The Journal

Summer 2009 Vol 9.3

New Jersey Appellate Court Upholds PIP Fee Schedule

Malpractice Premiums Are Falling, For Now

Get to Know the Paid Family Leave Act

Overqualified ● Unclear Lines of Authority ●

No New Hire Training ● Low Pay Scale ● Ineffective

No Benefits ● No Performance Reviews ● Low Produc

No Positive Reinforcement ● Negative

No Accountability ● No Remediation

Negative Work Environment ● Under

Criticism and Blame ● Lack of

No Employee Handbook ● Unconfirmed

Avoiding “Staff Infections” How to Hire and Retain Quality Practice Personnel

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2 THE JOURNAL | SUMMER 2009

TABLE OF CONTENTS

ADVERTISERS INDEX

THE JOURNAL Editorial and Executive Staffs

Executive Editor Robert W. BowenManaging Editor Kristen Bowen

ContributorsLaurie A. Clark Timothy L. Hoover

Mark E. Manigan

Executive OfficersPresident Alan Carr, DO

President-elect Lee Ann Van Houten-Sauter, DOVice President Antonios Tsompanidis, DO

Treasurer Karen Kowalenko, DOSecretary John LaRatta, DO

Immediate Past President Susan Volpicella-Levy, DO

NJAOPS StaffExecutive Director Robert W. BowenBusiness Manager Alice Alexander

Director, Exhibit Services Kristen BowenDirector, Medical Education Lila Cleaver

Director, Marketing& Communications Bonnie Smolen Office Manager Diana Lennon

The Journal is the official magazine of the New JerseyAssociation of Osteopathic Physicians and Surgeons(NJAOPS). NJAOPS is the sixth largest state affiliate ofthe American Osteopathic Association. NJAOPS representsthe interests of more than 3,500 active osteopathic physicians, residents, interns and medical students. Founded in 1901,NJAOPS is one of the most active medical associations in New Jersey with 13 county societies.

Opinions expressed in The Journal are those of authorsor speakers and do not necessarily reflect viewpoints orofficial policy of NJAOPS or the institutions with whichthe authors are affiliated, unless expressly noted.

NJAOPS/The Journal is not responsible for any statementsmade by any contributor. Although all advertising isexpected to conform to ethical medical standards,acceptance does not imply endorsement by this publication.

The appearance of advertising in The Journal is not anNJAOPS guarantee or endorsement of product or service,or the claims made for the product or service by theadvertiser. When NJAOPS has endorsed a product or program it will be expressly noted.

All advertising contracts, insertion orders, inquiries, correspondence, and editorial copy should be mailed to:The Journal (attention: Executive Editor), NJAOPS, OneDistribution Way, Suite 201, Monmouth Junction, NJ08852-3001. Telephone: 732-940-9000.

The Journal editorial staff reserves the right to edit all articlesand letters to the editor on the basis of content or length.

The Journal (ISSN 0892-0249) is published quarterly (January,April, July, and October) from the executive and editorial officesat NJAOPS headquarters in Monmouth Junction, New Jersey.Periodical postage paid at Monmouth Junction, New Jersey, andadditional mailing offices.

POSTMASTER, please send address changes to The Journalof the New Jersey Association of Osteopathic Physiciansand Surgeons, One Distribution Way, Suite 201, MonmouthJunction, NJ 08852-3001.

Subscription to The Journal is included in NJAOPS membership dues. Non-member subscription is $25.

Designed and printed in the USA by Mastergraphx, Monmouth Junction, New Jersey.

The Journal is printed on environmentally friendly paper. Byusing products with the FSC label you are supporting the growthof responsible forest management worldwide.

AROC 2010 .........................................................................Back Cover

BC Szerlip ..........................................................................................15

Conventus Inter-Insurance Exchange..................................................19

HealthCare Institute of New Jersey ............................Inside Front Cover

NJAOPS David L. Sirota, DO, Golf Classic ........................................23

NJ PURE...........................................................................................1, 3

Pellittieri Rabstein & Altman ..............................................................17

PNC Bank ............................................................................................5

Princeton Insurance ...................................................Inside Back Cover

Professional Liability Agency of South Jersey .......................................8

ProMutual Group .................................................................................9

UMDNJ-School of Osteopathic Medicine ............................................7

Woodland Group, The .......................................................................21

Classified Ads.....................................................................................24

Physicians’ Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4NJAOPS member Craig Wax, DO, shares his concept for healthcare reform: the “free-marketincentive model.”

President’s Message . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6In his first column as president, Alan D. Carr, DO, promotes education and activism as ameans of protecting the rights of practicing physicians in the age of healthcare reform.

From the Executive Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8Executive Director Robert Bowen encourages participation in two new memberrecruitment initiatives and emphasizes the importance of keeping NJAOPS apprisedof fee recoupment issues.

Capital Views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10Government Affairs and Legislative Counsel Laurie Clark provides an update on recentlegislative activity including the state appellate court’s recent ruling on the medical feeschedule for personal injury protection.

Avoiding “Staff Infections” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11In this issue’s cover feature, medical practice management experts Michael S. Lewis,MBA, FACMPE, and Deborah R. Mathis, CPA, CHBC, offer tips on how to improvepatient satisfaction, practice growth and overall profitability by hiring and retaining thebest staff.

Managing Malpractice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20Medical malpractice insurance expert Timothy Hoover explains the ups and downs ofmalpractice premiums and how physicians can make the most of falling prices.

Legal Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22Health law specialist Mark Manigan explains the New Jersey Paid Family Leave Act,which went into effect July 1.

Member News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24NJAOPS shares member honors and achievements and the new executive committeeencourages communication.

Actual rate increases since January 1, 2003*

THIS CHART TELLS YOU WHAT

YOUR AGENT WON’T.

©2008 New Jersey Physicians United Reciprocal Exchange

*Source: Perr&Knight Rate Filings based on AM Best and New Jersey Department of Banking and Insurance Rate Filing Information.

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PHYSICIANS’ FORUM

A Free-Market Approach to Healthcare Reform

“Physicians’ Forum” is an opinion columnin which NJAOPS members can expresstheir views on timely medical topics.

Healthcare reform is a phrase that isoften misused by politicians andmembers of the media. The actual

cost of healthcare delivery is confused withthe cost of health insurance, but these aretwo very different matters. Healthcareinsurance involves the monthly cost wepay either independently or through ouremployers to protect ourselves from healthcare expenses. Healthcare deliveryinvolves the actual cost of the medicalservices we receive. In our family, wetypically receive only a small fraction ofthe money we pay for health insurance inthe form of actual medical services. The largeremainder is insurance company profits.

As a family physician, I provide thoroughand complete patient care. I treat and pre-vent illness. I coordinate testing and spe-cialist consultations. I arrange for hospitalcare and care upon discharge. I am on callfor urgent phone consultations. My practiceis open weekdays, evenings and Saturdaysfor office visits for sick and well patients. Iwholeheartedly believe that there are manypositives to being a family physician. Yetdespite all of the nobility, honor and privilegeof our profession, we’re under siege fromevery side.

Our profession is highly regulated by lawand supervised by federal and state agencies.We must be knowledgeable about andcompliant with every health law, billingcode and Medicare rule. According to theMay 14, 2009, issue of Health Affairs, itannually costs the average physician nearly$70,000 to interact with insurance companies (i.e., completing forms, callingfor pre-authorizations, filing claims andappeals, etc.). These same payers dictatehow often we may see our patients, theamount and when we will be paid, and frequently, what we can prescribe. They canrescind previously paid compensation atwill—and do. In reality, insurance companies/HMOs are practicing medicine since theymust approve every test, course of treatment

and referral to a specialist. However, theyare rarely, if ever, legally responsible.

The personal injury arena of the legalprofession encourages patients to becomeour enemies and seek compensation forany maloccurrence. Frivolous lawsuitsexponentially increase the cost of healthcarethrough “defensive medicine” (i.e., needlessspecialist consultations, extra confirmatorytests, duplication of studies, extra hospitaldays, etc.) Tort reform must be instituted toreverse the culture of lawsuit profiteering.

My concept for reform is called the “free-market incentive model” for healthcaredelivery, healthcare insurance and healthylifestyles. All parties are incentivized topromote and maintain good health, and itthereby becomes a self-fulfilling cycle.

The solution lies in free-market competition,not government mandates or insurancecompany coercion. Physicians should bepaid for their time and effort just as otherprofessionals are. To keep prices down,physicians should compete with each otherfor patient “business.” Hospitals shouldcompete with other hospitals. Labs shouldcompete with labs. Pharmaceutical com-panies too should compete directly witheach other based on price—not “averagewholesale price,” which translates into thefamiliar “manufacturer suggested list price.”

With the free-market incentive model,patients pay directly for their care. Theyshop for quality and price, just like consumersdo for all other products and services. Theyare free to choose physicians and servicesbased on their needs, wants and resources,not their insurance provisos.

Under this model, insurance companies canprovide a product that pays a percentage oftotal patient-chosen care price only. Theywould not be involved in actual care, returningto the non-care entities they were manydecades ago. Under this model, insurancecompanies can financially incentivize theirinsureds by providing discounts for healthylifestyle habits and “free” coverage forpreventive care and exercise facilities.

This type of system works for other types of insurance including car insurance. In an ABC News report entitled “HealthInsurance Isn’t All It’s Cracked Up to Be,”John Stossell explains how people changetheir oil, supply gas, rotate tires, etc., all on their own. Car insurance kicks inonly when there is a huge accidentalloss. Health insurance should do onlywhat it was originally designed to do: cover a percentage of routine catastrophic costs.

Under the free-market incentive model, all parties involved would benefit and thehealth of America would improve.Unmanaged, unfettered and unimpededcompetition is the only lasting solution formedical care providers to survive to servetheir patients’ needs. Fair market value,determined by competition in the market-place, would be the price people pay forevery aspect of their care.

Public schools and parents must educateour youth on exercise and vegetable-baseddiets. Healthy lifestyles, free of poisons liketobacco smoke, alcohol, high-sugar foodsand animal fats, will reverse the obesityand chronic illness epidemic in the UnitedStates today. Healthy children will becomehealthy adults who continue the cycle ofthe pursuit of good health. Healthy peoplewho are committed to their own healthrequire less expensive medical care andpreventive care than those with no respectfor their own bodies.

Together the healthcare system, publicschool system and people’s individualhealth choices integrate and align incentives in the free-market incentivemodel for health reform. ��

Craig M. Wax, DONJAOPS Member

Interested in sharing your opinions on topics of importance to physicians? Sendyour letters to the editor to The Journalby email to [email protected].

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PRESIDENT’S MESSAGE

Alan D. Carr, DO

Protecting Practice Rights through Activism

In 1964 Bob Dylan released one of hismost famous songs, “The Times TheyAre A-Changin’.” Fast forward 45 years,

and this title could be used to describethe current status of the U.S. healthcaresystem and the practice of medicine aswe know it.

As politicians gather in Washington todiscuss the future of health care, it isessential that physicians are aware of thepotential for change and are ready to voicetheir opinions—for or against—the proposalsfor reform. Physicians frequently take apassive role in the political action arena,quietly allowing changes to occur that affecttheir practice rights and the way they treattheir patients. In the end, many complain andargue against these changes while they stoodidly by and did nothing to influence them.

Know the IssuesThis year, perhaps more than ever, we needto be politically active. We need to haveconstructive conversations with our legislatorson both the state and national levels. Asadvocates for patient rights and care, weneed to make our voices heard and supportthe policies that will enable us to bestpractice medicine with the least amount of restriction and red tape.

On the national front, at this writing,Congress has adjourned for its summer recess.Upon their return, our leaders will be facedwith President Obama’s goal of crafting a“solution” to the national healthcare issue.Congress will be challenged with how tomeld the five different proposals currentlyon the table into one cohesive bill that willultimately become law.

There are a number of bills under consideration by our state legislature thatcould ultimately change the way we practicemedicine in New Jersey. Some of the proposed changes affect scope of practice,caps on out-of-network expenses, and personal injury protection (PIP) reimburse-ment. As physicians, we must stay apprisedof this legislative activity so we can

advocate for the best interests of ourpatients and profession.

Voice Your ConcernsIn an effort to stay engaged in the process,NJAOPS is reinvigorating its Political AffairsCommittee. This committee is designed todiscuss potential legislative action and itseffects on health care. This committee willstay advised of all pending legislation thatcan affect our practice of medicine andthen advise association leadership on stepsthat should be taken.

We began bolstering this committee withour first meeting in June. We discussed thechallenges that may be faced by a newCamden-based medical school, reviewedthe AOA’s first Town Hall Meeting Webinaron healthcare reform, and discussed potentiallegislation in front of our state Assemblyand Senate.

The information covered was beneficialand has been disseminated to our countysociety presidents for our members to hearat their respective county meetings. Iencourage all NJAOPS members who areinterested in becoming involved in thePolitical Affairs Committee to contact me [email protected]. NJAOPS is here toserve you, and we want to hear your viewson the latest political issues.

To foster relationships and ensure our messageis heard, I have asked AOA leadership tohelp NJAOPS secure meetings with our federal legislators while they are in NewJersey on recess. Similar meetings shouldtake place with our state officials as well. Itis my goal to have interested membersbuild meaningful, long-term relationshipswith legislators in their districts.

Get InvolvedNJAOPS is also initiating a grassroots political effort. The proposed changes inour healthcare system will likely play adecisive role in the future of our osteopathicmedical students. On September 17, wewill initiate our grassroots political effort.

This “for-student” effort is designed to provide interested student members ofNJAOPS with an introduction to the politicalarena. At this meeting, we will orient studentson how to become politically active asthey develop into future leaders of themedical community.

Maximize Your ResourcesIn this ever-changing political environment,the concerns of our members will always beat the forefront of our actions. When changesdo occur, it is my hope to communicatethem to our members in the most effective,efficient manner possible.

Medical office managers and administratorsare valuable resources in helping practicesassimilate information and adapt tochange. I would like to help you capitalizeon your administrative resources by providingthem with patient advocacy training. Irecently met with members of Pfizer’s government affairs and patient advocacygroup. I was encouraged by their interestin partnering with us to create a series ofeducational sessions for office managers ontimely patient advocacy issues.

Properly educating your staff on relevantissues is an investment in improved patientoutcomes. Details on these and other freeeducational programs for your office personnel will be available soon. Pleasesupport this effort by selecting members of your staff who would benefit from theeducation and make it possible for them to attend these sessions.

Yes, “the times they are a-changin’.” Don’tsit idly by. Know the issues, voice yourconcerns, get involved and maximize yourresources. The stronger and more engagedour membership becomes, the moreNJAOPS can do to ensure the protection of your practice rights. �

Alan D. Carr, DO, is the 2009–2010president of NJAOPS. He is a board-certified anesthesiologist specializing inpain management.

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The program will focus on cutting edge advances in:

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The purpose of this program is to educatephysicians, physicians-in-training and healthprofessionals on neuromusculoskeletalmedicine. UMDNJ-School of OsteopathicMedicine is the leading center for physicianeducation in southern New Jersey.

Overview ofNeuromusculoskeletal MedicineThursday, October 8, 2009 • 7:30 am ~ 12:00 pm

University Doctors’ Pavilion, Suite 300042 East Laurel Road, Stratford, NJ

We anticipate Category 1A CME credit from the AOA


FROM THE EXECUTIVE DIRECTOR

Robert W. Bowen

Why Joining NJAOPS Really Pays

Iam pleased to report two new memberrecruitment programs have beenannounced by the NJAOPS Board of

Directors. The first rewards memberswho recruit new Active Members with a$50 credit per new member toward their2010 dues, up to the full amount of theirdues. If you recruit a new member, simply ask them to write your name atthe top of the application form. Onlyapplications that include a “sponsor”name written on them will be awarded a $50 credit toward the sponsors’ 2010member dues.

The second recruitment program offers newmembers the remainder of 2009 and all of2010 for the regular one-year dues rate.Any physician who has not been a membersince 2007 is eligible.

This program is modeled after the AmericanOsteopathic Association membershipprogram that has been so successful overthe past several years. Their introductorymembership campaign boasts a 40%renewal rate after the initial period.

New Jersey has continued to enjoy positivenet growth of osteopathic physicianspracticing in the state. As the professiongrows, so does the challenge of connectingwith prospective members from an increasingnumber of osteopathic medical schools andresidency programs, and increased specialtyrepresentation. More than ever we needour members to serve as ambassadors ofNJAOPS to their colleagues.

“These are challenging times for physicians,”says NJAOPS President Alan D. Carr, DO,

“but it’s never been more important for usto rally New Jersey osteopathic physiciansaround the issues that affect the future of the medical profession. In March, we setan all-time membership record, and wewant to see it continue to grow. New Jerseyhas a long history of being one of thestrongest osteopathic states in the country,and we plan to continue that legacy.”

Know Your Recoupment RightsI am reminded weekly of the progress thatis being made by this association and therich legacy already in place. In 2004, whenHarry Manser Jr., DO, became president ofNJAOPS, physicians had no recoupmentrights. Insurance companies could go backas many years as they wanted and recouppast fees without any advance notice. Atthe time, President Manser championed thereforms by bringing the problems to theattention of legislators with firsthand examplesof abuse by insurance companies. Thanks tohis initiative to educate key legislators, andtwo years of hard work crafting andnegotiating a policy that could successfullymove through the legislative process, thoserights are now law. However, establishingthe law is one thing; enforcing it is another.

We are still receiving reports from memberpractices of medical insurance companiesattempting to recoup fees in violation ofthe law. Physicians in New Jersey arerequired to be given 45 days’ written noticebefore funds may be recouped, and fees mayonly be recouped for 18 months. NJAOPSrecently provided assistance to a familypractice that received a fee recoupmentnotice going back five years.

In some cases, it appears the companieseither have not updated their policies orare willfully violating the law and onlycomplying if and when the practice citesthe statute in their response to the insurancecompany. Be sure you carefully reviewany notices of fee recoupment for compliancewith the law. The recoupment reforms passedin New Jersey are a prime example of whylegislative activities remain our most valuablebut often overlooked “member benefit” as we continue to fight for the rights of physiciansand their patients. �

Robert W. Bowen is the executive directorof NJAOPS.

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CAPITAL VIEWS

Laurie A. Clark

Appellate Court Upholds PIP Fee Schedule

Personal Injury Protection (PIP) hasbeen a hot topic of discussion amongNew Jersey physicians for some time.

As an extension of auto insurance, PIP coversmedical expenses and, in some cases, lostwages and other damages. You may haveheard it called “no-fault” coverage becausePIP is designed to be paid without regard tolegal liability.

In October of 2007, the Appellate Divisionconsidered arguments by NJAOPS legalcounsel regarding a new PIP Medical FeeSchedule adopted by the New JerseyDepartment of Banking and Insurance(DOBI). The arguments resulted in a 3½-year stay that prevented the PIP MedicalFee Schedule from going into effect.

The Appellate Division revisited the PIPissue on August 10 and upheld the 2007PIP Medical Fee Schedule, deeming iteffective immediately. The only exceptionto the ruling prohibits DOBI from using thecontroversial Ingenix database in determiningthe “usual, customary and reasonable fees”of physicians and ambulatory surgerycenters (ASCs) for CPT codes, which arenot assigned specific payment rates in thefee schedule.

Several years ago, the initial draft of thefee schedule circulated by DOBI set feesacross the board at 115% of Medicare.Due to vigorous objections by our association and others, physician feeswere increased to generally 130% ofMedicare, with various adjustments inthe 130%–800% of Medicare range. ASCfees were increased to approximately 325%of Medicare.

While we are not pleased with the currentfees, they do represent an increase overwhat was originally proposed. Next stepsinclude NJAOPS legal counsel asking theNew Jersey Supreme Court to review thedecision. The Supreme Court has discretionover their consideration of the matter,based on whether it finds there are “specialreasons” for reviewing the case. At thiswriting, the clock is ticking on a 20-daywindow to request that the Supreme Courtreview the case.

Prior to obtaining the stay in 2007, legislationwas moving forward to require the PIP FeeSchedule to be based on actual amountspaid by PIP carriers to physicians, asopposed to the hodge-podge of data uponwhich DOBI allegedly relied. The bill wasvoted out of the relevant committees in thestate Assembly and Senate. Movementstopped in light of the stay, as the legislaturedid not want to act pending the outcome ofthe litigation. We will now return to thelegislature and vigorously push the bill.

� Additional PIP Regulations On August 13, NJAOPS President AlanCarr, DO; NJAOPS Executive DirectorRobert Bowen; and I met with DOBIDirector of Insurance Douglas Wheeler todiscuss the fee schedule developments aswell as another PIP regulatory proposal. Inearly July, DOBI published a proposal tomake changes to current regulations withrespect to networks, protocols and MedicalReview Organizations. NJAOPS is concernedthis proposal could also reduce physicianpayments and potentially cut patientaccess to medical services under PIP. We encourage you to submit commentsto DOBI. Contact [email protected] details.

� Maternity Care Installment PaymentsOn August 12, S-1125/A-2539 was signedinto law by Governor Corzine. This legislation requires health insurers thatcover maternity services to reimburse state-licensed obstetricians, gynecologistsand midwives over the course of a pregnancy, in installments, instead of afterdelivery. The new law takes effect Sept. 1,2010. DOBI will circulate regulationsbefore the effective date.

� Health Benefits for AutismLegislation requiring New Jersey healthinsurers to provide coverage for autismscreenings and other developmental disabilities as well as medically necessaryoccupational, physical and speech therapywas signed into law on August 13.

S-1651/A-2238 requires insurers in NewJersey to provide coverage for diagnosticand therapeutic services designed to identify

and treat autism and other developmentaldisabilities. Under the bill, insurers mustannually provide up to $36,000 in coverage for medically necessary, behavioral,early intervention for all autistic patientsunder age 21. As of Jan. 1, 2012, DOBIwill adjust the maximum benefit toreflect inflation according to the consumerprice index.

� Horizon Out-of-Network BenefitsOn July 16, NJAOPS legal counsel filedan application requesting that DOBI prohibit Horizon Blue Cross Blue Shieldof New Jersey (BCBSNJ) from selling tosmall employers the Horizon AdvantageDirect Access health insurance plan.This plan limits ASC out-of-network benefits to $2,000 per person per calendar year. The commissioner deniedthe request.

NJAOPS legal counsel filed for a stay of the implementation of the plan with theAppellate Division so BCBSNJ would beprohibited from selling the plan while the matter was litigated. The AppellateDivision denied the stay request. Inresponse, emergent papers were filed inearly August with the state Supreme Courtrequesting that it issue a stay of the planwhile litigation is ongoing. The courtdenied the request.

NJAOPS will pursue legal and legislativestrategies to remediate the situation. In themeantime, Horizon is able to sell the planto small employers. Our position remainsthat this plan violates state laws governingsmall employer health benefits.

In ConclusionWe have a hard fight over the next fewmonths, but we are committed to movingforward on your behalf. If carriers are successful in eliminating patient access toout-of-network physicians, it will undoubtedlylead to harsher terms for all physicians. We cannot and will not allow this to occur unchallenged. �

Laurie A. Clark is NJAOPS’ governmentaffairs and legislative counsel. She is alsopresident of LegisServe.

THE JOURNAL | SUMMER 2009 11

“Teamwork is the ability to work together toward a common vision…the ability to direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to attain uncommon results.”

—Andrew Carnegie

Overqualified ● Unclear Lines of Authority ●

No New Hire Training ● Low Pay Scale ● Ineffect

No Benefits ● No Performance Reviews ● Low Prod

No Positive Reinforcement ● Negati

No Accountability ● No Remedi

Negative Work Environment

Criticism and Blame ● Lack

No Employee Handbook ●

Avoiding “Staff Infections” How to Hire and Retain Quality Practice Personnel

By Deborah R. Mathis, CPA, CHBCand Michael S. Lewis, MBA, FACMPE


Many private practice physicianswho would never let an infectionin a patient go untreated struggle

to diagnose and manage “staff infections”in their own offices. These infections can startsimply enough, perhaps by hiring the wrongperson or maybe hiring the right person butfor the wrong position. Left untreated, one“infected” employee can spread the illnessuntil you are left with an office mired in dissatisfied staff members, unhappy patients,and possibly even a practice that is vastly limited by employee discontent and turnover.

Successful practices are characterized bythe efforts and attitudes of the people whowork there. Teamwork plays a significant

role and is embodied by the ability to capturea common vision and work toward commongoals. Hiring, training and retaining qualityemployees who can work together as ateam are not only important responsibilitiesbut are essential for patient satisfaction,practice growth and overall profitability.

Sources of InfectionThere are a number of situations that cancause staff infections to occur in your practice.These include:

� Hiring someone with the wrong skill setor personality for a particular position

� Placing someone with a strong skill set in a position that doesn’t maximize his or her abilities

� Providing limited or no new hire training� Providing limited or no ongoing training� Operating under blurred lines of

responsibility and reporting� Failing to provide competitive

compensation and/or benefits� Failing to provide positive reinforcement

to staff� Placing blame instead of offering

constructive criticism� Ineffectively dealing with

problem employees

Hiring the Right PeopleHow do you attain above-average resultsfrom your employees? Start by hiring theright people for the right job. When a positionbecomes available in your office, reviewand update the job description, or createa written description if one does notalready exist. Use that description to writea job posting that includes the followingkey elements:

� Position title and office locationIn this tight job market, many job seekersare expanding their searches outside of what is a realistic commuting distance. Being specific about the location of your office can help narrow the number

of respondents. But knowing when to omit details is important as well. If you are looking to replace a current employee,leave out the name of your practice.

Sample: Growing Ocean County family medical practice seeks experienced office administrator.

� Specific skills, experience, education or certificationsAdding “must-haves” and “wish lists” for skill sets can reduce the number of unqualified candidates applying for a position. It will also help later when you are deciding who to interview.

Sample: Proficiency in Microsoft Office 2007 a must. Five years of medical

billing and coding experience, and priorpersonnel management experience required. CPC certification and a workingknowledge of EHR systems a plus.

� Office cultureRather than ask for specific character traits such as “detail-oriented” or “highly

motivated,” include details that demon-strate the type of work environment youare trying to attain.

Sample: We are a fast-paced, friendly team with a firm commitment to putting patients first.

� Response instructions, including salary requirementsConsider setting up a free email account to easily keep track of responses to your ad. Yahoo, Hotmailand Google (Gmail) offer you the option of creating “blind” response mechanisms. By limiting the ways in which a candidate can contact your office, you reduce the need to field calls about the position. If you prefer to receive resumes through a more traditional means, provide a fax number or use a PO Box.

Asking for salary requirements in your response instructions allows you to instantly rule out those who fall far outsideof the position’s salary range. If otherwisequalified candidates don’t include a salary requirement, don’t let that stop you from calling them. Only about 40%of people include salary requirements inan initial query when asked.

Sample: Please provide resume, salary requirements/history and three referencesby email to [email protected] or fax to xxx-xxx-xxxx.

Once you have created a concise butdescriptive posting, you can:

� Place a classified ad in a local or regional newspaper

� Post the opening on an Internet job site (such as monster.com, careerbuilder.comor other job boards)

� Post the opening on your practice Web site� Encourage staff members to circulate the

opening and offer them a finder’s fee

Successful practices are characterized by the efforts and attitudes of the people who work there.

How do you attain above-average results from your employees?Start by hiring the right people for the right job.

Overqualified ● Unclear Lines of Authority ● No New Hire Training ● Low Pay Scale

Remediation ● Negative Work Environment ● Criticism and Blame ● No Employee Handbo


� Talk to your colleagues for their recommendations

� Reach out to professional associations tospread the word among their membership

� Contact career offices at area colleges, universities and vocational schools

� Post the opening in your office so patientscan also refer potential candidates

Using several of the above strategies shouldprovide you with an ample pool of resumesfor consideration.

From there you should review eachresume, creating “yes,” “no” and “maybe”piles. It may seem like a daunting task,but it should take no more than an hourto review a hundred resumes. You canimmediately eliminate those who don’tmeet your “must-have” criteria. Others toadd to the “no” pile include resumes thatlook unprofessional or are peppered withmisspellings, and candidates who haveunexplained gaps in their work history ormany short-term assignments, whichcould indicate an issue with attendanceor skills.

Once you have identified several qualifiedapplicants, you can begin interviewing.Skilled interviewing is essential to thehiring process, so take your time andprepare for each interaction. If you havemany applicants who meet your minimumrequirements and seem qualified onpaper, maximize your time by conductingbrief phone interviews to identify thestrongest candidates.

Examples of appropriate phone interviewquestions include:

1. Why are you looking for a new job?2. What about this position sounds appealing

to you? 3. What aspects of this position have you

performed in your current position or past jobs?

4. What are your salary expectations? (If salary history was not provided.)

End the phone interview by thanking thecandidate and explaining that you are stillin the screening stage of the hiring process.Tell them that you have other potentialcandidates to speak to, and give them a dateby which you will contact them to let themknow if you’d like to schedule an interview.

These phone interviews will give you a better sense of the candidates’ communicationand interpersonal skills as well as their ability to think on their feet. Phone interviewswill also weed out applicants with inappropriate compensation expectations.The goal is to narrow your choices andcompile a short list of qualified candidatesfor in-person interviews.

Before conducting in-person interviews, besure to have a set of predetermined, writteninterview questions that are in compliance

with the U.S. Equal EmploymentOpportunity Commission (EEOC). Illegaland inappropriate interview questionsinclude those relating to religion, nationalorigin, race, marital status, parental status,age, disability, sex, political affiliation,criminal records, and other personalinformation. Generally, if the question is not job related, you should not ask it.

Proper advance preparation will ensure youcover all pertinent questions with each candidate. It is also wise to have candidatesinterviewed by more than one person inyour practice. Multiple opinions offer differentperspectives that can help identify the bestcandidate. Knowledge and skills areimportant, but the interview should alsoprovide you with a sense of the candidate’s

personality and attitude. This ensures agood fit within the culture of your practice.Skills can always be taught, but attitudesare difficult to change.

When the interviews are over and you havedetermined your top candidates, do someinvestigative work. Check references. Verifythe existence of all former employers, lookup phone numbers, and check each

candidate’s education and credentials.When contacting references, ask previousemployers the question, “Would you rehirethis individual?” If they answer in the negative,feel free to ask why. Many employers willonly confirm an individual’s employment,but if you get an employer who is willing totell you more, ask about the candidate’sstrengths and weaknesses, how well theyget along with other people and whetherthey take constructive criticism. Other stepsyou might consider before hiring include:

� Skills testing (medical terminology and filing)

� Drug/alcohol testing � Personality testing� Criminal background check� Credit check

Many of these services are availablethrough companies with whom you alreadydo business. Many payroll companies conduct criminal background checks; drugtesting can be arranged through labs. Othersources for checks can be found online atsites such as www.infocubic.com orwww.employeescreen.com.

If you are unable to invest the time neededto restructure your hiring practices, you mightwant to consider contracting an outside hiring agency that can ease you through the process. The money invested in such a service is often saved in the cost of lowemployee turnover. National statistics showthat employee turnover can cost a practice

e ● No Benefits ● No Performance Reviews ● No Positive Reinforcement ● No Accounta

ook ● Overqualified ● Unclear Lines of Authority ● No New Hire Training ● Low Pay

Skills can always be taught, but attitudes are difficult to change.

Employee turnover can cost a practice as much as 15%–30%of the employee’s annual compensation.


as much as 15% to 30% of the employee’sannual compensation.

If you do decide to go it alone, implementingthese hiring practices will help you selectan individual who will not only succeed inyour organization but will be a positiveinfluence on the office environment.

New Hire and Ongoing TrainingMany medical practices fail to take thetime to properly train new employees.Often a person is hired in response to avacancy, and the new employee is throwninto the fray without being given time forproper training.

Practices should have written, job-specifictraining materials for new personnel.For example, a new medical assistantshould be given both practice-level and medical assistant-related information.Managers should make sure that newstaff members are comfortable with theirresponsibilities before they are permittedto work independently. New and currentstaff should fully understand the lines ofauthority, and physicians need to lettheir managers manage, without fear ofinterference. Supporting their decisionshelps to establish clear lines of authority.Ongoing training should be provided forstaff members to ensure they remainknowledgeable about issues affectingtheir jobs.

Rewards and CompensationOnce you hire quality employees andintegrate them into your practice, how doyou keep them? Compensation, benefits,work environment and work/life balanceare all crucial to ensuring job satisfaction.

Start by providing your employees with asalary scale that is commensurate with jobresponsibilities and other practices in thearea. To determine appropriate salaryranges for practice positions, contact otherpractices, check the Health Care GroupSalary Survey (www.healthcaregroup.com)or review the Medical Group Management

Association (MGMA) salary surveys conducted in many states.

Don’t pay your employees at the lowest endof the scale, but do tell them what you spendon them in total. Their gross pay is only aportion of their total compensation onceyou include employer-paid taxes, healthand other insurance benefits, profit sharing,

bonuses, dues, uniform allowances,paid holidays and

vacations. Each year, give employees a totalcompensation statement that provides a break-down of the separate cost items to the practicefor each staff member. (Refer to Figure 1 onpage 15.) Visit our new Journal Bonus Sectionat www.njosteo.com to download a totalcompensation statement template.

Benefits are a large expense to any medicalpractice. Employees have come to expect

benefits as part of their compensationpackage. Often these include health anddental insurance, uniform allowances andretirement plans. But keep in mind thatemployees also value nonmonetary rewards.Interesting work, employer flexibility andfeeling appreciated are among the strongestinfluencers of employee retention.

Another way to engage your staff is to provide financial incentives for meeting orexceeding industry benchmarks. There canalso be internal goals, both on an individualor team basis. For instance, set goals for thebilling department that reflect the successfulcollection of outstanding accounts. For thefront desk, these goals may be related to

accuracy of intake information andtelephone etiquette. For the clinicalstaff, reward accuracy of vital signs or the ability to effectively use yourelectronic health record system. Goalscan also be related to group-wide profitability and can be recognized asbonuses or as profit-sharing contributions.

Employees tend to remain with an organization if they feel appreciated. Your staff members want to feel as if theyare making a difference. Reward them byallowing them to get involved. This leads to greater productivity and positive attitudes.Employee recognition does not have to bein the form of dollars and cents; it can bean award, a gift certificate, a staff appreciation luncheon or even a simplethank-you for their effort in front of peersand patients. Providing additional trainingcan be viewed as a reward and an indicationthat the practice wants to invest in their education.

Make a habit of referring to staff membersas your “associates” or “team members”instead of as “employees.” Acknowledgebirthdays and anniversaries. Send personalnotes for their major accomplishments suchas certifications, graduations, etc. Sporadicreinforcement of behavior has minimalmotivational impact—it must be ongoing.Fear, threats and power of authority are




usually met with resistance, reluctanceand animosity.

Be HonestIn difficult economic times, practices maynot be able to provide pay increases forstaff. If this situation is improperly handled,it can have a negative effect on morale,resulting in turnover. However, if you arehonest with your staff and explain theeffect of decreased reimbursement andincreased expenses, they may be moreunderstanding. You need not share everydetail, but relevant sharing of informationabout increases in malpractice insurance,

health insurance, supply costs, etc., can be helpful.

When difficult economic times do arise,you may need to be creative in yourrewards for good performance. In lieu ofraises, some practices provide additionaltime off (for birthdays and employmentanniversaries) as well as continuing educationcourses, flexible work schedules and evengas allowances.

Policies and ProceduresHolding regular staff meetings fosterscommunication and employee interaction.



EMPLOYEE NAME: _________________________________________

AnnualCost

00.000,62)ylkeewib 00.000,1$( yaP ssorG $ Social Security Tax (Employer Portion) 6.20% 1,612.00$

00.773%54.1)noitroP reyolpmE(xaT eracideM $ State Unemployment and Disability (Employer Portion) 3.30% 851.40$

00.65%80.0xaT tnemyolpmenU laredeF $ Health Insurance Premiums (Employer Contribution) $250/mo 3,000.00$

86.34$smuimerP ecnarusnI efiL80.802$smuimerP ecnarusnI ytilibasiD00.087%3)K(104/gnirahS tiforP $ 00.002ecnawollA mrofinU $ 00.001seud stnatsissA lacideM fo noitaicossA naciremA $

Holiday Bonus 500.00$

61.827,33NOITASNEPMOC LATOT $

In addition to your compensation, the following is a list of cash equivalents you receive asan employee from our vacation and time-off policies.

# of Days Cash Equivalent00.000,101noitacaV $ 00.0066syadiloH $ 00.0055syaD lanosreP/kciS $ 00.0033sgniteeM lanoitacudE $

00.004,2NOITASNEPMOC TNELAVIUQE HSAC $

TOTAL COMPENSATION AND CASH EQUIVALENTS 36,128.16$

BENEFITS AND CASH EQUIVALENTS AS A%93YAP SSORG FO EGATNECREP

MEDICAL PRACTICECALENDAR YEAR 2009

TOTAL COMPENSATION STATEMENT

Figure 1: Sample Annual Total Compensation Statement

B.C. Szerlip Insurance Agency has specialized in supporting the practices of health care professionals for almost 30 years. And now, the health care industry’s trusted source for top-rated malpractice, office property and liability coverage also offers general business and personal insurance.

Using our industry-wide contacts, we offer the most comprehensive coverage at the best possible rates, and provide insight that allows you to make informed decisions. In fact, we maintain our partnership with our clients three times longer than the industry average. It’s no wonder why–we operate with ethics, not profits, as our first priority.

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If properly conducted, they can makeemployees feel engaged, informed and appreciated.

At a minimum, hold quarterly staff meetingsand keep them to no more than about anhour. Each department can meet monthlyon a smaller scale to discuss issues thataffect daily job performance.

A major factor in avoiding staff infections isthe development and use of an employeehandbook or a policy and procedure manualfor the practice. (Refer to “The EmployeeHandbook: A Must for Every MedicalPractice” on page 18.) Having an employeehandbook and regularly referring to itensures everyone is treated equally and fairly, which keeps your team motivated.Employees must know what is expected ofthem and what the ramifications are for notfollowing established policy and procedure.All too often, good employees become discouraged when practices do not haveestablished protocols for dealing with problem employees.

Progressive DisciplineNo one relishes the discussions that must take place when an employee’s

performance does not meet expectations.Progressive discipline is a process ofusing increasingly formal methods toprovide employees with performancefeedback that improves performance and corrects issues.

Employees need to be told when their work is substandard and when they are not following the rules of the practice. Startwith a verbal warning and make note of the warning in the employee’s personnelfile. Tell them, “We’ve observed the followingbehavior that doesn’t fit in with your jobdescription or the culture of this practice.”Give the employee a time frame in whichthey must correct the issue. Let them knowthat if the problem arises again, they willreceive a written warning. If the employeesuccessfully corrects the issue, let themknow that you appreciate the effort.

Make sure all employees are aware of howmany warnings you will issue before theyare fired for cause. For instance, if yououtline in your handbook that employees

can be late for work no more than threetimes, an employee can be fired forcause for his or her fourth late arrival.Certain infractions may be cause forimmediate termination. This sort of effective, progressive discipline policycan also lower unemployment costssince employees terminated for causecan be denied unemployment benefits.

Performance ReviewsPerformance reviews go hand-in-handwith progressive discipline. Everyemployee should have his or her performanceannually reviewed. The most effective performance appraisal instruments arebased on job descriptions. The appraisalshould look at every facet of the jobdescription and judge the employee’scompetence level. Performance appraisalsshould be conducted even in those years


when financial circumstances do not permit pay increases.

People Will LeavePhysicians and administrators at well-runpractices care about their employees andtheir employees’ careers. When a staffmember leaves, you should not assume it is due to job dissatisfaction. It may bethat the individual has an opportunity toprofessionally advance. Find out. Make it a practice to hold exit interviews withdeparting employees. People who areleaving may be more honest about issuesin the practice.

Some exit interview questions include:

1. What is your primary reason for leaving?2. Did anything specific trigger your decision

to leave?3. What was the most satisfying aspect of

your job?

4. What was the least satisfying aspect of your job?

5. What would you improve to make our office a better place to work?

6. What does your new practice offer that we don’t?

The answers to these questions can beinvaluable if you are sincerely seeking tocreate an efficient, effective workplacethat attracts quality personnel. When astaff member leaves your employmentwith a sense of accomplishment and newand improved skills, it is a sign that yourpractice is providing a positive, dynamicwork environment.

In ClosingHuman resource management is one of the most challenging aspects of running amedical practice. In today’s labor market,recruiting, hiring and retaining qualityemployees can be daunting. Developing

and promoting a positive work environmentand making your employees feel part of yourorganization’s success are crucial to employeeretention. While much effort goes into findingindividuals who will be a good fit for yourorganization, the ultimate goal is to hold on tothem. So make sure you put as much effortinto retaining your good employees as youdid in hiring them. That is the key to avoidingstaff infections. �

Deborah R. Mathis, CPA, CHBC, isShareholder/Director, Healthcare ServicesGroup for Cowan Gunteski & Co. She is an expert in compensation plans, buy-sellagreements, practice valuations and practicevital signs.

Michael S. Lewis, MBA, FACMPE, isDirector, Healthcare Services Group forCowan Gunteski & Co. He is an expert inpractice management, physician relations,and reimbursement and billing.




The Employee Handbook: A Must for Every Medical Practice

Every medical practice needs anemployee handbook. All too oftenphysicians think, “We’re a small practice;

we don’t need a formal procedures manual.”Or, “We’re like family. We know howthings operate without putting it in writing.”Beware. This approach can leave yourpractice vulnerable to human resourceproblems and significant legal issues.

An employee handbook protects both thepractice and the employee. It sets forth theguidelines that govern the employment ofevery member of a practice. It calls for consistent treatment of employees acrossdepartments and practice sites.

While your employee handbook should beunique to your practice, you need not createit from scratch. Affordable, pre-draftedhandbooks with policies that can be editedand customized to reflect your operations areavailable through payroll service companies,attorneys and medical associations such as the Medical Group ManagementAssociation (www.mgma.com), which has a handbook that is specifically written forphysician practices.

Whether you are drafting your own hand-book or customizing an existing document,it should begin with an introduction thatwelcomes your staff to your practice. Fromthere, set a positive tone and communicatethe culture of your practice by sharing yourmission statement, history, goals andmanagement philosophy.

Next, include a disclaimer clearly statingthat the employee handbook is not anemployment contract. Then include thefundamental content—basic policies andprocedures, and how they apply to yourpractice. Below are descriptions of areas ofparticular importance to medical practices.

At-will EmploymentAn employee handbook does not constitutea contract with an employee. In moststates, employees in a medical practice areconsidered at-will and can be terminated atthe discretion of the employer.

Confidentiality, including HIPAAThe Health Insurance Portability andAccountability Act (HIPAA) of 1996imposed very specific laws regarding confidentiality of patient-protected medical

information. HIPAA confidentiality policiesshould be incorporated in your employeehandbook. The penalty for failure to keeppatient information confidential must bevery severe to discourage policy violationsby staff.

Work HoursThis section defines full-time employmentand specifies how many hours an employeemust work to be considered full time.

Work Schedules/Reporting/BreaksThis section typically defines the hours ofwork in a practice. It specifies when anemployee can clock in (how many minutesprior to start time), when and how muchtime is allotted for meal breaks, and if otherbreaks are permitted during the day.

Compensation and BenefitsThis section specifies who qualifies for benefitsand what benefits are offered. It generallyexplains whether the employees share inthe cost of benefits. It should address howbenefits are handled during a leave ofabsence, which is often an issue of conflict.

Vacation/Time Off/Paid Time OffThis section establishes the practice guide-lines for vacation, sick time and personaltime. It informs staff members how muchtime they receive and how it is calculated.It typically explains what the rules are forproviding notice for vacation and if unusedtime carries over to subsequent years.

Dress GuidelinesThis section specifies how employees areexpected to dress at work. There may be adifferent dress code for clinical staff andadministrative staff. This section also setspractice guidelines with respect to tattoosand piercings, and what is acceptable inthe office setting.

Computer Usage and Office PropertyMost practices will want to includespecifics on how the office computers maybe used. This section typically states thatthe computers are the property of thepractice and all information (emails,instant messages, etc.) are subject toreview and inspection. It also indicateswhich Web sites are acceptable to use and sets limits for any personal computerusage as well as other office property andpractice supplies.

Before your employee handbook is finalized,make certain your attorney reviews the latest draft to ensure it complies with local,state and federal laws. It should also bereviewed on a regular basis every threeyears or if there is a major change inemployment law, like the recently enactedstate Paid Family Leave Act (PFLA). (Formore on the PFLA, refer to page 22.)

Creating an employee handbook for yourpractice and providing it to every staff memberwill help prevent many common personnelissues and provide you with a resource forfairly and appropriately resolving personnelissues when they do occur. Your employeehandbook is an indispensable tool in practicehuman resource management. Don’t delay increating one for your practice.��

By Deborah R. Mathis, CPA, CHBC and Michael S. Lewis, MBA, FACMPE

Your Employee HandbookWhether writing your own employee hand-book or investigating a pre-drafted option,be sure it includes detailed information onthese standard policies and procedures:

� At-will employment/termination� Equal opportunity employment� Confidentiality� HIPAA privacy and security � Employment categories/job descriptions� Work hours� Work schedules/reporting/breaks� Compensation and benefits• Payroll• Holidays• Vacation/time off/paid time off• Sick leave• Family and medical leave• Bereavement• Jury duty• Military leave• Leave of absence• Inclement weather• Absences• Group health insurance and other benefits

� Standards of conduct• Safety/hygiene• Dress code• Timeliness• Smoking• Substance abuse• Discrimination and sexual harassment• Use of computers, office supplies, etc.

� Performance reviews� Grievance procedures

Conventus.The word is spreading

Frustrated with commercial insurancecompanies, a group of New Jersey private practice physicians formedConventus Inter-Insurance Exchange.Conventus is the only medical profes-sional liability insurance company in NJthat’s 100% owned and 100% governedby its member physicians and managed by insurance experts.

It’s contagious.

Now more than 1,000 members strong,Conventus’ steady growth is the result of…

• a conservative, fiscally responsibleoperating philosophy

• claims handling focused on pro-tecting the professional reputationsof physicians

• a risk management program gearedtoward helping members achieve efficiency and reliability in their practice

• fair and individual underwriting withno profit motive

By physicians. For physicians.

We invite you to do your own examinationof Conventus. We’re confident you’ll agreethat it’s the best course of treatment for aproblem that’s been plaguing New Jerseyphysicians for years.

For more information about Conventus Inter-Insurance Exchange:

Call 1-877-444-0484

Mail us at: [email protected]

Visit us online at: www.conventusnj.com

900 Route 9 North • Suite 503 • Woodbridge NJ 07095

Inter- Insurance ExchangePutting Physicians FirstTM

For the first time in many years, NewJersey medical malpractice insurancepremiums are actually falling. In fact,

if you have not seen a reduction in yourrates, you are missing the boat.

Be a Comparative ShopperNow is the time to complete a review ofyour insurance coverage. Even if you arecompletely satisfied with your currentinsurer, you need to compare availableoptions. Such an exercise should yield savingsof 5%–20% of your premiums, so it is wellworth the effort. In fact, even if you elect tostay with your current insurer, you may beable to reduce your existing price as thecompany vies to keep your business.

After seven years of annual price increases,comparative shopping will clearly benefit you.Don’t be passive. The very best pricing goesto the most aggressive shoppers. This is whereusing a qualified agent or broker can pay bigdividends. It can also save you valuable time,

as it is no small task to secure quotes frommultiple sources and compare policy terms.

This Offer WILL ExpireAs you know, the malpractice insurancemarket is cyclical. Prices rise and fall asinsurance company profits shrink andexpand. There are many underlying causesof these boom-and-bust phases. In recentyears, the number of malpractice claims asreported to the National Practitioner DataBank has fallen. Lower-than-expected claimfrequency means insurance company profits.These profits, in turn, attract more companiesinto New Jersey’s medical malpractice marketplace, creating more choices forphysicians and greater competition in pricing.

Lower malpractice claim counts and lowerpremiums are clearly good things. Butcould we be seeing too much of a good

thing? Perhaps. Recent indications showprofits in the industry are beginning to shrink.What happens when competition eventuallydrives away profit? The reverse of the

cycle. And when coupled by the possibilityof a reversal in the downward frequencytrend, or falling investment income to offsetthese new claims, we could once again seea surge in cost. It is usually the compound

effect of several negative trends that givesrise to sudden surges in premiums.

What’s Next?Believe it or not, there are ways to predictwhen the next crisis market will emerge, soyou can make advance preparations.Unlike the auto industry—which relies onthe price of gas and steel to price theirproducts—insurance has one simple, rawmaterial: money. Capital is used to pay

claims, so the cost to attract capital is alsothe cost of the insurance industry’s basicraw material and the break-even point itmust achieve. The gap between the cost ofcapital and the return generated by theinsurance industry is widening. (Refer toFigure 1.) Note that the same eventoccurred in 2001 and has occurred duringevery insurance crisis of the past 35 years.

Predicting the future is a perilous endeavor,but if the signs are accurate, we may beginto see rates rise in the next 18 months. Thatmeans you most likely have at least one, or

very possibly two, more renewal opportunitiesto lower your premium. If prices are goingup, you want to be sure they escalate fromthe lowest possible base. For that reason,now is not only the best time to shop butthe most important time. �

Timothy L. Hoover, CPCU, is the HealthcarePractice Leader with the Woodland Group.He can be contacted at 973-300-4216 [email protected].


MANAGING MALPRACTICE

*Excludes mortgage and financial guarantee insurersSource: The Geneva Association, Insurance InformationInstitute, courtesy of The Woodland Group

-4%

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4%

6%

8%

10%

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14%

16%

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91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08*

ROE Cost of Capital

The cost of capital is the rate of return insurers need to

attract and retain capital to the business

-13.

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-9.7

pts

Don’t be passive. The very best pricing goes to the most aggressive shoppers.

If the signs are accurate, we may begin to see rates rise in thenext 18 months.

Timothy L. Hoover, CPCU

Malpractice Premiums Are Falling, For Now

Figure 1: ROE vs. Equity Cost of Capital

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NJAOPS


LEGAL PERSPECTIVES

Mark E. Manigan

Get to Know the Paid Family Leave Act

The New Jersey Paid Family Leave Act(PFLA), which allows employees totake up to six weeks of paid time off

to care for a new child or sick relative, willaffect New Jersey medical practices of virtually every size. So it is crucial that you understand this far-reaching workplacereform and communicate its benefits toyour staff.

The PFLA, which went to into effect on July 1, makes New Jersey only the thirdstate in the nation to offer a paid family

leave. Previously, family leaves were unpaidand exempted certain small businesses.This new law differs from the federalFamily Leave Act and previous state versionin that even employees of small businessescan avail themselves to its benefits. Let’stake a look at who exactly this new lawaffects under what circumstances.

Who Can Take Leave and WhenPFLA benefits are payable to employeeswho need time off to care for a familymember with a serious health condition or to bond with a child1 at any point duringthe first 12 months after the child’s birth, if the covered employee or their spouse orpartner is a biological parent of the child. Italso applies to the first 12 months after theadoption of a child. Employees can onlytake new child leave during consecutiveweeks, not intermittently.

PFLA benefits are also available to care fora family member2 with a serious healthcondition, which must be supported by certification from a physician or otherhealthcare provider. Claims may be filedfor six consecutive or intermittent weeks orfor 42 intermittent days during a 12-monthperiod beginning with the first date of theclaim. However, intermittent leave is onlypermitted if, in addition:

1. The notice of the leave is given no less than 15 days before the first day on which the benefits are to be paid,

unless an emergency situation precludessuch notice

2. The employee makes an effort to schedulethe leave so as to avoid unduly disruptingthe employer’s operations

3. And, if possible, the employee providesa regular schedule of the days on whichthe leave will be taken (before the leave starts)

Employees are entitled to benefits underthe PFLA as defined under New Jersey's

Unemployment Compensation Law.Therefore, individuals are eligible if:

1. They perform services for remuneration or under any contract of hire, and

2. Those services are performed: (a) Wholly in New Jersey or all but

incidentally in New Jersey, or

(b) Not primarily in New Jersey but from the employer’s base of operation or the worker’s residence in New Jersey

However, an employee is eligible for benefitsonly if the employee worked at least 20weeks in the covered employment; or earnedat least a thousand times the minimum wage(presently $7,250) in covered employmentduring the preceding year. The PFLA doesnot cover independent contractors. However,there is a presumption of coverage thatmust be overcome by the employer.

Providing the BenefitsPFLA requirements apply to:

1. Any individual, organization, partnershipor association, trust, estate, company orcorporation that employs one or more individuals who perform services withinthe state, and

2. Paid remuneration for employees of $1,000 or more in either the current or preceding year

The PFLA benefits must be provided by theemployer through either a state plan or aprivately funded plan. Under the state plan,a covered employee can receive two-thirdsof their salary, up to $546 weekly. Themaximum total payment is equal to thelesser of: (1) six times the weekly benefitamount; or (2) one-third of the employee’stotal wages in his or her base year.Generally, payments under the state planmust be paid directly to the employee.The state plan is funded by a new payrolltax on employees, which began onJanuary 1.

A private benefit plan may be self fundedor through a contract of insurance issuedby an approved carrier. The plan must beat least as favorable to the employee as thestate plan and must provide benefits thatare consistent with or greater than the newprogram. However, if you choose not touse the state plan, you must obtainapproval from the Division of TemporaryDisability Insurance and written consentfrom the majority of employees if the premium will be deducted from theemployees’ wages.

As you can see, the PFLA has added severalrequirements for all employers in New Jersey.It is important that you and your practiceare aware of this law and are compliantwith its provisions. Moreover, it is importantto determine which employees are eligibleand to prepare a strategy to communicatethe PFLA requirements to them. �_____________________________________

1”Child” is defined by the PFLA as a biologicaladopted, or foster child, stepchild or legal ward ofa covered individual, child of a domestic partnerof the covered individual, or child of a civil unionpartner of the covered individual, who is less than19 years old or is 19 or older but incapable of self-care because of mental or physical impairment.

2”Family member” is defined by the PFLA as achild, spouse, domestic partner, civil union partneror a parent of a covered individual.

Mark E. Manigan is a member of BrachEichler’s Health Law Practice Group,NJAOPS’ general counsel.

The PFLA, which went to into effect on July 1, makes New Jerseyonly the third state in the nation to offer a paid family leave.

� �

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a beautiful view and gourmet fare.

Don’t delay! Visit or

call to register today or

receive additional information.

www.njosteo.com

732-940-9000

��

NJAOPS 7 David L. Sirota, DO, Golf Classicth

Thursday, September 24

Sea Oaks Golf Club

Little Egg Harbor Township

S


MEMBER NEWS

AchievementsNJAOPS is proud to announce the followingachievements by our members.

Paul Kruger, DO, of Stratford, was presentedthe prestigious American OsteopathicFoundation Educator of the Year Award atthe AOA House of Delegates meeting inChicago this July. Dr. Kruger is AssociateDean of Academic Affairs and Professor ofObstetrics and Gynecology at UMDNJ–School of Osteopathic Medicine.

Former NJAOPS president and board memberAlvin Dubin, DO, of Cherry Hill, wasawarded the AOA Presidential Citation inrecognition of his years of service to theosteopathic medical profession. Dr. Dubin,a retired otolaryngologist and facial plastic surgeon, is the executive director of thecertifying board the American OsteopathicColleges of Ophthalmology andOtolaryngology—Head and Neck Surgery.

Joseph Farrell, DO, of Medford, was honoredwith a Letter of Commendation by the AOA in recognition of his dedication, serviceand leadership on behalf of the osteopathic medical profession. Dr. Farrel is an orthopedicsurgeon with Reconstructive Orthopedics, PA.

Alexander Doctoroff, DO, of Clark, waselected president of the New JerseyDermatological Society. In addition tomaintaining his private practice in cosmetic,medical and surgical dermatology, Dr.Doctoroff teaches dermatology residents at theVeterans Administration Medical Center inEast Orange where he serves as assistantchairman of the Dermatology Department. Dr.Doctoroff is also a clinical assistant professor atthe UMDNJ–School of Osteopathic Medicine.

New Officers Invite Member Communication

Member communication is essential to the success of the association. It is throughthis communication that priorities are set and goals are achieved. Your officersvalue your feedback and input. They are interested in how the association can bestserve your needs and the challenges you face as you manage your practice andnavigate the changing landscape of health care.

To contact your officers by mail, send correspondence to:

NJAOPSOne Distribution Way, Suite 201Monmouth Junction, NJ 08852

Include the officer’s name in the address line.

Your officers are also available by phone or email:

Alan Carr, DO Lee Ann Van Houten-Sauter, DOPresident President-elect856-489-3300 [email protected] [email protected]

Antonios Tsompanidis, DO Karen Kowalenko, DOVice President Treasurer732-203-0800 [email protected] [email protected]

John LaRatta, DO Susan Volpicella-Levy, DOSecretary Immediate Past President856-767-0078 [email protected] [email protected]

The 2009–2010 NJAOPS Executive Committee: Secretary John LaRatta, DO; TreasurerKaren Kowalenko, DO; President Alan Carr, DO; Immediate Past President SusanVolpicella-Levy, DO; Vice President Antonios Tsompanidis, DO; and President-elect Lee Ann Van Houten-Sauter, DO.

Classified

Practices for SaleTwo, long-established medical

practices for sale.Camden: 856-963-8907Lumberton: 609-267-8888Jack Goldstein, DO

Send your professional achievementsto The Journal so we can share themwith your colleagues. Email a briefdescription to [email protected] inclusion in the next issue.

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