeth G. LittenEditor4 F o c u s
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  • Finan Financial i Incen Incentives or Ene For Energy cien Efficiency With generous incentives from NJ SmartStart Buildings, we were easily able to afford the replacement of our inefficient, outdated lighting with high efficiency options that have drastically reduced our electric bills. Energy Smart. Bottom Line Brilliant! FINANCIAL INCENTIVES AVAILABLE New Jersey’s Clean Energy Program offers an extensive collection of comprehensive initiatives that make energy efficiency more accessible than ever. You’ll save up front through sizeable financial incentives and down the line with dramatically reduced utility bills. To get your share, visit NJCleanEnergy.com/BIZ or call 866-NJSMART to speak to a representative. NJ SmartStart Buildings® is a registered trademark. Use of the trademark without permission of the NJ Board of Public Utilities is prohibited. 11-T1-339 Garden State Focus 7.3125x9.5625.indd 1 5/3/11 2:59 PM6 F o c u s
  • March/April 2 0 1 2American HospitalAssociation ReleasesResults of the 2009Schedule H Project by Scott J. Mariani, JD and Allison S. Kimowitz, CPA Scott J. Mariani The American Hospital Association (“AHA”), with the suburban or rural) based onassistance of Ernst & Young, LLP, undertook a project to zip code and hospital typeanalyze the different ways hospitals are serving their com- (general medical/surgical, child-munities based upon recent tax return filings. When the ren’s, teaching or critical access)Internal Revenue Service (“IRS”) revised the Federal Form 990 based on the facility response.starting with 2008 tax returns, they included Supplemental For purposes of this project,Schedule H, Hospitals. This schedule serves to report a the single hospitals were cate-hospital’s benefit to the community through both reporting gorized by size as follows:financial information based upon costs and answering ques- • a small hospital had lesstions with narrative responses. Schedule H allows a hospital than $100 million of totalto “tell its story”. The IRS granted hospitals transitional relief hospital expenses; Allison S. Kimowitzin the first year of the new Form 990, making only Part V,Facility Information, mandatory to complete. However, for • a medium hospital had $100 million to $299 million of2009 tax returns, all licensed tax-exempt hospitals were re- total hospital expenses;quired to complete all six parts of Schedule H. • a large hospital had $300 million or more of total hospital expenses;Responding Hospitals and Systems, by Size, Location and Using the size category criteria outlined above, the 477Type individual hospitals were categorized as follows: A total of 571 Schedule Hs were utilized in the project; 477individual hospitals and 94 healthcare systems (“systems”). • 172 small hospitalsThe information was gathered in two phases; one for calendar • 185 medium hospitalsyear taxpayers and one for fiscal year taxpayers. During phase • 120 large hospitalsone, 349 Schedule Hs were collected and 222 Schedule Hswere collected in the second phase. The 94 system responses The Resultsrepresented approximately 400 hospitals. Thus, the results On average, overall, the participating hospitals and systemsof the project represent approximately 900 hospitals or 30 report 11.3 percent of their total annual expense as a benefit topercent of the total hospitals that are required to complete the community. The 11.3 percent is comprised of the followingForm 990, Schedule H annually. These hospitals and systems categories: 8.4 percent represents total charity care, means-are representative of thirty-five different states throughout the tested government programs and other benefits; 2.4 percentUnited States. represents Medicare shortfall; 0.4 percent represents bad debt Data was gathered on all six parts of the Schedule H and expense attributable to charity care and 0.1 percent representsthe results were divided into different segments. Systems were community building activities. For purposes of this project,separated from individual hospitals due to the fact that cer- benefits to the community include charity care, Medicaidtain system hospitals may fall into different categories. underpayments, community health improvement programs,Single hospitals were categorized by size (small, medium health research and education, subsidized services, bad debtor large) based on total hospital expense, location (urban/ continued on page 9 Focus 7
  • March/April 2 0 1 2 Save the Date! Annual NJ HFMA Golf Outing May 10, 2012 Fiddler’s Elbow Country Club Far Hills, NJ Sponsorship opportunities are available. Contact Laura Hess at NJHFMA@aol.com8 F o c u s
  • March/April 2 0 1 2continued from page 7expense attributable to charity care, Medicare shortfall, and represents subsidized health services; 0.1 percent representscommunity building activities. medical research and 0.1 (approx, rounded down) percent represents cash and in-kind contributions to communityCharity Care, Means-Tested Programs, and Other Benefits groups. Schedule H, Part I, Financial Assistance and Certain OtherCommunity Benefits at Cost was analyzed for all participants. Large HospitalsThe information shows that the 8.4 percent was the overall The 9.8 percent is comprised of the following: 5.7 percentaverage of expenses attributable to “community benefit” under represents charity care, unreimbursed Medicaid, and otherthe definition adopted by the IRS and reported on each hos- unreimbursed costs from means-tested government programs;pital’s respective Schedule H, Part I. The 8.4 percent is com- 0.5 percent represents community health improvement;prised of the following: 5.7 percent 1.6 percent represents health pro-represents charity care, unreim- fessions education; 0.7 percent repre-bursed Medicaid, and other unreim- Under the Patient Protection and sents subsidized health services; 0.9bursed costs from means-tested Affordable Care Act enacted percent represents medical researchgovernment programs; 0.5 percent and 0.4 percent represents cash andrepresents community health im- on March 23, 2010, the IRS in-kind contributions to communityprovement; 0.8 percent represents must review the Form 990, groups.health professions education; 0.8percent represents subsidized health Schedule H for every filing Systemsservices; 0.3 percent represents tax-exempt hospital at least The 9.3 percent is comprised ofmedical research and 0.3 percent the following: 5.8 percent representsrepresents cash and in-kind contri- once every three years. charity care, unreimbursed Medi-butions to community groups. caid, and other unreimbursed costs The average of expenses attrib- from means-tested government pro-utable to “community benefit” under the definition adopted grams; 0.5 percent represents community health improvement;by the IRS and reported on each hospital’s respective Schedule 1.2 percent represents health professions education; 0.7H, Part I was further reported by hospital size. The report percent represents subsidized health services; 0.5 percentshows that small hospitals reported an average community represents medical research and 0.6 percent represents cashbenefit percentage of 7.3 percent, medium hospitals reported and in-kind contributions to community groups.8.0 percent, large hospitals reported 9.8 percent and systemsreported 9.3 percent; respectively. The hospital size categories Federal Poverty Guidelines to Determine Free andand respective community benefit categories which total to Discounted Carethese percentages are as follows: Hospitals frequently utilize Federal Poverty Guidelines (“FPG”) issued annually by the Department of Health andSmall Hospitals Human Services to determine free and discounted care The 7.3 percent is comprised of the following: 5.7 percent to their patients. The results indicated that 96 percent ofrepresents charity care, unreimbursed Medicaid, and other hospitals in each size and location categories use FPG to determine eligibility for free care, with 99 percent of largeunreimbursed costs from means-tested government programs; hospitals utilizing them. The data also shows that 88 percent0.3 percent represents community health improvement; 0.2 of hospitals in each of the size and location categories usepercent represents health professions education; 1.0 percent FPG to determine eligibility for discounted care.represents subsidized health services; 0.0 percent representsmedical research and 0.1 percent represents cash and in-kind Bad Debt Expensecontributions to community groups. Estimates of bad debt expense attributable to charity care were completed by greater than 70 percent of theMedium Hospitals participants. The average bad debt expense attributable to The 8.0 percent is comprised of the following: 5.8 percent charity care reported was 0.4 percent of total expenses orrepresents charity care, unreimbursed Medicaid, and other approximately $1.6 million per participant. A majority ofunreimbursed costs from means-tested government programs; hospitals and systems reported that a portion of their bad0.5 percent represents community health improvement; 0.6 debt expense would qualify as a benefit to the communitypercent represents health professions education; 0.9 percent continued on page 10 Focus 9
  • March/April 2 0 1 2continued from page 9as charity care if these individuals provided certain necessary Summaryfinancial information. The project report is useful as it shows information based upon the initial complete filing of Form 990, Schedule H.Medicare Surplus and Shortfall We must remember that this information is based upon More than 75 percent of the respondents reported a only 900 of approximately 2,900 not-for-profit hospitalsMedicare reimbursement shortfall. Shortfall is when the nationwide; approximately thirty percent. Therefore, thisFederal government reimburses hospitals at less than their costs information and the averages reported herein may varyfor treating Medicare-qualifying patients. Of the respondents from those hospitals who elected not to participate. Inreporting a shortfall, 27 percent of them reported having a addition to the project results, the IRS instructions are ashortfall greater than six percent of their total expenses. good, comprehensive starting point when preparing your Both bad debt and Medicare shortfall (or surplus) are organization’s Schedule H. Please note that as Schedulereported in Part III of Schedule H. In this part of Schedule H is still in the early stages of development, there are stillH the IRS also asks hospitals to describe why bad debt and many gray areas with respect to whether a hospital program,Medicare shortfall constitutes community benefit. Most department or activity may be considered “communityhospitals participating in the AHA project described their benefit” for purposes of Form 990, Schedule H.rationale for inclusion. Reasons given included: Under the Patient Protection and Affordable Care Act • Under IRS Revenue Ruling 69-545, the promotion of enacted on March 23, 2010, the IRS must review the Form health is evident when a hospital serves patients with 990, Schedule H for every filing tax-exempt hospital at least Medicare and other government health benefits. once every three years. In addition, the Secretary of the Treasury must report the comparative levels of the charity • Hospitals are lessening the burden on the government care for these hospitals annually to Congress and complete a by providing medical assistance to individuals eligible Congressional study every five years to report the trends over for Medicare. Under the recently issued IRS Notice this time period. As a result, further guidance from the IRS 2011-20, this act of treating patients under Medicare and the Department of Treasury in the future with respect to was deemed a charitable purpose. Schedule H and community benefit is likely.Community Building Activities About the authors The participating hospitals and systems indicated that they Scott J. Mariani, JD, is a Partner at WithumSmith+Brown,spend only 0.1 percent of their total expenses on community Certified Public Accountants and Consultants, and is also abuilding activities. These activities include, but are not limited Practice Leader of the firm’s Healthcare Services Group. Scott canto, making cash or in-kind donations to programs addressing be reached at smariani@withum.com.health problems or participation on the state Board of Health,universities and schools, regional health departments and com- Allison S. Kimowitz, CPA, is a Senior Accountant atmunity relations committees in the community. WithumSmith+Brown, Certified Public Accountants and Con- sultants, and is a member of the firm’s Healthcare Services Group. Allison can be reached at akimowitz@withum.com. Dont let your HFMA membership lapse! Be sure to renew at www.hfma.org.10 F o c u s
  • To assist our health care facilities clients who may be experiencing severe financial pressure, members ofthe Norris McLaughlin & Marcus Health Care and Creditors Rights & Bankruptcy Practice Groupsformed a team to help financially troubled health care facilities. Services provided by the Group include:• Serve as counsel and health care consultants to troubled health care facilities and institutions considering filing for reorganization or liquidation under the federal Bankruptcy Code or state insolvency laws• Provide advice and counsel to entities seeking to take over targets which are financially troubled health care facilities and institutions• Analyze and advise new venture capital groups involving the takeover and mergers of financially troubled health care facilities and institutions• Serve as regulatory and litigation counsel, and regulatory consultants, to hospitals and their affiliated corporations, hospital medical staffs and medical staff members, nursing homes and other long-term care facilities, professional practices and other providers of health care services• Assist health care facilities that are the target of federal program fraud investigations, whistle-blower actions, and other federal and state compliance actions which may involve emergent criminal and civil defense support• Accept appointments by the Bankruptcy Judges in the District of New Jersey, the Commissioner of the New Jersey Department of Health and Senior Services, and New Jersey Chancery Judges to serve as Trustees, Assignees for the Benefit of Creditors, Rehabilitators for New Jersey and New York health care facilities and institutions Financially Troubled Health Care Facilities Group J. Anthony Manger Matthew R. Sorrentino Gary N. Marks Bruce J. Wisotsky Ira S. Novak Morris S. Bauer Sandra Jarva Weiss Larry K. Lesnik Please visit our web site for more information on our Health Care Law Group www.nmmlaw.com New Jersey • New York • Pennsylvania P: (908) 722-0700 • F: (908) 722-0755 A full-service law firm serving the health care community for over 50 years. Focus 11
  • March/April 2 0 1 2ICD-10 and EMR Impacts onan Organization by Keith Fulmer, MHSA, PMP We are in the midst of unprecedented change in the EMR – may take focus awayhealthcare industry. The entire healthcare coding structure from beginning the ICD-and logic is changing from ICD-9 to ICD-10 and so must 10 implementation process,every financial, clinical and operational IT system that touches experts agree that healthcare Keith Fulmerthese codes. Additionally, the federal government has paid organizations need to havemore than $3 billion to U.S. hospitals and doctors’ offices in the assessment process under way. Without an assessment,the process of switching to electronic medical records (EMR). organizations cannot budget accordingly, and the costWhile both proponents and critics agree that ICD-10 and is higher than many may think. In a 2011 survey byEMRs will ultimately lead to improved patient care, there is HealthLeaders Media,2 32 percent of healthcare organizationfar less concurrence on the timetable, approach and estimated who had completed a financial assessment expected to spendbudgets for these large projects. up to $1 million to prepare, while just 9 percent estimated a Perhaps the most heated debate centers around timing of cost between $1.1 million and $5 million. Fast-forwarding toICD-10 implementation efforts. The recent announcement the present, 19 percent of respondents to the recent HIMSSby Centers for Medicare & Medicaid Services (CMS) that Leadership Survey said their organization had already spentthe date for ICD-10 implementation will be postponed more than $1 million on the conversion to ICD-10.beyond Oct. 1, 2013, has prompted a number of unintended Not only is there varied and eye-opening speculation onconsequences. Waiting until a new date has been identified, the total cost of implementation, but the amount of employeeif one is identified, will further strain resources and tim- training and IT systems to be remediated can be staggering.ing. A Healthcare Information and Management Systems A comprehensive ICD-10 readiness assessment3 on a 293-Society (HIMSS) member survey suggests that any delay in bed hospital in Pueblo, CO, helped the CEO identify thethe implementation of ICD-10 could result in additional length of time, budget and amount of resources required forprovider costs. Examples of these costs include maintaining the implementation preparation and “go live” phases. Thetwo separate systems, retaining the services of consultants medical center had initially identified six IT systems thatfor longer than anticipated and re-training staff. That is on would be impacted in addition to the planned MediTechtop of multi-million dollar financial investments that have 6.0 upgrade. The hospital also was planning for the trainingbeen budgeted to meet the ICD-10 deadline.1 Delaying needs of their coding, clinical documentation improvementprogress and disbanding project teams will result in lost (CDI), health information management (HIM), as well astribal knowledge, talent and jobs as they look for other billing and medical staff. In actuality, the readiness assessmentopportunities within the market. This will further strain conducted by an outside vendor revealed that 27 IT systemsthe talent pool when the new date is set and once again would require remediation and testing. Additionally 35,000healthcare organizations are racing toward the same dead- personnel hours – including 15,000 education hours – wouldline. ICD-10 implementation will still be the same volume be required. The conversion would directly impact 1,084 ofof work, regardless of a delayed deadline, and is still expected the hospital’s employees and physicians, including the humanto take 18+ months. HIMSS urges maintaining the existing resources department, trauma registry, and diabetes anddeadline of October 1, 2013 for most providers. Delaying wound care clinics, many of which were never anticipated inthe inevitable may give facilities a cushion – which can be the hospital’s initial estimate.critical for those hospitals who haven’t even completed an While the 2015 implementation deadline for EMR holdsICD-10 readiness assessment of primary functional areas like solid, there are varied approaches suggested by industry con-IT, revenue cycle, operations. However, there is still a drain on sulting firms. Several best practices, commonly seen include:talented professionals and experienced consulting partners. • Analyze and redesign workflows Organizations will needWaiting will only make those resources more scarce. to realign and standardize procedures across the organ- While competing priorities – like meaningful use for ization to accommodate the new technology. It is vital12 F o c u s
  • March/April 2 0 1 2 to evaluate bad processes and correct them prior to division. His ICD-10 experience includes establishing the Kforce implementation to avoid simply proliferating and auto- ICD-10 Consulting Practice as well as defining and developing the mating bad processes. ICD-10 Assessment and Implementation methodology. Keith serves on the Board of Directors for a local Healthcare Services company and • Provide multiple and varied training opportunities An holds a Master of Health Services Administration. He is also certified effective training plan will ensure maximum utilization through the Project Management Institute as a Project Management Pro- once the EMR system is up and running. While a formal fessional (PMP). Fulmer can be reached at HealthcareSolutions@kforce. training plan is the first step, a refined training plan based com. For more information, please visit www.kforce.com/Healthcare- on the roles of each user group offers a specific perspective Solutions. on real-life, day-to-day activities. • Identify and train super users Super users act like “per- Footnotes sonal trainers” and complete rounds with physicians, as 1 Boeke, E. HIMSS Calls for Maintaining October 1, 2013 well as station themselves at each patient unit, to assist ICD-10 Implementation Deadline for Most Healthcare Entities with questions or system procedures. Retrieved Feb. 21, 2012, from http://press.himss.org/article_ display.cfm?article_id=5388 The proliferation of EMRs and implementation effortsfor ICD-10 will no doubt continue, but at what pace? A 2 Minich-Pourshadi, K. ICD-10 Puts Revenue at Risk, Health-survey by the American Hospital Association (AHA) found Leaders Media, July 2011that 35 percent of U.S. hospitals are using electronic healthrecords, up from 16 percent in 2009, and 85 percent have 3 Kforce Healthcare Solutions, ICD-10 Transition: Parkviewsaid they intend to apply for incentive payments for using the Medical Center Case Study, Retrieved Feb. 21, 2012, fromtechnology by 2015.4 Many large providers, hybrids and http://www.kforce.com/ICD-10/ICD-10-Case-Study.aspxacademic medical centers are well on their way to meeting 4 Twiddy, D. Sebelius: $3B paid in electronic health recordthe current ICD-10 deadline of Oct. 1, 2013, and have signifi- incentives, Kansas City Business Journal, February 17, 2012.cant investment made in both permanent and temporarystaffing to support these projects. Also, many vendors areworking hard to get their systems ready for ICD-10 and haveestablished plans to complete prior to October 2013. How-ever, it is human naturefor people to use all thetime they have availableto complete a task or pro-ject. Hopefully, organi-zations will heed warn-ings from experts likeHIMSS and the Ameri-can Health InformationManagement Associa-tion (AHIMA) and con-tinue working toward theOctober 2013 deadline.About the authorKeith Fulmer has more than20 years’ experience in Infor-mation Technology and Con-sulting. He has successfullyintegrated Kforce ClinicalResearch and Health Infor-mation Management opera-tions within Kforce Inc.’sHealth and Life Sciences Focus 13
  • March/April 2 0 1 2Keys to Effective DenialManagement by Michael Sowinski Estimates show denied claims represent over 13% of gross gether, however, this problem isrevenue for providers nationwide. Some studies suggest that easily and clearly worth resolv-over 90% of those denials were preventable and nearly 70% ing given the amount of rev-could be overturned. An additional 6% of gross revenue was enue at stake.lost to underpayments. These numbers are staggering when 4) Considering how deniedyou combine lost revenue as a result with the high cost associ- Michael Sowinski accounts are assigned toated with resolving these denials. follow-up staff To face this challenge, providers must have an effective Too often the focus on resolving EVERY denial resultsstrategy in place to identify denials, manage their resolution in chasing hundreds of low-balance denials while sacrificingand analyze root cause to facilitate prevention of future de- valuable resources who could be working on resolving collect-nials. Some keys to an effective denial management strategy ible denials. Make sure follow-up assignments are reasonable.include: If a follow-up work queue has 2,000 denied accounts in it,1) Capturing all remittance information necessary for de- the likelihood of staff always working on the most importantnial management account will be pretty low, and the likelihood of timely follow- A primary source of denial information is the payer remit- up on all 2,000 denied claims is even lower. There are alwaystance advice (RA). Many providers focus on payment posting exceptions that require judgment, however, consider filteringfrom the RA and neglect to capture all of the information follow-up work queues to include a smaller number of highcritical for effective denial management. For denial follow-up, priority accounts. Also, consider setting a threshold (based onit is important to capture and categorize all payer reason and cost to collect or other defined criteria) for automating low-remark codes. balance write-offs on denials, eliminating those accounts from2) Paying attention to payers who provide hard copy re- work queues.mittance reports 5) Automating or streamlining follow-up activity To maximize collections, providers must manage denials Efficiency is the key to maximizing recoveries. Follow-upfor 100% of their payer mix. Payers who cannot provide elec- staff should have tools to save them time, allowing them totronic remittance advice (ERAs) typically represent around work and resolve more accounts. Some examples:15% of total revenue, and many providers feel that the cost of • Payer-specific appeal letter templates that can be auto-capturing denial information from a hard copy remittance re- filled with account-level information like Patient Name,port is just too high to chase such a low percentage of revenue. PCN, MRN, DOS, Denial Reason Codes, etc.A simple cost/benefit analysis will likely reveal that the cost • Write-off authorization tools to streamline the requestof capturing denial information from a hard copy remittance and approval processreport is easily outweighed by the denial recovery opportunity, • Canned follow-up actions and notes to prevent staffand the opportunity to identify and prevent future denials. from wasting valuable time typing the same thing over3) Identifying and managing underpayments and over again If your denial management process does not identify and • Quick access to view and/or print the EOB and the de-manage underpayments, you may be losing up to 6% of your nied claimannual gross revenue. Managing underpayments is frequently • Automated alerts that notify users when a prior follow-overlooked as part of a denials management strategy. First, you up action has not resolved the denial within the desig-can qualify partial payment denials from remittances by look- nated period of timeing for specific reason codes to identify charge-level denials. 6) Tracking and analyzing the outcome of denial follow-upSecond, it is critical to identify payment variances by compar- Make sure the outcome of each resolved denial is clearlying remittance paid amount to the expected payment amount. identified. Analyze outcomes and educate staff to evaluateThis can be challenging if HIS systems, contract management processes that historically have not been successful overturn-systems and denial management systems don’t work well to- continued on page 16 Focus 15
  • March/April 2 0 1 2continued from page 15ing denials. If sending the same appeal letter to the same payer can make business decisions to facilitate prevention. Studiesfor the same denial reason on 100 different claims has not suggest that almost 80% of denials are Patient Access errors,overturned any denials, consider creating a new follow-up but if the cause is unknown, staff may not be solving the rightplan for that denial reason. problem. It is worth the effort to evaluate and assign root7) Identifying root cause and focusing on prevention cause to denials which includes identifying trends and taking Increasing denial recovery rate is good. Decreasing initial steps to prevent future denials.denial rate is better! The key to prevention is in identifying 8) Setting and tracking financial and operational perfor- Risk Ad_3 7/11/11 5:16 PM Page 1the root cause. When providers understand root cause, they mance goals Dashboard-style reporting tools are very helpful to communicate performance met- rics throughout the organization and to We know the risks manage performance. Important denial per- formance metrics include: initial denial rate, recoveries on denials and underpayments, rate of appeals overturned, monthly denial trends by payer and error type, denial out- comes by payer and error type. These tips are some of the keys to a com- prehensive and effective denials manage- ment strategy. Combining these eight tactics with a strong denial management solution like Emdeon Denial Manager will simplify execution of this strategy. Emdeon Denial Manager optimizes efficiencies in each of these areas to help you reduce your collec- tion costs and A/R days, while improving your recoveries and cash flow. About the Author Michael Sowinski is an Account Executive for Institutional and Large Providers with Emdeon. He can be reached at: msowinski@ emdeon.com. We have the solutions Emdeon is a leading provider of revenue and payment cycle management and clinical infor- mation exchange solutions, connecting payers, New Jersey’s Leading providers and patients in the U.S. health- care system. Interested in learning more about Hospital/Healthcare Insurance Broker these eight strategies for effective denial man- We provide our clients with the best combination agement or finding out where the industry is headed with Denial Management applica- of coverage, pricing and risk management. tions? Find out more information by visiting Emdeon online at www.emdeon.com/denial- William H. Connolly & Co., LLC manager/. Insurance and Risk Management Source for all statistics in article: The 56 Park Street / Montclair, NJ 07042-2999 Healthcare Advisory Board Tel: 973.744.8500 Fax: 973.744.6021 www.whconnolly.com16 F o c u s
  • March/April 2 0 1 2Time is Money: CMSProposes 10-Year Look-Back Period for ReturningOverpayments By Cecylia K. Hahn Cecylia K. Hahn By now, most everyone is aware of Section 6402(a) of the overpayment to the Secretary and inform of the reasonthe Affordable Care Act (“ACA”), which was signed into for the overpayment.2 This requirement will be implementedlegislation on March 23, 2010, requiring that an overpay- through the existing voluntary refund process. Providersment be reported and returned by the later of – (1) the date will report overpayments using an appropriate form fromwhich is 60 days after the date on which the overpayment a Medicare contractor, an intermediary. The purpose ofwas identified; or (2) the date any corresponding cost report the form is to identify the claim to CMS. Additionally, theis due, if applicable. On February 16, 2012, the Centers for provider is burdened with the requirement to inform CMS ofMedicare & Medicaid Services (“CMS”) proposed new rules the following information:to implement this requirement. The new rules will expand 1. How the error was discovered;the power of CMS to recover overpayments, contributingto paying for of the expensive ACA, while simultaneously 2. A description of the corrective action plan implementedcosting providers millions of dollars in cost-reporting to ensure the error does not occur again;expenses. 3. The reason for the refund; 4. Whether the provider has a corporate integrity agree-What is an overpayment? ment (“CIA”) with the OIG or is under the OIG Self- An “overpayment” means “any funds that a person receives Disclosure Protocol;or retains under [Medicare] to which the person, afterapplicable reconciliation, is not entitled . . . .”1 Examples of 5. The timeframe and the total amount of refund foroverpayments include: the period during which the problem existed that caused the refund; 1. Medicare payments for non-covered services; 6. Medicare claim control number, as appropriate; 2. Medicare payments in excess of the allowable amount for an identified covered service; 7. Medicare National Provider Identification (“NPI”) number; and 3. Errors and non-reimbursable expenditures in cost reports; 8. If a statistical sample was used to determine the over- 4. Duplicate payments; and payment amount, description of the statistically valid 5. Receipt of Medicare payment when another payer has methodology used to determine the overpayment. the primary responsibility for payment. Of course, along with satisfying the onerous reporting Overpayment may also result from Medicare’s overestimat- requirement, the provider must submit a refund in the amounting payments for services. Medicare may overestimate pay- of the overpayment. The slew of requirements will renderments to providers throughout the cost year with the expecta- reporting and returning of overpayments, which should be ation that those overpayments will be returned upon recon- simple and uncomplicated accounting task, a form of art.ciliation. What does “identified” mean?What are the requirements for reporting and returning The proposed regulations attempt to clarify the statute whichoverpayments? does not define when an overpayment is “identified.” Under A person who has received an overpayment must return continued on page 19 Focus 17
  • client-focused solutions Meeting the unique needs of each client Successful solutions produce a significant return on investment, fit within the client’s culture, and provide long-term benefits. McBee Associates’ creates custom solutions that address the unique needs of your facility. Our world-class consulting team carefully balances the need for both short-term fixes and long- term solutions. Create a strong foundation of financial health with our full-service consulting services, including: Revenue Cycle Enhancement—Improve billing efficiency and accuracy with the help of our knowledgeable health care finance professionals. Denial Management—Recoup revenue associated with denied claims and reduce denial rates with our successful appeals process and root-cause analysis. Revenue Recovery—Identify underpayments and recover lost revenue with our proven Revenue Data Mining services. Regulatory Compliance—Strengthen internal compliance initiatives and reduce risk with the help of our expert consulting team. Custom consulting services that meet your needs. Jeffrey Silvershein Vice President - Principal 212.594.6669 JeffreySilvershein@McBeeAssociates.com18 F o c u s
  • March/April 2 0 1 2continued from page 17CMS’ proposal, a person has “identified” an overpayment if the Financial hardship exists when the total amount of outstandingperson has actual knowledge of the existence of the overpayment overpayments is 10 percent or greater than the total Medicareor acts in reckless disregard or deliberate ignorance of the payments made for the cost reporting period: (1) covered byoverpayment. CMS believes defining “identification” in this way the most recently submitted cost report, or (2) for the previousgives providers an incentive to exercise reasonable diligence to calendar year for a non cost-report provider.3determine whether an overpayment exists. However, provider beware: failure to report or return an CMS has provided examples of when a provider might act overpayment may give rise to liability under the False Claimsin reckless disregard or deliberate ignorance. In some cases, Act and the Civil Monetary Penalties Law.a provider may receive informationconcerning a potential overpay- What is the look-back period?ment that creates an obligation Provider beware: The proposed regulations extendto make a reasonable inquiry failure to report or return the look-back period for reportingto determine whether an over- an overpayment may give overpayments from 4 years 10payment exists. Failure to con- years.4 However, not surprisingly,duct such inquiry could result in rise to liability under the the proposal is silent as to whetherthe provider knowingly retaining False Claims Act and the the new 10-year look-back periodan overpayment. A provider may begins immediately or whether it Civil Monetary Penalties Law.be required to make a reasonable will be applied prospectively. Expectinquiry when, for example: the proposed look-back period to be 1. A provider receives an anonymous tip of an overpayment applied from the date the regulations from a compliance telephone hotline; are adopted. After all, all is fair in love, war, and regulating Medicare. 2. In reviewing records, a provider determines a service was Comments to the proposed rules must be received by 5 improperly coded, resulting in an increased reimburse- p.m. on April 16, 2012. ment; 3. A provider learns a patient died prior to the service date About the Author on a claim submitted for payment; Cecylia K. Hahn is an associate with the health care practice of 4. A provider learns an unlicensed or excluded individual McElroy, Deutsch, Mulvaney & Carpenter, LLP, a 300-attorney provided a service; firm with ten offices in New Jersey, New York, Connecticut, Mas- sachusetts, Pennsylvania, Delaware, and Colorado. As of July 1, 5. An internal audit reveals overpayment(s); 2011, Kalison, McBride, Jackson & Robertson, P.C. has consoli- 6. A government agency advises a provider of a potential dated its health care practice with McElroy, Deutsch, Mulvaney overpayment; and & Carpenter, LLP. 7. A provider receives, for no apparent reason, a significant increase in Medicare revenue. Footnotes 1 42 C.F.R. § 414.303. If reasonable inquiry reveals that an overpayment has been 2received, the 60-day clock begins to run from that revelation. Id. at § 401.305.There is no further guidance as to how long a provider may 3 Id. at § 401.607. Amounts included in an approved, exist-take to conduct the reasonable inquiry. Thus, the meaning of ing repayment schedule are excluded from the calculation“identified” remains elusive. pertaining to financial hardship. Id. 4 Id. at § 401.305(g).Is it possible to extend the time to return an overpayment? The 60-day deadline to return an overpayment can beextended if the provider will suffer a financial hardship. Focus 19
  • March/April 2 0 1 2Mission Possible:Finding Capital forStand-Alone Hospitals By Anthony J. Taddey and Jason Beakas Your mission, should you choose to accept it, is to find stand-alone hospitals can usecapital to renovate or replace your aging hospital at an afford- to revamp their aging plants or Anthony J. Taddeyable cost. As a stand-alone hospital that doesn’t rely on taxes, refinance existing higher costhow hard can it be in 2012? debt. Let’s find out. Median-ratios reports issued at the end of2011 for nonprofit hospitals and health systems by the “Big Mission Possible for BBB orThree” credit rating agencies–Standard & Poor’s, Fitch Rat- Belowings and Moody’s Investor Service–indicate how industry and Hospital leaders–particularlyeconomic pressures are affecting the credit ratings of hospitals. those of stand-alone, investmentThese median ratios, by offering a snapshot of the finances of and noninvestment-grade facili-all rated hospitals in their individual portfolios, help in the ties–need to be aware of whatcomparison of credits across rating categories and are used to financing options are availablepredict future sector performance. to them in order to choose the best way to fund construction,What Lies Ahead? renovations and new technolo- Year-end median reports pointed to an overall improve- gies and care-delivery methods. Jason Beakasment in performance for hospitals and health systems, but In addition to obtaining a debtpredicted challenging conditions for 2012. The Big Three rating, hospitals can consider the following routes to accesswarned of the growing pressures on the nonprofit health-care long-term, fixed-rate capital:sector with a still weak economy, selective credit markets,health-care reform uncertainties, low patient volumes and the Government-Sponsored Optionsincreasing number of uninsured/underinsured patients along • The U.S. Department of Housing and Urban Devel-with decreased reimbursement rates. These serious external opment’s FHA Sec. 242 Mortgage Insurance offersthreats continue to apply pressure on a hospital’s bottom line 100% nonrecourse debt at fixed-interest rates. Thewhile patients increasingly expect state-of-the-art facilities and maximum term is 25 years after construction comple-services that provide quality and value. tion and loan-to-value is capped at 90%, which in some On the positive side, due to a waning supply of higher cases allows the loan to cover the entire actual projectrated, investment-grade debt over the past three years, health- cost. Average operating margins must be positive andcare investors have moved down the credit spectrum in search the average debt-service-coverage ratio must be equal toof higher yields. Health-care investors’ increased risk tolerance or greater than 1.25 for the previous three years.is evident by the narrowing spread between BBB and A-rat- • The U.S. Department of Agriculture offers two pro-ed 30-year bonds as investors search for higher returns. For grams for rural hospitals–the Business & Industryexample, the spread between Healthcare Baa/BBB and A/A Program (B&I) for communities of 50,000 or less and30-year offerings was 151 basis points in January 2009. How- the Community and Facilities Program (CF) for com-ever, as of January 2012, that spread has dropped by 53.6% munities of 20,000 or less. The B&I program offers ato just 70 basis points. This has created an opportunity for maximum term of 25 years and is best suited for projectslower rated, stand-alone hospitals to reduce their cost of capi- of $10 million or less with the size of the loan guaranteetal to levels that more closely match their higher rated breth- varying between 60% - 80% depending on the loan size.ren. This landscape also requires a growing list of alternative The CF program provides direct and guaranteed loanscapital-funding options, which low- to noninvestment-grade, 20 F o c u s
  • March/April 2 0 1 2 (up to 90%) with a maximum term of 40 years. For FHA Sec. 242 in Action both programs, the guarantee is generally issued upon Electra Memorial Hospital is a critical access hospital in construction completion. northwest Texas. Challenged by a tight credit market and • The New Markets Tax Credit Program (NMTCP) rural location Electra and its lender turned to the FHA Sec. through the U.S. Department of the Treasury may 242 program to significantly renovate its 45-year-old facil- be used to finance capital projects for the health-care ity and build a new wing of private rooms. As a result of the sector. NMTCP attracts investment capital to eligible FHA mortgage insurance credit enhancement, Electra is low-income communities–rural or urban–by providing expected to increase patient volume revenues through en- investors with a tax credit against their federal income hanced patient care and added services at AA-rated equiva- tax return in exchange for making equity payments in lent cost of capital. Community Development Entities (CDEs). The tax credit, which totals 39% of the original investment Commercial Options amount, is claimed over a period of seven years. The All nonprofit hospitals and governmentally owned hospitals CDE will then make two loans to the borrower at below can issue revenue (or cash-flow supported) bonds, which market rates, which require interest-only payments for are generally ratable depending on their underlying credit the first seven years. Amortization on the loans begins characteristics. Additionally, many governmentally owned after that initial period. The borrower pays no fees and hospitals can issue general-obligation (or tax-supported) most banks will treat investor-provided equity as proj- bonds, which also may be rated. These long-term, fixed-rate ect equity, reducing the amount of equity a non-profit bonds are underwritten by a broker/dealer in a primary of- borrower needs to contribute to finance the project. Ad- fering. Depending on market conditions and other available ditionally, many states offer state tax credits in conjunc- financing options, the hospital has the ability to use addi- tion with the federal program. tional credit enhancement to further reduce its borrowing. BBB Rates Spread A Rates The tightening spread over the past three years shows that investors have moved down the credit spectrum in search for higher returns. At the same time, it illustrates a waning supply of higher rated credit due to a growing list of alternative funding options. continued on page 22 Focus 21
  • March/April 2 0 1 2continued from page 21 • A floating-rate index note may be a more preferable op- Private Placement in Action tion than a fixed-rate bond. Basically, the index floater is Fulton County Health Center, a small hospital in north- a variable-rate bond with an initial index-floater mode west Ohio, has grown to include several specialty units, or period (typically three to seven years) during which several medical clinics and a senior-living facility. FCHC, the bond pays an interest rate equal to a short-term in- in good financial standing, faced an expiring LOC with dex plus a fixed-credit spread. The bond can be a pub- a bank. A 5-year variable-rate direct purchase structure lic offering or privately placed directly with a bank and was selected. The new issue was a refunding of the earlier is subject to renewal risk at the expiration of its initial bonds plus cost of issuance. The transaction addressed the term. upcoming LOC expiration and removed the credit renewal • Private placement, a common alternative today, is when risk during the 5-year term. tax-exempt bonds are privately placed with a bank or multiple banks or with a large bond fund. These bonds Despite mixed reviews from the Big Three for the health- are negotiated with a select group of investors and dis- care sector in 2012, credit spreads have narrowed and options closure requirements can sometimes be minimized and exist for stand-alone hospitals, such as Electra Memorial and covenants made more flexible. If the private placements Fulton County, to continue to finance their growth. A good are deemed “bank qualified,” banks can deduct 80% of understanding of all the options will help you obtain the re- their costs and can pass along the savings to borrowers quired financing at reasonable terms to complete your mission. by means of a reduced interest rate. However, only $10 million in tax-exempt bonds can be designated as bank- About the Authors qualified by a debt issuer in a year. Anthony J. Taddey is a managing director with Lancaster Pol- lard and the regional manager of its Los Angeles office. He can • The Federal Home Loan Bank (FHLB) letter-of-cred- be reached at ataddey@lancasterpollard.com. Jason Beakas is an it wrap gives a borrower the means to enhance taxable- associate with Lancaster Pollard in Columbus. He can be reached debt issuances with a FHLB’s AA+ rating when an FHLB at jbeakas@lancasterpollard.com. member bank provides the underlying LOC. This means smaller local banks could provide organizations access to Reprinted with permission from The Capital Issue at investment-grade credit enhancement usually available www.lancasterpollard.com. only from larger banks. Nonprofits should still investigate FHLB LOCs because tax-exempt debt is not providing the cost break it has in the past. Also, taxable bonds re- quire fewer upfront closing costs and fewer restrictions on the use of bond proceeds. •Certification Corner• NJ HFMA recently completed its annual 6 week Basic teered their time to teach the various course modules and shareFinancial Management Series. This series was an opportunity their expertise with the participants. This year, Tracy Davison-not only for those who were new to the healthcare industry Dicanto, Rita Romeu, Steven Frankenbach, Cheryl  Cohen,to gain exposure to nearly all areas of healthcare finance, but Maria Facciponti and George Kelley all presented.served as a review class for those HFMA members interested in If you were unable to attend the series, but are interestedtaking the certification exam. Thirty individuals registered for in learning more about the certification process, please reviewthis series, which took place at ARMDS’ offices in Burlington the newly updated certification page at http://www.hfmanj.and Bloomfield. org/Certification3.page or contact the chapter’s Certification Thank you to those individuals who so generously volun- Chairperson: Eric Fishbein at efishbein@presscott.com22 F o c u s
  • March/April 2 0 1 2What’s New With Stark LawEnforcement? By Gary W. Herschman, Anjana D. Patel, and Matthew J. McKennan The federal Stark law continues to be a powerful weap- Tuomey agreed to pay theon in the government’s quest to combat Medicare fraud and physicians a base salary whichabuse. In just the last year, the government recovered a record- was “tiered” based on collec- Gary W. Herschmanbreaking $4.1 billion from its health care fraud prevention and tions of services personally per-enforcement efforts. Many of these cases are easy targets from formed, plus a bonus totalingthe government’s perspective because they involve Stark law 80% of collections and 5.6%violations that are easier to prove under Stark’s strict liability of collections for meeting cer-standard of proof. This article highlights several recent Stark tain quality measures. The totallaw enforcement actions and provides practical recommenda- compensation, including salarytions for compliance in light of the ever-increasing govern- and benefits, was approximatelyment enforcement activity. 19% higher than the profes- sional fee collections for theHalifax Hospital Medical Center – DOJ Intervenes physicians’ professional services. This whistleblower case was originally brought by an em- In tape-recorded conversations,ployee of the hospital in charge of physician services. In late Tuomey executives stated that2011, the government partially intervened in the lawsuit al- the payments were consideredleging that the hospital made improper payments to three “phantom ownership” in an Anjana D. Patelneurosurgeons and six oncologists that were above fair market outpatient surgical center aimedvalue, not commercially reasonable and took into account the at sharing revenue “with thosevolume or value of referrals, all in violation of the Stark law. people who might otherwise,Specifically, the government focused on the payment by the frankly go out and compete”hospital to the physicians of improper incentive compensation with the hospital.in the form of “bonus pools” that were based on a percentage On appeal to the Fourth Cir-of the hospital’s operating margin for a particular service line. cuit, Tuomey argues that the ar- Thus, according to the government, the more referrals the rangements do not violate thephysicians made, the higher the profits of the hospital and the Stark law because the physiciansphysicians. By sharing the profits (which presumably included were paid only for personally per-the technical component of the services) with the physicians, formed professional services. Thethe hospital allegedly violated the Stark law. government argues that the fi- nancial relatioships did not meetTuomey Healthcare System – Federal Appeals Court Deci- the requirements of the indirect Matthew J. McKennansion Expected Soon compensation exception to the In July 2011, a federal court entered a $45 million judg- Stark law because the payments took into account the volumement against Tuomey Healthcare System (“Tuomey”), follow- or value of the physicians’ referrals. Oral argument on the ap-ing a jury verdict finding that Tuomey violated the Stark law. peal occurred in January 2012 (which included both substantiveThe allegedly improper financial relationships involved part- and procedural arguments), and the Fourth Circuit’s decision istime employment agreements entered into between wholly- expected this Spring.owned subsidiaries of Tuomey and certain specialist physicians This case is important because if the government’s positionon its medical staff. Under the arrangements, a local gastroen- is adopted by the Fourth Circuit, certain compensation structuresterology group and local orthopedists agreed to perform out- based on personally performed services (which previously werepatient procedures exclusively at Tuomey for 10 years. continued on page 24 Focus 23
  • March/April 2 0 1 2continued from page 23thought not to implicate the Stark law) could fall directly within ment is alleging are tied to the volume or value of the physicianthe law’s restrictions. For example, compensation based on the referrals. The Select Medical and Cayuga cases are equally im-professional component of services, such as a methodology that portant because they demonstrate again how easily a hospital-takes into account patient encounters, collections, or wRVUs, physician compensation arrangement can violate the Stark law.could implicate the Stark law. Further, the government’s argu- All of these cases show how Stark law violations are easy targetsments could call into question compensation arrangements to the federal government’s enforcement efforts, and how whis-whereby physicians are paid in excess of their personally per- tleblowers frequently include insiders such as hospital manage-formed collections. ment, employees, and physicians.Select Medical Corporation – $7.5M LTAC Settlement Practical Recommendations. In September 2011, Select Medical Corporation (“Select”), Health care providers can and should take pro-active stepsthe owner and operator of 110 long-term care acute care hos- to avoid falling into the Stark law non-compliance trap, such as:pitals, agreed to pay $7.5 million to settle alleged violations 1. All arrangements with referring physicians should complyof the Stark law and the False Claims Act. The lawsuit was with a relevant exception to the Stark law. Complianceinitially filed by a former employee, who worked in various with the Stark Law requires, among other things, that ar-capacities for the company over a span of five years, including rangements are in writing and signed, and contain termsas regional director for provider relations in Ohio. that are commercially reasonable and fair-market value. The government joined the lawsuit which alleged that Select At a minimum, “fair market value” should be support-paid several physicians for “sham” medical directorships under ed by a thorough and reasoned internal analysis, and forwhich the physicians did not perform any duties and which higher dollar and complex arrangements, a valuation fromwere based on referrals. The government will pay the whistle- an independent and reputable health care valuation firm.blower nearly $1.4 million from the settlement proceeds, and 2. Hospitals should conduct periodic audits of their arrange-Select will pay the whistleblower’s attorneys’ fees and costs. ments with physicians (personal services, physician recruit- ment, etc.) to confirm compliance with the Stark law. AllCayuga Medical Center – $3.5M Hospital Settlement arrangements with physicians should be reviewed every In January 2012, Cayuga Medical Center in Ithaca, New few years to ensure that the services are still being providedYork, agreed to pay $3.5 million to settle alleged violations at the same level, and that the terms are still fair-marketof the Stark law and the False Claims Act. The lawsuit was value and commercially reasonable. In addition, arrange-initially filed by a plastic surgeon who alleged that the hospi- ments should be reviewed in light of applicable regulatorytal recruited physicians (including himself ) in violation of the amendments, recent settlements, and case law developments.Stark law by failing to update its physician recruitment con- 3. Finally, to protect against the increasing prevalence oftracts following the 2004 amendments to the Stark law, and whistleblowers, hospitals should implement robust “whis-for certain expenses that were no longer permitted in light of tle-blower avoidance” strategies as part of their compli-the regulatory changes (because they went beyond the actual ance programs to promote the internal identification andincremental costs attributable to the recruited physicians). reporting of compliance and billing issues. Employees Significantly, the hospital had in effect signed physician re- should be favorably recognized for reporting on all suchcruitment contracts, but it failed to update them in light of matters, and all reported issues should be fully investigat-changes to the Stark law. Once it discovered this oversight, it ed and corrective actions should be taken where appropri-self-disclosed to the government, but it failed to self-disclose all ate. These steps should be fully documented and shouldof the non-compliant arrangements, including the ones subject decrease the risk that employees will report improprietiesto the whistleblower’s lawsuit. This case is important because it to the government or initiate whistleblower lawsuits.demonstrates how easily hospital-physician arrangements canfall into the non-compliance trap if hospitals are not vigilant in About the authorsmonitoring their physician arrangements in light of the ever- Gary W. Herschman is Chair of the Health Care Practice Group atincreasingly complex and changing regulatory landscape. Sills Cummis & Gross P.C. and may be reached at gherschman@ sillscummis.com. Anjana D. Patel is Co-Chair of the Health CareConclusion Practice Group and may be reached at apatel@sillscummis.com and The Halifax and Tuomey cases discussed above are signifi- Matthew J. McKennan is an Associate in the Health Care Practicecant because they may be indicative of an evolving area of focus Group and may be reached at mmckennan@sillscummis.com. Theby the government with respect to different types of physician views and opinions expressed in this article are those of the authorsincentive or bonus compensation structures that the govern- and do not necessarily reflect those of Sills Cummis & Gross P.C.24 F o c u s
  • March/April 2 0 1 2Patient’s “Meaningful Use” ofElectronic Health InformationProposed as Core Measurefor Provider IncentivePayments from Feds by Elizabeth G. Litten Elizabeth G. Litten The Centers for Medicare & Medicaid Services (CMS) re- cure electronic messaging to communicate with patients oncently published proposed rulesi setting forth the “Stage 2” relevant health information” and would require the providercriteria that eligible providers (EPs), eligible hospitals (EHs), to show that more than 10% of the provider’s patients seenand critical access hospitals (CAHs) (referred to herein col- during the reporting period actually sent secure messages (pre-lectively as “providers”) would be required to meet, in order sumably, to the provider, though the language is not precise)to qualify for Medicare and/or Medicaid incentive payments using the “electronic messaging function of Certified EHRfor the use of electronic health records (EHRs) (“Stage 2 Pro- Technology.”  According to CMS:posal”).  The Stage 2 Proposal is a small-font, acronym-laden, [O]ver 43,000 providers have received $3.1 billion totediously-detailed 131-page document that modifies and ex- help make the transition to electronic health records; thepands upon the criteria included in the “Stage 1” final rule number of hospitals using EHRs has more than doubledpublished on July 28, 2010. It is likely to be of interest pri- in the last two years from 16 to 35 percent between 2009marily to providers concerned with  receiving or continuing to and 2011; and 85 percent of hospitals now report thatreceive added payments from CMS for adopting and “mean- by 2015 they intend to take advantage of the incentiveingfully using” EHR.  payments.ii The Stage 2 Proposal is not, at first glance, particularly The Stage 2 Proposal will incentivize providers to continuerelevant reading for those of us generally interested in issues this trend toward meaningful use of EHRs, but is also likelyinvolving the privacy and security of personal information -- to result in providers’ efforts to induce to their patients to be-or even those of us more specifically interested in the privacy come EHR users.and security of protected health information (PHI).  Still, two Perhaps patients are ready, willing and able to communicatenew provisions caught my attention because they measure with providers via email and to download and forward theirthe meaningful use required for provider incentive payments PHI.  According to AARP, the aging baby boomer generationbased not simply on the providers’ use of EHR, but on their is apparently embracing electronic media and social network-patients’ use of it.  ing at an unprecedented rateiii, and it is this segment of the One provision of the Stage 2 Proposal would require a pro- population that is most likely to require health care services. vider to give at least 50% of its patients the ability to time- Two new provisions in the Stage 2 “meaningful use” crite-ly “view online, download, and transmit” their health informa- ria measure the meaningful use required for provider incentivetion (“timely” meaning within 4 business days after the provider payments based not simply on the providers’ use of EHR, butreceives it) (and subject to the provider’s discretion to withhold on their patients’ use of it. certain information). Moreover, it would require that more   than 10% of those patients (or their authorized representatives) Footnotesactually view, download or transmit the information to a third i https://www.cms.gov/EHRIncentivePrograms/60_Regula-party. There’s an exception for providers that conduct a majori- tionsNotices.aspty (more than 50%) of their patient encounters in a county that http://blog.cms.gov/2012/02/28/stage-2-meaningful-use- iidoesn’t have 50% or more of “its housing units with 4Mbps nprm-moves-toward-patient-centered-care-through-wider-broadband availability as per the most recent information avail- use-of-ehrs/able from the FCC” (whew!) as of the first day of the applicableEHR reporting period.  http://www.aarpinternational.org/resourcelibrary/resourceli- iii Another provision would require a provider to use “se- brary_show.htm?doc_id=1630777 Focus 25
  • March/April 2 0 1 2 New Members Sheila Archibald Nancy A. Christie John Santuoso Princeton HealthCare System CentraState Medical Center Kelly Financial Resources Supervisor Charge Master Analyst Senior Business Development Manager (609) 620-8392 (732) 294-7064 (201) 804-6941 sarchibald@princetonhcs.org nchristie@centrastate.com santuja@kellyservices.com Angela Cocuzza Lloyd F. George, CPA Eva J. Goldenberg Meridian Health Lloyd F. George CPA, LLC Atlantic Health System, Inc. Manager Patient Accounts Principal Corporate Compliance Officer and Internal Audit (732) 897-7906 (609) 799-5863 (973) 660-3143 acocuzza@meridianhealth.com Lloyd.George@LFGCPA.com eva.goldenberg@atlantichealth.org Lynne Hofstaedtr Lynne M. Wiese Ryan P. Lodge University Medical Center of Princeton Technosoft Corporation BESLER Consulting Manager HIM Director Provider RCM Junior Consultant (609)498-74268 (609) 936-7224 (732) 392-8314 lhofstaedtr@princetonhcs.org lwchange@msn.com lodgeryan@gmail.com Amy Marques Teresa Edge David S. Barmak, Esq. St. Michael’s Medical Center Capital Health System Law Offices of David S. Barmak, LLC Director of Revenue Cycle Supervisor Attorney (973) 877-2419 (609) 815-7825 (609) 454-5351 amarques@smmcnj.org tedge@capitalhealth.org david@barmak.com Michael J. Nudo Janice A. Klama Linda Lederman MedLink Computer Sciences Capital Health System UnitedHealthcare V.P. Marketing and Sales Supervisor Vice President of Contracting (732) 762-7405 (609) 394-6000 (732) 623-1330 mjnudo@medlinkcs.com jklama@chsnj.org Linda_Lederman@uhc.com Michael Setteducati Allan Gregory Scott Stark Aergo Solutions Robert Half International J & S Stark President (732) 596-2174 Billing & Consulting, Inc. (732) 917-7111 allan.gregory@rhi.com (732) 440-1439 mike@aergo.com sstark@jsstark.com Jakahra Williams Patricia Woods Capital Health System Shelby Johnson Princeton HealthCare System Supervisor C & H Collections Supervisor Managed Care (609) 537-7001 Director, Sales (609) 620-8333 jwilliams@capitalhealth.org (856) 356-4848 pwoods@princetonhcs.org shelby.johnson@chcollects.com Peter DiCanto, Jr. Daniel G. Bryson Horizon Blue Cross Blue Shield Mario Salvati ARMDS of New Jersey Shriners Hospital Assistant Manager Informatics Manager Director of Fiscal Services (609) 342-2000 (609) 718-9366 (215) 430-4040 dbryson@armds.com Peter_DiCanto@horizonnjhealth.com msalvati@shrinenet.org Lauren Irwin-Szostak Ian S. Katz Peter Tarricone Business Processes Redefined Horizon NJ Health Wells Fargo President Hospital Account Executive Senior Vice President (800) 470-6622 (609) 718-9421 (973) 437-2425 lauren@bprllc.com ikatz@horizonnjhealth.com peter.tarricone@wellsfargo.com Jenna Andrusisian Eyo Effiong Atlantic Health System (864) 569-6024 Financial Analyst effiong_eyo@yahoo.com (908) 522-2847 jenna.andrusisian@atlantichealth.org26 F o c u s
  • March/April 2 0 1 2Making Sense of it All:Seeing through theTransparency by Julie Kay Julie Kay “Transparency,” according to the Kernerman English Multi- Compare and NJ Hospital Price Compare attempt to makelingual Dictionary is the full, accurate and timely disclosure information available to consumers to make decisions aboutof information. As it relates to healthcare, transparency is the where they receive their healthcare and how much they willability to provide meaningful information to patients regard- have to pay for it.ing the cost and quality of the services they receive. Specifical- With this new focus on transparency in healthcare, pro-ly, patients are becoming savvier regarding their out of pocket viders are uniquely positioned to serve their population. Bycosts because they have to pay a larger piece of the pie. embracing the opportunity to educate the patient providers Let’s face it, providers today are confronted with a number are better equipped to identify alternative payment sourcesof challenges within the industry including increased number and accelerate the cash collection process while improvingof uninsured patients, employers shift- overall patient satisfaction.ing more of the financial risk to the In one particular provider’s case,employee, larger co-pays, co-insurance implementing a pre-service financialand deductibles. Additionally, costs As many as 36 states clearance process yielding tremendouscontinue to escalate and bad-debt is on have enacted legislation that benefits both to the provider as well asthe rise. the consumer. As most healthcare providers know, requires information regarding Collecting the patient’s portion ofpresenting specific information about quality and cost be made the charges is more important thana patient’s out of pocket liability can ever in the current economy. A fewbe very complex. There are multiple available to the consumer. techniques and tools can make thecomplex considerations including the job easier for patient financial servicescharge description master (CDM) or staff members. Even if you have a goodlist pricing, payor reimbursement rates or contracts, eligibil- patient estimating tool, communicating with patients aboutity and benefit information. Not to mention determining the their out-of-pocket liability can be much more challengingservice and related components that the patient is receiving than it used to be, especially if your staff is not equipped to(i.e. hip replacement, tonsillectomy, colonoscopy, etc.) The ask for money. Historically, healthcare providers have avoidedfinancial clearance process has become more important than the process of asking for payment before services are rendered.ever to secure payment and reduce the risk of insurance and Further, Patient Access staff members have not been equippedidentity fraud. with the appropriate tools and techniques to execute a pre- Providers, payors as well as consumers (formerly known as service collection program. To better address the challenges wepatients) all have specific needs when it comes to transparency. face as an industry today, we must be prepared to implementProviders are expected offer a fully transparent out-of-pocket a successful pre-service collection program.liability estimate for their patients. But patients also expecttheir payor to provide this information. Unfortunately, it can What You Should Dobe difficult for both in this mixed up healthcare reimburse- What makes a pre-service collection program successful?ment model. As many as 36 states have enacted legislation First, you need to establish a clear financial policy that boththat requires information regarding quality and cost be made patients and staff understand. The policy should clearly defineavailable to the consumer. Web sites such as NJ Hospital Care continued on page 28 Focus 27
  • March/April 2 0 1 2continued from page 27whether prepayment is a request or a requirement and deter- be involved in the financial decision-making process of receiv-mine what conditions might be an exception. The key is to ing health care. They want to be able to plan for these expensesprovide options that benefit both patients and the healthcare and avoid unpleasant surprises after services have been pro-provider to prevent policy exceptions. Second, there must be vided. A pre-service collection program coupled with trainingsupport from the Board of Directors as well as the senior ex- and clear processes can raise consumer awareness, improve col-ecutive team. Without support from the top down, a plan is lections, and avoid costs post-service.sure to fail. There should be no policy exceptions regardlessof a patient’s relationship to the executive team. Staff expecta- Pre-service Collection Techniquestions should be clearly defined and supported so that there is Here are a few tips for a successful pre-service collectionno question regarding the execution of the policy. Once you effort:have clearly defined the expectations, a comprehensive train- • First, plan for solid, dependable collections by establish-ing program should be developed to ensure that staff members ing a clear financial policy that patients and staff under-are equipped with the appropriate techniques. In many cases, stand. Every successful business has such a policy. The keythe skill sets required of Patient Access staff do not include is to give adequate options to patients that benefit bothasking patients for money. Even individuals who have excel- the provider and the patient and control the urge to makelent customer service and clerical skills may be unwilling and/ policy exceptions on the spur of the moment.or unable to ask for money from your patients. Although pre-service collection techniques should employ a soft approach, • Use questions beginning with why, when, what, who, andconsider teaming up with your collection agency to apply how. This will allow patients to talk more, providing moresome of the training techniques used in their programs. insight into their situations and mindsets. Specific scripting should be developed for every possible • Don’t let patients say “no.” Phrase questions so they re-scenario. Consider questions that begin with why, when, what, quire more than a yes/no response. For example, ask,who, and how. Avoid questions that require only yes or no an- “How will you be paying today?” Don’t ask, “Would youswers to allow patients to provide additional insight into their like to make a payment today?”particular situation. One of the most effective techniques in • Use motivational phrases to get patients to take a positivescripting is the “pregnant pause.” Providing information about action. For example, ask, “Do you want to pay this billthe patient’s financial obligation and then allowing the patient today so you won’t have to be bothered with it in theto respond before saying anything can be the most effective future?”form of communication as it relates to point-of-service col-lections. Staff should also be allowed to customize the scripts • Phrase statements as questions. For example, ask, “Payingto suit their personality. Practice makes perfect. Allow ample your bill today will allow you to focus on getting betterrole-playing time as well as a certification process to ensure and not worry about the bill, won’t it?”that your staff is comfortable in each of the defined scenarios • Practice, practice, practice. Identify the various collectionsand that an escalation process exists for certain situations. scenarios that the collections coordinator is likely to enLast, once a program is implemented, continuous monitoring counter, and plan appropriately using strategies similarshould be part of your process. In other words, measure every- to those outlined above. Role-play the situations duringthing that moves, including staff performance, customer sat- staff meetings so that staff members fully understand theisfaction, collection success rates, and employee satisfaction. policies and those responsible for collections are preparedThe result will give you a clear picture of the entire program when patients raise questions or concerns.from every angle of the process. About the AuthorBenefits of Implementing a Pre-service Collection Julie Kay is vice president, revenue cycle solutions strategy atProgram MedAssets. She can be reached at jkay@medassets.com. Implementing a pre-service collection program not onlycan result in increased point-of-service collections, but alsomay improve customer satisfaction. Consumers today want to28 F o c u s
  • March/April 2 0 1 2Your Healthcare FacilityCan Benefit from EnergyDeregulationTwo Ways: “Reverse Auctions” and“Name Your Electricity Price” John A. Smith by John A. Smith Energy deregulation has eliminated many government rules provides information about deregulation and billing. The fol-and regulations that stifled competition in the energy indus- lowing is excerpted from Atlantic City Electric’s website:try, the same way competition was suppressed in the telecom- Atlantic City Electric Supports Energy Choicemunications industry. Now healthcare facilities in deregulatedstates can choose to receive their electric supply from their Whether you choose to stay with Atlantic Citylocal utility company or from a qualified, third-party electric Electric as your electricity supplier, or choose anothersupplier known as a Retail Electric Provider (REP). supplier, we will continue to provide reliable energy In New Jersey, there are four local electric utility com- delivery and service.panies: PSE&G, JCP&L, Rockland Electric and Atlantic CityElectric. Energy deregulation here has spawned a variety of The Choice Is Yoursthird-party electric suppliers that are state-licensed and regu- The restructuring of the electric utility industry allows youlated by the New Jersey Board of Public Utilities (NJBPU). to select the electricity supplier that fits your needs. If youAll of them would like to win your business. Many states, in- don’t choose a supplier, Atlantic City Electric buys electricitycluding NJ, NY, PA, DE, MD, MA, NH, CT, OH, IL, TX for you and charges you according to rates approved by theand others, have opened their markets to third-party energy New Jersey Board of Public Utilities. This is called “Basic Gen-suppliers. eration Service” (BGS), and the cost for this appears under the Under the traditional energy delivery system, a network of “Supply Charges” in the Electric Delivery Charges portion ofpower plants produces electric energy to be released into the your bill (customer bills are broken down to indicate chargesgrid. Local utility companies like PSE&G and JCP&L pur- for “supply”, the actual electricity, and “delivery”, the processchase this energy in large blocks to be provided to the cus- of getting that electricity to end users). Atlantic City Electrictomer. These utilities are required to purchase their power continues to deliver the electricity to all customers whether orat a fixed moment in time, regardless of market conditions. not they choose another supplier.Conversely, competitive energy suppliers are able to analyzea wide array of market conditions, and use this intelligence Your Facility Can Save Money by Leveraging the Power ofas a basis to purchase their power strategically. The net result Reverse Auctionsis that REPs like Hudson Energy, Suez, or Hess Corporation Healthcare facilities are some of the highest consumerscan purchase energy from the grid to resell it to the customer of electricity in the commercial space, according to the USat a lower price per Kilowatt than the local utility is currently Department of Energy. Today these facilities can shop aroundoffering. for the lowest cost per kilowatt-hour (Kwh) since this is a commodity price that changes every day according to marketVisit any local utility’s website to find the NJ “Energy conditions.Choice Program” Online Reverse Electricity Auctions represent a relatively It provides more information for your hospital about your seamless way to procure electricity at the lowest cost. Natural“power to choose” an alternative electricity supplier, and it also continued on page 30 Focus 29
  • March/April 2 0 1 2continued from page 29gas commodity prices are a leading indicator for electricity/ Your Facility Can Name Your Electricity PriceKwh prices, and they are at a 10+ year low. This fact has helped There is also a platform which enables your healthcaremany 3rd party suppliers to win new customers. Government facility to name its own electricity price per Kwh. This is much like Priceline.com or a put option to buy a stock foragencies, commercial and industrial facilities utilize electricityauctions to ensure they get the lowest Kwh price on the mar- 5% less than the current asking price. The customer choosesket from a third-party electric supplier. a fixed price that stays active online until the prospective client cancels the order, or one of the suppliers agrees to meetHow Reverse Auctions Work that price. The result is a cost effective solution for a facil- There is a simple way for healthcare facilities to procure ity currently in a term contract with an alternative electriccompetitive bids for electricity without using the traditional supplier.“paper bid” Request for Proposal (RFP), brokers, or other For example, a hospital may have a current contractedtime-and-budget-consuming methods. Online reverse auc- price of $0.082 from a supplier like Hudson Energy lockedtions for hospitals, nursing homes and other health care fa- in until February, 2013. The hospital would be willing tocilities are becoming a popular way to procure electricity and extend or move the contact to another supplier on that futuresave a substantial amount of time and date if they could procure a $0.078 permoney. A reverse electric auction is the Kwh fixed price. That’s when the “nameopposite of eBay. For example, a start- Online reverse auctions for your price” platform really makes sense.ing bid can be $0.98 per Kwh and then hospitals, nursing homes and Perhaps at today’s prices none of the sup-the alternative electric suppliers can other health care facilities pliers can meet your desired target price,keep bidding the price down. but a month from now the spot market There are only a few good platforms are becoming a popular way may go down enough for one supplier toin this online reverse auction space. The to procure electricity and match that price and still profit from youbest of breed platforms provide an easy as a new client.online process to procure the lowest save a substantial amount The range of electricity supplyelectricity price. They may use remote of time and money. options and the degree of competi-independent consultants who can assist tion made possible by deregulationhealthcare facilities, at no charge, to au- have created new opportunities fordit their past usage, forecast future demand, create a bidding healthcare facilities to significantly reduce a major oper-profile for electric suppliers and establish a reverse rate with ating cost. Your facility can win by using a reverse onlinewhich to begin an auction. auction or naming your own electricity price, bringing ben- Prior to an auction, the healthcare facility should request efits to your bottom line today. To learn more call Markthat the folks running the online reverse auction platform Dougherty, Business Development Manager for Energyprovide indicative price quotes from these suppliers. This Systems Group. Mark serves on our HFMA-NJ Communi-document should provide annual dollars saved and the per- cations Committee, and he can be reached at 201-359-4162,centage of savings. This may help a facility narrow the field to or email mdougherty@energysystemsgroup.com.the top three suppliers most likely to win their electric supplyin a reverse auction. The facility can then schedule an auc- About the Author:tion for a future specified time. Most auctions occur within a John A. Smith is managing partner of Capable Communi-compact time window; as short as five minutes or up to thirty cations and past president of Central Jersey Business Associa-minutes long is the norm. During a typical auction, if any tion. He is an independent energy, telecom and IT consultantsupplier enters a bid in the last few minutes this may trigger working with many government agencies, healthcare facilitiesan extension to the auction. This prevents a supplier from and other business entities on the topic of helping them reducewaiting until the last few seconds to place a low (but not their energy, communications and IT costs. John can be reached atlowest) bid. email jsmith@capablecomm.com.30 F o c u s
  • March/April 2 0 1 2 •Focus on Finance• A Successful Marriage: Factors Both Sides should Consider when a Physician Practice is Acquired by a Hospital or Health SystemQ.We are a hospital considering the acquisition of a physicianpractice, and have quite a few candidates seeking to partnerwith us. What are some factors to consider regarding the location, budgeting and fore- casts and other complex and variable factors. High-levelprocess? factors may include: • What is the current netA.The current economic climate is making things tough inhealthcare, let’s face it. Between healthcare reform changes,looming audits by regulatory oversight organizations, mal- revenue of the practice to be acquired? • Will the hospital or sys-practice litigation and stiff competition in the marketplace, tem have to make anyit is no wonder many physician practices are seeking oppor- substantial investmentstunities with hospitals or healthcare systems for acquisition. in the practice regardingTheir hope is to find a good fit, thereby receiving subsidy from equipment, additionalthe hospital in terms of covering overhead costs and salaries, staffing, etc? Daniel J. Vitaleand also establishing a solid referral source for a continuousflow of new patients. The hospital, in turn, receives the • Is there currently a strong collections process in place?specialized expertise or geographic location to fill a patient • What happens with current accounts receivables? need, hopefully resulting in a new income stream. Successful Will the hospital fold them into its own, or, with thephysician-hospital alignment can and does happen, and practice, look to resolve?assuming the proper due diligence has revealed a clean bill of • Will current salaries be affected? Will there be a changehealth on both sides, the partnership should be looked at from in compensation structure, such as pay based onthree key perspectives, ensuring a good match for everyone performance? Are any of the current physicians withininvolved. a few years of retirement? 1. Strategy Fit. In order to remain competitive and to serve • Will the current staff in the office be retained, or willthe community as best it can, a hospital or healthcare system there be cuts?looking to acquire a practice might be seeking to fill a voidwhether in a service offering, geographic location, improved Leveraging the services of a professional who can provideaccess to coverage, or to gain entrée to a different payment an objective business valuation would be a prudent move tomodel, such as an ACO (accountable care organization). help answer many of these questions and more.The doctors within a physician practice might be seeking 3. Culture Fit. With any business acquisition, theaccess to more resources for growth, and/or to ensure he or importance of a good culture fit is important. Will doctor-she continues to practice in the area of medicine about which management personalities mesh or conflict? Does the hos-they are passionate. Both sides need to be up-front about pital’s overarching vision for future growth and treatmenttheir vision and expectations of what the union would bring of patients and personnel align with that of the doctors atto the table. the practice? What is the communication strategy between 2. Financial Fit. The financial impact of the union must the hospital or system and the newly acquired physicianbe considered in two phases: 1) current value of the physician practice? What are the expectations of the brand image to bepractice; and 2) projected value of the revenue generated portrayed to the community? These issues may seem minorby the practice for the acquiring hospital or system. This compared to those of financial or strategic considerations,requires thoughtful and careful consideration, analysis and but they can be important in helping with staff morale andassessment of historical data, the economic climate, state of productivity. A story once heard involved a newly acquiredthe industry, financial position of the business, geographic continued on page 32 Focus 31
  • March/April 2 0 1 2continued from page 31physician practice throwing a $12,000 holiday party for About the authorits staff, fully expecting the hospital to reimburse them for Daniel J. Vitale, CPA, is the partner-in-charge of the Toms River,the expense, as it was a long-standing tradition to hold this NJ, office of WithumSmith+Brown, Certified Public Accountantselaborate function (ultimately the dispute led to sour feelings and Consultants. He is also the Co-Practice leader of the Firm’sbetween the practice and the hospital). People enjoy working Healthcare Services Group. Dan has over 35 years of professionalwith - and doing business with - people they like. Cultural experience in business consulting, mergers and acquisitions andconsiderations can certainly influence the success of the general tax matters, specializing in healthcare. He can be reachedintegration process. at dvitale@withum.com. Ensuring the strength of physician-hospital alignment iscrucial in the success of an acquisition. Similar to a marriage,it is important for both parties to identify the positives eachcan offer the other in order to make an effective partnership,and address those issues up front which could develop intolarger problems later on. Taking the right steps now will payoff in the long term, hopefully resulting in a successful, life-long relationship. mark your calendar ... April 24, 2012 8AM- 12 PM May 8, 2012 all day Barnabus Health FACT Committee Spring Woodbridge Hilton Bimonthly Meeting: Managed Care Corporate Office Educational Northern Session: West Orange, NJ Healthcare Reform and Other May 10, 2012 all day Hot Topics Fiddler’s Elbow CC Annual Golf Outing April 26, 2012 8AM- 12 PM June 12, 2012 all day AtlantiCare Life FACT Committee Spring Woodbridge Hilton Bimonthly Meeting: Center Bldg. Educational Southern Session: Revenue Integrity Egg Harbor Township, NJ Healthcare Reform and Other Hot Topics September 11, 2012 all day Woodbridge Hilton Bimonthly Meeting: Regulatory & Reimbursement PLEASE NOTE: NJ HFMA offers a discount for those members who wish to attend Chapter events and who are currently seeking employment.  For more information or to take advantage of this discount contact Laura Hess at NJHFMA@aol.com or 888-652-4362. The policy may be viewed at: http://hfmanj.orbius.com/public.assets/A02-Unemployed-Discount/file_168.pdf32 F o c u s
  • March/April 2 0 1 2 •Focus on...New Jobs in New Jersey• JOB BANK SUMMARY LISTINGHFMA-NJ’s Publications Committee strives to bring New Jersey Chapter members timely and useful information in a convenient, accessible manner. Thus,this Job Bank Summary listing provides just the key components of each recently-posted position in an easy-to-read format, helping employers reach the mostqualified pool of potential candidates, and helping our readers find the best new job opportunities. For more detailed information on any position and the mostcomplete, up-to-date listing, go to HFMA-NJ’s Job Bank Online at www.hfmanj.org.[Note to employers: please allow five business days for ads to appear on the Web site.] Job Position and OrganizationASSISTANT CONTROLLER FINANCIAL/CDM ANALYST JFK Medical Center Atlantic Health System Edison, NJ Morristown, NJ SENIOR FINANCIAL ANALYST DIRECTOR OF ACCOUNTING Chilton Hospital Hunterdon Medical Center Pompton Plains, NJ Flemington, NJSENIOR ACCOUNTANT FINANCIAL ANALYST Surgem LLC Surgem LLC Oradell, NJ Oradell, NJCONTROLLER DIRECTOR OF FINANCE Atlantic Health System Somerset Medical Center Morristown, NJ Somerville, NJ Focus 33
  • March/April 2 0 1 2Your Personal FinancesRoth IRAs: What You Need to Know by Mark McLafferty, MBA Saving for retirement is a personal responsibility and a What Are the Benefits?necessity. One tax-advantaged savings option is the Roth IRA. You’ll need to carefully ana-The Roth IRA has been available for more than a decade to lyze your unique situation to Mark McLaffertytaxpayers below certain income levels. Due to a change in the determine if there are any long-law that goes into effect in 2010, taxpayers at all income levels term benefits to using a Roth IRA as opposed to a traditionalcan now take advantage of the Roth IRA, as the income limit IRA. Essentially, the Roth IRA allows taxpayers to lock in aon conversions from traditional IRAs to Roth IRAs has been tax rate, whereas those with traditional IRAs will be unable toeliminated. predict whether changes in the law or their own circumstanc- Many people are unsure as to how the Roth IRA might es could push them into a higher tax bracket in retirement.fit into their retirement plans. With this in mind, let’s take a Many retirees expect to owe less tax in retirement, since theycloser look at this retirement savings vehicle. no longer earn income from working; however, if you expect to be in a higher income tax bracket in retirement, the RothWho Is Eligible? IRA may be beneficial for you. At first glance, the primary advantage of a Roth IRA is that The Roth IRA also offers a savings vehicle for those who arecontributions and earnings can be withdrawn free of income participants in a qualified plan (such as a 401(k)) and whose AGItaxes, as long as the withdrawal is a qualified distribution. Un- exceeds the expanded deductible IRA income limits ($56,000like a traditional, deductible Individual Retirement Account to $66,000 for single tax-payers and $89,000 to $109,000 for(IRA), contributions to a Roth IRA are made on an after-tax married taxpayers filing jointly for 2010), without exceeding thebasis, and as a result, no income tax is due when distributions income limits for a Roth IRA.are taken. In 2010, you are eligible to make a full contribution to a Should You Convert to a Roth?Roth IRA if your modified adjusted gross income (MAGI) Under the Tax Increase Prevention and Reconciliation Actdoes not exceed $105,000 for single taxpayers or $167,000 for of 2005 (TIPRA), the income limit for conversions from amarried taxpayers filing jointly (contributions to a Roth IRA traditional to a Roth IRA is eliminated in 2010, meaningare phased out for single filers with AGIs between $105,000 that taxpayers at all income levels may now take advantage ofand $120,000 and for joint filers with AGIs between $167,000 the Roth IRA. Converting your traditional IRA into a Rothand $177,000). You can contribute to a Roth even if you are does come with a price, however. Any deferred income taxesa participant in a 401(k) or other employer-sponsored quali- from your traditional IRA (the one you will be converting)fied retirement plan. However, contributions to a Roth IRA will be due in the tax year in which the conversion occurs. Tomay be limited if you are also contributing to a traditional make conversion more attractive in 2010, TIPRA also stipu-IRA. Combined contributions for Roth IRAs and traditional lates that a saver who converts in 2010 may choose to pay theIRAs may not exceed $5,000 in 2010 ($6,000 for those aged tax owed immediately or spread the tax payment over 201150 and older). and 2012. Income inclusion will, however, be accelerated if You can withdraw contributions and earnings from a Roth distributions are taken during these years. It is important toIRA free of income taxes after the account has existed for five note that, under current law, tax rates are scheduled to in-years and you have reached age 591⁄2. If you take withdraw- crease in 2011.als prior to age 591⁄2, you may be subject to a 10% Federal In addition, taxpayers under age591⁄2 will be subject to anincome tax penalty. However, certain situations qualify as ex- early withdrawal Federal tax penalty of 10% if IRA funds areceptions, such as early withdrawals for qualified education ex- used to cover the taxes owed on the conversion. Therefore, ifpenses or first-time homebuyer expenses. you are younger than age 591⁄2, you will need to pay this in-34 F o c u s
  • March/April 2 0 1 2come tax from out-of-pocket sources to avoid the 10% penalty What’s more, your Roth IRA beneficiary may continue totax. benefit from tax-free withdrawals over his or her life expectan- If you’re thinking about converting an existing IRA to a cy, as long as withdrawals commence before December 31st ofRoth, be sure you consider the following: the year after your death. (Note: If your beneficiary does not 1) When you expect to need the IRA proceeds begin taking withdrawals by December 31st of the year after 2) Your ability to pay the income tax due in the year of your death, the Roth IRA proceeds must be withdrawn byconversion from an alternative source December 31st of the fifth anniversary of your death.) 3) Whether the additional tax incurred at the time of con- The Roth IRA provides you with another retirement sav-version will place you in a higher tax bracket, which could ings option. A thorough review of your overall retirement planresult in a greater than expected income tax liability with your financial and tax advisors can help you determine 4) Whether or not converting will benefit your long-term how a Roth IRA might fit into your financial future.bottom line The information provided is not written or intended as specific tax or legal advice and may not be relied on for the purposes ofOther Considerations avoiding any Federal tax penalties. Individuals are encouraged to In addition to tax-free withdrawals, a Roth IRA has two seek advice from their own tax or legal counsel.other important features: 1) there are no Internal RevenueService (IRS) restrictions on when you must begin taking About the authorwithdrawals (e.g., age 701⁄2 with traditional IRAs), and 2) you Mark McLafferty, MBA, is a financial representative with Emeraldcan continue to contribute to a Roth beyond age 701⁄2 if you Financial Resources, a MassMutual Agency; courtesy of Massa-have earned income and are within the applicable income lim- chusetts Mutual Life Insurance Company (MassMutual).its. Over the long term, this can lead to the potential for ad-ditional savings, especially if you plan to work past age 701⁄2 Mark can be reached at mmclafferty@financialguide.com.or if you have other sources of retirement income and do notexpect to rely heavily on your Roth IRA. Save The Date! 2012 Annual Institute Charity Event Join Us to Support the Make-A-Wish Foundation of New Jersey Wednesday Evening, October 10, 2012 The Borgata Hotel Casino & Spa Atlantic City, New Jersey Focus 35
  • March/April 2 0 1 2 •Who’s Who in NJ Chapter Committees• 2011-2012 Chapter Committees and Scheduled Meeting Dates *NOTE: Committees have use of the NJ HFMA Conference Call line. If the committee uses the conference call line, their respective attendee codes are listed with the meeting date information below. PLEASE NOTE THAT THIS IS A PRELIMINARY LIST - CONFIRM MEETINGS WTH COMMITTEE CHAIRS BEFORE ATTENDING. CHAIRMAN/EMAIL/ CO-CHAIR/EMAIL/ SCHEDULED MEETING MEETING BOARDCOMMITTEE PHONE PHONE DATES*/TIMES LOCATION LIAISONCARE (Compliance, Audit, Michael McKeever Nadinia Davis First Thursday of the Month Meeting in person at Deloitte & Touche, Darlene MitchellRisk & Ethics) mckeeverm@deborah.org Nadinia.Davis@mountainsidehosp.com (888) 269-3831 9:00 AM Princeton, NJ for Oct., Jan., Apr. and July mitchell.darlene@hunterdonhealthcare.org 609-893-1200 ext 5201 973-429-6801 Attendee Code: 5952498 Balance are calls. Please call to confirm 908-237-7059 Elizabeth Litten Al Rottkamp First Thursday of each month Fox Rothschild offices Tony ConsoliCommunications ELitten@foxrothschild.com ajcr123@aol.com (888) 269-3831 9:15 AM 997 Lenox Dr Bldg 3 aconsoli@cbiz.com 609-896-3600 609-584-6508 Attendee Code: 7844155 Lawrenceville, NJ 732-794-2662Education Maria Facciponti Rita Romeu First Friday of each month Conference calls with Tracy Davison-DiCanto mfacciponti@armds.com romeur@armds.com (888) 269-3831 8:30 AM in-person quarterly meetings. tdavison-dicanto@princetonhcs.org 973-614-9100 973-614-9100 Attendee Code: 7363742 Call for more info. 609-620-8471Certification Eric S. Fishbein First Friday of each month Conference calls with Tracy Davison-DiCanto(Sub-committee efishbein@presscott.com (888) 269-3831 8:30 AM in-person quarterly meetings. tdavison-dicanto@princetonhcs.orgof Education) 860-677-7888 Attendee Code: 7363742 Call for info. 609-620-8471FACT (Finance, Lisa Hartman M ichael DiFranco Second Wednesday of each Month To alternate between in person Scott MarianiAccounting, Capital lhartman@princetonhcs.org mike.difranco@gt.com (888) 269-3831 8:00 AM and conference calls; smariani@withum.com& Taxes) 609-430-7789 215-814-1757 Attendee Code: 8730600 locations TBD 973-898-9494 x420 Howard Krain Dan Willis Fourth Thursday of each Month Conference calls with in-person Mike AlwellInstitute 2011 hkrain@microsoft.com DWillis@childrens-specialized.org (888) 290-0578 8:00 AM meetings. malwell@smmcnj.org 908-377-5020 908-301-5458 Attendee Code: 8788393 Call for more information. 973-877-2853 LINK Elizabeth Litten Dennis Scotti As needed. Mike Alwell (Local Information ELitten@foxrothschild.com discotti@presscott.com (888) 290-0578 malwell@smmcnj.orgNetworKs) 609-896-3600 732-238-3188 Attendee Code: 9654515 973-877-2853 Kevin Joyce Jill Squires 3/7, 4/4, 6/7, 7/11, 9/6, New Jersey Stella Visaggio Managed Care kjoyce@qualcareinc.com jill.squiers@ehmc.com 10/24, 12/12 9:30-11:30 AM Hospital Association svisaggi@hrmcnj.org 732-562-7823 201 894-3099 No conference calling Board Room 908-850-6928 Membership Services/ Erica Waller Kevin Margolis Call for meeting arrangements Locations alternate Deborah ShapiroNetworking Ewaller@princetonhcs.org kevin.margolis@amerihealth.com (888) 269-3831 by month - dshapiro@wfs-services.com 609-620-8335 609-662-2422 Attendee Code: 5495569 please contact the chairs 201-617-7100 William Hunt Diana Sessions Second Thursday of each Month CBIZ KA Consulting offices Laurie Grey Patient Access Services whunt@humed.com Diana.Sessions23@gmail.com (888) 269-3831 9:30 AM in East Windsor, NJ lgrey@princetonhcs.org 201-996-2897 770-330-1259 Attendee Code: 8942192 609-620-8383 Josette Portalatin Steven Stadtmauer Second Friday of each Month New Jersey Jay PicernoPatient Financial Services jportal@valleyhealth.com sstadtmauer@csandw-llp.com (888) 290-0578 10:00 AM Hospital Association jpicerno@sbhcs.com 201- 291-6017 973-778-1771 Ext. 146 Attendee Code: 6748634 Board Room 973-322-4102 Regulatory & Rich Rifenburg Vickie Ozmore Third Tuesday of each Month Locations alternate Heather Weber Reimbursement rifenburgr@deborah.org vicki.ozmore@atlanticare.org (888) 269-3831 9:00 AM by month - hweber@parentenet.com 609-893-6611 x5794 609-677-7171 Attendee Code: 9169098 please contact the chairs 215-557-2016 Lindsey Colombo Vickie McElarney First Wednesday of each Month Alternates Raritan Bay MC and Steven Bilsky Revenue Integrity lcolombo@rbmc.org Victoria.McElarney@rwjuh.edu (888) 290-0578 9:00 AM New Jersey Hospital Association sbilsky@causeycpas.com 732-324-6031 732-418-8423 Attendee Code: 8128109 Board Room 303-672-9896 Michael Ruiz de Somocurcio Second Thursday of each Month Michael Ruiz de Somocurcio Sponsorship Michael.RuizdeSomocurcio@amerihealth.com (888) 290-0578 8:30 AM Conference calls Michael.RuizdeSomocurcio@amerihealth.com 732-726-6709 Attendee Code: 8451888 732-726-6709 36 F o c u s
  • March/April 2 0 1 2Who Are the Industry’s Rising StarLeaders?HFMA’s Future Financial Leaders Award HFMA’s Future Financial Leaders Award is an industry that you provide specific examples of how the nominee demon-award that recognizes those who provide innovative and ex- strated leadership skills, fostered a culture promoting teamworkemplary performance resulting in organizational performance and commitment to the organization’s purpose, communicatedimprovement. Award winners are recognized for their ability to a compelling organizational vision, and managed change.inspire individual and organizational excellence, create and at- • A brief summary of the initiative and how it was car-tain a shared vision, and successfully manage change to achieve ried out or a brief summary of the demonstrated ongo-the organization’s strategic ends and successful performance. ing leadershipThe Future Financial Leaders Award will be presented at ANI: • The nominee’s role in the initiative and how the nomi-The 2012 HFMA National Institute. nee influenced the concept and execution of the initia- tive or the nominee’s ongoing influence as an organiza-Eligibility tional leader Mid-level healthcare managers in provider organizations. • The measurable effect of the initiative on the organiza- tion’s strategic and financial objectives or the measurableSubmission deadline effect of the nominees ongoing leadership on the organi- Submit nominations by May 1, 2012. Nominations can be zation’s strategic and financial objectivessubmitted at: http://www.softconference.com/subs/hfma/2011/ • Ways in which the nominee influenced others partici-fla/default.asp?log=1 pating in the initiative or ways in which the nominee continues to inspire commitment to excellence from othersFuture Financial Leaders Award nominees are evaluated based • Ways in which the nominee’s contribution was innova-on their contributions in the following leadership areas: tive or exceptional • Leadership Skills and Behavior: Exercise appropriate leadership styles and behavior, employ critical thinking Scoring skills, and advocate for the organization and its values in A panel of senior finance executives will review nominations the community and public policy arena. and select award winners. • Organizational Climate and Culture: Foster a culture that values diversity, promotes teamwork, and engenders Selection process a commitment to the purpose and values of the organi- A review panel comprised of recognized healthcare financial zation. leaders select recipients based on the established criteria. • Communicating Vision: Establish and communicate a compelling vision for the organization that guides strat- Presentation egy formation and direction. The award will be presented at ANI. Award winners will be • Managing Change: Promote organizational development recognized in a special section in hfm magazine on ANI award and continuous improvement, and use systems thinking recipients and announced in electronic communications in- to enact change in complex organizations. cluding HFMA’s website, the Weekly News e-newsletter, the online news section of hfm magazine, and in a press release. Nomination Directives For questions or information, contact Joseph Abel, HFMA In 500 words or less, please tell us about either one organi- Professional Resources Director at (800) 252-4362, ext. 335 orzational initiative or an ongoing demonstration of leadership in jabel@hfma.org.which the nominee exemplified notable leadership. Make sure Focus 37
  • March/April 2 0 1 2Trends in HealthcarePhilanthropy and the Use ofSeparate Foundations by Walter J. Dillingham, Jr., CFA, Leigh H. Weiss, and John M. Lawson Walter J. Dillingham, Jr. In the June 5, 2011 edition of The New York Times, a full- For 2010, the Report men-page ad framed in violet announced NYU Langone Medi- tions that health-related orga-cal Center’s philanthropic milestone: in less than four years, nizations received an estimat-the Medical Center had raised an unprecedented $1billion. ed 8% of charitable dollars, orThis significant accomplishment helps to demonstrate how $22.8 billion; in recent priorimportant philanthropy is to healthcare organizations as the years this was approximatelyindustry goes through significant change. 6%. This represented a 1.3% Then, just two months later, on August 8, 2011, The increase from 2009 (a declineWall Street Journal published an article on a Moody’s assess- of 0.3% adjusted for infla-ment of the overall industry titled “Hospitals Put on Sick tion). The Report notes thatList.” The article discussed how not-for-profit hospital rev- these totals benefited fromenue is growing at its slowest rate in two decades, leading to multimillion dollar gifts thatan uptick in mergers. supported research and treat- Leigh H. Weiss With this in mind, philanthropic dollars will be even ments for certain diseases, asmore crucial for hospitals as they seek to maximize their rev- well as support of healthcareenue base in these challenging times. As overall program rev- systems. Over the two year pe-enues continue to shrink and the industry faces regulatory riod (cumulative 2008-2010,changes that are expected to occur over the next few years, inflation adjusted), donationshealthcare organizations must seek to diversify their fund- related to health increasedraising strategies and employ the best structures for reaching 4.1%, which was the secondnew donors. largest increase after Interna- William C. McGinley, President and CEO of the Associ- tional Affairs at 17%.ation of for Healthcare Philanthropy, commented: “Many of Also in June 2011, the As-the larger healthcare systems have a long history of successful sociation for Healthcare Phi-fundraising programs. The small and medium sized hospi- lanthropy (AHP) providedtals are starting to take steps to build out and diversity their its Annual Giving Report forfundraising strategies, which is crucial for their success.” 2010. The Report showed John M. Lawson that hospitals and healthcareTrends in Healthcare Philanthropy systems raised more than $8.3 billion last year, which is an Before determining which strategies and structures work 8% increase from the prior year. This level translated intobest for a given organization, it helps to have a good under- an additional $620 million in fundraising dollars. Figure 1standing of the current giving trends for the industry. provides a view of a decade in annual giving for healthcare, In June 2011, Giving USA Foundation(1) released its An- which shows the recent years trending back up.nual Report for Philanthropy for the Year 2010, which high- See Figure one on next page.lights current trends in giving. According to the Report,overall giving was up 2.1% (inflation adjusted) to $290 bil-lion compared to the prior year.38 F o c u s
  • March/April 2 0 1 2 Figure 1: AHP Report on Giving, U.S., two thirds of individual donations (50% of all giving) an- FY 2000-FY 2010 Annual Trends nually. The study defines high-net-worth families as those Approximate Total Funds Raised with net worth of over $1million or annual income of at least (Median value for all institutions) $200,000. For 2009, 70% of these families gave to health- care organizations, compared to only 23% of families in the general population. Thus, the high-net-worth family may be the most valuable demographic for healthcare organizations to seek as potential and continuing donors. The use of Foundation Structures as a Fundraising Strategy One strategy that healthcare organizations have employed is to establish a separate fundraising foundation to lead their development efforts. Many other types of not-for-profits also use foundations, such as public colleges and membership or- ganizations, just to name a few. There are a variety of reasons why a foundation structure can be beneficial to the healthcare organization: With fundraising on the rise for healthcare organiza- Increasing Trustee Opportunities: a separate foundationtions, it’s important to identify the source of this funding in creates additional board leadership and volunteer opportuni-order to market to the appropriate demographic. As detailed ties for trustees, who in turn can be substantial donors. Somein Figure 2, hospitals utilize a number of fundraising strate- foundations have been increasing their trustee membership.gies with individual giving being a very important source of Maintaining Focus/Control: this is a way to keep thetheir fundraising.(2) of Research: Key Findings fundraising, operations and administration in a separate area away from the core operations of the hospital. It enables theFigure 2: Funds Raised by Type of Fundraising Activity  Over 70% of the hospitals had trustees to be focused on fundraising rather than the opera-in Fiscal Year 2010 separate foundations tions of the healthcare organization. In turn, it also allows AnnualFund majority 20.0% Individual the management and trustees of the hospital itself to focus on A of these foundations were the complexities of running the day-to-day operations of the managed as long-term endowment Major Gifts 17.1% Individual hospital and not the fundraising. structures 15.4% Capital Campaign Corporate/Foundations Marketing: this allows the hospital to have a more focused  Average hospital philanthropy is a marketing and branding strategy. Many hospital foundations Special Events 14.8% Individual small percentage of the budget at have separate web sites to highlight their upcoming special Grants 2.9% (as % of overall hospital 10.7% Corporate/Foundations events as well as to communicate about different ways to give. Planned Giving 9.5% Individual Investing Endowment Funds: some hospitals utilize this structure to manage their foundation funds separately as a long- Endowment Interest 4.9% Institutional term endowment, versus commingling all assets at the hospital. Memorial Gifts 3.8% Individual Limiting Liability: the funds that are in a separate founda- Other 3.8% tion may be protected from any hospital-related litigation. In addition, any trustees of the foundation may be viewed as sep- Total 100% arate from the hospital with respect to their liability exposure.Source: Association for Healthcare Philanthropy Separating Finances: this is a way to keep hospital fi- nances separate from any fundraising efforts. For example, if These statistics make it clear that healthcare organizations the foundation is having a capital campaign, any significantneed to focus on building and cultivating relationships with inflows would impact the financials of the parent if they wereindividual donors, while maintaining a diversified fundraising not separate. Thus keeping the funds separate gives a betterapproach. And, it’s equally important to know who com- picture of the parent financials, and would not have implica-prises the organization’s strongest donor base. tions for grants or government reimbursement rates. According to The 2010 Study on High Net Worth Philan- Borrowing: it provides another separate pool of fundsthropy(3) conducted by the Center on Philanthropy at Indiana which can be used as collateral for loans.University, high-net-worth families comprise approximately continued on page 40 Focus 39
  • March/April 2 0 1 2continued from page 39 Providing Separate, Not Public Vehicles: separate 501(c) dations as long-term endowment funds and thus tend to fol-(3) organizations are often set up since donors prefer to give low long-term balanced investment strategies. This may beto a foundation versus an entity that is controlled by the local due, at least in part, to the fact that some of these funds may begovernment. restricted monies. Eight organizations use their foundations as Fulfilling a bequest: some hospitals have been set up flow-throughs, where they keep the funds in cash and transferwhere a separate foundation has been required. For example, them to the parent organization as needed. Some foundationsone hospital foundation evolved from a bequest which stipu- maybe be invested too conservatively and may want to con-lated that the monies needed to be in a separate endowment sider more robust investment plans if appropriate.structure from the actual hospital. We also researched the number of foundation trustees for Fundraising vehicle for foreign hospitals: Not-for-profit these foundations, which showed the range to be 5 to 87.organizations based in other countries often use U.S. based Hackensack University Medical Center (NJ) had the great-foundations to help them fundraise to U.S. based-donors. est number of trustees at 87, which maximizes their boardThe funds are then funneled back to the parent organization. representation, but at the same probably requires the imple- We came across two situations where a not-for-profit or- mentation of an executive committee. The average numberganization actually closed its foundation. One organization of foundation trustees was 21. Larger organizations tended toclosed it foundation to reduce costs, while the other closed its have more trustees. At the same time, small organizations arefoundation due to board conflicts and overlap. considering expanding their boards as a way to be proactive with their fundraising.Research on the use of Healthcare Foundations(4) Summary of Foundation Research Data In order to get a better understanding of how healthcare Survey size: 57 organizationsorganizations are using foundations to support their fundrais-ing efforts, we conducted independent research of 57 health- How many had separate 501(3)(c)care organizations/foundations located in New York, New foundations: 40 or 70%Jersey, and Pennsylvania. Research was conducted through in- # Foundations using Long-termterviews, tax return and recent form 990 reviews, and web site investment strategies: 32 or 80%visits. We included total contributions, including government # Foundations with flow-throughgrants, and adjusted for transfers from their foundations. foundations: 8 or 20% Key Findings of Research: Range of giving rates • Over 70% of the hospitals had separate foundations (contributions /total revs): 0.11% to 24% • A majority of these foundations were managed as Average giving rate: 3.3% long-term endowment structures Average giving rate • Average hospital philanthropy is a small percentage of (adjusted for a large grant): 2.9% the budget at 2.9% (as % of overall hospital revenue) • Wide range of board trustee size – with an average of Range of total donations: $124k to $310MM 22 foundation trustees Range of long term foundation $1.2MM to size ($MM) $340MM The average donation size compared to total revenues was Largest three foundations ($MM): $340; $211; $133 about 3.3% (2.9%, when adjusted for the large grant for onehospital). This measure is much lower than for other types of Range of # of Foundation Trustees: 5 to 87nonprofits. The size of the foundations ranged from $1.2 mil- Average # of Foundation Trustees: 21lion to $340 million, and the total annual donations rangedfrom $124,000 to $310 million. Susan Raymond, of Changing Our World, completed an We found that 40, or 70%, of the healthcare organizations earlier study of healthcare foundations that looked at 159 hos-we reviewed had foundations. It was interesting to note that pitals with affiliated foundations. Susan’s research showed thatfour of the largest hospitals in the metro New York area did the use of hospital foundations began as more of a westernnot have separate foundations, including NYU Medical Cen- U.S. phenomenon that has since moved east. Many of theter, Memorial Sloan Kettering, New York Presbyterian, and western foundations had been formed over 25 years ago, andMontefiore Medical Center, which may indicate their already some had larger asset bases. California and Texas were home toestablished tradition and history of giving. some of the larger ones. They also tended to be associated with Of these 40 organizations, 32, or 80%, manage their foun- larger, metropolitan hospitals.40 F o c u s
  • March/April 2 0 1 2Investment Considerations for Hospital Foundations The healthcare arena will continue to be impacted by both While hospital foundations provide an effective fundrais- economic and regulatory forces. Philanthropic dollars will being tool, as with any long-term pool of assets, making sure the even more important in the future, and separate foundationsappropriate objectives, spending and liquidity requirements, will be a key strategy for enhancing and managing a successfuland risk tolerance are defined and considered is of great im- fundraising plan.portance. Creation or revision of an up-to-date investment As Susan Holt, a healthcare fundraising consultant frompolicy statement codifies this work. Further steps related to Vision Philanthropy Group, Inc. said, “hospital philanthro-asset allocation and the specific investment choices that com- py may only represent a small percentage of a hospital’sprise portfolio construction round out an effective and com- overall budget but that additional funding helps a hospitalprehensive investment program. move from good to great.” Healthcare foundations plus well Each state has a legal and regulatory framework for its resi- thought-out strategic plans will become even more importantdent nonprofits that have investment implications. An exam- in the future.ple is New York’s Prudent Management of Institutional FundsAct (NYPMIFA), which has the specific requirement that allnonprofits adopt a written investment policy. These topics will Foundation Profilebe covered in greater detail in a future article. Metro Hospital* in upstate New York is an exam- Steps to consider in forming a stand-alone foundation: ple of how a healthcare organization has effectively Step 1: Review the costs/benefits of starting a sepa- utilized a separate hospital foundation to maximize rate stand-alone foundation. Do a competitive analysis both its fundraising plans and endowment manage- to see which hospitals use them. ment strategies. The Foundation for Metro Hospital, Step 2: Work with a team of legal, development and which was founded in 1983, strives to ensure qual- investment advisory experts that can help you map out ity health care in its community by raising, invest- a game plan on how to formally start a foundation. ing, and distributing funds that support the lifesav- Step 3: Review any governance requirements, such ing work performed at Metro. It currently maintains as the need to follow New York Prudent Management a $12.4 million endowment, which it manages for of Institutional Funds Act (NYPMIFA) guidelines. long-term balanced growth. Step 4: Partner with an investment advisory firm that has experience working with healthcare endow- The Foundation has a strong website page which includes a ments & foundations that can assist with the invest- summary on ways to give and a calendar of upcoming events, ment policy statement and provide a full service, valued along with comprehensive information on planned giving op- added approach. tions. They include newsletters on their site, which focus onConclusion fundraising testimonials. They also expanded their number of Our research took a closer look at separate 501(3)(c) stand- trustees to 29.alone healthcare foundations and reviewed how their parents Metro has raised $12.1 million over the past five years.utilize these structures as both a fundraising and long-term During the difficult 2008 and 2009 years, they were able toinvestment portfolio vehicle. maintain their peak fundraising dollars at $3.4 million for each Further analysis shows that other types of not-for-profit or- year, which shows their commitment towards fundraising.ganizations have benefitted from a using a stand-alone foun-dation strategy. Some examples include: continued on page 42 Organization Type of Foundation Foundation Name Diocese of Brooklyn Religious Alive in Hope Foundation Buffalo Philharmonic Orchestra Society   Arts and Culture    Buffalo Philharmonic Orchestra Foundation Farmingdale State College Education Farmingdale College Foundation LIM College Education LIM Fashion Education Foundation AHRC New York City Social Services AHRC NYC Foundation Queens Public Library Education Queens Library Foundation American Medical Association Membership organization American Medical Association Foundation Phoenix House Social Services Phoenix House Foundation Society for Human Resource Management Membership organization SHRM Foundation Focus 41
  • March/April 2 0 1 2continued from page 41 Organization Profile: Healthcare organization: Metro Hospital, upstate New York Foundation: The Foundation for Metro Hospital (separate 501(3)(c) organization) Founded: 1983 Staff: Six professionals Board: 29 board members, recently added five new members Donor targets: Individuals, corporations, foundations Ways to give: Annual appeal, special events, memorials, capital campaign, planned giving Legacy society: Yes-“1885 Society” Foundation funds raised in 2009: $3.4MM/6.3% of total revenues Foundation fundraising trend: 2009: $3.4MM; 2008: $3.4MM; 2007: $1.1MM; 2006: $1.5MM; 2005: $2.7MM Website: “Make a Gift” and “The Foundation” tags; separate foundation page Planned giving details: Stock, bequests, charitable gift annuity, pooled income fund, life insurance, real estate, endowments, retire- ment plans Online giving: Yes Social Media: Use emails, exploring other uses Newsletter: Yes, highlighted benefits of charitable gift annuity Capital Campaign: mentions capital projects Public Relations: Their successful capital campaign was highlighted in the Chronicle of Philanthropy along with their relationship with their fundraising advisor, Community Counselling Service Co. (CCS) Endowment assets: $12,400,000 Strategy: Long-term investment strategy Policy Statement: Must follow NYPMIFA requirements *fictional name used to preserve confidentiality WHEN ACTIONS SPEAK LOUDER THAN WORDS Coding, compliance, reimbursement and revenue solutions infused with intelligence and delivered through our consulting, software, publications and webcasts to more than 4,000 U.S. providers in 2011. MedLearn is now Panacea™ panaceahealthsolutions.com MedLearn | RACmonitor | ICD10monitor42 F o c u s
  • March/April 2 0 1 2References: This publication is not designed or intended to provide finan- 1: GIVING USA 2011 Report; The Center on Philan- cial, tax, legal, accounting, or other professional advice since suchthropy at Indiana University. advice always requires consideration of individual circumstances. 2: Association of Healthcare Philanthropy. If professional advice is needed, the services of a professional ad- visor should be sought. This publication is for information pur- 3: The 2010 Study of High Net Worth Philanthropy; poses only and is not intended as an offer, recommendation, orThe Center on Philanthropy at Indiana University. solicitation for the sale of any financial product or service or as a 4: Guidestar and various Form 990 and websites. determination that any investment strategy is suitable for a spe- cific investor. Investors should seek financial advice regarding theAbout the authors suitability of any investment strategy based on their objectives,Walter J. Dillingham, Jr., CFA, Managing Director, Leigh H. financial situations, and particular needs.Weiss, Managing Director and John M. Lawson, ManagingDirector, are all from Wilmington Trust. All three work in the Copyright 2012 Wilmington Trust, N.A.New York office of Wilmington Trust, N.A., and specialize inserving the investment advisory needs of endowments, foundationsand healthcare organizations. Wilmington Trust, N.A. is partof M&T Bank. Walter Dillingham can be reached at WDilling-ham@WilmingtonTrust.com. The Power to Connect Balancing costs, care and operations Balancing the demands of patient care, rising costs and the need to run a successful business can be a struggle for healthcare organizations. The professionals in ParenteBeard’s Healthcare Services Group have decades of experience in providing financial and business advisory services to hospitals and healthcare systems, physician and medical group practices, dental practices and other provider institutions. Because ParenteBeard’s practice is structured regionally, we provide our clients with a thorough understanding of healthcare issues in their regions. It’s challenging to envision what the healthcare industry will look like tomorrow. ParenteBeard can provide you with a secure business foundation today to help you move confidently into the future. Audit | Accounting | Tax | Business Advisory Services Parentebeard.com 732.388.5210 © Parentebeard LLC Focus 43
  • March/April 2 0 1 2The Parade of Major ReportedPHI Breaches Hits 400 –Theft is the Primary Typeof Breach by Michael J. Kline, Esq. Michael J. Kline Previous issues of this magazine have contained articles on Breach reveals that it was an event as to which Triumph ap-the breaches of Protected Health Information (“PHI”) that pears to have been a victim with little ability to avoid the loss.have been reported on the U.S. Department of Health and Triumph should be commended for having placed a HIPAAHuman Services (“HHS”) list (the “HHS List”)1 as breaches Breach Notification (the “Notification”)3 on its Web site andof unsecured PHI affecting 500 or more individuals (the “List a prominent notice on its Home page4 in red with a link toBreaches”). On February 24, 2012, HHS posted number 400 the Notification and the following advice: “Please click herein the ever-lengthening Parade of List Breaches. to read the public notice which may affect consumers re- As the first postings on the HHS List occurred on March 4, ceiving services from our Winston-Salem, Mocksville and2010, it took almost exactly two years to reach the 400 level, King facilities.” Many covered entities have not prominentlywhich means that an average of 200 postings of List Breaches detailed List Breaches on their Web sites.have been occurring each year. The Notification states that the Triumph Breach occurred A closer look at the 400 List Breaches reveals that there are on December 13, 2011 when three men entered the 2ndan appreciable number of repeat marchers in the parade.2 In floor lobby of a Triumph facility. While two of them weresome cases assumptions had to be made as to repeat marchers distracting the receptionist, the third entered a hallway andbecause the names of some covered entities on the HHS List stole a laptop computer from an office. Because the Notifica-were similar but not identical to others or appeared to be dif- tion does say that the laptop was password protected, one canferent divisions of the same covered entity. reasonably conclude that there was not encryption of data on Based on such assumptions (including counting multiple the laptop.divisions as one covered entity), there were: The information on the Triumph computer was reported (i) 28 covered entities with two List Breaches, in the Notification to have included names, dates of birth, (ii) 16 covered entities with three List Breaches and medical record numbers, insurance/Medicaid numbers, bill- (iii) 1 covered entity with four List Breaches. ing codes and authorization status for services, but not social security numbers, diagnostic codes or specific financial infor- Therefore, there were 337 separate covered entities that re- mation.ported the total of 400 List Breaches. Of the total of 400 List Although the HHS List states that 2,000 individuals wereBreaches, 223 of them attributed the cause or partial cause affected by the Triumph Breach, no reference to the number ofof the breach to be “Theft.” Of the 223 thefts reported, 93 affected individuals was contained in the Notification. Manyof them were characterized as theft of a laptop. Therefore, it covered entities that provide information on their Web sites asis not surprising that the 400th List Breach was reported by to List Breaches do disclose the number of affected individuals.Triumph, LLC (“Triumph”) as a theft on December 13, 2011 Additionally, while the Notification included contact infor-of a laptop containing PHI that related to several of its North mation for questions about the Triumph Breach, no referenceCarolina behavioral and psychiatric facilities and affected was made in the Notification as to the offering by Triumph of2,000 individuals (the “Triumph Breach”). credit monitoring or other security services to affected indi- While the facts of the Triumph Breach were not remarkable viduals, as has been done for many other similar List Breaches.in themselves, the event is worthy of review as being a typical Perhaps the explanation for the latter omission is the followingList Breach involving a theft of a laptop that contained PHI statement by Triumph in the Notification:of several thousand individuals. A closer look at the Triumph44 F o c u s
  • March/April 2 0 1 2 We believe the motive for the theft was for the About the Author computer not for the information stored on the com- Michael J. Kline, Esq., is a partner with Fox Rothschild LLP, puter. In light of this theft, we are examining our pol- based in its Princeton, NJ office, and is a past Chair of the firm’s icies, procedures and protocols to safeguard against Corporate Department. He concentrates his practice in the areas any future incidents. of corporate, securities, and health law, and frequently writes and Nonetheless, it is uncertain as to whether the PHI stored speaks on topics such as corporate compliance, governance andon the computer will be inappropriately accessed and used. business and nonprofit law and ethics. Triumph was an unfortunate victim of a theft of PHI asmany other providers have been. Nonetheless, the Triumph FootnotesBreach is a reminder that, no matter how a List Breach is 1 The Internet link is http://www.hhs.gov/ocr/privacy/hipaa/caused, it will be costly for the covered entity on many lev- administrative/breachnotificationrule/breachtool.html.els, and the ultimate extent of the adverse impact cannot be 2 The blog series produced by lawyers at Fox Rothschild LLPknown with certainty. relating to HIPAA/HITECH/HIT has followed a number Finally, while the Parade of List Breaches continues to grow, of them, including Health Net, Henry Ford Health System,there are many more PHI data breaches involving fewer than SAIC and University of Rochester Medical Center. Its Inter-500 individuals that are occurring as well. It is likely more a net link is http://hipaahealthlaw.foxrothschild.com/articles/question of when, rather than whether, a covered entity will breaches/.suffer a PHI data breach. 3 The Internet link is http://www.triumphcares.com/Public- Notice.pdf. 4 The Internet link is http://www.triumphcares.com/. 4862_7.3125x4.68_FNL.qxp:Layout 1 4/4/11 5:15 PM Page 1 Focused. Proud Partner of the Medical Society of New Jersey Experienced. Trusted. Sun National Bank’s healthcare group offers a full spectrum of financing, treasury management and advisory solutions for hospitals, surgical centers and practices. Find out how we can ® build a healthy partnership and a strong future together. Sun National Bank 800-SUN-9066 Recognized by Forbes as one www.sunnb.com/healthcare of America’s most trustworthy companies – 5 years running. Focus 45
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  • INTRODUCING THE FIRST ANNUAL NJ HFMA CFO CUP INTRODUCING THE FIRST ANNUAL NJ HFMA CFOTOURNAMENT GOLF CUP GOLF TOURNAMENTWhen: WednesdayWednesday October 10, 2012 When: October 10, 2012Where: Where: Galloway National Golf Club Club Galloway National Golf Galloway, NJ Galloway, NJ recently named Galloway one of America’s best private golf clubs! Golf Digest Golf Digest recently named Galloway one of America’s best private golf clubs! Schedule: Registration and brunch: 11:00 AM NJHFMA CFO Cup Golf Tournament shotgun start 12:30 PMSchedule: Registration and brunch: 11:00 AM 5:30 PM Reception at Galloway National Golf Club Approx NJHFMA CFO Cup Golf Tournament shotgun start 12:30 PM Awards: One First Place Team Trophy – CFO Cup Reception at Galloway National Golf Club receiveApprox 5:30 PM First & second place team players will also trophies Winners announced and trophies awarded on Wednesday night atAwards: One First Place Team Trophy – CFO Cup Borgata during NJHFMA Institute function. First & second place team score of all four players utilizing a Callaway scoring Scoring: Combined team players will also receive trophies Winners announced and trophies awarded on Wednesday night at Borgata during system NJHFMA Institute function. Foursomes will be $3,500 and include complimentary registrations to the Institute. Each foursome will be required to include a minimum of 2 hospital executives.Scoring: Combined team score of all four players utilizing a Callaway scoring system Save the Date!!!Foursomes will be Registration and more information will be releasedInstitute. Each foursome $3,500 and include complimentary registrations to the soon!will be required to include at johnbrault@mcbeeassociates.com, or (973) 624-0980 x3617, with any the tournament is Contact John Brault a minimum of 2 hospital executives. Participation in questions.reserved for providers and current sponsors of the NJ HFMA Annual Institute. Save the Date!!! Registration and more information will be released soon! Contact John Brault at johnbrault@mcbeeassociates.com, or (973) 624-0980 x3617, with any questions.
  • Meet Rudy Giuliani.The 2012 Annual InstituteCommittee is pleased toannounce that Rudy Giuliani willdeliver the keynote address on“The National Healthcare Debateand the Need for ResoluteLeadership”.Charity EventGolf TournamentNJ-HMFA 1st AnnualCFO Cup Golf Tournament 2012 NJ HFMA Annual Institute October 10-12, 2012 The Borgata Hotel and Casino, Atlantic City, NJ www.njhfmainstitute.org
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