Welcomes You to€¦ · Welcomes You to... Schedule Inside Institute page 32-33. QUALITY SERVICE...

Fall 2014 • vol 61 • num 1

new jersey chapter

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QUALITY SERVICE AND EXTRAORDINARY INSIGHT IS PART OF OUR DNA

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Dan Vitale, CPA, Partner, Co-Practice Leader732.341.8728 [email protected]

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Scott Mariani, JD, Partner, Co-Practice Leader [email protected]

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CBIZ KA Consulting Services, LLC

Centenary College

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Institute Speakers ........................................................................................... 4

New For 2014 – Product Demo Sessionsby Mike McKeever ..................................................................................................... 6

New Delinations, New Opportunities and New Questionsby Scott Besler and David Verbaro ............................................................................... 11

Building a Successful Denial Management Teamby Charles Reitano & Jennifer Tosto .............................................................................. 17

Part B Medical Billing – The Wave of the Future – is Here! by Rich Papperman, PA, MBA, CHBME ......................................................................... 21

Appropriate Level of Care and the 12-Midnight RuleWhere is Stands as of NOW...

by Edward J. Niewiadomski, MD and Laureen A. Rimmer, RHIA, CPHQ, CHC ................... 23

Impact of Quality Reporting in the Healthcare Industryby Kim Charland .......................................................................................................... 26

Department of Health Recommendations onHospital Financial Transparency

by Karen Henderson, CPA and Ryan Bixenman .............................................................. 27

Institute Schedule at a Glance ................................................................ 32-33

Top Five Considerations for Provider Consolidationsby Brandon Klar, MHSA ................................................................................................ 34

Transforming New Jersey’s Health Care Delivery Systemby Joe O’Hara ............................................................................................................. 36

Sunshine Act Will Soon Provide a ‘Rich Database’for Compliance

by Nina Youngstrom ..................................................................................................... 37

Strategies for Reducing and Controlling PhysicianPreference Item Costs

by Frank Longo and Debbie Schuhardt ......................................................................... 40

Four Major Revenue Cycle Challenges forHealth Care Market in 2014!

by Lyman Sornberger .................................................................................................. 42

Medicare Bundled Payment What Is It Worth to You?by John Harris, Idette Elizondo and Andrew Isdaner ....................................................... 46

Health Plan Cost Trend Management: A Case Studyby Christopher Valerian, DO, MMM and Allison Hofmann ................................................ 51

Chapter Year-End Financials .................................................................... 55Institute Sponsor Guide ................................................................................... 58-61Sponsors ................................................................................................................ 61-63

focus•cover•

Courtesy Hermitage Press, Inc.

Who’s Who in the Chapter ...... 2

The President’s View by Tracy Davison-DiCanto ............. 3

Job Bank Summary ................ 9

Who’s Who in NJ Chapter Committees ........... 20

Certification Corner ................ 29

Focus on Finance .................... 30

Mark Your Calendar ................ 31

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focus/hfmaWho’s Who in the Chapter 2014-2015Chapter Website …………………………………..www.hfmanj.org

Communications CommitteeBrian Herdman, Director ......................................................................CBIZ KA ConsultingElizabeth G. Litten, Esq., Chair ........................................................... Fox Rothschild LLPAl Rottkamp, MBA, Vice Chair .............................. Princeton Healthcare System/AramarkAnthony F. Consoli ................................................................... CBIZ Benefits & InsuranceMark Dougherty, FACHE .................................................................................... GI EnergyLaura Hess, FHFMA ............................................................................................ NJHFMAJohn Manzi ................................................................ Panacea Healthcare Solutions, LLCRhonda Maraziti .....................................................................WithumSmith + Brown, P.C.Nicole K. Martin, MPH, Esq. ..................................................................... Martin Law, LLCWilliam McCann ................................................................................................HealthfirstDavid A. Mills ..............................................................................Hinduja Global SolutionsAmina Razanica .............................................................New Jersey Hospital AssociationJames A. Robertson, Esq. ..........................McElroy, Deutsch, Mulvaney & Carpenter, LLPRoger D. Sarao, CHFP ................................................... New Jersey Hospital Association

NJ HFMA Chapter OfficersPresident, Tracy Davison-DiCanto, MBA , FHFMA ..................Princeton Healthcare SystemPresident-Elect, Heather Weber ...................................................................ParenteBeard Treasurer, Dan Willis ...................................................... Sutherland Healthcare Solutions

Secretary, Scott Mariani ........................................................... WithumSmith + Brown, P.C.

NJ HFMA Board MembersBrian Herdman – Associate Board Member .......................................... CBIZ KA Consulting

Scott Besler ..............................................................................................Besler Consulting

Stacey Bigos ....................................................................New Jersey Hospital Association

Steve Bilsky .............................................................................................................. Causey

Megan Byrne ..................................................................................................Ernst & Young

Kevin Joyce .....................................................................................................QualCare Inc.

Michael McKeever .............................................................Saint Peter’s University Hospital

Rosemary Nuzzo .................................................................................................Atlanticare

Josette Portalatin ...................................................................................The Valley Hospital

Roger Sarao, CHFP – Ex-Officio .......................................New Jersey Hospital Association

Jennifer Shimek – Associate Board Member ........................................ Ernst & Young, LLP

Stella Visaggio, FHFMA, CPA .....................................................Hackettstown Regional MC

Erica Waller ........................................................................... Princeton Healthcare System

NJ HFMA Advisory CouncilDavid J. Wiessel ................................................................................... Ernst & Young, LLPJohn Brault, FHFMA ................................................................................................ AetnaMichael Alwell, FHFMA ...........................................................................Barnabas Health Mary T. Taylor, MBA, FHFMA .......................................... Southern Ocean Medical Center

Advertising Policy/Annual RatesThe 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 5 bi-monthly issues are as follows:

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.

DEADLINE FOR SUBMISSION OF MATERIAL Issue Date Submission Deadline January December 1 April February 28 June April 30 October July 15 December October 15

IDENTIFICATION STATEMENTGarden State “FOCUS” (ISSN#1078-7038; USPS #003-208) is published bimonthly by the New

Jersey Chapter of the Healthcare Financial Management Association, c/o Elizabeth G. Litten, Esq., Fox Rothschild, LLP, 997 Lenox Drive, Building 3, Lawrenceville, NJ 08648-2311

Periodical postage paid at Trenton, NJ 08650. POSTMASTER: Send address change to Garden State “FOCUS” c/o Laura A. Hess, FHFMA, Chapter Administrator, Healthcare Financial Management Association, NJ Chapter, P.O. Box 6422, Bridgewater, NJ 08807

OBJECTIVEOur 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 professionals and as to serve as a forum for the exchange of ideas and information.

EDITORIAL POLICY Opinions expressed in articles or features are those of the author(s) and do not neces-sarily reflect the view of the New Jersey Chapter of the Healthcare Financial Management Association, or the Communications Committee. Questions regarding articles or features should be addressed to the author(s). The Healthcare Financial Management Association and Communications Committee assume no responsibility for the accuracy or content of any articles or features published in the Newsmagazine. The Communications Committee reserves the right to accept or reject contributions whether solicited or not. All correspondence is assumed to be a release for publication unless otherwise indicated. All article submissions must be typed, double-spaced, and submitted as a Microsoft Word document. Please email your submission to:Elizabeth G. Litten, Esq. [email protected]

REPRINT POLICY The New Jersey Chapter of the HFMA will not reprint articles published in Garden State FOCUS Newsmagazine. Individuals wishing to obtain reprint authorization must obtain it directly from the author(s) of the article. The cover of the FOCUS may not be used in the reprint; however, the reprint may note that the article was published in a specific issue. The reprint may not imply endorsement by the HFMA, directly or indirectly.

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Focus Focus Focus Focus Focus Focus Focus Focus Focus Focus 33

The President’s View . . .

Tracy Davison-DiCanto

Hello everyone –

Welcome to the 38th Annual Institute Edition of the Garden State Focus! It is hard to believe that it is already time again for the Institute and that the summer is

over. This year’s Institute has an amazing line-up of speakers and vendors supporting the event. In this issue you will find articles from many of our speakers and ad materials from our sponsors. I truly encourage all of you to make your best efforts to attend this event. It is the premier event each year, and allows you access to one of the most comprehensive educational agendas and networking opportunities in our area. For the first time, we are offering Vendor Demos and you will find more details about those in the issue. These demos, as well as all of our exhibitors and sponsors, can show systems/solutions and discuss ideas that can help you with many of the facets of the healthcare industry you deal with each day.

In highlighting the National theme of Leading the Change, I have to thank Jennifer Vanegas, Michael McKeever and Erica Waller for their continued efforts chairing the planning committee and managing all of the intricate details that go into putting on an event of this magnitude. In addition, many thanks go to the Institute Committee, Charity Event Sub-Committee, and the Education Committee for their efforts and dedication to making this event a success. It is amazing to see that, through volunteer efforts, we put on such a high quality event which over 500 people attend each year. The events that will be occurring throughout the two and half days will prepare attendees to Lead the Change. We will equip you with the latest industry knowledge that can be shared with your organizations and colleague as we collaborate to address the issues that face us now and in the future.

I would be remiss if I didn’t take a moment to thank the individuals that allow us to put this event on each and every year. To our Sponsors – without your investment in the event, and in the chapter, we would not have the opportunity to share all of the wonderful education and fun networking that occurs at the Institute. We thank you for your continued support. You directly drive the success of our chapter and our ability to serve our membership, and bring value to the industry.

If you haven’t registered – REGISTER NOW! Registration for this year’s Annual Institute, being held from October 8-10th in Atlantic City, can be found on the Institute webpage at www.njhfmainstitute.org.

I hope that you enjoy this edition of the Focus. I look forward to seeing all of you at the Institute!

Warm regards –

Tracy Davison-DiCanto

Warm regards –Warm regards –

metropolitan philadelphia chapter

2014 Annual InstituteThe Borgata Casino & Spa

October 8-10, 2014FEaTuREd SpEakERS...

Michael Josephson and Michael daugherty

Michael Josephson is one of the nation’s most sought-after and quoted ethicists. As founder and presi-dent of Josephson Institute and its CHARACTER COUNTS! project, he has conducted programs for more than 100,000 leaders in government, business, education, sports, law enforcement, journalism, law, and the military. Mr. Josephson is also an award-winning radio commentator.

Mr. Josephson is a former lawyer, law professor, and successful entrepreneur, is one of the nation’s most respected and sought-after speakers and consultants in the field of ethics and character, with a special expertise in the area of ethics and character in schools and the workplace.

Every weekday, listeners hear his award-winning commentaries on stations across the country and around the world on American Forces Network. Broadcast continually since 1996, his commentaries have become one of the longest-running editorial features in radio history. They are also available as blog posts at WhatWillMatter.com and as a daily podcast.

Michael Josephson

17.5 HOuRS OF CpEsTo download the App:

App Store Name: NJ PA HFMA 2014 AIURL: https://crowd.cc/njpaai

Michael Daugherty

Michael daugherty is President & CEO of LabMD, an Atlanta-based clinical and anatomic medical laboratory with a national client base. LabMD specializes in analysis and diagnosis of blood, urine, and tissue specimens for cancers, micro-organisms and tumor markers. Mike founded LabMD in 1996 after 14 years in surgical device sales with U.S. Surgical Corp. and Mentor Corporation.

Mr. Josephson is frequently interviewed and profiled by major media organizations including CNN, Nightline, Dateline, ABC World News, Good Morning America, Today, The Wall Street Journal, USA Today, Los Angeles Times, and Time. He has written seven books.

Full agenda

on page 32-33

Five years ago, the US government teamed with a private enterprise to attack and take a file without authorization from an American small business. They used that information in order to expand and grow a government agency.

Michael Daugherty, a small business owner who created LabMD, a cancer detection center in Atlanta, became a victim of a private cyber security company. That company, in association with a prestigious American university, conducted an invasion of business files and then used their findings to motivate

the US Government to ride the wave of new cyber security protections and legislation.

Mr. Daugherty has engaged in an exhaustive effort to protect his company, one that saves lives, to repair his reputation and to ensure that this does not happen to any other American.

The book in engaging detail describes his experience of the last six years as he personally witnessed a government power grab and intimidation that, if not for the fact that it is all real, would make for an a brilliant novel.

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New For 2014 – Vendor Product Demo Sessions

Mike McKeever

by Mike McKeever

continued on page 8

So I’m sure you’re all asking what’s new at this year’s Annual Institute, which is the 38th time we’ve gathered as a Chapter for some seriously good education, networking and plain old- fashioned fun. The agenda this year has six General Sessions, 35 Breakout Sessions and a Panel Discussion. We’ll also have two Keynote Speakers on Thursday, with Michael Josephson from the Josephson Institute of Ethics presenting at 11:00 am and Mi-chael Daugherty from LabMD on at 1:00 pm. I had the pleasure to hear Michael Josephson speak at a national conference earlier this year where he electrified the crowd with his common sense approach to ethics and transparency in our everyday lives. And I’ve just started reading Michael Daugherty’s book, The Devil Inside the Beltway. After just three chapters, if I didn’t know that it’s a true story, I would have assumed that I was reading an in-triguing cyber-novel. I’m looking forward to hearing Michael tell his story, which continues to progress on an almost daily basis.

One totally new development for this year is the addition of vendor product demo sessions, where several of our spon-sors will present new and innovative services to attendees in an interactive forum. I know that there have been times when I’ve attended conferences with the idea of seeing a new product being showcased, but found the vendor hall environment not conducive to a serious discussion with the vendor. I’ve actually missed educational sessions in order to be able to visit vendor booths in the “off hours” in order to have a substantive dis-cussion. There are currently six sponsors scheduled to present vendor product demo sessions, which will take place during the breakout sessions in Boardroom #2. Due to the nature of these sessions, they will not qualify for Continuing Education Credits. Finally, those attendees who participate in the vendor demos have a chance to win a new iPad, courtesy of Jennifer Vanegas and First American Healthcare Finance.

The vendor product demo sessions to be featured are scheduled as follows.

Capio partners - Wednesday, 2:00 pm, Boardroom #2Capio Partners’ product demo will focus on their aged

receivable purchase program, which allows providers to:• Generate a new, non-recourse revenue stream from assets

that would be written off to zero, by converting them to cash.• Accelerate bad debt reimbursement on the Medicare

cost report, by limiting the amount of time accountsare placed with outsidecollection agencies.

• Ensure patient satisfaction through Capio’s Complaintless Collec- tions™ model and commitment to patient advocacy.

The demonstration will highlight a behind-the-scenes look at the debt sale process, which will include: •Pricingfactorsandprocess •Evaluationofprice/offer •Contractingandimplementation •Establishingcontrolsandsafeguards •Ensuringpositivecommunicationbetweentheseller

(and staff at all levels), purchaser, and your patients •Ongoingintelligence(portfoliofeedback) •Misconceptionsofsellingdebt

Founded in 2008, Capio Partners has grown to become the largest healthcare-exclusive debt purchaser in the country. To date they have purchased over $15 billion worth of aged receivables from hospitals, health systems, physicians groups and ambulance providers. As the pioneers of Complaintless Collections™, they have successfully aided their clients in generating needed revenue, while enhancing their relationships with their patients.

BESLER Consulting – Wednesday, 3:00 pm, Boardroom #2BESLER Consulting will be showcasing their newest

product offering, Readmissions AnalyticsSM. The discussion will address the need to monitor readmission levels in order to avoid Medicare penalties, the information contained in the QualityNet hospital specific data files, and why it is not enough to ascertain the root causes of readmissions, and how new data-driven methods can help hospitals begin to identify the underlying causes of readmissions at your facility.

“BESLER Consulting is pleased to demonstrate our Re- admissions AnalyticsSM tool at the 2014 NJ PA HFMA Annual Institute. The vast majority of hospitals in our region have experienced Medicare penalties for excess readmissions. We are excited to bring them a solution which can help in-form their strategies to reduce readmissions and avoid future penalties.”

Focus 7

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8 Focus

continued from page 6

GaFFEY Healthcare – Wednesday, 4:10 pm, Boardroom #2GAFFEY, in speaking of their ongoing relationship with the

Chapter and their demo stated, “GAFFEY is proud to be a member of the NJ HFMA and would like to thank its mem-bers for 27 years of partnership. At this year’s Annual Institute, we are excited to have the opportunity to demo two of our business intelligence and workflow automation applications – AlphaCollector & AutoStatus. Designed to eliminate ineffi-ciencies in the collections process, AlphaCollector ensures that the right account is placed in the right hands at the right time for follow up and, when used in conjunction with AutoStatus, our automatic claims statusing platform, collector productiv-ity can increase by up to 75%. GAFFEY Healthcare customers typically experience a 50%- 75% reduction in claims touched, 33% increase in collections efficiency, 5%-15% cost reduction with EBO services and a 2%-6% increase in overall net rev-enue. We hope you’ll come and join us for our demo session.”

Commerce Bank – Thursday, 2:10 pm, Boardroom #2Commerce Bank, will be discussing the automation of the

accounts payable function. An overview of their demo states: “Alex Julewitz will discuss how HFMA members can

actually earn revenue in their AP department by turn-ing over their vendor payments to payment professionals. Alex will describe the Accounts Payable automation pro-gression from merely paying card accepting vendors – to paying all vendors (I.E. check, ACH Card and wire) – to electronic invoice imaging – to decisioning the actual pay-ments. Let healthcare professionals do what they do best - care for patients. Let payment professionals pay your vendors.”

alpha Systems – Thursday, 3:10 pm, Boardroom #2With nearly 40 years of healthcare experience, Alpha

Systems provides data capture, automation and predictive analytics solutions to help hospitals and health systems lower denials and improve revenue cycle operations.

Looking for a focused solution for denials avoidance which doesn’t require a complete system overhaul? Come to the introduction of Alphalytics™, a fast-to-deploy, software-as-a-service solution where the targeted focus is to predict revenue leakage before it occurs.

Alphalytics is designed specifically to pinpoint denials-driven revenue risk and predict future revenue leakage thereby enabling revenue cycle executives with timely visibility into the root causes of denials to prevent them from re-occurring, and ultimately to recover/prevent lost revenue. Unlike other revenue cycle analytics that are based solely on traditional his-toric business intelligence, Alphalytics uses advanced predic-tive analytics to automatically uncover hidden revenue risks that otherwise go undiscovered.

MediTract – Thursday, 4:30 pm, Boardroom #2MediTract, headquartered in Chattanooga, TN, is focused

on improving the contracting process for providers while re-ducing non-compliance. We deliver our solution through a combination of innovative technology and best practices con-sulting services. MediTract is currently used in 1 in 4 hospitals nationwide with over 100,000 active users of the system. Our mission is to serve the healthcare community as the most trust-ed advisor for compliance and contract management needs. We do this by helping hospitals and healthcare organizations manage their contracts, enabling them to reduce risk, maintain compliance and operate efficiently. There are three key com-ponents to our solution. • Contract Library is a centralized electronic repository

for all documents, contracts and attachments, both paper and electronic. Contract Library uses an intuitive user interface that allows direct and fully searchable access to an “electronic filing cabinet.” The system also allows clients to use custom fields for advanced monitoring and workflow. The system offers full report writing capa- bilities with scheduled report delivery, monitoring of critical milestones, and event driven notification. In addition, the dashboard provides user-defined specific activity and milestone notifications to track and view KPIs across the organization. • Contract Collaborator allows for contract origination

and drafting to streamline the contract origination and drafting process to drive standardization, ensure compliance and “organizational conformance” through custom workflows and processes defined by contract type. Con- tract Collaborator has an existing standardized template and clause library in addition to electronic capturing and approval of pre-contract requirements. Lastly, it has a feature with action triggers based on field data and electronic signature.• MediTract also offers a series of compliance driven mod-

ules focused on reducing the risk of non-compliance. The first three main modules allow direct access to contract terms.

◆ Vendor Evaluation Form (VEF) - Automated distribution, submission and management of electronic forms for the evaluation of 3rd party vendors.

◆ Conflict Of Interest Disclosure Statements (COIDS) - Authoring, distribution and submission of conflict of interest disclosure statements.

◆ Time And Effort Record Management System (TERMS) - Allows for simple physician time entry of activities as well as administrative review and approval of physician time entries based upon contractual obligations.

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Focus 9

◆ Accumulator - designed specifically to help hospitals comply with the Stark Law and the Anti-Kickback Statute by tracking and limiting gifts to Physicians complete with dollar limitations and threshold notifications.

The Institute Committee is excited about this new offer-ing and hope that you consider participating in the vendor product demo sessions. If you are considering new services and solutions to assist manage your facilities more efficiently and effectively, these sessions provide the perfect opportunity to gather the information you need in order to make an informed decision. Remember, the support of our partners is what makes the Annual Institute a reality each year.

About the authorMichael P. McKeever is currently the Director of Internal Audit at Saint Peter’s Healthcare System. He has over 25 years’ experience in healthcare finance, compliance and audit in acute care hospitals, long term care settings, ambulatory surgery centers, physician practices and a health sciences university. He was intricately involved in the nation’s first Voluntary Disclosure to the Office of Inspector General of the Department of Health and Human Services which lead to a Corporate Integrity Agreement, as well as a successful Advisory Opinion Request. A graduate of Rider College, he is a member of the AICPA, NJSCPA, HCCA and NJ HFMA, where he is a member of the Board of Directors, the Chairman of the Education Committee and the Co-Chair of the Annual Institute Committee. He is a Certified Public Accountant, and is also certified in Healthcare Compliance and Healthcare Research Compliance. Mike can be reached at [email protected].

•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 most qualified pool of potential candidates, and helping our readers find the best new job opportunities. For more detailed information on any position and the most complete, 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 OrganizationCoding Professional Ernst & Young (EY)

Site Director Sutherland Healthcare Solutions

Cost Accountant Saint Peter's Healthcare System

Sr. Director, Patient Accounting St. Luke's University Health Network

Director Corporate Registration Taconic Crossing

Financial Analyst AtlantiCare Regional Medical Center

Business Analyst CentraState Healthcare System

Reimbursement Manager AtlantiCare

Manager-F/T Patient Access Putnam Hospital Center

Director, Patient Accounting Hospital for Special Surgery

Senior Reimbursement Analyst St. Luke's University Health Network

Sr. Manager - Reimbursements & DSH BESLER Consulting

Associate Vice President, Finance Montefiore Health System/Medical Center

Director of Finance Robert Wood Johnson Physician Enterprise

Vice President of Design and Construction Universal Health Services, Inc.

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Focus 11

New Delinations, New Opportunities and New Questions

by Scott Besler and David Verbaro

Scott BeslerWhile the term “fall” is commonly used in North America to describe the season after summer, we have always been more partial to the word “autumn.” It is one of our favorite seasons. Many of us think of autumn as a new beginning and a time for change, whether it is students going back to school (although that occurs in the final weeks of summer) or a time for harvest as farmers prepare as much as they can for winter. Is it any surprise that the federal fiscal year (FFY) begins at this time?

As we all know, the inpatient prospective payment system (IPPS) final rule for FFY 2015 was released on August 5, 2014 and published in the Federal Register at the end of August. The final rule contains many changes that will impact providers dur-ing the current fiscal year. There are some updates that will af-fect hospitals now and in subsequent years-most likely the next ten. One such update discussed in this article is the adoption by the Centers for Medicare and Medicaid Services (CMS) of the February 28, 2013 OMB bulletin that revised the previous wage index labor markets used by CMS for the past ten years. This ar-ticle will review the impact of these changes to the labor markets that are used to develop the wage index of acute care hospitals. We’ll focus on the ramifications of the new labor markets im-pact on New Jersey and neighboring counties in New York and Pennsylvania. Changes to the labor markets will affect hospitals differently in FFY 2015, presenting future opportunities (and challenges) to the entire region. It is autumn, a time for change, a change that we knew was coming in FFY 2014.

BackgroundThe February 28, 2013 OMB bulletin No. 13-01 was is-

sued and revised delineations of Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas (CSA), and provided guidance on their uses.

The purpose of OMB’s bulletin was to establish revised delineations for the Nation's Metropolitan Statistical Areas, Micropolitan Statistical Area, CSAs as well as delineations of New England City and Town Areas. For FFY 2015, CMS will continue to treat Micropolitan Areas as “rural” and they will be used to calculate each state’s rural wage index. Using the 2010 census, the new OMB delineations determined there are fewer Micropolitan Areas than in the previous OMB delineations,

which utilized the 2000 census (541 vs. 581). The delinea-tions reflect the Standards for Delineating Metropolitan and Micropolitan Statistical Areas that OMB published in the June 28, 2010 Federal Register (75 FR 37246 -37252) and the application of those standards to Census Bureau population. Both the change in the stan-dards and the application of new Census Bureau data has resulted in an increase in the number of CSAs. These areas were first introduced in the 2000 standards, and can impact many geographic reclassifica-tions. This is mainly because, in order for a county or group application to meet approval of the Medicare Geographic Clas-sification Review Board (MGCRB), both the geographic area and desired areas must reside in the same CSA. New Jersey has 21 counties, twenty of which are in two separate CSAs – 13 are in the New York CSA (code #408) and seven are in the Phila-delphia CSA (code #428). The remaining county, Warren, re-sides in an undefined CSA. All are indicated in the table below. As we discuss later in the article, these CSAs will both allow and prevent hospitals from achieving a higher wage index.

David Verbaro

New Jersey CSAs per February 28, 2013 OMB bulletin

New York Philadelphia Undefined

Bergen Morris Atlantic Warren

Essex Ocean Burlington

Hudson Passaic Camden

Hunterdon Somerset Cape May

Mercer Sussex Cumberland

Middlesex Union Gloucester

Monmouth Salem

continued on page 12

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ImplementationCMS had delayed the implementation of these new delin-

eations in order to allow sufficient time to assess the changes. In addition to the changes to the Micropolitan Statistical Ar-eas and Combined Statistical Areas, there will be refinements to the alignment of certain counties within a CBSA. For FFY 2015, under the new OMB Delineations, 37 counties that were previously classified as urban became rural and 105 counties previously considered rural became urban. In addition to the counties that were once rural and will now be considered ur-ban, several urban counties that were previously included in one CBSA have been moved to another urban CBSA. For FFY 2015, there were counties that changed their CBSA in name and number, counties that were consumed into an existing CBSA, counties that were removed from one CBSA and in-cluded in a new CBSA, and finally CBSAs that lose counties but retain the same name and number.

Transition periodSomewhat similar to the way the new CBSAs were

phased-in back in FFY 2005, CMS is allowing a similar phase-in for FFY 2015. For hospitals that were located in an urban county and became rural under the new delinea-tions in FFY 2015, CMS has adopted a three-year transition period. These hospitals will be assigned the urban wage in-dex value of their FFY 2014 CBSA for the entire three-year period. This has no impact to New Jersey hospitals. For hospitals that will experience a decrease in their FFY 2015 wage index as a result of the new delineations, CMS will utilize a blended methodology to determine their wage in-dex amount. This blend will be the sum of 50 percent of their new FFY 2015 wage index and 50 percent of their FFY 2014 wage index. There are 39 hospitals in New Jersey that utilize this blending methodology.

Labor MarketsPrior to FFY 2015, New Jersey had ten labor markets that

impacted the hospitals in the state. New Jersey does not have a designated rural area, and therefore does not have a rural wage index value. New Jersey does however have an imputed rural floor and has since FFY 2005. The rural floor allows hospitals to receive a competitive wage index throughout the state. Table 1A lists the previous labor markets that impacted New Jersey hospitals’ wage index for FFY 2013 and FFY 2014, and Table 1B lists the current labor markets for FFY 2015. The source for these tables is the Provider Three Year Wages and Hours for Final Rule 2015 and Produced Using Wage Data Dated and Occupational Mix Data Dated June 26, 2014. An additional labor market, Philadelphia, PA, actually is impacted by one New Jersey hospital which creates a positive blend when com-bined with the other Philadelphia hospitals.

Table 1A Old Delineations (FFYs 2013 and 2014)

CBSA # CBSA Description # of Hospitals

10900 Allentown-Bethlehem-Easton, PA-NJ 2

12100 Atlantic City-Hammonton, NJ 4

15804 Camden, NJ 8

20764 Edison-New Brunswick, NJ 15

35084 Newark-Union, NJ-PA 17

35644 New York-White Plains-Wayne, NY-NJ 14

36140 Ocean City, NJ 1

45940 Trenton-Ewing, NJ 4

47220 Vineland-Millville-Bridgeton, NJ 1

48864 Wilmington, DE-MD-NJ 2

Total 68

As you can see from these tables, hospitals that were previ-ously located in the Edison-New Brunswick, NJ CBSA have been put into either the Newark, NJ-PA CBSA (Somerset County) or the New York-Jersey City-White Plains, NY-NJ CBSA (counties of Middlesex, Monmouth and Ocean).

ExemptionsHospitals can receive a different wage index value than their

geographic wage index factor as a result of various exemptions. Certain New Jersey hospitals receive a wage index value that is greater than their calculated wage index through one or more of the following three exceptions, as labeled by CMS: • Reclassifications; • Out-migrationadjustment;and • ImputedRuralFloor.


Table 1B New Delineations (FFY 2015)

CBSA # CBSA Description # of Hospitals

10900 Allentown-Bethlehem-Easton, PA-NJ 2

12100 Atlantic City-Hammonton, NJ 4

15804 Camden, NJ 8

35084 Newark, NJ 18

35614 New York-Jersey City- White Plains, NY-NJ 28

36140 Ocean City, NJ 1

45940 Trenton, NJ 4

47220 Vineland-Millville-Bridgeton, NJ 1

48864 Wilmington, DE-MD-NJ 2

Total 68

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Focus 13


ReclassificationsThe wage index also reflects the geographic reclassification of

hospitals to another labor market area in accordance with Sec-tions 1886(d)(8)(B) and 1886(d)(10) of the Social Security Act (the “Act”). Per the statute, a hospital has the opportunity to seek a higher wage index as either an individual hospital or group (county) of hospitals. New Jersey hospitals will continue to ben-efit from such reclassifications and the new delineations have added additional opportunities for a few counties. Of the 68 New Jersey acute care hospitals, 13 have approved wage index re-classifications for FFY 2015. For FFY 2014, 20 hospitals reclassi-fied. This decrease is a result of the Mercer County withdrawing their reclass into Newark for FFY 2015, and Middlesex County withdrawing their reclass as they became part of the New York-White Plains-Wayne, NY-NJ CBSA. For FFY 2015, three Morris County hospitals, seven Essex County hospitals geographically located in the Newark-Union, NJ-PA CBSA, as well as one Bur-lington County hospital located in the Camden, NJ CBSA, will reclassify into the New York-Jersey City-White Plains, NY-NJ CBSA. Interesting note here is that specific hospital, although reclassed for FFY 2015 into the New York-White Plains-Wayne, NY-NJ CBSA as an individual hospital via Monmouth County would be precluded to reclassify as a county should it wish to do so because its geographic county location (Burlington County) is not contained in the same CSA). The reason is that Burling-ton County is included in the Philadelphia CSA and Monmouth County is included in the New York CSA and one of the criteria that county/group reclasses must meet is that both the geograph-ic county and their desired reclass county must be contained in the same CSA. Another hospital from the Camden, NJ CBSA will reclassify into the Philadelphia, PA CBSA, and the remain-

ing hospital will reclassify from the Vineland-Millville-Bridge-ton, NJ into the Atlantic City-Hammonton, NJ CSBA. Table 2 displays each CBSA and where each New Jersey hospital is located after reclassifications in FFY 2015 and FFY 2014. For FFY 2013, 14 hospitals were able to reclassify.

Out-Migration adjustmentSection 1886(d) (13) of the Act established a process to

make adjustments to the hospital wage index based on com-muting patterns of hospital employees (the “out-migration” adjustment). The out-migration adjustment (which is effective for three years) allows for hospitals in counties that have their residents migrating to counties in CBSAs with higher wage index values to receive an increase to their wage index. Hos-pitals cannot receive the out-migration adjustment if they are reclassified under Section 1886(d)(10) of the Act or redesig-nated under section 1886(d)(8)(B) of the Act. In total for FFY 2015, 568 hospitals in 336 counties nationwide are eligible to receive an adjustment forout-migration;however,due totheir acceptance of their reclassification, only 286 hospitals in 194 counties will continue to benefit from the out-migration adjustment. Simply put, a hospital that is located in a county that has a specific number of residents that travel to a different county for employment may be eligible to receive this adjust-ment. As stated earlier, if that county or hospital located in that county does reclassify, it is not eligible for an out-migration adjustment. Hospitals that reclassify must annually review this adjustment and compare it to the impact they receive from their reclassification to determine which wage index value is greater. Therefore hospitals should still take the opportunity to reclassify if it meets the criteria regardless of their out-mi-

gration adjustment amount. Each year after the proposed IPPS final rule is re-leased (late April/early May) hospitals are given the opportunity to withdraw their application for the upcoming fed-eral fiscal year. In New Jersey, 23 hospi-tals located in the counties of Camden, Essex, Mercer, Morris, and Middlesex are eligible to receive an out-migration adjustment;however,only12hospitalsbenefit from this provision as the re-maining hospitals, as a result of their re-spective wage index reclassifications, do not. This adjustment varies in amount and is added to their overall geographic wage index value.

Table 3 lists the wage index values for each CBSA by New Jersey County. As you will see there are different wage index values within the same CBSA,

Table 2

CBSA # CBSA Description FFY 2014 After FFY 2015 After Reclass # of Reclass # of Hospitals Hospitals

10900 Allentown-Bethlehem- Easton, PA-NJ 2 2 12100 Atlantic City-Hammonton, NJ 4 5 15804 Camden, NJ 6 6 20764 Edison-New Brunswick, NJ 12 n/a 35084 Newark-Union, NJ-PA 11 8 35644 New York-White Plains-Wayne, NY-NJ 28 n/a35614 New York-Jersey City- White Plains, NY-NJ n/a 3936140 Ocean City, NJ 1 1 37964 Philadelphia, PA 1 1 45940 Trenton-Ewing, NJ 0 4 47220 Vineland-Millville-Bridgeton, NJ 1 048864 Wilmington, DE-MD-NJ 2 2

Total 68 68

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14 Focus

Table 3

CBSA # New Jersey County Table 2 Wage Index Wage Index Wage Index Old CBSA New CBSA

10900 Warren county 1.1119 1.1145 1.1092

12100 Atlantic county 1.1841 1.1821 1.1841

12100 Cumberland county, NJ reclass 1.1504 1.1484 1.1504

15804 Camden county (3 of 4 hospitals) 1.1145 1.1092 1.1145

15804 Burlington and Gloucester counties 1.1119 1.1092 1.1145

35084 Hunterdon, Sussex and Union counties 1.1131 1.1169 1.1092

35084 Somerset county 1.1119 1.1145 1.1092

35614 Bergen, Hudson and Passaic counties 1.2973 1.3115 1.2831

35614 Deborah, NJ reclass 1.2700 1.1145 1.2700

35614 Essex and Morris counties NJ reclass 1.2820 1.2700 1.2940

35614 Middlesex county 1.3075 1.1145 1.2831

35614 Monmouth and Ocean counties 1.2831 1.1145 1.2831

36140 Cape May county 1.1119 1.1145 1.1092

37964 Cooper Hospital, NJ reclass 1.1127 1.1108 1.1145

45940 Mercer county 1.1346 1.1145 1.1092

48864 Salem county 1.1119 1.1145 1.1092


this is either a result of their blend plus any applicable out- migration adjustment or their active reclassification wage index value.

Imputed Rural FloorNot unlike a vampire who fears daylight, the imputed

rural floor fears the dawn of each new fiscal year. It seems like almost every year the imputed rural floor provision is in danger of ending.1 This adjustment ensured that hospitals in metropolitan areas would not have a wage index value lower than that of hospitals in rural areas of the state. There were, however, a few states that did not have a rural area and were, therefore, considered “all-urban”. Since these “all-urban” states did not have a rural hospital, CMS created the imputed rural floor by regulation. Since FFY 2005, New Jersey hospitals have been eligible to receive an imputed rural floor. In FFY 2005, Massachusetts, New Jersey and Rhode Island were considered all-urban states and were, therefore, not eligible to have a rural floor impact. In later years, Massachusetts as a result of having a rural area and a new rural hospital ceased to be an all-urban state and only New Jersey and Rhode Island remained. Beginning in

FFY 2015, a new all-urban state, Delaware, will join New Jersey and Rhode Island as the only states that do not have designated rural areas.

The imputed rural floor is calculated by taking the low-est and highest wage index value in each all-urban state to create a low-to-high average. A low-to-high average can never be greater than 1. Each all-urban state has the discretion to use their individual low-to-high average or the aggregate low-to-high average divided by the number of all-urban States (there are now three) in the calculation of the imputed rural floor (whichever is greater), and then multiply that factor by the highest wage index value in the state and by the national bud-get neutrality factor. For FFY 2015, 22 New Jersey hospitals will benefit from the imputed rural floor provision. Previous-ly, 35 New Jersey hospitals benefited from the imputed rural floor. This provision was due to sunset on September 30, 2014 but has been extended for one more year.

Conclusion For several years CMS has discussed their concerns with

the calculation and exemptions regarding the current wage index system. The current system has its flaws, but CMS was

Fall 2 0 1 4

Focus 15

unable to find a suitable and auditable solution for its re-placement.

CMS has adjusted the labor markets for the first time in ten years. These changes will not be realized entirely in FFY 2015. The resulting blend of prior year wage index values with the current year values has given hospitals ample time to prepare for the changes that many will experience in FFY 2016. CMS could have exempted the blend, raised the reclass criteria per-centages, or increased the mileage requirement as they have mentioned in previous final rules.

Change can be a difficult endeavor for hospitals in New Jersey and elsewhere. The New York-Jersey City-White Plains, NY-NJ CBSA has seen its CBSA add three New Jersey coun-ties (Middlesex, Monmouth and Ocean) that dilute its wage index value. It seems similar to FFY 2005 when the CBSA adopted three other New Jersey counties (Bergen, Hudson and Passaic). Moving south, down Route 95, the Philadel-phia, PA CBSA witnessed a three county reduction in both FFY 2015 (Bucks, Chester and Montgomery are now part of their own CBSA) and in FFY 2005, when the counties of Burlington, Camden and Gloucester were removed. This subtraction and addition of counties in these two major met-ropolitan markets are not uncommon throughout the coun-try. This is the type of wage index “smoothing” that CMS has envisioned for the Medicare wage index system. Many hos-pitals were prepared for these changes, but remain skeptical that these will be the only changes to wage index for the next ten years. For New Jersey hospitals, the potential of losing the imputed rural floor and/or increased thresholds for reclassifi-cations would have a negative impact on almost one-third of its hospitals. As recently as August 8, 2014 CMS published a revised timetable which moved forward dates from their previous timetable.

Hospitals should do all they can to monitor and evaluate their labor costs as well as their neighboring hospitals’ data. As sure as autumn arrives each year in New Jersey, hospitals must be prepared to deal with wage index changes that are also inevitable.

About the authorsDave has been with BESLER Consulting for four years and has assisted hospitals in the preparation and review of their annual Medicare and State cost reports. In addition, he has assisted with wage index analyses and various reclassification projects. Dave has worked to develop different solutions for a variety of reim-bursement functions. He is a member of both the New Jersey and Philadelphia Chapters of the HFMA and an active participant in both the Education and Reimbursement committees. Dave graduated from James Madison University with a Bachelor of Science degree in Accounting and is currently pursuing his MBA at Rutgers University-Camden. Dave can be reached at [email protected]

Scott has over 23 years of progressively responsible experience in hospital reimbursement. He has been responsible for a myriad of areas relating to healthcare facility reimbursement while work-ing at BESLER Consulting. Some of the major areas of his exper-tise encompass the New Jersey state subsidy calculations as well as the Medicare wage index reimbursement arena. Scott is very well versed in the detailed calculations that derive the wage index fac-tors. Additionally, he has participated in detailed audit reviews of the wage index for a number of acute care hospitals and hos-pital associations. Scott received a Bachelor of Science degree in Accounting from LaSalle University. He is a member of the New Jersey and Philadelphia HFMA and its Reimbursement Commit-tees. He also served on the Institute as well as Education Commit-tee for the New Jersey chapter and is currently their board liaison. Scott can be reached at [email protected]

Footnote:1. The rural floor adjustment was established by Section 4410 of the Balanced Budget Act of 1997, and the imputed rural floor was established by regulation for FFY 2005.

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Fall 2 0 1 4

Focus 17

Building a Successful Denial Management Team

by Charles Reitano & Jennifer Tosto

Charles Reitano

When third-party payers deny a claim for payment, the reasons may be justified—or not. Staff members working on these denials are not always able to tell the difference. Lost time and lost revenue batter finances, while delays and rework damage patient satisfaction and frustrate collection representatives.

This challenge is apt to worsen. With more patients entering the healthcare system through coverage under the Affordable Care Act, the number of third-party claims will likely grow. The upcoming conversion to ICD-10 codes can be expected to make coding more complex and cause more coding errors, leading to more denials.

For decades, hospitals have struggled to keep collection percentages high and costs to collect low. According to Healthcare Business Insights (HBI), denial write-offs for the top quartile of hospitals nationwide range from 0.4 percent to 0.6 percent of net revenue. In New Jersey, average denial write-offs for hospitals are significantly higher, currently sitting at 1.3 percent. The average cost to collect for these hospitals is three percent, far exceeding the industry benchmark of two percent.

An effective way to reach these target numbers is to establish a denials management team with the tools and expertise to identify and address the root causes of denials and use regulatory knowledge to collect payment on inappropriately denied claims.

a case in point: Cooper university Health CareCooper University Health Care in Camden is a leader in

providing health services in southern New Jersey, reaching half a million patients annually. Like many other busy hospitals in the state and across the country, Cooper was struggling to collect the full value on many of its third-party claims.

Several factors contributed to Cooper’s high percentage of denials versus net revenue. Overwhelmed with increasing patient volumes, staff had limited time to balance work on current accounts and follow up on aged and denied claims. They also lacked the time and legal resources to keep abreast of ever changing reimbursement regulations and state-specific protocols for adjudicating denied claims. With a practice of writing off claims over 240 days old, the hospital was seeing more and more revenue slip away as these claims fell over the collections cliff. Clearly, the situation needed to change.

Cooper teamed up with Convergent Healthcare Reve- nue Cycle Management to find the answers. Together, they developed a three-pronged approach—analyze, educate, escalate—for determining the reasons behind the specific denials Cooper receives and responding to payers with the facts to turn denials into payments. Each element of the approach is described below.• analyze denials by

payer, type and timing. Convergent uses Cooper data to identify the root cause of denials by payer, the type of denial, such as technical, clinical underpayment, inpatient or outpatient, and timing of the denial—pre-service, time of service or post- service. Monthly reports, including a thirteen-month trending of issues by account volume and dollars, have revealed systemic issues behind many denials, such as front-end authorization and length of service issues. Cooper shares this information directly with responsible departments and teams to course correct and prevent future errors.• Educate staff on reimbursement regulations. Using

state-specific research conducted by Convergent’s legal team, Convergent regularly conducts free on-site workshops for Cooper staff that cover state and federal regulations that apply to the most common denials the hospital receives. In the workshops, a Convergent attorney presents reimbursement scenarios—such as pre-authorization denials, spousal liability, refund demands, medical necessity denials and wrongful delays—and discusses how staff can leverage current New Jersey state and federal statutes to overturn denials and expedite payment from providers. With a solid understanding of legal rights and limitations,

Jennifer Tosto


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18 Focus

Cooper staff now work first-level appeals on their own to lower the hospital’s accounts receivable balance, accelerate cash flow and reduce write-offs.

• Escalate high value and complex claims to a specialized legal team. Cooper segments aged claims that have a high net value or complexity and escalates them to Con- vergent’s specialized legal team for follow up. The more than 60 in-house staff attorneys in Convergent’s legal department have extensive state-specific legal reimbursement knowledge to help resolve difficult to collect healthcare claims. The team reviews payer contracts and develops appeals supported by legal documentation and customized to the payer and the account. The team also uses pre-litigation strategies to apply pressure on payers while maintaining positive payer relations. The Con- vergent legal team works to negotiate successful resolu- tions in order to avoid litigation and account write-offs.

The average age of the high dollar and complex ac-counts Cooper escalates to Convergent is 309 days, and the average balance is roughly $5,000. Convergent col-lectsmorethan25percentontheseaccountseachmonth;Cooper’s prior collection rate on these accounts was less than five percent, which is typical of most hospital’s col-lection success on accounts this old.

The Cooper–Convergent denial management team has had a significant impact on helping the hospital reach denial and collection benchmarks. Insight gained from analyzing the source of denials, staff knowledge of reimbursement regula-tions to defend claims and legal resources for the most impor-tant claims have helped Cooper realize an additional $6 mil-lion in collections on accounts that would have otherwise been written off to bad debt, all while maintaining a two percent cost to collect.

applying legal expertise through examples1. Wrongfully Delayed Claims

Common Scenarios• Highbalancereview• Medicalreview• Audit• Deniedreceiptofclaim• “Theclaimshuffle”

Legal ConceptsFor individual and/or fully funded plans, State Insurance Laws apply.Health Insurance: prompt payN.J. Stat. ann. § 17B:26-9.1(d) (Individual policy)N.J. Stat. ann. § 17B:27-44.2(d) (Group policy)

N.J. Stat. ann. § 26:2J-8.1(d) (HMO)• Insurer must pay an electronically submitted claim no later

than 30 days after claim received or no later than 40 days for written claims.

• Penalty for delayed claim payment is 12% per annum interest, in addition to the amount of the claim.

Workers’ CompensationN.J. Stat. ann. § 34:15-15

• Allfeesandotherchargesforphysician,surgeon,andhospi- tal treatment shall be reasonable and based upon the usual fees and charges which prevail in the same community for similar services.

For self funded plans, Federal Statutes apply (ERISa):

aCTION TIME LIMIT

Initial Benefit Decision 30 days from date of claim

Extension 15 days if plan notifies claimant

Claimant Forward 45 days from date of noticeRequested Info

Appeal a denial 180 days from notice of decision

Decision on 1st Level Appeal 60 days from receipt

Decision on 2nd Level Appeal 30 days from receipt

What Can You Do?• Verify date the claim was received• If receipt is denied, fax the claim and confirm receipt

with carrier’s claims representative• Overnightormailtheclaimreturnreceiptrequested• Quote statutory language when speaking to the carrier’s

claims representative

2. Refund DemandsCommon Scenario• Hospital submits Patient’s $5,500 claim to Aetna for

payment• Hospital received a $5,000 payment from Aetna• Three weeks later, “Accent Recoveries” sends a letter

saying: • Patient’scoveragelimitsexceeded; • Aetna’spaymentwasinerror;and • Hospitalmustrefund$5,000


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Focus 19

Legal Concepts N.J. Stat. ann. § 17B:26-9.1 (Individual)N.J. Stat. ann. § 17B:27 44.2 (Group)N.J. Stat. ann. § 26:2J-8.1 (HMO)

• The deadline for a payer to submit a request for an overpayment is 18 months after the date the first payment on the claim was made.

• No payer shall collect or attempt to collect a refund on or before the 45th calendar day following the submission of the refund request to the provider. A provider may appeal a refund request on or before the 45th calendar day following submission of the refund request to the provider.

Contract: Contract language will dictate outcome of refund request

Unjust Enrichment: Occurs when provider receives payment that exceeds total charges

Knowledge of Mistake or Fraud: Provider has knowledge of mis-take or fraud regarding coverage

What Can You Do?• Assessthesituation!• Isitanon-contracted,contracted,orgovernmentpayer?• How long since the payment was received? (Period of

time to audit claims)• DoNOT automatically refund money!

3. Pre Authorization Denials

Common Scenario• Patient was assessed and stabilized in the Emergency

Room and was then admitted for further observation and testing• Hospital calls number on Patient’s Humana card and

attempts authorization, but can only leave a message. Humana does not call back• HospitalsubmitsPatient’sclaimtoHumanaforpayment• Humana denies claim as not preauthorized and states

that balance should be written off

Legal ConceptsN.J. Stat. ann. § 17B:30-52• Apayermust communicate denial of a request or the

limitation imposed on the requested service to the hospital within a time frame appropriate to the medical exigencies of the case but no later than: • 15 days following the time the request was made

for inpatient hospital services and health care services in anoutpatientorothersetting;or • 24hoursfollowingthetimetherequestwasmadefor

hospital or emergency department (ED) services.

• If a payer fails to respond to an authorization request within the appropriate timeframe the request will be deemed approved and the payer shall be responsible for payment of covered services.

What Can You Do?• Documentall information from preauthorization call.• Strong appeals can be based on the fact that: • Preauthorization was attempted, but not obtained and

insurer does not allow authorization 24 to 48 hours after admit;or

• Hospital was told that authorization is unnecessary for specifiedtreatment;or

• Member failed to advise the hospital of the coverage• If scope of treatment changes after authorization: • Verballyrequestthattheauthorizationbechanged;or • Submit appeal requesting retroactive authorization of the

admission, with the medical records to show the medical necessity of the inpatient treatment

About the AuthorsCharles Reitano, Vice President Revenue Cycle, Cooper University HealthcareCharles’ healthcare experience in Operations and Revenue Cycle spans over 22 years. His current role as Vice President of Revenue Cycle at Cooper University Healthcare includes oversight for Patient Access, Hospital and Physician business offices, and Health Information Management. Charles holds a bachelors degree in Information Systems Management from the University of Phoenix and is certified as a Lean/Six Sigma Blackbelt. Charles can be reached at [email protected]

Jennifer Tosto, Esq., Account Executive, Convergent Revenue Cycle ManagementJennifer Tosto is an account executive, healthcare attorney, and frequent subject matter speaker at Convergent Revenue Cycle Management, Inc. As an account executive, she is responsible for managing multiple client engagements along the east coast. As a frequent speaker, Mrs. Tosto stays abreast of the current changes and developments in healthcare reimbursement law, speaking at healthcare associations and hospitals across the nation. She can be reached at [email protected].

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20 Focus

•Who’s Who in NJ Chapter Committees•

2014-2015 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.

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*/TIME LOCATION LIASON Lisa Hartman Dara Quinn/Deb Carlino First Thursday of the Month Meeting in person at Deloitte & Touche, Stacey BigosCARE (Compliance, [email protected] [email protected] / [email protected] 9:00 AM Princeton, NJ for Oct., Jan., April and July [email protected], Risk, & Ethics) (908) 507-7065 (201) 388-0637 / (973) 972-3260 Balance are calls. Please call to confirm (609) 275-4017

Elizabeth Litten Al Rottkamp First Thursday of each month Fox Rothschild offices Brian HerdmanCommunications [email protected] [email protected] 9:30 AM 997 Lenox Dr Bldg 3 [email protected] (609) 896-3600 (201) 821-8705 Lawrenceville, NJ

Mike McKeever Mary Cronin & Stacey Bigos First Friday of each month Scott MarianiEducation [email protected] [email protected] / 10:00 AM Conference Calls [email protected] (732) 745-8600 x5089 [email protected] (973) 898-9494 x420 (732) 839-1217 / (609) 275-4017

Certification Rita Romeu To Be Determined Mike McKeever(Sub-committee [email protected] 10:00 AM Conference Calls [email protected] Education) (973) 418-6071 (732) 745-8600 x5089

FACT (Finance, Karen Henderson Monika Fennegan Second Wednesday of each Month Megan ByrneAccounting, Capital [email protected] [email protected] 8:00 AM Conference Calls [email protected]& Taxes) (973) 532-8879 (609) 383-2115 (732) 516-4696

Erica Waller Jennifer Vanegas Fourth Thursday of each Month Tracy Davison-DiCantoInstitute 2014 [email protected] [email protected] 8:00 AM Conference Calls [email protected] (609) 620-8335 (585) 643-3377 (609) 529-9461

Belinda Doyle Puglisi John Brault 9/8/14 (1 hr. conf. call only) Children's Specialized Kevin JoyceManaged Care [email protected] [email protected] 9/12/14*, 10/13/14, 11/10/14, 2:00 PM (Two Locations) [email protected] (908) 301-5458 (973) 244-3536 12/8/14 (1 hr. conf call only), 12/10/14* *NJHA (732) 562-7823

Jennifer Barr Maria Facciponti Call for meeting arrangements Locations alternate Stella VisaggioMembership Services/ [email protected] [email protected] by month - [email protected] (201) 821-8932 please contact the chairs (908) 850-6928

Dara Derrick Maria Lopes-Tyburczy 9/11/14, 11/14/14, (with Managed Care) Mary TaylorPatient Access Services [email protected] [email protected] 1/8/15, 3/12/15, 5/14/15 9:30 AM CBIZ KA Consulting offices [email protected] (908) 850-6870 in East Windsor, NJ

Steven Stadtmauer Cynthia Kaufhold Second Friday of each Month Josette PortalatinPatient Financial [email protected] [email protected] 10:00 AM New Jersey Hospital Association [email protected] (973) 778-1771 Ext. 146 (201) 833-7012 Board Room (201) 291-6017

Jennifer Shimek Deborah Carlino/Tony Panico Second Thursday of every other month Conference Calls Steven BilskyPhysician Practice [email protected] [email protected] / [email protected] (Nov. 14, Jan. 9, March 12, Sept. & Jan. meetings will also be in person [email protected] Form (732) 516-4676 (973) 972-3260 / (973) 898-9494 May 14) 9:00 AM Room TBD (303) 672-9896

Kathryn Gibbons Peter Demos Third Tuesday of each Month Monmouth Shores Corp. Park Scott BeslerRegulatory & [email protected] [email protected] 9:00 AM Meridian Conf. Room 1C [email protected] 1350 Campus Pkwy, Neptune

Christine Putterman Helene O'Donnell First Wednesday of each Month Rosemary NuzzoRevenue Integrity [email protected] [email protected] 9:00 AM Princeton HealthCare System [email protected] (215) 630-8916 (215) 882-1670 (609) 383-2114

Lew BivonaCPE Designation [email protected]

Fall 2 0 1 4

Focus 21

Part B Medical Billing – The Wave of the Future – is Here!

by Rich Papperman, PA, MBA, CHBME

Rich Papperman

We have been in Part B medical billing business for almost 25 years. The first few years seemed to be relatively free of much change. Sure, we were able to use computers and billing software instead of ledger cards (how many of you remember ledger cards!), and the insurers did not seem to change their policies daily in those days! However, starting with the Office of the Inspector General (OIG) Guidelines for Physicians in 1998, then shortly after that, the OIG Guidelines for Third Party Billers, and HIPAA – change became the norm.

The challenge has been how to control healthcare costs and root out improper billing and fraud. Fraud has been a major focus of Medicare and insurers since at least the late 1990s with increased prevention and recovery activities, and new anti-fraud regulations and laws every year. The current “buzz words” are RAC and ZPIC!

The latest insurance industry high deductible plans have added yet another significant change – this time in the billing and payment paradigm.

A bit of history may help understand these changes. In the 1980s HMOs and DRGs became the new way to control healthcare costs. HMO co-pays and deductibles were thought to be the way to force patients to participate in the healthcare decision process – but the co-pays were never really high enough to make a significant change. DRGs were aimed at hospitals to try to force them to provide more efficient care since they essentially paid one lump sum based on the diagnosis codes reported. These had varying degrees of success, but certainly did contribute to a slowing of healthcare costs. However, the GNP related to healthcare continued to climb.

The three major initiatives now to control costs are:• Increased provider correct billing education plus fraud

abuse investigations.• ACOsandsimilarorganizationstoincreasethequalityof

care thru better coordination of care. EHRs are an integral part of this to improve provider communication and documentation.• Highdeductibleplanssothatpatientsnowhaveamore

acute interest in how their healthcare dollars are spent.

We view medical billing in two parts depending upon who is responsible for the balance: insurance and patient.

On the insurance side, insurers have focused armies of people using high end computers with sophisticated software on their

side of medical billing. Insurers use claims data from all provid-ers to “data-mine” - searching for patterns of incorrect coding by providers which allows them to either recoup perceived overpay-ments or place providers on pre-payment audit review. At times it seems like this vast array of resources is solely focused on not paying providers!

patients traditionally have had little incentive to watch costs. Co-pays were not high enough. Few plans had deductibles, and those that did, were too low to make a difference.

So what can you do to prevent “revenue leakage” from both sources?

The answer is through a combination of technology, poli-cies and procedures, and staff education. There are no low-priced short-cuts because in healthcare billing, whether it is in-house or outsourced, you will get what you pay for.

TechnologyTo be useful, technology (hardware and software) has to

have value. In medical billing, it has to do it more efficiently and more accurately. Hardware determines how well software can operate. Software can bring good efficiencies to the of-fice – or nightmares, including unnecessary expenses and loss of cash flow.

In our opinion, some important characteristics of billing soft-ware:• Datamustbeabletobeenteredeasily–whethermanually

or thru interfaces. • Softwarewith Function keys that allow data entry staff

to keep their hands on the keyboard instead of searching for the mouse. • Thereneedstobeerror-checkingability.• Abilitytocheckpatienteligibilityandplancoverageelec-

tronically in real time from within the software. • Abilitytopost835sforallinsurances.• Flexibilitytochangeyourclearinghouse,and/orpatient

statement vendor, is important to ensure you are not paying too much and that you receive the service expected. You need the ability to change vendors with unacceptable service and high cost as necessary. • Electronicworkqueuestoautomaticallyaddunpaidin-

surance claims for follow-up using insurance specific time intervals.


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22 Focus

policies and proceduresThis covers a large range of how the office operates:• Hiring–who,how,pay rates,benefits, etc.Areback-

ground checks done? Is the front desk/receptionist com- fortable asking patients for money, or are they quick to accept excuses for not paying?• Employeeongoingeducationandtraining.Whattopics

are required by certifications? What education is obtained

to stay current with insurance company policies and Medicare/Medicaid regulations?• Who is responsible for setting financial policies and

procedures? Are co-pays collected upon patient arrival? If a patient fails to bring their copay, how is that handled? How are high deductible patients handled? • Are patients scheduled so that they are seen on time?

Patients often are not able to gauge the quality of care, but they do know if they were seen at their appointment time. • A well run office with proper

financial policies and procedures will attract high quality patients. High quality = paying patients!• The provider(s)MUST actively sup-

port the policies. As mentioned above, high deductible

plans have changed the paradigm of patient payments. Only thru firm policies and pro-cedures can practices maintain and even im-prove cash flow.

Staff EducationOK, you have the technology and good

policies and procedures, is the staff aware of how to make technology work and been trained on the policies and procedures?

In summary, a lot of good decisions must be made to collect the maximum amount of money from insurers and patients. Join us in October at the 2014 NJ PA HFMA Annual Institute to hear more about this.

About the AuthorSince 1990, Rich Papperman, PA, MBA, CH-BME, has been the President/CEO of Cape Pro-fessional Billing, d/b/a Cape Medical Billing. Rich has held executive positions with several major hospitals throughout the United States, is a graduate of the University of Pennsylva-nia’s Wharton Graduate School, and is a Board member of the Healthcare Billing and Manage-ment Association (HBMA). Rich has been a speaker and panelist on various topics related to medical billing at a number of medical profes-sional events and was a contributing author to HBMA’s “Collected Wisdom-Best Practices for Third-Party Healthcare Billing Companies.” Rich can be reached at [email protected].

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Focus 23

Appropriate Level of Care and the 2-Midnight Rule Where it Stands as of NOW...

By Edward J. Niewiadomski, MD and Laureen A. Rimmer, RHIA, CPHQ, CHC

Edward J. Niewiadomski


Effective October 1, 2013, The Centers for Medicare and Medicaid Services (CMS) implemented a new rule, the “2-Midnight Rule” that is intended to clarify which patients are sick enough to be admitted to a hospital by adding “midnight” as a point in time for determining inpatient length of stay and requiring physicians to certify that they have the expectation of care surpassing two midnights. Medicare would then pay inpatient hospital rates. Prior to this rule, CMS outlined observation care as short term, and generally would not exceed 24 hours but could be up to 48 hours in rare and exceptional cases. It is important to note that a New Jersey State regulation stipulates a length of stay criteria of less than 24 hours for observation services. The New Jersey Department of Health and Senior Services, N.J.A.C., Title 8, Chapter 43G-32.21 outlines the state standards for observation services and scope which is more stringent than the CMS guidance on observation services.

The key elements of the 2-Midnight rule require docu-mentation in the medical record for medical necessity and a presumption of the length of stay. The focus of the documentation requirements for Medicare inpatient admission is as follows:• Inpatient admission order at the time of admission by a physician or qualified practitioner licensed by state toadmitinpatientsandwhohasadmittingprivileges;• Physician certification of medical necessity includes (before discharge):

Inpatient admission order signed/authenticated by thephysicianorcountersigned,ifneeded; Datedorder; Reason for inpatient services, including diagnosis, patient history, patient comorbidities, severity of signs & symptoms, risk of adverse events, current medical needs requiring inpatient care, plan of care, andplansforposthospitalcare;and Estimated length of stay (expected to stay at least 2 midnights).

There are other circum-stances supporting short inpa-tient stays, exceptions to the 2-Midnight benchmark, based upon CMS guidance which are as follows: • Procedures defined as “Inpatient–Only” • Unforeseen beneficiary death • Unforeseen transfer • Unforeseen departure against medical advice • Unforeseen clinical improvement • Election of hospice care in lieu of continued treatment in the hospital • Mechanical ventilation initiated during present visit

Documentation in the medical record, as always, is critical to explain what happened during the episode of care. Physicians need to tell the story of the patient by outlining the above, which will provide auditors with the reasons for the inpatient status.

The 2-Midnight presumption and the 2-Midnight Benchmark

The 2-Midnight presumption and benchmark are outlined in CMS-1599-F. The 2-Midnight presumption specifies that hospital stays spanning two or more midnights, after the beneficiary is formally admitted as an inpatient based upon the physician order, will be presumed to be reasonable and necessary for inpatient status, as long as the stay in the hospital is medically necessary. CMS will direct Medicare Administrative Contractors (MACs) not to focus medical reviews on stays spanning at least two midnights after admission. MACs may review these claims as part of routine monitoring activity or as part of other target reviews and/or in the event of evidence of

Laureen A. Rimmer

Edward J. Niewiadomski

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24 Focus


systematic gaming, abuse or delays in the provision of care to qualify for the 2-Midnight presumption.

The 2-Midnight benchmark represents when an inpatient admission is generally appropriate for Medicare coverage and Part A inpatient payment. For purposes of determining whether the 2-Midnight benchmark was met, CMS will direct MACs to consider time the beneficiary spent receiving outpatient services within the hospital prior to inpatient admission, in addition to the post-admission duration of care. The pre-admission time may include services such as observation services, treatment in the emergency department (ED), and procedures provided in the operating room or other treatment area. MLN Matters Number: MM8586 was released January 24, 2014 to provide clarification to hospitals regarding the billing of inpatient hos-pital stays to track the total, contiguous outpatient care prior to inpatient admission to the hospital. CMS has redefined oc-currence span code 72 which allows providers to voluntarily identify those claims in which the 2-Midnight benchmark was met because the beneficiary was treated as an outpatient in the hospital prior to the formal inpatient order and admission.

From the issuance of the Inpatient Prospective Payment System (IPPS) Final Rule CMS 1599-F for Fiscal Year (FY) 2014 on August 19, 2013 to the soon to be published IPPS Final Rule FY 2015, CMS-1607-F on August 22, 2014 to the Outpatient Prospective Payment System (OPPS) Proposed Rule for Calendar Year (CY) 2015, the public comments and CMS guidance evolves. The table on page 25 outlines the milestones in this regulatory journey. In spite of the OPPS Proposed Rule for CY 2015 which proposes 20 days as the appropriate minimum threshold for physician certification, these regulations have been and continue to be effective as of October 1, 2013. In spite of the OPPS CY 15 proposal, clinical documentation in the medical record drives medical necessity for inpatient hospital stay. Physician documentation needs to be specific and explicit.

Best practice TodayCurrently, no specific procedures or forms are required.

The physician certification may be entered on various forms, notes or records (with appropriate signatures) included in the medical record, or on a special form, so long as there is a separate signed statement for each certification. In the absence of specific certification forms, the medical record elements identified above may be sufficient to meet the initial inpatient certification requirements for each component.

Collaboration of the revenue cycle team, inclusive of Case Management, Patient Access Services, Health Information Management, Clinical Documentation Improvement and Patient Financial Services with the physicians is the key strategy to success. Understanding the clinical processes, electronic

health record interfaces to the billing system and validating the patient status concurrently are essential. How would your organization answer these questions?: • What is the Case Management model to support con- currentphysiciandecisionmakingonthepatientstatus; inpatient vs. observation vs. outpatient? • Are there case managers in the ED to collaborate with the ED physicians, hospitalists and/or community physicians to assess the clinical picture of the patient, ensure the medical record tells the story and then places the patient in the appropriate status? • Is there strong physician leadership to monitor observation patients timely and make the next appropriate clinical decisions? • What is the role of the Utilization Review Committee and Physician Advisors? • Are physicians educated and do they have the tools needed to support the clinical decision making? • Are the clinical and financial metrics implemented and assessed for improvement opportunities? • Are there policies for observation billing, use of occurrence span code 72, inpatient only procedures? • Is there auditing of hospital systems, policies and procedures for compliance? • Is there a process to aggressively appeal cases that appear to meet inpatient criteria?

As CMS continues to state, the decision to admit a patient as an inpatient is a complex medical decision based upon many factors including the risk of an adverse event during the period considered for hospitalization. The MACs will continue their probe and educate while the Recovery Auditors will be in a holding pattern by not conducting inpatient status review of claims through March 31, 2015. Hospitals need to monitor the regulatory advisories and remain diligent and compliant in meeting the CMS requirements for the 2-Midnight Rule.

About the authorsLaureen A. Rimmer, RHIA, CPHQ, CHC, Director, has over twenty-five (25) years of experience in health information management administration, performance improvement, utilization management, medical staff operations and physician practice management. Laureen’s health information management experiences, as well as operational experiences, have provided key expertise in Recovery Audit Contractor (RAC) engagements for the firm. Laureen has extensive experience with Joint Commission accreditation, post survey intervention, as well as CMS/State licensure compliance and has been instrumental in implementing change in departmental operational engagements for the firm. Laureen is a Registered Health Information Administrator, Certified Professional in Healthcare Quality and Certified in Healthcare Compliance.

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Focus 25

date Guidance Comments

8/19/13 IPPS Final Rule CMS-1599-F for FY 2014 2 Midnight Rule effective with admissions on or after 10/1/13.

9/26/13 CMS Special Open Door Forum

Conference call and transcript of call outlining responses to provider questions and probe & educate by the MACs for dates of admission 10/1/13 to 12/31/13. MAC to focus on one inpatient midnight claims. Recovery Auditors not to review claims for this issue for same dates of admission. (exception for pre-payment reviews of therapy in pre-payment demonstration states).

1/24/14CR # 8586 Occurrence Span Code 72 Identification of Outpatient Time Associate with an Inpatient Hospital Admission and Inpatient Claim for Payment

Guidance to account for total hospital time, including outpatient time that directly precedes the inpatient admission when determining if an inpatient order should be written, based upon the expectation that the beneficiary will stay in the hospital for 2 or more midnights receiving medically necessary care.

1/30/14 CMS guidance to clarify physician order & certification for Hospital inpatient admission

Content of physician certification outlined, timing, authorization to sign the certification, inpatient order and specificity of orders.

10/1/13 to 1/31/14 MAC Probe & EducateProbe & educate time period 10/1/13 to 9/30/14. MAC requested to re-review claims to ensure claim decision and subsequent education consistent with most recent clarifications. Appeal timelines clarified.

4/1/14 President signed the Protecting Access to Medicare Act of 2014

Extends MAC probe & educate to 3/31/15. Recovery Auditors prohibited to conduct inpatient status review of claims 10/1/13 to 3/31/15.

5/12/14CMS UPDATE: MACs completed most of first round probe reviews (10 or 25 claims, volume dependent) and beginning provider education

CMS conduct pre-payment patient status probe reviews for dates of admission 10/1/13 to 3/31/15. MACs conduct patient status reviews using probe & educate strategy for claims 10/1/13 to 3/31/15. MAC education and repeat process, when necessary.

5/15/14 CMS, HHS Proposed IPPS Rule for FY 2015. Final Rule to be published 8/22/14.

SuggestedExceptionsforthe2MidnightBenchmark;inviting further feedback in rare and unusual circumstances that were not identified to justify inpatient admission for Part A payment, absent an expectation of care spanning at least 2 midnights.

7/14/14 CMS, HHS Proposed OPPS rule for CY 2015

Inpatient admission order is necessary for all inpatient admissions and proposing to require such orders as a condition of payment, rather than as an element of the physician certification. Medical necessity documentation for inpatient stay still required. Proposing, for non-outlier cases, 20 days as the appropriate minimum threshold for physician certification and define long stay cases as cases with stays 20 days or longer.

Edward J. Niewiadomski, M.D., Senior Medical Advisor, is an accomplished physician with over three (3) decades of experience in direct patient care and healthcare administration. Dr. Niewiadomski is President of Healthcare Initiatives, LLC, a healthcare consulting company that brings new, cutting-edge technologies and programs to Healthcare organizations that result in high quality, increased efficiency, cost-savings and compliance. Dr. Niewiadomski is the former Senior Vice President of Medical Affairs and Chief Medical Officer for a community, acute care facility in New Jersey. He has served in multiple senior leadership positions for other New Jersey hospitals. Dr. Niewiadomski earned his medical degree from the University of Medicine and Dentistry of New Jersey – Rutgers Medical School and completed a residency in

Internal Medicine at Robert Wood Johnson University Hospital in New Brunswick, New Jersey. He also is a member of the American Medical Association, the Medical Society of New Jersey and currently serves on multiple association committees and board of trustees.

FootnotesCMS: Selecting Hospital Claims for Patient Status Reviews: Admissions on or after 10/1/13 (last update: 2/24/14) CMS: Inpatient Hospital Reviews, Update 3/12/14CMS FAQs, Update 3/12/14CMS:MLNMattersNumberMM8586,1/24/14;revised4/8/14CMS Fact Sheets: FY 2015 Policy & Payment Changes for Inpatient Stays in Acute Care Hospitals and Long Term Care Hospitals, 8/4/14New Jersey Department of Health and Senior Services, N.J.A.C., Title 8, Chapter 43G-32.21

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26 Focus

Impact of Quality Reporting in the Healthcare Industry

by Kim Charland, BA, RHIT, CCS

Kim Charland

Quality. What does it mean in today’s healthcare environ-ment? Quality relates to the type of care given – evidence-based medicine, complications, adverse effects, hospital ac-quired conditions (HACs). Quality relates to hospital and physician profiling. Quality relates to payment - value-based purchasing. The Centers for Medicare and Medicaid (CMS) Pay for Performance Initiatives alone include the following:• HospitalInpatientReportingProgram(IQR)• HospitalOutpatientReportingProgram(OQR)• HospitalValueBasedPurchasing• PhysicianQualityReportingSystem(PQRS)• AmbulatorySurgeryCenterQualityReporting (ASCQR)• InpatientRehabilitationfacilityQualityReporting Program (IRF QRP)• Long-termCareHospitalQualityReporting Program (LTCHQR)• PPS-ExemptCancerHospitalQualityReporting Program (PCHQR)• InpatientPsychiatricFacilityQualityReporting Program (IPFQR)• HomeHealthQualityReportingProgram(HHQRP)• HospiceQualityReportingProgram• End-StageRenalDiseaseQualityInitiative• HospitalReadmissionsReductionProgram• HospitalAcquiredConditionsReductionProgram

What do all these initiatives have in common? They are re-ported with ICD-9 codes and soon ICD-10 codes. To sum it all up, it’s all about the coded data and it all starts with physician medical record documentation. The documentation gets turned into codes that then get reported to payors and various agencies (Quality, Mortality, Registries, etc.). With all this coded data reporting, does your coded data really reflect the acuity of your patients and services provided to them in comparison to Sever-ity of Illness (SOI), Risk of Mortality (ROM), Length of Stay (LOS), and charges? What does your data show? Do you know?

Quality reporting requirements are continuing to increase and impact hospitals and physicians in many ways. Items such as staffing, processes for collecting and reporting the data, tech-nology, the anticipated conversion to ICD-10, and medical re-cord documentation requirements are a few major areas that are

affected. These items then im-pact the reporting of coded data, that impact quality scores, reim-bursement, and consumer interpretation of the data.

Have you looked at your data? You may be doing your “cod-ing audits” but are you really looking at the Physician documen-tation to see if it is saying what it should. Are you looking at what the coded data is saying in regards to complications, HACs, etc. What is the Severity of Illness (SOI) and Risk of Mortality (ROM) of your patients? Are you getting a lot of RAC denial letters for medical necessity? Has Medicaid started auditing yet? Payors are data mining and using the APR-DRG grouper to see what your SOI and ROM is, they look at your coded data (di-agnoses, procedures and present on admission (POA) indicators, LOS, MS-DRG and charges to see how that compares to national and peer averages as well as facilities and practices that are similar to you. Payors are also data mining to see how they can reduce contract payments, if your data is showing low SOI, low ROM, longer LOSs, and higher charges, they are going to try and reduce your payments. Can your data defend them doing this?

In addition to the payors and regulatory agencies using our coded data, it is also being accessed by consumers to see how hospitals and Physicians compare to each other and with na-tional data. Consumers are then using this data to determine where they go for healthcare.

You need to make sure that you are reporting accurate coded data, based on complete documentation. In addition, you need to be sure that the collection of this data is in the right place and is being reported appropriately. These will be discussed during the presentation in October in Atlantic City.

About the Author:Kim T. Charland is the senior vice president of clinical innovation for Panacea Healthcare Solutions. Kim has more than 25 years of experience in health information and reimbursement management for hospitals and physician offices. Kim is responsible for ensuring that Panacea’s consult-ing, software, and publishing divisions are at the forefront of the industry and delivering the most current and beneficial products to their custom-ers. In addition, she is the co-host for the company’s ICD10 Monitor’s Internet news broadcast, Talk-Ten-Tuesday. She also is recognized as a nationally renowned speaker and assists with coordinating clinical con-tent for Panacea’s MedLearn Publishing Division. Kim can be reached at [email protected].

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Focus 27


Karen Henderson

Ryan Bixenman

Department of Health Recommendations on Hospital Financial Transparency

By Karen Henderson, CPA and Ryan Bixenman

The New Jersey Health Care Facilities Financing Authority (“Authority”) acted as a moderator at a May 29, 2014 meeting that was held “in furtherance of P.L. 2013, c.195, signed Janu-ary 17, 2014, which instructs the Commissioner of Health, Mary O’Dowd, to “undertake a review of New Jersey’s hospital financial reporting requirements and... report any findings and recommendations directly to the Governor no later than six months from enactment.’ The law further instructs the Com-missioner to ‘examine the impact of, and make recommenda-tions on, the following areas for all entities receiving Health Care Subsidy Fund payments from the State: Internal Revenue Service filings, Securities and Exchange Commission filings, and audited financial statements.’” Following the meeting, the State of New Jersey Department of Health (“Department”) issued a 24 page report on July 19, 2014 entitled “Hospital Financial Transparency - Department of Health Recommen-dation on Hospital Financial Transparency” (“Report”). In this Report, Commissioner O’Dowd recommends that New Jersey require all hospitals, both for-profit and not-for-profit, be re-quired to disclose additional financial information at certain intervals during the year. As a result of the significant amount of income provided from state programs to hospitals the gov-ernment has the ability to request such information.

BaCkGROuNdOn August 8, 2012, Governor Christie conditionally vetoed

Senate No. S-782 (“Bill S-782”). This bill would have required for-profit hospitals to disclose certain information similar to that of not-for-profit hospitals in order to be eligible to receive charity care payments from the State of New Jersey.

On March 15, 2012, the Senate and General Assembly of the State of New Jersey passed the New Jersey Hospital Disclosure and Public Resource Protection Act (Act) with a vote of 32 to 4. The Act would have required for-profit hospitals in the state to increase the disclosure of their financial reporting so as to increase transparency and allow for a better comparison to tax-

exempt hospitals. The Act had specifically outlined twelve factors, such as funding sources and revenues, expenditures, vendor information and a list of compensation paid to each board member and officer of the hospital, that a licensed general hospital that is owned or managed by a for-profit entity, including an entity that has a majority ownership interest in the hospital, would be required to report to the Department of Health and Senior Services and to post on its website. The new reporting requirements had been introduced to ensure that both for-profit and tax-exempt hospitals disclose similar type data for purposes of transparency and uniformity. There are many correlations between the Act and the required reporting that tax-exempt organizations must comply with on Federal Form 990, Return of Organization Exempt from Income Tax. Governor Christie conditionally vetoed Bill S-782 to allow Mary O’Dowd six months to study the issue and recommend what information should be required to be disclosed by for-profit hospitals. In his veto, Governor Christie said “I believe this bill fails to address the need for greater public access to the practices of all health care providers that benefit from state funding.” The changes proposed by this bill require careful consideration to prevent the state from over-reaching into the business arena, while still acknowledging the importance of transparency for institutions receiving state funds.

The New Jersey Hospital Association, wanting not to dis-suade for-profit companies from purchasing hospital facilities in the state, believes that Governor Christie was correct in con-ditionally vetoing Bill S-782 allowing for the six-month study period. On the other hand, Senate Majority Leader, Loretta

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28 Focus


Weinberg, a Democrat from Bergen and the sponsor of Bill S-782, is strongly opposed to Governor Christie’s veto claim-ing that the bill is necessary to require for-profit hospitals to disclose similar information to that of a not for-profit hospital in order to receive state charity care funding. I believe that if a hospital is going to apply for millions of dollars in charity care payments, then the public deserves to know that the money being spent is going into the operating room, and not the board room. We should not be using public dollars to sub-sidize private hospitals’ profit margins.

THE dEpaRTMENT’S REpORTOne of the main areas emphasized in the Report is on the

transparency, or lack thereof, that for-profit hospitals are currently being required to disclose with respect to financial reporting. Accordingly, this is raising concerns about their financial viability and the potential impact that their financial health could have on the cost of, access to, and quality of healthcare. The meeting attendees included eight staff members of the Department and six staff members from the Authority including stakeholders of at least one representative from each of the following: five hospital trade organizations, three unions representing hospital employees, three community action groups, a publicly traded for-profit hospital, the trade association for health insurers and the trade association for nursing homes. A representative from Senator Loretta Weinberg’s office attended the meeting as an observer. A complete listing of the attendees may be found in Appendix A of the Report.

The Report outlines recommendations but is silent as to an implementation date of such recommendations. The Report states that the following recommendations are made keeping in mind the careful balance between the unique and important nature of healthcare services, the significant amount of public funds hospitals receive and the need to prevent imposing too steep a burden on healthcare providers. These recommendations focus primarily on enhancing the Department’s access to information in its role as a regulator protecting the public’s interest and access to healthcare while also providing additional information to the public so that it can raise concerns if it believes the hospital is not being a good steward of public funds.

The Department provided specific recommendation related to the following areas:

• Audited Financial Statements must be provided to the Department and conspicuously published on the hospital’s website within 180 days of close of hospital’s fiscal year (rather than the current July 1st). If the hospital is part of a multiple hospital system, the audited financial statements should include both the system’s audited annual financial information and a breakdown

for each New Jersey hospital owned or operated by the system. Additionally, copies would need to be available for review by the public at the hospital’s annual public meeting, which should be within sixty days of publishing their audited annual financial statements.

•Quarterly unaudited Financial Statements should be provided to the Department within 45 days of the end of each quarter and made public on the hospitals website within 60 days of end of the quarter. These should be prepared in accordance with Generally Accepted Accounting Principles (GAAP) and contain the same four financial statements included in the audited financial statements for each New Jersey hospital.

•Contracts with Related parties. There should be stan-dardization of the disclosure of related party transactions for both for-profit and not-for-profit hospitals, to the ex-tent permitted by law.

•Names of Owners, Board Members and Officers - Board accountability. The names of the owners of five percent or more of the corporation should be reported to the Department as part of the annual license renewal process as well as names of board members and officers. Currently, N.J.A.C. 8:43G-5.1(b) requires that a hospital provide, with a license application or annual renewal, the names of each member of the hospital’s governing body and the names of the chairperson of the governing body and the chief executive officer. Information similar to this is required to be submitted annually by all domestic and foreign corporations doing business in New Jersey as for-profit corporations.

•Hospital Charges. The requirement of the Centers for Medicare & Medicaid Services effective for all dis-charges on or after October 1, 2014 requiring hospi-tals to make available a list of the standard charges for items and services provided on the hospital website or in another reasonably available manner sufficiently addresses this issue.

• Insurance Networks and Out-of-Network Services. Each hospital should make the information available to patients regarding network coverage in a form allowing the patients to understand the insurance information and services and use the available data in in order to facilitate making appropriate decisions.

• Sale-Leaseback arrangements. A form of notice should be filed with the Department prior to an agreement en-tered into by a hospital with respect to any sale-leaseback arrangements. Additionally, these transactions should be reported at the hospital’s annual public meeting. Any ar-rangement of this type should be contingent upon the

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Focus 29

continuance of an established and functioning governing body responsible for institutional management and plan-ning.

• Financial Reporting of Other Entities. Broad public policy decisions on healthcare transparency should be considered for all parts of the delivery system

Additional items of disclosure were reviewed and deemed

to either not be beneficial in providing the Department with information germane to maintaining access to quality healthcare services or noted that the information was already required to be made available to the State. For example, the disclosure of compensation of board members, officers and highly compensated employees was not seen as a significant area requiring a specific recommendation. Commissioner O’Dowd stated in the Report that, “this type of information does not provide the Department with information that is helpful for this purpose assuming other financial information recommended herein is provided.” Another example of this would be payments to the highest paid independent contractors. Commissioner O’Dowd recommended that having to provide this type of information would place an undue burden on the hospitals and that this information should only be required if it is also required by the Internal Revenue Service, Securities and Exchange Commission or another governmental entity.

CONCLuSIONThe proposed reporting requirements have been introduced

to ensure that both for-profit and tax-exempt hospitals disclose similar type data for transparency and uniformity purposes. With the recent increase in the number of for-profit hospitals in the State (a number that is expected to grow), the proposed reporting requirements would allow for an easier comparison of for-profit and tax-exempt hospitals. This would require increased work, both internally and externally, but would be a beneficial step towards transparency amongst all hospitals and uniform re-porting in the State of New Jersey. Mary O’Dowd has stated that if hospitals do not voluntarily follow her recommendations, that her department can issue rules requiring this amplified level of reporting if the recommendations do take effect. The Report also requested penalties to be consistently applied to hospitals that do not timely comply with reporting requirements.

About the AuthorsKaren L. Henderson, CPA, is a Senior Manager at Withum- Smith+Brown, Certified Public Accountants and Consultants, and is an active member of the firm’s Healthcare Services Group. Ryan Bixenman is a Staff II Accountant with WS+B. They can be reached by email at [email protected] or [email protected].

•Certification Corner•

I am very flattered that the Board has asked me to be the NJ Chapter’s Certification Chair for this year. I became certified almost 10 years ago and I believe that it has enhanced my knowledge of the field

and inspired me to pursue other learning opportunities. I look forward to the chance to assist other members of the Chapter in completing their certification goals.

This year, we are trying something new. We are partnering with the New York Chapters to offer a combined “study group” review course. It is a webinar series running over a 10

week period, that began on August 25th. The group meets once a week from 5:30 to 7:30 PM with rotating instructors, each covering a subject matter area of the exam. There is no charge for the course! If a session is missed, participants are able to order a recording to catch up. Participants may also purchase HFMA’s online study guide for a discounted rate.

Our Chapter offers members who successfully complete the exam reimbursement of exam fees and the cost of the online study guide. Please feel free to contact me with any questions at [email protected].

I look forward to working with all of you. I will keep you posted of other certification news and programs.

Rita Romeu, FHFMACertification Chair

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30 Focus

A.Q.Related to the Affordable Care Act, I understand there is a new “fee” to be aware of for years 2014-2016. What is it, and what’s it all about?

First, thePatient-CenteredOutcomesResearchFee; next, theTransitionalReinsuranceFee ("Fee"); if that iswhatyouwerethinking, know you are not alone. Introduced as part of the Af-fordable Care Act ("ACA"), the Fee was created and designed to fund reinsurance payments to health insurance issuers that cover high-risk individuals in the individual market and is in-tended to stabilize insurance premiums in the market for the 2014 through 2016 years. The Fee has also been instituted to pay administrative costs related to the Early Retiree Reinsurance Program (“ERRP”).

BaCkGROuNdThe ACA established a transitional reinsurance program to

provide payments to health insurance issuers that cover high-risk individuals and to more evenly spread the financial risk of issuers. The program, as provided by the final regulations, is designed to provide issuers with greater payment stability as insurance market reforms are implemented and the state-based health insurance exchanges/marketplaces facilitate increased en-rollment. It is expected that the program will reduce the un-certainty of insurance risk in the individual market by partially offsetting issuers' risk associated with high-cost enrollees. In an effort to fund the program, the ACA created the Fee which is a temporary fee that will be assessed on health insurance issuers and plan sponsors of self-funded health plans. The Fee is appli-cable for the 2014, 2015 and 2016 years and is deductible as an ordinary and necessary business expense.

appLICaBILITYThe Fee is applicable to all health insurance plans provid-

ing major medical coverage. Major medical coverage is defined as health coverage for a broad range of services and treatments, including diagnostic and preventive services, as well as medical and surgical conditions in inpatient, outpatient and emergency room settings. Since COBRA continuation coverage generally qualifies as major medical coverage, the Fee will also apply in this instance. It does not, however, apply to employer provided

major medical coverage that is secondary to Medicare.

The Fee, as currently struc-tured, does not apply to various other types of plans including, but not limited to, health sav-ings accounts, employee as-sistance plans or wellness programs that do not provide major medical coverage, health reimbursement arrangements integrat-ed with a group health plan, health flexible spending accounts and coverage that consists of only excepted benefits (e.g. stand-alone dental and vision).

aMOuNT OF THE FEEThe Fee for 2014 is equal to $5.25 per month per covered

life for a total of $63 per year per covered life. It is expected that the fee will generate approximately $12 billion in revenue dur-ing 2014. For 2015 the Fee per covered life will decrease to $44 and is expected to raise about $8 billion in revenue. The Fee for the 2016 year has yet to be determined but it is anticipated that the Fee during this year will raise approximately $5 billion in revenue. Thereafter, the Fee is set to expire and no longer be applicable.

CaLCuLaTION aNd paYMENTSimilar to the Patient-Centered Outcomes Research Fee,

this Fee will be calculated with respect to the number of cov-eredlives;includingemployeesorsubscribers,andtheircoveredspouses and dependents. However, a plan is not required to use the same method for counting covered lives that was used in calculating the Patient-Centered Outcomes Research Fee. In addition, once a method is selected it must be used for the en-tiretyoftheyear;however,adifferentmethodcanbeselectedona year-to-year basis.

There are four methods available to plan sponsors of self-insured group health plans to count the number of covered lives:

actual Count – Under this method one must count the total number of covered lives for each day of the first nine months of the plan year and divide that number by the total number of days.

ACA Transitional Reinsurance Fee

Anthony J. Panico

•Focus on Finance•

By Anthony J. Panico, CPA, MS

Fall 2 0 1 4

Focus 31

Snapshot Count Method – Count the total number of covered lives on a specific day, or more than one day, in each of the first three quarters of the plan year (can generally be within a three-day range) and divide this number by the total number of days in which a count was made.

Snapshot Factor Method – Includes the total number of those with self-only coverage plus the total number of those with oth-er than self-only coverage multiplied by a factor of 2.35. This method requires at least one count per quarter for the first three quarters of the plan year.

Form 5500 Method – For plans with self-only coverage the number of covered lives includes summing the total number of participants reported on the Form 5500 filed by the plan at the beginningandendofyear;anddividingthattotalbytwo.Forplans with other than self-only coverage the total number of cov-ered lives includes the sum of the plan participants at the begin-ning and end of year as reported on the Form 5500.

The above methods, although similar to the methods used in calculating the average number of covered lives for the Patient-Centered Outcomes Research Fee, have built on these Patient-Centered Outcomes Research Fee methods and have been modi-fied for applicability to this Fee. For example, the counts for the Fee are made during the first nine months of the benefit year since the average number of covered lives for the Fee is required to be reported to the Department of Health and Human Services (“Department”) during the fourth quarter of the benefit year.

For the initial fee for the 2014 year, the number of covered lives must be reported to the Department no later than Novem-ber 15, 2014. The Department will then notify reporting orga-nizations no later than December 15, 2014 the amount of the fee that will be due and payable. The first portion of the Fee, or $52.50 per covered life, is due and payable no later than 30 days

after issuance of the notice from the Department. This portion of the Fee will cover reinsurance payments and administrative expenses. The second portion of the Fee, $10.50 per covered life, will cover Treasury’s administrative costs associated with the ERRP and will be due in late 2015.

REpORTING THE NuMBER OF COVEREd LIVESGuidance has been issued explaining how to report the

number of covered lives to the government. There is a form available on www.pay.gov wherein basic company and contact information will be required to be submitted along with the number of covered lives. Representatives at www.pay.gov have indicated that the form to report the number of covered lives for the Fee will be available in the fall of 2014.

CONCLuSIONAs the initial number of covered lives is due to be reported

no later than November 15th of this year employers should re-view their types of health coverage and determine which plans are subject to the Fee. Employers that have fully insured plans should be on the lookout for potential increased premiums as the insurance carrier is responsible to report and pay the Fee on behalf of the plan in these instances. It is recommended that employers consult their tax advisers for additional information related to the Fee.

About the AuthorAnthony J. Panico, CPA, MS, is a partner with Withum-Smith+Brown, Certified Public Accountants and Consultants. He is an active member of the firm’s Healthcare Services Group and Team Leader of the Healthcare Reform Advisory Team. Based in the Morristown, NJ office, Tony can be reached at [email protected].

mark your calendar . . .

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 [email protected] or 888-652-4362. The policy may be viewed at: http://hfmanj.orbius.com/public.assets/A02-Unemployed-Discount/file_168.pdf

November 11, 2014 all dayHotel Woodbridge FACTat Metropark*

January 13, 2015 PFS/PAS (Patient Financial Hotel Woodbridge Services/Patient Access Services)at Metropark*

March 10, 2015 CAREHotel Woodbridge (Compliance, Audit, Risk & Ethics)at Metropark & Physician Practice Mgmt.

*Formerly the Woodbridge Hilton

32 Focus

2014 Annual Institute Schedule at a Glance

Wednesday, October 8, 2014

10:00 - 11:00 General Session #1 Ballroom Lyman Sornberger Capio Partners Top 4 Healthcare Challenges in 2014/2015 General

11:00 - 12:30 General Session #2 Ballroom Mario Schlosser Oscar Insurance Corp. Future of the Insurance Market General

12:30 - 2:00 Lunch & Vendor Fair Vendor Hall & Awards

2:00 - 2:50 Breakout #1 Room 1 John Walsh ParenteBeard Revenue Recognition Fin Mgmt Louis Feuerstein

2:00 - 2:50 Breakout #1 Room 2 Neil Pressman ParenteBeard Fair Market Value for Physician Compensation Phys

2:00 - 2:50 Breakout #1 Room 3 Laureen Rimmer BESLER Consulting Appropriate Level of Care & Comp Edward Niewiadomski, MD the 2 Midnight Rule

2:00 - 2:50 Breakout #1 Room 4 Joe O’Hara Horizon Patient-Centered, Value-Based Programs - Mngd Care Transforming Patient Care and Redesigning Payment to Achieve Beter Quality Patient Care at Lower Cost

2:00 - 2:50 Breakout #1 Boardroom 1 Bret Bissey MediTract Managing Physician Agreement Comp John Ras University Hospital and Focused Arrangement Risk/Best Practices

2:00 - 2:50 Breakout #1 Boardroom 2 Capio Partners Vendor Demo

3:00 - 3:50 Breakout #2 Room 1 Michael Serluco WithumSmith+Brown Proposed Revisions to Not-for-Profit Fin Mgmt Healthcare Entity Financial Statements

3:00 - 3:50 Breakout #2 Room 2 Debbie Schuhardt MedAssets Physicians Control Device Costs Phys Frank Longo Through the Use of KPI’s

3:00 - 3:50 Breakout #2 Room 3 Glenn Prives McCarter & English Regulatory Compliance in Hospital/ Comp Todd Brower Physician Alignment Strategies

3:00 - 3:50 Breakout #2 Room 4 Charles Reitano Cooper University Using Legal Education to Build a Successful Reimb Healthcare Jennifer Tosto Convergent Revenue Denial Management Team Cycle Management]

3:00 - 3:50 Breakout #2 Boardroom 1 Robert Raucci Thomas Jefferson Univ. Evaluating and Implementing an Accounts Fin Mgmt Hospital Payable Invoice Automation Project Louise S. Perchinsky PNC Healthcare

3:00 - 3:50 Breakout #2 Boardroom 2 BESLER Consulting Vendor Demo

3:50 - 4:10 Break

4:10 - 5:00 Breakout #3 Room 1 Maria Facciponti Adreima ACA - New Jersey Style: An Offer You PFS John Bucci Cooper Univ. Hosp. Can’t Refuse Lynda Adams Inspira Laura Weaver Hackensack Univ. Hosp. Network

4:10 - 5:00 Breakout #3 Room 2 Richard Papperman Cape Medical Billing Part B Medical Billing - The Wave of the Phys Future - Is Here!

4:10 - 5:00 Breakout #3 Room 3 Richard Parker CBIZ KA Consulting Five Steps to Keep Your Entitled Revenue Rev Int George Kelley

4:10 - 5:00 Breakout #3 Room 4 Dr. Christopher Valerian QualCare Managing Cost Trends Mngd Care Allison Hoffman

4:10 - 5:00 Breakout #3 Boardroom 1 Brett Matteo / Jack Byrnes PFM Group Strategic Forecasting Fin Mgmt

4:10 - 5:00 Breakout #3 Boardroom 2 GAFFEY Healthcare Vendor Demo

6:00 - 9:00 Charity Event Ballroom Buffet and Charity Auction Benefiting the Make-A-Wish Foundation

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Friday, October 10, 20149:00 - 10:00 General Session #1 Ballroom Michael McLafferty EisnerAmper 2015 Annual Healthcare Update

10:00 - 11:00 General Session #2 Ballroom Kelly A. Pingleton Consulting Practice Seimens Making the Most of Your IT Investment Director – IT Adoption Center11:00 - 11:15 Break

11:15 - 12:30 Panel Discussion Ballroom Scott J. Mariani, JD Partner WithumSmith+Brown NJ Hospitals - Carl M. Alberto Vice President of Finance St. Luke’s University Health Network Current Market Ronald J. Napiorski, CPA Executive Vice President - Saint Michaels Medical Center, Inc. place Trends Finance Peter J. Newell VP, Finance Integration & Geisinger Health System Operational Improvement James P. Nolan, Jr., CPA Senior Vice President AtlantiCare Health System for Finance Thomas G. Shanahan Executive Vice President Raritan Bay Medical Center and COO Scott A. Kobler Partner McCarter & English, LLP

Thursday, October 9, 20149:00 - 9:50 General Session #1 Ballroom TBD HFMA National Leading the Change General10:00 - 10:50 General Session #2 Ballroom Day Egusquiza AR Systems, Inc. -The Mastering the Chaos of the Audits - General

HealthCare Navigator Co. Learning from the Probe & Educate 11:00 - 12:00 Keynote Speaker Ballroom Michael Josephson Josephson Institute What Will Matter Keynote

of Ethics 12:00 - 12:50 Lunch & Learn Room 1 Craig Nesta Craig Nesta Physician Employment: Lessons Learned for Phys

Greg Kelliher MD Pro Solutions Successful Integration12:00 - 12:50 Lunch & Learn Room 2 Thomas Flynn Hackensack University OIG Medicare Compliance Reviews - Comp Nicole Kovolenko Health Network Provider Perspective 12:00 -12:50 Lunch & Learn Room 3 Mark Dubow Camden Group Healthcare Organization Sustainability Fin Mgmt Brandon Klar12:00 -12:50 Lunch & Learn Room 4 Jim Hoffman BESLER Consulting The True Financial Impact of Readmissions Rev Int12:00 -12:50 Lunch & Learn Boardroom 1 Kim Charland Panacea Healthcare Impact of Quality Reporting in the Reimb Solutions Healthcare Industry1:00 - 2:00 Keynote Speaker Ballroom Michael Daugherty LabMD, Inc. The Devil Inside the Beltway Keynote2:10 - 3:00 Breakout #1 Room 1 Ric Perez / Jorge Wong Passport/Experian Putting the Revenue Back in the Revenue Cycle PFS 2:10 - 3:00 Breakout #1 Room 2 Karen Henderson WithumSmith+Brown Healthcare Industry Tax Update 2014 Fin Mgmt 2:10 - 3:00 Breakout #1 Room 3 Bret Bissey MediTract Physician Payment Sunshine Act or Open Comp Jennifer Shimek E&Y Payments - What is it? How do you manage it Deb Carlino Rutgers and the message to the public? 2:10 - 3:00 Breakout #1 Room 4 Tony DiLuca / Anne DelPizzo PATHS PPACA Mngd Care2:10 - 3:00 Breakout #1 Boardroom 1 Scott Besler BESLER Consulting Wage Index Delineations Reimb David Verbaro2:10 - 3:00 Breakout #1 Boardroom 2 Commerce Bank Vendor Demo 3:10 - 4:00 Breakout #2 Room 1 Mary Rita Hyland The Cooperative Exchange ICD-10, What’s Next Rev Int 3:10 - 4:00 Breakout #2 Room 2 Michael Monahan Grant Thornton Working with Physicians to Control Costs in the Phys New Era of Health Reform 3:10 - 4:00 Breakout #2 Room 3 Craig Standen SEI Advisory Team Using ERM Principles to Implement Effective Fin Mgmt Chris Seidl Investment Management Programs 3:10 - 4:00 Breakout #2 Room 4 Sean Callagy Callagy Law What Hospitals Don’t Know About PIP and Reimb Thomas LaGreca Workmens Comp Is Costing You Millions 3:10 - 4:00 Breakout #2 Boardroom 1 Paul Errigo GREENCROWN Energy Why Hospitals in New Jersey Need to Install Fin Mgmt Cogeneration Now 3:10 - 4:00 Breakout #2 Boardroom 2 Alpha Systems Vendor Demo 4:00 - 4:30 Break 4:30 - 5:20 Breakout #3 Room 1 Michael Duke KPMG Big Data and the Revenue Cycle - PFS Enhancing Operational Outcomes 4:30 - 5:20 Breakout #3 Room 2 John Harris / Idette Elizondo DGA Partners Bundled Payments - What is it Worth to You? Reimb4:30 - 5:20 Breakout #3 Room 3 Gretchen Segado E&Y Is Your EHR Putting Your Pratcice at Risk? Comp Audrey Gitkos Compliance Concerns When Implementing EHR’s 4:30 - 5:20 Breakout #3 Room 4 Susan Cobb / Andre Kemeny PNC Healthcare Protecting Your A/R During System Conversions Rev Int4:30 - 5:20 Breakout #3 Boardroom 1 Paul Osborne Berkeley Research Group Turning Data Into Dollars - Innovative Fin Mgmt Kevin Hamilton Benchmarking for Comprehensive Performance Improvement 4:30 - 5:20 Breakout #3 Boardroom 2 MediTract Vendor Demo 6:00 - 8:00 President’s Reception Poolside 10:00 - ? Late Night Get Together The Mixx

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34 Focus

Top Five Considerations for Provider Consolidations

by Brandon Klar, MHSA

Brandon Klar, MHSAThe healthcare environment is evolving at a rate nev-

er before experienced. Providers are faced with strategic decisions that will forever alter their future. Reimbursement uncertainty, regulatory scrutiny, medical staff challenges, and constant assaults by competitors are just a few of the pressures driving organizations to reevaluate their role and position in the marketplace.

Should an affiliation or merger represent the right strate-gic direction for a provider, it is imperative that the “value” of the transaction be greater than the simple combination of the parties. Affiliations and mergers must create value through the improved quality, enhanced access, and reduced healthcare costs for the communities served.

Other benefits of the affiliation could include expanded market access for population health management, enhanced clinical expertise, improved op-erational efficiencies, greater ac-cess to capital, or the opportu-nity to achieve clinical integra-tion. However, as organizations embark on these fundamen-tally altering initiatives, there are five critical considerations that should take priority as the transaction and integration plan takes shape:

1. Timing is EverythingFactors driving organizational alignment vary greatly from

transaction to transaction. Financial and strategic impera-tives typically head the list. They also tend to drive the level of urgency for consolidation. Significant attention must be focused on balancing the level of urgency against the toler-ance to experience it. Short term wins will be essential to demonstrate leadership’s commitment to operate within a system mindset. Such wins will also help build support and momentum for further integration. Consolidating functional areas with no or limited patient contact first will allow for enhanced efficiency, recognizable savings, and limited risk for organizational turmoil.

2. Integration plansAlignment among two

previously independent or competitive provider organizations into a new system does not occur overnight. Board discussions, feasibility assess-ments, and regulatory reviews are just a few steps that must be undertaken in support of the business case for such a transaction. While the process can take anywhere from a few months to a few years, the parties must focus attention dur-ing this time towards the development of a detailed integra-tion plan. Integration plans will be influenced by both the corporate and administrative tables of organization for the system. These organizational charts must outline not only the management structure for the system but also articu-

late those core functions that will be consolidated at the system level and those that will remain with the busi-ness units. Understanding this will drive the integra-tion plan within the follow-ing three categories.

Administrative FunctionsBack office departments

offer the greatest opportunity for consolidation at the system level as their functions can be standardized and co-located under central leadership. Information technology will offer unique challenges, and thus will require attention related to the efficiency of both hardware and software offerings, recent upgrades or installations, optimal secure information exchange, and medical staff deployment.

Support FunctionsDepartments including food services, environmental

services, and facilities/maintenance lend themselves to a centralized management approach with standardized policies and procedures. Joint contracting for commonly outsourced services is a tangible opportunity as well.

Should an affiliation or merger representthe right strategic direction for a provider,

it is imperative that the “value” of thetransaction be greater than the simple

combination of the parties.

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Focus 35

Clinical FunctionsSensitivity will be high among areas considered for clinical alignment. A thoughtfully conceived and inclusive process must be followed to identify opportunities for alignment or rationalization. While the two business units can transcend to clinical consolidation, the importance related to the involve-ment of clinical leadership and medical staff representatives cannot be over-emphasized.

3. Economies of ScaleThe development of a Business Plan of Efficiencies

(“BPOE’’) will systematically transform departmental integra-tion plans into savings. The plan, which should highlight both labor and non-labor opportunities, should be developed using a three-step approach:

Conduct a Scope of Services ComparisonProper understanding of the objective and scope of services

offered by each department will help align similar departments throughout the system and identify unnecessary redundancies.

Benchmark DepartmentsUsing an agreed upon benchmarking database, analyze the

departments based upon their departmental integration plans. Benchmarking will outline productivity and expense per unit of service (labor and non-labor) variations between depart-ments and similar ones in comparable peer groups.

Opportunity IdentificationBenchmarking will guide the organization to quantify its

opportunities. While the opportunities in this analysis may be substantial, administrative scrutiny will be required to evaluate the opportunities against potential political missteps that may negate financial savings.

The BPOE can and should be developed pre-transaction. However, limitations in the organizations’ ability to share com-petitively sensitive information pre-transaction may limit the ability to validate certain opportunities. The BPOE should be evaluated shortly after the transaction closes for further confir-mation, with responsibilities quickly assigned to assure timely implementation and accountability.

4. Medical Staff ImplicationsMedical staffs must be involved in planning and execut-

ing integration plans. The system must recognize that deci-sions made “corporately” will impact nearly every member of the staff to varying degrees. While opportunities for mutual growth exist among nearly all parties, plans must be carefully

reviewed to understand the impact on existing practices and the communities they treat. Access to services, financial im-pact, electronic medical record integration, and the degree of practice integration will be high priorities on their list of ques-tions. As clinical integration models are adopted, it is para-mount that the medical staff recognize not only the impor-tance of the system’s strategic benefits but the benefit of the more clinically integrated, high quality, less costly services in a pay-for-value environment.

5. Cultural ConsiderationsThe new system will need to establish a culture of its own-

one grounded in the foundation of new system mission, vi-sion, and values. These system fundamentals will become the underpinnings for future organizational perspective and guide decision making throughout the new organization. While both heritage organizations bring their unique attributes to the cultural equation, the new system must expand upon those platforms and highlight a fresh perspective to overcome new challenges within the changing marketplace. As benefits of the organizational alignment are recognized, the cultural mindset begins to refocus on advantages at the system level and not just the business unit.

But cultural transformations and significant organi-zational change bring heightened anxiety. Anxiety of the unknown will engulf some all the way from the C-suite to the front lines. Regardless of the scale, design, or individu-als involved in the transaction, the need for constant and consistent messaging across the spectrum of organizational stakeholders is essential.

The value associated with any provider transaction will be measured against its ability to enhance access, improve quality, and control costs. Provider consolidation plans should be designed with enhanced value as its central objec-tive, involve those most influential in guiding the system towards value, and be executed with improved population health as the primary goal.

About the authorMr. Klar is a senior manager with The Camden Group and special-izes in strategic and business planning advisory services, including medical staff development, physician alignment, service line plan-ning, master facility planning, and transaction work (e.g., merg-ers, acquisitions, affiliations, joint ventures). For more information please contact Brandon Klar at [email protected].

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36 Focus

Transforming New Jersey’s Health Care Delivery System

by Joe O’Hara

Joe O’Hara

Annual health care spending in the United States is $2.8 trillion. That’s a mind-boggling number. The dollars we in-vest must be spent prudently and deliver high quality results and true value. A recent report published by the Institute of Medicine estimates that up to 30 percent of this $2.8 trillion in spending does nothing to improve patient health. That’s $840 billion annually, which on a per capita basis, equates to $2,658 each U.S. resident sends per year to the black hole of the health care system.

Rising costs and ineffective health care spending continue to make the affordability crisis worse. These inefficiencies arise as patients see multiple doctors without proper care coordina-tion. Duplicative tests and treatments are prescribed, as are a number of medications. The inefficiency is driven by a fee-for-service payment model that rewards providers for the volume of the services and test ordered, rather than the value of the actual care delivered

One promising solution is the development of new collab-orative, innovative care programs that reward physicians and hospitals for coordinating health services to deliver better qual-ity care, lower costs and an improved patient experience.

At Horizon BCBSNJ we refer to these collaborative ini-tiatives as our patient-centered programs. These programs include Patient-Centered Medical Homes, Accountable Care Organizations and Episodes of Care programs.

Today, more than 500,000 Horizon BCBSNJ members are receiving services from doctors in patient-centered programs. These initiatives focus on improving care coordination to help deliver the right care at the right time in the right setting. Early results show patient outcomes are better and patients and doc-tors are more satisfied as total costs are going down.

Here’s how it works. A primary care physician’s office oper-ating as a patient-centered practice coordinates the full scope of a patient’s care, closely following tests, exams, prescriptions, visits with specialists and other medical and wellness activities beyond the doctor’s office. Patients are at the center of this coordination, and they too become directly engaged in their health care.

For example, patients can expect to receive a follow-up call from their doctor’s office immediately after an ER visit or hospital discharge to help ensure they understand their care plan. Patients may also experience enhanced and active communication with their doctor’s office, and receive wellness and preventive care based on national guidelines.

Medical practices in this program receive additional finan-cial resources to use for workforce support, like nurses, who help coordinate care and ensure patients understand their care plans. Horizon BCBSNJ also pays practices upfront financial support not tied to a patient visit in order to improve and maintain the health of their entire patient population. In addi-tion, practices have the opportunity to earn shared savings pay-ments for delivering a better health outcome with a satisfying patient experience at a lower cost.

Horizon BCBSNJ’s 2013 findings confirm that patient-centered practices are delivering more effective, coordinated health care. Our research compared members in traditional primary care practices to over 200,000 members receiving care at practices participating in Horizon BCBSNJ’s Patient-Cen-tered Medical Home Program.

We found that patient-centered practices achieved a:• 14 percent higher rate in improved diabetes control• 12 percent higher rate in cholesterol management• 8 percent higher rate in breast cancer screenings• 6 percent higher rate in colorectal cancer screenings

We also found that more active care is being provided at a lower cost, as patient-centered practices delivered a 4 percent lower cost of care compared to non-participating practices. In addition, patient-centered practices delivered a 4 percent lower rate in emergency room visits and a 2 percent lower rate in hospital admissions.

These results are encouraging. When people get and stay healthy through accountable and coordinated care, everyone benefits – the patient receiving the care; the doctors and other health professionals delivering the care, and the employers and consumers who pay for the care.


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Sunshine Act Will Soon Provide a ‘Rich Database’ for Compliance

by Nina Youngstrom

Nina Youngstrom

Pharmaceutical and medical device manufacturer payments to physicians and teaching hospitals are on the verge of being publicly available under the Physician Payments Sunshine Act, which could change the dynamics of fraud enforcement, the management of conflicts of interest and the public perception of physicians and hospitals.

The CMS database with the payment information — in-cluding ownership and investment interests — will be open for business on Sept. 30, 2014. The unparalleled transparency will create an opportunity for hospitals to identify payments that were left off conflict-of-interest forms, resolve discrepancies and formulate responses to questions about the impact on medical decision making of physician arrangements with manufacturers.

“This can be a rich database for compliance people,” said Bret Bissey, who is senior vice president of compliance services at MediTract. “It’s a huge opportunity to bolster conflict-of-interest policies and procedures and to educate physicians who haven’t been totally transparent about disclosures that…will be on the Sunshine database.”

The Physician Payments Sunshine Act (Sec. 6002 of the Affordable Care Act) requires manufacturers of drugs, devices and biologics to report to CMS certain payments and other “transfers of value” (e.g., travel, grants) to physicians and teach-ing hospitals. Ownership and investment interests held by phy-sicians or family members are reportable, as is interest income. As a result, manufacturers must report payments that physi-cians receive from a device company when, for example, they develop part of a device. CMS is required to make the payment information available in a public, searchable online database.

“You want someone looking at that data from the hospital’s perspective” — whether it’s the compliance officer, internal au-dit or medical staff office, Bissey said May 27 at a Health Care Compliance Association webinar. “Relationships can present potential risks.”

According to the Sunshine Act, which CMS now calls the “open payments program,” payments to physicians and

teaching hospitals must be reported if they are $10 or more, or if they are less than $10 but add up to $100 annually, said Jennifer Shimek, a senior manager at EY, who also spoke at the webinar. The final rule was published on Feb. 8, 2013, and data collection began Aug. 1. The first submission from the manufacturers, covering Aug. 1 through Dec. 31, 2013, was due to CMS on March 31, 2014, she said. Data submission ends June 30, 2014, and CMS confirmed to RMC the database will be online by Sept. 30, with reporting annually thereafter.

Manufacturers will report payments to “covered recipients,” whoincludedoctorsofmedicineandosteopathy;dentistsanddental surgeons; podiatrists; optometrists; and chiropractors,unless they are bona fide employees (i.e., they get their pay-check from the manufacturer). Fellows are covered recipients but residents aren’t, Bissey and Shimek said. CMS will decide on a case-by-case basis whether physicians are covered recipients when they are paid to be a medical director or board member of a device or drug manufacturer, according to Shimek. Also excluded from reporting are nurses, nurse practitioners, physi-cian assistants, other allied health professionals and pharmacists. Payments to “covered teaching hospitals” also must be reported (i.e., hospitals receiving graduate medical education payments, indirect medical education payments and psychiatric hospital IME money).

Lots of payments Must Be ReportedThere is a long list of reportable payments — cash, consult-

ing fees, food, travel, entertainment, honoraria, gifts, education, royalties, licenses and charitable contributions, among others. Some things are exempt, however. Drug and device manufactur-ers can feed physicians at a conference, but the food and drink must be “readily available to everyone and not directed at one individual,” Shimek said. Educational materials don’t have to be reported as long as they’re used for the benefit of patients. The expense of an anatomic model, such as a human skeletal continued on page 38

Reprinted with permission of Atlantic Information Services, Inc. Original publication in the June 2, 2014 issue of Report on Medicare Compliance.

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38 Focus

set, doesn’t have to be reported to CMS because it benefits the patient and is used during the visit, she said. The same goes for product samples given to patients.

The Sunshine Act is specific about the information that must be reported (see box). For example, for ownership and investment interests, manufacturers must disclose the physi-cian’s name, address, specialty, national provider identifier, state licensing number, the value and terms of the owner-ship, what they are receiving, what percentage they own and any family members involved. This includes space, rental or facility fees at a teaching hospital, Bissey said.

Sixty days before the Sunshine database is turned on, physicians can dispute the accuracy of the manufacturers’ payment information. CMS will pass along the complaint but will remain neutral in the matter. Manufacturers may change the data; if not, the disputed datawill be put on the database as is, with a note about the physician’s objection. To dispute payment data, physicians have to register with CMS’s “Enterprise Portal,” Bissey and Shimek said.

Teaching hospitals will have another avenue, which has not yet been announced, to dispute manufacturer payment reporting.

The new transparency provided by the public database opens compliance and enforcement doors for everyone, said Bissey and Shimek. The database could provide a trail lead-ing to allegations of Stark and kickback violations. “The gov-ernment will have access to information that historically was hard to obtain or compile without an investigation or audit,” Shimek said.

There’s also the matter of reputational harm, since the press may mine the database and publish stories on pay-ments to local hospitals and physicians, and patients may access data on their physicians’ relationships with manu-facturers. “As that information gets into the marketplace, it has the potential to cause reputational harm. The hospital CEO will want to make sure their hospital is not the sub-ject of a story regarding a relationship that was previously not disclosed,” Bissey said. “The worst case scenario is you get an unpleasant surprise by the release of this informa-tion…and there could be a claim that medical judgment and decision making has been compromised because of the relationship.”

He says there could be risk to the hospital if a full dis-closure is not made inside the hospital so it can be vetted through the conflict-of-interest policies. If that doesn’t hap-pen, “the release of this information would be a surprise and could lead to claims of a potential cover-up of impor-tant relationships. This type of scenario could present risk to a hospital.”

What Steps Should Hospitals Take?Here are suggestions from Bissey and Shimek as hospitals

adapt to the Sunshine Act:

• SignupforCMSupdatesontheopenpaymentspro- gram at http://tinyurl.com/mdd6sam. Encourage covered recipients to do the same.

• urge covered recipients to document manufacturer payments they receive so they can be compared to the database and accurately reported on conflict-of- interest forms. “Don’t be passive on this. I know we are all really busy, but a decision should be made in hospitals, medical schools and physician practices on who will review this information,” Bissey said.

• develop or improve conflict-of-interest policies that crosswalk to Sunshine data, Bissey said. “If there are discrepancies, deal with it,” he said, but in a “non-Draconian way.” He recommends “getting in front of the medical staff now” with some Sun- shine Act education. As physicians get more com- fortable reporting their manufacturer payments, hospitals can better manage potential conflicts. Maybe the hospital will determine there is no problem or maybe physicians will have to divest ownership. Or perhaps an abuse is flagrant and the physician will face disciplinary action. Sometimes it’s relative; if aphysiciandidn’t report the largepizza that a drug sales rep bought for her practice, “it’s not as important as [not disclosing] a trip to an exotic location and receiving a huge honorarium from a company that does significant business with the hospital,” he said.

• Make Sunshine act education part of privileging and credentialing. That way, incoming physicians know their payments will soon become public and should match what they report on conflict-of-interest forms, according to Bissey.

Contact Bissey at [email protected] and Shimek at [email protected].

Understanding the Sunshine Law on the Eve of Its Sept. 30 Launch

CMS says the Physician Payments Sunshine Law database will go online Sept. 30, which means hospitals, the govern-ment and the public will be able to see how much physicians are paid by pharmaceutical and medical device manufactur-ers (except for employment relationships). It’s a revolution in


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Focus 39

terms of transparency and will open doors for Stark and kickback enforcement and better management of conflicts of interest. Here are some details of the law provided by Bret Bissey of MediTract and Jennifer Shimek of EY. Contact Bissey at [email protected] and Shimek at [email protected].

Open payments (physician payments Sunshine act)Payment Reporting Exemptions• Payments for speakers and faculty at certain accredited CME events• Foodandbeverageprovidedtoallattendeesofalargescale conference or meeting• Productsamplesintendedforusebypatients• Educationalmaterialsforusebyorwithpatients,suchas anatomical models• Paymentsortransfersoflessthan$10invalue,unlessthey exceed $100 in annual aggregate*http://www.asco.org/about-asco/physician-payments-sunshine-act*

What information is reported about the payment?• Recipientnameandaddress• Physicianspecialty,NPIandstatelicensenumber• Amountofpayment• Dateofpayment• Formofpayment• Natureofpayment• Nameofdrug,device,biological,ormedicalsupplyassoci- ated with payment (up to 5 products may be reported and allows for product class/therapeutic area for devices)• Shortdescriptionforeachtransaction

What information is reported about the research payment?• Nameoftheinstitutionreceivingthepayments• Principalinvestigatorname***Delayed publication for certain research payments (devel-opmental / clinical investigator) must be reported the year the

payment occurred (but not until FDA approval or 4 years after the payment)

What is reported about the investment / ownership interest?• Physicianname, address, specialty,NPI and state license number• Valueandtermsofownershiporinvestmentinterest(including immediate family member)• Whetherinterestisheldbyanimmediatefamilymember of the physician• Paymentsmadetothephysicianownerorinvestor

What is the submission / dispute process?• Physicianshave45daystoreviewandworkwiththemanu- facturer or Group Purchasing Organizations (GPO) to correct any incorrect information (before it is made public)• After45days,themanufacturerorGPOhasanadditional 15 days to submit corrections (based on any physician dis- putes)• Thereviewprocessbegins60daysbeforetheinformation is made public• CMSnotifiesthemanufacturerorGPOifthephysicianis disputing part of the information, but CMS does not mediate the dispute• Afterthedispute,themanufacturerorGPOmustsubmit a revised report to CMS• Ifdisputeisnotresolvedin60days,CMSwillpublishthe information as-is, but with an indicator that information is in dispute

About the authorNina Youngstrom has written Report on Medicare Compliance, a weekly newsletter, for 22 years. Previously she was a reporter for daily newspapers in upstate New York, including the Ithaca Journal and the Syracuse Post-Standard. Nina earned a bachelor’s degree in political science and journalism from the State Univer-sity of New York at Albany. She can be reached at [email protected].


Horizon BCBSNJ also recently intensified its commitment to this model of care by introducing two new patient-centered health plans for small businesses with 50 or fewer employees. The new plans, offered at a 15 percent discount compared to the lowest-priced Horizon plan for small businesses, also extend savings to employees through no deductibles and no co-insurance when care is delivered by a patient-centered primary care practice.

As New Jersey’s largest health insurer, Horizon BCBSNJ is continuing to expand our patient-centered programs through-

out New Jersey. We encourage all stakeholders to become attuned to the transformational changes occurring in our delivery system and look forward to collaborating with health care innovators throughout our state.

About the AuthorJoe O’Hara is Director of Clinical Innovations for Horizon Blue Cross Blue Shield of New Jersey. Joe can be reached at Joseph_O'[email protected].

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40 Focus

Strategies for Reducing and Controlling Physician Preference Item Costs

by Frank Longo and Debbie Schuhardt

Frank Longo

Controlling implant pricing is a challenge for many health-care organizations. However, with a comprehensive, collabora-tive approach, significant cost savings can be achieved and main-tained. Keys to success include a strategy to involve physicians who select the implants and implementing an ongoing moni-toring program that assures timely and transparent feedback to physicians and other key stakeholders. This feedback loop provides an opportunity for the organization to hold decision makers accountable, prevent “creep”, and continue to celebrate the success of the initiative.

Who must be involved in the process and is responsible for the success of the program?

There are several key participants from the healthcare or-ganization that must be included from the inception of the project in order to be successful. These include the Chief Medical Officer, Chief Financial Officer, Chair of the ap-propriate surgical departments selecting implants, all of the implanting surgeons, operating room and supply chain man-agement leadership teams.

Obtaining lower pricing for physician preference ItemsListed below are several strategies that a healthcare organi-

zation can utilize to reduce PPI pricing. The pricing mecha-nism selected should be determined by the project stakeholders based on the hospital’s political and economic environments. The best solution is the one that is actively supported by all stakeholders, and there is not one “right answer” that applies to all hospitals. Without surgeon and administrative support and a well mapped and executed process for price reduction, hospitals risk negatively impacting relationships with surgeons, volume, and future initiatives to engage surgeons in cost reduc-tion or program development projects.

Sole Source Vendor award – Perhaps the most logical and beautiful in its apparent simplicity, this strategy consoli-dates purchase volume to one vendor. It can be the quickest strategy to implement, and depending on the market and existing pricing, it can yield significant cost savings. How-

ever, restricting surgical staff to one vendor will limit sur-geons’ choices. As a result, some surgeons will be forced to switch to an unfamiliar im-plant making them uncom-fortable until they overcome the learning curve or devices they believe are not the best option for their patients.

Limited Vendors and/or Implant Styles – Vendors will often provide attractive pric-ing for older versions of their implant product lines. Just like a car, once a new version is released the previous version of the product becomes less in demand, and therefore, can be sold at a lesser price than the newest model available from the manufac-turers. In addition, rather than instituting a sole source model, opting for a limited vendor scenario with two or three in the mix, can also yield significant savings. This strategy is less re-strictivethanthesolesourceoption;however,itmaystillrequiresurgeons to switch to unfamiliar products.

pricing Capitation – In this model, the hospital prede-termines the maximum amount it will pay for a specific con-struct, such as a hip or a knee, or each component within a construct, e.g., a femur or an insert. This strategy allows for all vendors to participate in the program as long as they meet the hospital’s established prices for the construct or component as applicable. Assuming all vendors meet the established price schedule, surgeons may continue to use the implant they pre-fer. Vendors that do not meet the hospital’s price schedule are not permitted to provide products for a pre-determined period of time ranging from six months to the full contract term.

After considering the hospital’s environment, level of surgeon and administrative support, and potential savings opportunity, the project team should determine the most appropriate strategy and ensure all stakeholders understand the process, timeframe,

Debbie Schuhardt

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and potential roadblocks that may be encountered. Then, the hospital can engage the vendors in negotiations. During the negotiation period, all project team members must provide a united front to the vendor community. Vendors may attempt to “divide and conquer”, pitting surgeons against the hospital. When the vendors realize that the hospital and surgeons are united, they will begin to yield and meet the hospital’s pricing strategy.

Reducing pricing alone does not guarantee that actual savings will be realized.

Once the new pricing structure is in place, the real work begins! When the newly negotiated, reduced implant pricing is finally implemented, project team members usually congratu-late each other on a job well done, close the project, and move onto the next pressing initiative. Several months pass, and the organization audits the purchasing documents of implant pur-chases only to find that the cost savings originally projected never materialized as planned. Why?

In most cases, cost savings realization failed because many of the vendors worked diligently once the new pricing was implemented, salvaging their margins and commissions by moving surgeons to other products that were not in use at the time prices were negotiated. Some also added additional products or service fees where costs were not incorporated and approved in the original pricing model of the program, i.e., pricing “creep”. While most hospitals have a process in place to ensure “new” products are reviewed and pricing negotiated prior to use by surgeons, these processes are often loosely ad-ministered, and products find their way into surgeons’ hands without review and pricing negotiated.

What can a healthcare organization do to ensure that the cost savings identified are actually realized and obtained on an ongoing basis?

A major, urban academic medical center had experienced failure in maintaining contracted pricing for total joints im-plants in the past. Surgeons and the OR management team negotiated pricing for total joint implants only to find the vendors migrated most of the surgeons to more costly styles, and options of implants that were not covered under any pricing agreements or for which pricing premiums were per-mitted in order to accommodate surgeons’ requests for de-vices. In addition, vendors began to add disposable product and tray rental costs to invoices in attempt to continue to maintain higher profit margins.

Given the history and the understanding that if the medical center did not change its behavior, results would be no differ-ent than previously experienced. The supply chain team de-veloped a strategy to monitor and ensure that the new pricing structure operated as intended to yield the expected savings.

This monitoring system is a key performance Indicator (KPI) report which is developed for each total joint implant proce-dure. This KPI report includes the following information:

1. Date of implant procedure

2. Type of implant

3. Implanting surgeon

4. Total cost of the implant billed by vendor

5. Was the pricing in compliance with the approved pricing structure (Y or N)?

This report is prepared and published on a weekly basis, and the KPI Total Joint report is provided to all stakeholders: CMO, CFO, all implanting surgeons, OR Management Team and the Supply Chain Team.

Surgeons, upon receipt and review of this weekly report, are encouraged to discuss the results directly with their ven-dors if they are not in compliance with the established pricing structure. In addition, each surgeon has agreed to migrate his implant business to a compliant vendor, if necessary.

Has this system been effective in yielding the savings projected for the hospital?

Yes, it has! This system has been in place for the last nine months, and the results have been outstanding. The cost sav-ings originally projected for this project has been realized and has been documented and approved by the hospital’s financial team.

During the first several weeks of this program there were many pricing compliance issues, but through the weekly KPI monitoring process, vendors and implanting surgeons quickly realized that purchase orders would not be issued to allow for payment for inappropriately priced implants. This process forced vendors to comply. Also, additional costs that were incorrectly invoiced and reimbursed in past procedures were identified and eliminated through this monitoring process.

Vendors attempted to upsell implants they labeled pre-mium, and claimed they should be provided additional pay-ment for these devices. The surgeons, when presented with the request for an additional pricing option from the ven-dors, uniformly rejected the notion and insisted that the ven-dors stay within the payment guidelines regardless of how the vendor labeled the technology. Within a few weeks after this decision was made by the implanting surgeons, several ven-dors began providing these implants for the same contracted price as their traditional technology.

Finally, once the vendors realized that their payments would be deferred until their invoices were compliant with the new pricing program, their pricing structures aligned with the pric-ing schedule established by the hospital.

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Four Major Revenue Cycle Challenges for Health Care Market in 2014!

by Lyman Sornberger

Lyman Sornberger

The Revenue Cycle Management (RCM) segment within the health care market is in for its fair share of changes in 2014. Based on sheer volume and growth, the patient’s financial responsibility for medical expenses (i.e. “self-pay” portion), in particular, is worthy of examination. This article identifies some of the many opportunities for providers, vendors and investors alike.

The opportunity is clearly immense to either gain, or lose, revenue. Some facts: ✓ 55% of the patient financial responsibilities are never covered ✓ 81% of “true” self-pay responsibilities are never covered

✓ It costs 2X as much to collect from the patient vs. the payer ✓ Patient responsibility rose from 12% of total hospital revenue in 2007 to 30% in 2012 ✓ Self-Pay has become the number three payer behind Medicare and Medicaid ✓ Out-of-pocket financial responsibility is expected to be 32% higher per family in 2014 ✓ An “insured” patient doesn‘t guarantee full payment ✓ A new skill set is required to enroll, educate, and advo- cate for the patient ✓ ICD.10 could potentially increase the patient’s responsibility ✓ Provider practices impact the future of self pay

Historically, hospitals have written off about 3% to 5% of revenues (to bad debt). Today that number is trending towards 7% to 9% and providers recover less than 9% of every dollar of healthcare self-pay bad debt.

Below are four challenges unfolding in 2014 that could inflate these numbers further:

They are:

1. 501(r)2. The Exchanges3. Two Midnight Rule4. ICD.10

Let’s take a look at each of these programs and its potential impact to the industry.

1. 501(r) Section 501(r), born of the Internal Revenue Service, im-

poses new requirements on 501(c)(3) organizations that oper-ate one or more hospital facilities. Among other requirements, each 501(c)(3) hospital organization is required to make rea-sonable efforts to determine whether an individual is eligible for assistance under the hospital’s financial assistance policy before engaging in “extraordinary collection actions” against the individual.

What will this mean to self-pay activities? Providers may have to wait as long as 240 days to place an account in collections. True self-pay will have to be discounted to the contractual of your bottom three payers. Finally a commu-nity assessment will be required to be completed of each hos-pital system.

In addition, the charity care will increase for hospitals. It is very possible that once patients learn the process, those that are not eligible for charity will change their behavior of pay-ing their financial responsibility to hospitals. Why? With the communication protocol from 501(r), the public will know that they can expect to receive a certain number of bills prior to possibly being contacted by a third party collection agency. Therefore, they will have less incentive to pay early in the process. Innovation opportunities abound as hospitals and technology/service vendors will need to adapt and offer new solutions in order to capture this revenue stream. One idea, though it seems out of place in the context of healthcare pro-vision, might be to offer discounts for prompt payment!

2. The Exchanges Given the way the Affordable Care Act works, individu-

als need to keep their current insurance plan, purchase cover-age, face a penalty tax or get an exemption. The Individual Mandate stipulates that health plans can be purchased through a broker, direct from a provider, obtained through work, ob-tained through Government healthcare programs like Medi-

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care or Medicaid, or can be bought via state-offered online health insurance marketplaces (also known as health insurance exchange pools).

Once consumers understand their options, many will select the “bronze” plan in an exchange, which offers the lowest pre-mium payment. Naturally, these low premium plans also come with higher out-of-pocket costs to the patient. Given that a high percentage of these patients were previously uninsured, we expect that many will not pay, and that this will be a major driver in the growth of delinquent self-pay receivables.

Providers recognizing this challenge need to be creative with their charity and bad debt programs to minimize the financial impact to their bottom line. In addition, if providers use a third party Medicaid eligibility vendor, they should emphasize the importance of verifying patients’ eligibility for exchanges.

3. Two-Midnight RuleDo you engage your patients in claims denied for medical

necessity? In the 2014 Medicare inpatient prospective payment system final rule, CMS included a new regulation for hospitals and health systems: the two-midnight rule.

CMS has issued guidance on the rule in a couple separate instances. For hospitals and health systems trying to grasp the foundational elements of the two-midnight rule, here are 10 points to know.

1. Inpatient admissions are considered reasonable and necessary for Medicare beneficiaries who require more than a one-day stay in a hospital or who need treatment specified as inpatient only.

2. Stays lasting less than two midnights must be treated and billed as outpatient. In other words, physicians should ad-mit Medicare beneficiaries as inpatients if they expect benefi-ciaries will “require two or more midnights of hospital services, and [physicians] should treat most other beneficiaries on an outpatient basis,” according to CMS.

3. Medicare administrative contractors and recovery auditors — better known as MACs and RACs — will not review claims involving stays that span two or more midnights after the initial inpatient admission to see if the admission was appropriate.

4. Medicare auditors will conduct prepayment patient sta-tus reviews for claims that span less than two midnights and have dates of admission on or after Oct. 1, 2013, but before March 31, 2014, but they will not conduct post-payment pa-tient status reviews for claims during that same period.

5. MACs will review 10 to 25 claims per hospital, depend-ing on the size of the hospital.

6. Critical access hospitals are exempt from MAC and RAC reviews.

7. Medicare auditors will base their review of a physician’s expectation of medically necessary care surpassing two mid-nights on the information available to the admitting physician at the time of admission.

8. Hospitals can rebill for medically reasonable and neces-sary Part B inpatient services if their Part A inpatient hospital claims are denied, provided the denial is based on the fact the inpatient admission was not reasonable and necessary.

9. Physician documentation will be crucial for hospitals. According to CMS, a reasonable inpatient hospital stay that spans more than two midnights will have to show “sufficient documentation…rooted in good medical practice.” For ex-ample, patient history, comorbidities, the severity of signs and symptoms, current medical needs and the risk of an adverse event are items MACs and RACs will expect to be documented in a physician’s assessment and plan of care.

10. Based on the results of initial reviews, CMS will con-duct educational outreach efforts later in 2014. Claims that do not comply with the new rule will be denied, and hospitals will receive reasons for denial via letter. Individual phone calls will be made to providers with moderate, significant or major compliance concerns.

Can your health system afford to manage this change? What will you do with the patient at 7PM Friday evening when your lab is closed etc?

4. ICd-10Delayed again until October 2015, the much-anticipated

ICD-10 will keep providers and their vendors busy throughout 2014 as they prepare for the implementation. ICD-10-CM is a clinical modification of the World Health Organization’s ICD-10, which consists of a diagnostics classification system and which replaces the former ICD-9. ICD-10-CM provides classifications and diagnosis codes for accepted clinical practices in the US. The system consists of more than 68,000 codes compared to 10,000 that were in ICD-9. Similarly, ICD-10-PCS was developed to capture inpatient procedure codes and, with 87,000 codes, is much more detailed than the prior system. Together, ICD-10-CM and ICD-10-PCS have the potential to reveal more about quality of care, so that data can be used in a more meaningful way to better track the outcomes of care.

This federal mandate will add additional expense to the healthcare industry. How will the industry respond? How will hospitals/providers react to erroneous denials? Will some at-tempt to engage the patient? Do hospitals and providers have the resources and the budget to argue claims denied in error? What new opportunities does this create for financial/RCM technology and RCM service providers?

Whether you’re already involved in RCM, offer a product or service to the market, or are considering expansion into RCM, these are a few of the critical issues that might offer you and your team some interesting opportunities.

Patient responsibility is a growing concern for healthcare executives. More than ever before, patients are challenged to

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44 Focus

pay a larger share of their medical bills. A new mindset must be applied to respond to increasing patient responsibility.

In today’s complex healthcare environment, providers must act as advocates for patients by guiding them through the in-surance and collection process and clearly communicating in a more patient-friendly way than in the past. Providers that leverage a leading practice collection approach by opening the lines of communication will be in the best position to mitigate the growing bad debt quandary.

So where is self pay heading? In 2011, U.S. hospitals de-livered $41.1 billion in uncompensated care, according to the American Hospital Association. This represents approximately 6% of annual hospital expenses, up nearly $2 billion from the previous year.

Uncompensated care has continued to increase by roughly 8% annually, and it’s estimated that this will double by 2016. Parenthetically, the Southeast region of the U.S. had the high-est percentage of total uncollectible accounts at close to 7%, according to the hospital accounts receivable analysis.

Hospitals admit that there is much room for improvement in managing patient receivables associated with bad debt expense. It’s estimated that 2 - 4% of additional patient collections could be accomplished with enhanced procedures.

The major challenge in collecting “patient balance due” is that many providers have not embraced industry-leading practices, or what PatientMatters terms “Optimal Industry Patient and Provider Practices.” PatientMatters is the new in-dustry leader in assisting providers and their patients, not only with their financial responsibilities, but also navigating them through the mandated regulatory healthcare changes.

At the end of the day, it seems that as an “industry,” we are somewhat uncomfortable with following through with solid patient-friendly practices throughout the process. Is dropping six bills to a patient for a one-day stay practical to the provider or the patient? Why are health care costs so high? It’s not just the $20.00 aspirin.

The effective resolution of the patient’s portion of bills as-sociated with clinical services continues to challenge providers and their patients. Just the mere mention of the word “collec-tions” is often intimidating to both parties.

There are two key elements that can minimize your staff ’s sensitivity to pursuing patient balances:

1. Hospitals and physicians can establish “patient advocacy” practices to ensure that every patient who can afford to pay has the opportunity to do so.

2. The second should include correct, clear and concise financial communications. Both HFMA and the ACA’s Medical Debt Collection Task Force have recently vali- dated this approach.

It’s time to start with phase one of ensuring that our prac-tices support the best “patient advocacy program.” An inven-tory of industry-leading practices in patient advocacy should certainly include:

•Same-dayscheduling•On-lineregistration•Kiosks•Financialcounseling•Medicaideligibilityscreening•Disabilitysupportprograms•ProviderCOBRAcompensation•Medicalloanprograms•On-linepatientportal•Creditanddebitcardacceptance•Paymentplans•Charity•E-statements•Computer-assistedcoding•Codingdocumentationimprovementprogram•Denialmanagement•On-linepatienteducationprograms•Monthlyon-sitepatientadvocacytraining•Collectionagencyassociations•Debtbuyerpartnership

By embracing these state-of-the-art practices, providers are supporting patient-friendly financial communication. Each of the practices/processes must be carefully thought out and, more importantly, effectively executed and communicated.

Key components to supporting patient advocacy within the billing process are transparency, consistency and validity. Paramount to the financial communications are the three “C”s:

•Correct•Concise•Clear

In other words, billings should CORRECTLY reflect the financialelementsoftheepisodeofclinicalcare;theyshouldcontain CONCISE detail effectively communicating the message;andthefinancialcommunicationshouldCLEARLYexpress what actions are required from the patient in order to resolve any patient amount due.

The need for healthcare services can happen at any time to any one. These unforeseen incidents add even more distress to the billing process, which is another reason that providers must ensure that they offer state-of-the-art payment options and a communication process that is clear, accurate and comprehensive. Have you ever received a utility statement and didn’t know what you owed? Even worse, did the balance not make sense?


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Whether insured or not, medical debt impacts everyone when they receive care. Healthcare reform created an indus-tryassumptionthatself-paywoulddeclineorbenonexistent; however, it’s very evident that’s not the case. In fact, out-of-pocket patient expenses have increased while collections of those balances has declined.

Fifteen percent of Americans don’t have insurance, and almost half of the population has outstanding medical bills that average from $8,000 to $10,000 per person. It’s reported that more than 60% of medical debt complaints come from patients with insurance coverage. Additionally, more than 70% of the people who filed for bankruptcy because of medical bills had insurance coverage.

The National Consumer Law Center recently reported a growing problem with abusive medical debt collection pro-cesses. Those processes included everything from not offering charity care to denying future care for patients with outstand-ing debts.

It’s important to stress that offering the patient population various means to pay their bills is critical to patient satisfac-tion. At the end of the day, the definition of bad debt should be patients who could afford to pay, were offered various alter-natives to reimburse the services provided, but elected not to pay. In that population, there is a percentage that clearly will

not pay for something that they do not understand -- all the more reason for the three C’s of financial communications in healthcare.

About the authorLyman Sornberger currently serves as Chief Healthcare Strategy Officer for Capio Partners. In addition, he is President and CEO of LGS Health Care Solutions Inc. and serves on a number of healthcare boards. Prior to his current roles, Lyman was Executive Director of Revenue Cycle Management (RCM) with the Cleveland Clinic Health System (CCHS) for seven years.

Prior to his affiliation with CCHS, Lyman was with the University of Pittsburgh Medical Center (UPMC) for 22 years as a leader in that organization’s revenue cycle management. Mr. Sornberger has great admiration for both health systems (each with revenues of greaterthan$6billion)andhighlyrespectstheirmissions,visionsand strategies.

Over the past 29 years, Lyman is proud to have served as a consultant and advisor for various healthcare practices across the country. He has authored over 2200 articles for HFMA, AAHAM, and other leaders in the revenue cycle arena. Mr. Sornberger can be reached at [email protected].

ConclusionSignificant pricing reductions can be negotiated using the

strategies identified at the beginning of this article. These pric-ing reductions can be achieved only when all stakeholders involved in the implant selection process for the organization are part of the process from the outset.

In addition, many institutions stop managing the project at the time new pricing is finalized only to realize, upon ret-rospective review, that the pricing they originally negotiated with the vendors deteriorated and savings were not achieved as originally projected. Therefore, in order to both achieve and maintain cost savings originally projected, all members of the project team must stay engaged in the monitoring process and hold vendors and surgeons accountable.

About the authorsFrank Longo, Vice President Client Executive has spent the last 14 years working with several healthcare organizations through-out the United States to improve overall supply chain operations and costs. Prior to joining Broadlane, Inc. in 2000 (Broadlane was incorporated into MedAssets, Inc. in 2011), Mr. Longo held several Director of Supply Chain positions with various healthcare providers in the Philadelphia marketplace, most recently with The

Graduate Hospital and Hahnemann University Hospital. Mr. Longo holds a Bachelor of Science in Organizational Manage-ment and Finance from LaSalle University as well as a MS in Organizational Dynamics from The University of Pennsylvania. Frank can be reached at [email protected].

Debbie Schuhardt, Vice President, has spent over 20 years in healthcare with diversified management roles in both hospitals and consulting. Ms. Schuhardt’s breadth of experience includes change management, service line development and management, supply chain improvement specifically in the areas of orthopedics and spine, utilization management, performance improvement, ambulatory care, physician practice management, women’s services, and train-ing and mentoring. Prior to joining MedAssets, she served as the Corporate Director for Orthopedics, Neurosciences, and Rehab for Meridian Health, a five hospital system in central New Jersey, and as a Vice President for Staten Island University Hospital, part of the North Shore – LIJ Health System located in New York. Ms. Schuhardt holds Master’s in Hospital Administration from the Uni-versity of Minnesota, a Bachelor of Science from the University of Maryland, and is a Fellow of the American College of Healthcare Executives. Debbie can be reached at [email protected].


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46 Focus

Bundled payment arrangements are gaining traction with some hospitals, partially due to Medicare’s Bundled Pay-ments for Care Improvement (BPCI) initiative. One piece of good news from BPCI is that hospitals can obtain savings from reducing someone else’s utilization—specifically that of post- acute care facilities. The fact that savings also may be gleaned from reducing readmissions could be seen as a bonus, although this result must be achieved in any case to avoid Medicare penalties.

Hospitals contemplating participating in the BCPI program should perform an in-depth analysis to determine whether they can benefit from bundled payments and, if so, how to achieve maximum benefits. The analysis should examine the extent to which the participating providers can reduce costs for episodes of care, because success under bundled payment arrangements will depend on achieving such cost reductions.

Particular attention should be given to evaluating opportunities to reduce readmissions and/or skilled nursing facility (SNF) costs (BPCI Model 2). Research suggests that these two areas present the greatest opportunity to reduce episode costs because they not only account for a large percentage of the episode costs, but also exhibit the greatest variation in utilization across the country.a

To illustrate key steps for assessing a bundled payment opportunity, we have chosen to focus on Model 2 because it offers the best opportunity for reducing episode costs, and because it helps engage and reward physicians, offering strategic benefits to the sponsoring hospital.b It also involves the least amount of administrative effort and encourages hospitals to partner with post-acute care providers to manage care transitions effectively.

assessment of the Extent of OpportunityIdentifying whether there is opportunity in bundled payment, and where it lies, requires

identifying the types of initial admissions (termed index admissions) that offer the greatest potential to reduce SNF and/or readmission costs. Depending on how much cost cutting the

Medicare Bundled PaymentWhat is it Worth to You?Bundled payment can represent a tremendous strategic opportunity for a hospital and can result in financial benefits if an organization understands where to best target its cost-reduction efforts.

by John Harris, Idette Elizondo and Andrew Isdaner

John Harris

Idette Elizondo

Andrew Isdaner

aT a GLaNCE > Hospital leaders who are contemplating

participation in a bundled payment initiative should first assess current circumstances to determine the extent ofthe opportunity for their organizations.

> Those who have decided conditions are favorable for such an initiative should next perform a financial assessment that includes modeling direct contract results, assessing the financial impact of reduced utilization and of improved clinical care and operations, and evaluating the net financial impact.

> Hospital executives also should understand the competitive and strategic benefits that bundled payment offers.

REpRINT January 2014 HFM

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Focus 47


hospital has already done, there could be additional benefit from reducing hospital operating costs.

Hospitals that are not actively coordinating care after hospitalization (that is, most hospitals today) are likely to find there is significant potential for improvement in this area. SNF and readmission costs account for 36 percent of the average episode costs. Although many providers have begun to address 30-day readmissions in conjunction with Medicare readmission penalties, SNF costs have been largely unaddressed.

The greatest BPCI opportunity lies with major common conditions—particularly congestive heart failure, major joint replacement, and pneumonia—that are likely to have post-acute episodes of different lengths. The first 30 days after discharge constitute the critical period for generating savings on episode costs. However, hospitals choosing bundled payment that includes a 90-day post-acute period can benefit from a lower required discount from the Centers for Medicare & Medicaid Services (CMS)—i.e., 2 percent instead of 3 percent.

When seeking to identify specific conditions that offer savings opportunities, it’s important to know the conditions for which SNF care adds substantially to cost and those for which readmissions are most likely. Although SNF care accounts for 24 percent of episode costs, on average, and readmissions account for 12 percent, these proportions vary tremendously by condition. For example, readmissions tend to constitute a higher percentage of costs for care around atherosclerosis, pacemaker device replacements, and medical peripheral vascular disease, whereas SNF costs tend to run higher with diabetes care, care related to hip or knee replacement, and treatment of medical noninfectious orthopedic conditions.

Financial assessmentPerforming a financial assessment is essential to getting a true

picture of the financial and strategic impact of bundled payments or any new payment model.c A comprehensive assessment of financial results from a bundled payment initiative should consider direct contract results, the financial impact of reduced utilization and of improved clinical care and operations, and the net financial impact. To illustrate the requirements for such an assessment, we will present hypothetical case examples of an organization that is considering pursuing bundled payment for major joint replacement at 90-days.

direct contract results. The organization should begin the financial assessment by modeling the direct contract results required to meet hospital goals. In this case, the direct contract results are the CMS episode savings.

Our sample BCPI participant will manage 200 episodes an-nually with a historical 90-day episode cost of $40,000 each, representing about $8 million in episode costs annually (see exhibit below).

The organization wants to ensure that the 2 percent discount ($160,000) and care management and IT costs ($250,000) are covered, but also aims to have modest gain-sharing with physicians. To achieve these goals, it must target a 7 percent cost savings ($560,000).

The organization should then test the feasibility of achieving $560,000 in cost savings, and identify specific opportunities for improvement. In our example, care redesign focuses on shifting costs from higher-cost to lower-cost settings (for instance, from SNF to home health or from home health to home) and elimi-nating readmissions. Overall, a 20 percent cost reduction would be required in each of four targeted areas to achieve the desired level of savings, as shown on page 46.

To this end, the organization should compare its readmis-

ILLuSTRaTIVE COSTS BY SETTING

1%1%

40%

12%

4%

18%

24%

Index Admissions SNF Home Health

Outpatient/Physician Other

Readmissions Inpatient Rehab

ESTIMaTEd dIRECT CONTRaCT IMpaCT

Total for

all Episodes

Number of Episodes 200

Adjusted Readmissions 100

Historical Episode Costs (90-Day) $40,000 $8,000,000

CMMI Discount Rate 2.0% 2.0%

CMMI Discount $800 $160,000

Target Price $39,200 $7,840,000

Amount Required to Cover CMS Discount $ (160,000)

Operating Expenses (Care Management/IT) $ (250,000)

Targeted Funds Available for Gainsharing $ (150,000)

Savings Required $(560,000)

Percentage Savings Required 7%

Fall 2 0 1 4

48 Focus

sions and SNF length of stay and costs with industry averages to assess whether a 20 percent reduction seems feasible. The organization could also look at internal variation in readmis-sions and SNF costs to see whether some physicians might be able to improve their care processes. Engaging physicians in the assessment can help to verify this analysis. Let’s assume that, in our example, theorganization finds its SNF usage and readmis-sions are higher than average. Given that 20 percent savings is aggressive, the participant should next consider what it would take to achieve breakeven results (see the exhibit below).

Chances are that most providers will find that the direct contract results of bundled payment are breakeven or slightly positive at best. Although there is a risk of experiencing down-side losses if savings are not achieved, this risk can be managed through selection of episodes where the participant has a good expectation of being able to reduce costs. Assuming direct con-tracting results are near breakeven, the organization should consider the impact of other financial and strategic factors.

Financial impact of reduced utilization. The impact of uti-lization shifts on BPCI participants will differ depending on whether they own a skilled nursing unit or facility. Participants in model 2 will reduce SNF volume, so this model is likely to be most appealing to hospitals that do not own SNFs, because they can reduce episode costs without reducing the health system bottom line.

The impact of BPCI on hospital revenues also will vary depending on whether readmissions occur at the participating facility. Nationally, most readmissions do occur at the same facility as the index admission, so if readmissions are reduced, then the hospital participant will experience the full benefit. Better coordination of care can ensure that the remaining readmissions that are necessary now occur at its facility instead of another hospital.

Again, modeling is important to teasing out the most likely impact on revenues. In our example, we assume two impacts: readmissions decrease by 20 percent from historical levels during the performance period through increased care coordination efforts, and readmissions occurring at the same hospital increase from 70 percent to 80 percent.

In this example, the participant hospital would lose $42,000 based on six fewer readmissions and the fixed costs associated with those readmissions (see the exhibit).

Financial impact of improved clinical care and operations. It is possible that the bundled payment initiative will result in improvements in care and operations, such as reductions in hospital-acquired infections and complications, or in cost reductions from decreased duplication of services and/or supply standardization. In the past, hospitals with independent medical staffs may have had difficulty engaging physicians in developing pathways and standards of care; however, if physiciansunderstand that they could share in the savings derived from improved quality of care and reduced costs, they are likely to be more amenable to participating in such endeavors.

Several factors will influence whether operational savings can be generated:

> The extent to which the hospital has already succeeded in making significant operational improvements (no more low-hanging fruit)

> The hospital’s performance compared with external benchmarks

> The amount of internal variation> The scale of the initiative (with more episodes being

more likely to impact overall hospital cost structure)> The care redesign plan

SIMuLaTION TO GENERaTE 7 pERCENT SaVINGS

Total percentage Number of Episodes Reduction Episodes Savings

Reduced SNF Care 100 20% 20 $292,500

Substitution of Home Health for SNF Care 20 (68,250)

Reduced Home Health forCurrent Home Health Patients 200 20% 40 136,500

Readmissions: Avoided Readmissions 100 20% 20 199,250

Total Savings $560,000

Percentage Savings 7%

SIMuLaTION FOR BREakEVEN RESuLTS

Total percentage Number of Episodes Reduction Episodes Savings

Reduced SNF Care 100 15% 15 $225,000

Substitution of Home Health for SNF Care 15 (52,500)

Reduced Home Health forCurrent Home Health Patients 200 15% 30 105,000

Readmissions: Avoided Readmissions 100 13% 13 132,500


Percentage Savings 100%

Total Sponsoring average Hospital Readmissions Hospital payment payments

Historical 100 70 $10,000 $700,000

Under Bundled Payments 80 64 $10,000 $640,000

Impact on Readmissions $(60,000)

Variable Cost Percentage 30%

Total Readmission Impact $(42,000)

SIMuLaTION TO GENERaTE 7 pERCENT SaVINGS


Fall 2 0 1 4

Focus 49


For modeling purposes, we assume $500 can be saved on each of the 200 episodes through supply standardization and LOS reduction efforts. The amount of savings may be much higher or lower depending on what actual operational effi-ciency efforts have already been achieved with respect to relevant MS-DRGs.

Hospitals may also benefit from a bundled payment initia-tive by avoiding readmission penalties. However, the overall im-pact for a participant engaged in only one episode may be slight. In this model, we assume zero impact in reducing or affecting readmission penalties, although readmission penalties for major joint conditions are expected by 2015 and the performance pe-riod would occur from 2014 to 2016.

Net financial impact. At this point, after having addressed the three more quantitative aspects of the financial impact of a bundled payments initiative on a hospital participant, the hospital can consider the likely net financial impact. In our example, assuming a 7 percent savings can be achieved, a hospital participant is likely to reach breakeven and/or create a modest savings pool to be shared with the physicians (see the upper exhibit on page 6). Pooling positive effects related not only to the direct contract, but also to any operational savings may increase the likelihood of having funds to share with physicians.

Although the financial benefits to both parties are some-what limited, the hospital may also be able to gain significant competitive and strategic benefits from pursuing bundled pay-ment. The hospital therefore should consider these aspects of the opportunity before finalizing its decision about pursuing a bundled payment initiative.

Competitive BenefitsSome hospitals may be interested in bundled payment as a way

to respond to increasing value-based payment in a market, using a model that does not require as much change as accountable care. A potential hospital participant may see bundled payment as a strategy to ensure competitors are not actively encroaching on its market share. A hospital that engages in bundled payment more extensively (e.g., more than 10 episodes) can improve its chances of holding its own against competitor initiatives.

More narrowly, a bundled payment initiative also can be an effective competitive response for key, profitable service lines, particularly where a hospital has an independent medical staff and wants to retain key or loyal physicians. Many such bundled payment initiatives focus on orthopedic and cardiac care and highly profitable procedures.

Will the potential savings from both internal and episode savings be enough to ensure physician participation? The answer depends on the extent to which physicians have taken a leadership role in redesigning care and have been willing to increase their focus on managing costs across episodes in bundled payment arrangements. Under such circumstances, the physicians will probably have had to yield some autonomy and rely more on protocols and pathways to help determine the next level of care. The hospital also will need to perform more measurements and comparisons and focus on quality of care, not only in the initial hospitalization, but also in post-acute settings.

Moreover, physicians may not regard gain-sharing distri-butions alone as sufficiently attractive to compel them to participate, so it is important that they also understand the other aspects of the opportunity.

With waivers for certain fraud and abuse laws available for those piloting this initiative, it is possible to share not only in the episode savings, but also in the hospital internal operating cost savings. With modest costs savings, physicians may realize only modest distributions, such as is shown under our scenario in the exhibit at left. Nonetheless, the arrangement is risk-free for most physicians, and if incremental operational savings and episode savings are achieved, it is a win. Although there are restrictions under BPCI to ensure that the distributions do not exceed 50 percent of the physicians’ previous year’s fee-for-service revenues, it is unlikely that this level of distributions can be achieved.

Strategic BenefitsOverall, bundled payment requires a lot of work to get physicians on board, redesign care, enable data and information sharing so-lutions, and administer gain sharing. So why would a hospital choose to enroll? There are several compelling strategic benefits.

Carryover benefits. The hospital may be engaged only in Medicare bundled payment, but once physicians are on board, the physicians will be more inclined to implement operational

Hospital physicians

Direct Contract $ 75,000 $ 75,000

Volume/Market Share (42,000)

Clinical Care/Operational Improvement 50,000 50,000

Total Impact $83,000 $125,000

NET REVENuE IMpaCT

IMpaCT OF BCpI aNd INTERNaL COST SaVINGS ON dISTRIBuTIONS TO pHYSICIaNS

Episode Savings Internal Cost Savings $560,000 $100,000

Savings Available for Distribution


BPCI Operating Expenses (410,000) Available for Distribution $250,000

50% of Total

Physician Distribution of Savings

Available for Distribution $125,000

Total Physicians 4 Average Distribution per Physician $ 31,000

Fall 2 0 1 4

50 Focus

and quality improvements for patients with other insurance as well. For example, orthopedic surgeons associated with this initiative may consider bringing patients now being admit-ted to other hospitals to the participating hospital, whether to simplify their practice or because they appreciate the coordinated system of care being extended to patients beyond the bundled payment initiative.

positive patient reaction. Traditionally, the link between hos-pital care and post-acute care has tended to be weak, making it difficult for patients to navigate a complex healthcare environ-ment. Patients may appreciate a more seamless care network, building the hospital’s reputation as a center of excellence for care of a particular condition.

Good partners. Hospitals that are engaged in bundled payment initiatives are more likely to be good partners for accountable care organizations, narrow network arrangements, and self-insured entities. As low-cost providers focused on operational excellence in managing episodic care, such hospitals can posi-tion themselves to effectively manage the cost of care for these networks, where transitions of care and readmission reduction programs are emphasized.

Readiness for new payment models. Hospitals that participate in bundled payment will be developing a recipe for successful care coordination that includes managing costs while maintain-ing or improving quality. It takes time to master these processes, so hospitals that have participated in BPCI will have a head start on adopting the requi site best practices in their own institutions should bundled payment be rolled out globally. Having physi-cians and clinical leaders who have expertise with bundled pay-ment will be useful in ensuring success on a broader scale.

an Opportunity Well Worth Considering The direct finan-cial benefits of a bundled payment initiative may be break-even or a slight win for hospital participants, at best. However, the competitive and strategic benefits may make participation worthwhile. A focused bundled payment initiative is an op-portunity to “dip one’s toe in the water” of payment change without significant implications for the hospital’s volume or market share while still aligning with physicians.

The opportunity for participating physicians is greater, espe-cially if both post-acute costs (read: missions and skilled nurs-ing) and internal clinical and operational costs can be addressed.

Bundled payment requires real culture change, even if it is focused within a fraction of the total care provided by hospitals. Hospitals and physicians will need to work together more closely not only to address clinical and operational costs in the hospital, but also to address the costs of care across an episode of 30 to 90 days. They will engage more closely with post-acute providers,

such as skilled nursing, to focus on readmissions, skilled nursing LOS, and transitions of care to home and the community.

With everyone watching the care process, better quality and lower cost care just might be achieved. Because CMS al-ready has the legislative authority to roll out bundled payment more broadly, it is wise to be prepared. Thus, whether or not hospitals choose to participate in bundled payment now, they should be watching bundled payment participants and con-sidering what steps they would need to take in the event of a broad roll-out.

About the authorsJohn Harris is a Principal with DGA Partners, a healthcare manage-ment consulting firm. John is a frequent speaker on payer-provider alignment and account-able care for several organizations, including the American Association of Integrated Health Delivery Systems, The Governance Institute, and the Healthcare Financial Management Association. John spends much of his time facilitating strategic discussions or ana-lyzing financial arrangements between physicians, hospitals, and health plans seeking to improve quality and cost-effectiveness. John has a BA from Dartmouth College and an MBA in Health Care Management from the Wharton School of the University of Pennsylva-nia. John can be reached at [email protected].

Idette Elizondo is a manager with DGA Partners, a healthcare manage-ment consulting firm.Idette is an insightful, success-driven consultant with a track record of significant contributions in addressing strategic, financial, business de-velopment, and operational issues for health systems and health plans, particularly around innovative payment arrangements and value-based payments.Idette holds an MBA from Harvard Business School and a BA in Psy-chology from Princeton University. Idette can be reached at IElizondo at dgapartners.com.

Andrew assists health care organizations with strategic, financial and business planning, as well as with financial modeling and valuation analyses. Andrew earned a B.A. Degree in Economics from The Univer-sity of Chicago. Andrew can be reached at [email protected]

Footnotesa. Interim Report of the Committee on Geographic Variation in Health Care Spending and Promotion of High-Value Health Care, Institute of Medicine, March 22, 2013, www.iom.edu/reports (search on key words healthcare spending).

b. For information about the CMS BPCI Initiative and its four models, go to innovation.cms.gov/initiatives/Bundled-Payments/index.html.

c. Harris, J.M., and Hemnani, R., “The Transition to Emerging Revenue Models,” hfm, April 2013.Reprinted from the January 2014 issue of HFM magazine. Copyright 2014 by Healthcare Financial Management Association, Three Westbrook Corporate Center, Suite 600, Westchester, IL 60154-5732. For more information, call 800-252- HFMA or visit www.hfma.org


Fall 2 0 1 4

Focus 51

In an effort to maximize financial performance of the health plan, improve outcomes, and enhance the member experience, QualCare implemented its Health Services Team model, a mul-tidisciplinary team of clinicians, claims examiners and customer service advocates with expertise in a client’s benefit plan, provider network and Inner Circle* resources. QualCare developed the Health Services Team approach to positively impact the client’s cost curve through a variety of innovative approaches and initia-tives. The Health Services Team Model delivers comprehensive service to the members and providers through this integrated team. All members of the team have an in-depth understanding of the member’s benefit plan, employer wellness initiatives and support services, as well as community resources. The level of plan expertise and team integration allows for timely, efficient responses to member and provider issues. The service model en-ables us to support the success of wellness programs, promotes increased engagement, coordinates care and ensures members maximally leverage their benefits to receive the most appropriate services in the most appropriate setting. Through this process, the Health Services Team interacted with 70% of the total mem-bership of the pilot population in 2013.

QualCare developed a pilot program with a marquee client in order to implement the Health Services Model. As part of the pilot, QualCare agreed to several constraints that would limit QualCare’s ability to achieve greater financial savings. Some of these considerations included QualCare agreeing that cost savings could not be attained through:• Imposing any initiatives that would be viewed as disrup-

tive or unduly harsh to members or providers, such as: additions to the preauthorization list (i.e., sleep studies, genetic testing, and/or select outpatient surgeries), change in fee schedule on Inner Circle physicians (which was estimated to result in $1.2M additional savings) or implement additional plan design changes for redirection.• Provider profiling to potentially restructure the Inner

Circle tier based upon inappropriate provider cost/utilization trends.

Simultaneously, there were several initiatives that were cost additive during the plan year that ultimately would lead to cost savings over time such as:

• Increased member engagement levels on all chronic condition programs.• Increased preventive

health services utilization by 11%.• Increased awareness of

wellness incentive program, which included promotion of:

o PCP selection and bio- metric screenings health assessment completion.

o Educating membership on the importance of preventive visits and age appropriate screenings.

METHOdS:A Health Services Team (HST) was established for a large

QualCare client. This team was responsible for the following:• Reviewingthecustomer’smonthlypopulationmanage-

ment reports to identify opportunities to: o Reduce “leakage” to non-participating providers o Increase volume going to “preferred (Inner Circle)

providers” o Increase member engagement in chronic condition

management and wellness programs • Providing an integrated customer service experience

for the member. This was achieved by integrating the clinical medical management staff with customer service staff and providing cross training opportunities. This allowed for a seamless member experience regardless of the nature of the contact.• Inadditiontoprovidingall“traditional”healthplanser-

vices (i.e.: UM, care management, claims questions, etc.), the HST provided “concierge” level service which included such white glove services as PCP referrals, real time appointment scheduling, and assisting with understanding the benefit plan.

Health Plan Cost Trend Management: A Case Study

by Christopher Valerian, DO, MMM and Allison Hofmann

Christopher Valerian

Allison Hofmann


Fall 2 0 1 4

52 Focus

OuTCOMES:QualCare held plan spend flat on an incurred basis (calen-

dar year 2012 vs. 2013). Utilizing the tactics outlined above, the Health Services Team achieved the following:

• An overall 6% reduction in high cost case claims (>$50,000) (2013 vs. 2012)

• Redirection of cases from non-participating providers to in network and optimally Inner Circle providers:

o Total Cases – 792 o Total Redirected – 143 o 85% to Inner Circle o 15% to In-Network

all graphs are based on incurred claims CY 2012 vs. CY 2013• A53%increase inDiseaseManagementEngagementre- sulting in an overall 37.8% engagement rate

• Reducedallcausereadmissionratesbyintensiveoutreach and management by 34%

• Reducedoverallinpatientlengthofstayby20%through chronic condition management

*Includes all service categories

• ReducedERvisit ratesby16.4%through intensive case management and clinical integration strategies


Fall 2 0 1 4

Focus 53

• QualCareachievedahigherdiscountin2013than2012 and target

• Anoverall cost trendanalysis shows significantdecreases in most areas from a PMPM perspective

• Quality Metrics were improved – sampling of HEDIS metrics below

These results were reviewed by an independent actuarial firm which concluded the following:• Plandesigneffectsin2013areworthapproximately-3%

over the course of the year which leaves an approximately 6% decrease due to plan management initiatives.• Incurredspendremainedflat2012-2013.• The plan spend in 2013was below the set budget on

both a fully-mature incurred basis and a paid basis.

SuMMaRYQualCare Inc. was successful in achieving a flat trend year

over year from 2012 to 2013 in the face of an industry aver-age trend increase of approximately 7.5%. This was achieved through a variety of innovative and customized interventions. Additionally, this was accomplished while quality metrics im-proved and pharmacy adherence rates increased in all chronic conditions that QualCare manages. These results are currently being replicated across a larger segment of the QualCare popu-lation.

* Inner Circle refers to services provided by a health system and its preferred physicians to its own employee base. It is the highest level of benefits that the members receive under the health plan with the least out of pocket member expense.

About the authorsAllison Hofmann is the Vice President of Account Management and the Vice President of Marketing at QualCare, Inc. where she has worked since 1993. She oversees QualCare’s self-insured employee health plan product, as well as the reinsurance division, and is also responsible for coordinating the overall administration of QualCare’s self-insured large group medical plans. Ms. Hofmann has direct oversight for national insurance companies with whom QualCare conducts business. In her other role as the Vice President of Market-ing, she oversees all aspects of QualCare’s marketing department. Ms. Hofmann can be reached at [email protected].

Christopher Valerian, DO, MMM serves as Chief Medical Of-ficer of the QualCare Alliance Networks, Inc. (QANI), oversee-ing and advancing the organization’s clinical vision. Dr. Valerian supports all QANI divisions, including: QualCare, Health-Lynx, Qual-Lynx, QualCare Captive Insurance Company and Qual-Care Management Resources. Dr. Valerian has extensive experi-ence in management, clinical program development, analytics and tracking the success of Targeted Population Health programs. Dr. Valerian can be reached at [email protected].

Fall 2 0 1 4

54 Focus

Fall 2 0 1 4

Focus 55

2014 Chapter Internal Financial Review

HFMA requires that each chapter conduct either an independent audit or an HFMA Internal Financial Review. The HFMA Internal Financial Review process and reporting was developed by HFMA and must be followed by any chapter opting for this approach instead of an independent audit. Pursuant to HFMA’s requirements, the Internal Financial Review must also be completed by an individual or individuals possessing the appropriate financial experience and who are not involved in the chapter’s bookkeeping activity.

The purpose of the Internal Financial Review is to test and validate the chapter’s fiscal integrity and operating guidelines. Furthermore, the review: Addresses whether the chapter’s financial statements correctly reflect its activities for the year. Considers whether an adequate level of documentation is maintained for the chapter’s receipts and disbursement transactions in order to reconcile checking and saving account bank statements. Considers whether transaction approval guidelines are in place and being observed.

The Internal Financial Review for the 2013-2014 Chapter Year was completed on a voluntary basis by a certified public accountant who is a member of the chapter. Heather L. Weber, Chapter Treasurer for the 2013-2014 year, provided the necessary documentation required for the Internal Financial Review. The completed Internal Financial Review questionnaire was provided to the chapter’s Audit Committee of the Board of Directors. A meeting of the Committee was held to review the findings and the questionnaire. Upon review, the Audit Committee accepted the Internal Financial Review findings and approved the final financial statements for the 2013-2014 Chapter Year.

The accompanying balance sheets and statements of activities and cash flows for the years ended May 31, 2014, 2013 and 2012 reflect the final financial statements for the NJ Chapter. If you should have any questions, please feel free to reach out to any Board member for assistance.

Respectfully submitted,

John Brault 2013-2014 Audit Committee Chair NJ HFMA

2014 2013 2012

Income Meeting and education income $ 239,599 $ 239,627 $ 267,708 Newsletter income 43,062 38,518 48,114 Golf outing Income 61,835 54,952 69,255 General sponsorship income 189,137 214,820 228,900 Interest income 300 503 691 Other income 29,843 29,298 29,228 Total income 563,776 577,718 643,896

Expenses Meeting and education expenses 360,183 460,871 402,041 Newsletter expenses 43,167 38,736 42,169 Golf outing expenses 53,780 54,603 61,854 Member recognition and social event expenses 5,175 26,839 28,525 General and administration expenses 78,072 69,594 70,523 Depreciation 1,039 257 3,084 Provision for bad debts 1,197 3,045 4,000 Total expenses 542,613 653,945 612,196 Net operating income 21,163 (76,227) 31,700

Net (loss) income $ 21,163 $ (76,227) $ 31,700

Year ended May 31

Healthcare Financial Management Association - New Jersey ChapterStatements of Activities

2014 2013 2012



Net (loss) income $ 21,163 $ (76,227) $ 31,700

Year ended May 31


2014 2013 2012



Net (loss) income $ 21,163 $ (76,227) $ 31,700

Year ended May 31


2014 2013 2012



Net (loss) income $ 21,163 $ (76,227) $ 31,700

Year ended May 31


2014 2013 2012 Assets Current assets Bank accounts $ 253,136 $ 250,112 $ 272,666 Accounts receivable, net 8,062 14,590 29,460 Other current assets 8,041 23,000 34,346 Total current assets 269,239 287,702 336,472

Fixed assets - 1,039 1,296 Total assets $ 269,239 $ 288,741 $ 337,768

Liabilities and net assets Liabilities Current liabilities Accounts payable $ 54,969 $ 92,579 $ 72,686 Deferred revenue 41,385 42,698 33,035 Accrued payroll 4,706 6,448 8,803 Total current liabilities 101,060 141,725 114,525 Total liabilities 101,060 141,725 114,525

Net assets Unrestricted net assets 168,179 147,016 223,243 Total liabilities and net assets $ 269,239 $ 288,741 $ 337,768

May 31

Healthcare Financial Management Association - New Jersey ChapterBalance Sheets





May 31






May 31






May 31






May 31


2014 2013 2012

Operating activities Net income (loss) $ 21,163 $ (76,227) $ 8,335 Adjustments to reconcile net income (loss) to net cash provided by (used in) operations: Accounts receivable, net 6,528 14,870 (12,518) Other current assets 14,959 11,346 (27,347) Depreciation 1,039 257 3,084 Accounts payable (37,610) 19,893 (12,924) Deferred revenue (1,313) 9,663 (2,443) Accrued payroll (1,742) (2,355) 4,478 Net cash provided by (used in) operating activities 3,024 (22,554) (39,334)

Cash at beginning of period 250,112 272,666 288,635

Cash at end of period $ 253,136 $ 250,112 $ 249,301

Year ended May 31

Healthcare Financial Management Association - New Jersey ChapterStatement of Cash Flows

2014 2013 2012




Year ended May 31


2014 2013 2012




Year ended May 31


2014 2013 2012




Year ended May 31


Focus 57

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Focus 63

Editorial Calendar and Ad Rates 2014Editorial Calendar and Ad Rates 2014--20152015

To advertise, please contact Laura Hess :: 888To advertise, please contact Laura Hess :: 888--652652--4362 :: [email protected] :: [email protected]

Winter Issue—January/February Deadline December 15 Topics: Quality; Cost benefit analysis of quality improvement measures; DSRIP; ACOs… where are we?

Spring Issue—March/April Deadline February 15 Topics: Data & health information management.

Fall Issue—September/October *Special ANNUAL INSTITUTE Issue* Deadline August 15 Bonus Distribution at HFMA-NJ’s 38th Annual Institute in Atlantic City, October 8-10, 2014! Topics: Spotlighting issues and topics shared by the Institute presenters.

Holiday Issue—November/December Deadline October 15 Topics: Looking ahead to 2015; future trends in healthcare; Telemedicine; Nurses and PAs as valuable physician extenders.

Summer Issue—May/June Deadline April 15 Topics: Reimbursement/Financial Management; Billing & Collections; Revenue Cycle.

Black & White 1x, 2x 3x, 4x 5x

Full Page $ 525.00 $ 475.00 $ 430.00 Half Page $ 375.00 $ 325.00 $ 290.00 Quarter Page $ 250.00 $ 225.00 $ 175.00 Color 1x, 2x 3x, 4x 5x Back Cover—Full Page $ 1,300.00 $ 1,100.00 $ 920.00 Inside Front Cover—Full Page $ 1,000.00 $ 925.00 $ 870.00 Inside Back Cover—Full Page $ 1,000.00 $ 925.00 $ 870.00 First Inside Ad—Full Page $ 950.00 $ 875.00 $ 850.00 Full Page $ 800.00 $ 750.00 $ 690.00 Half Page $ 625.00 $ 575.00 $ 520.00

Published 5x a year, Garden State Focus is the premier publication reaching over a thousand Healthcare Industry influencers and decision makers behind New Jersey’s prominent hospitals and healthcare systems.

Topics listed are subject to change, in order to report on the most relevant issues in healthcare at that time.

Frequency rates displayed below. Advertise in more issues for maximum exposure and better value!

DATE: 9/9/14 FILE NAME: NJ HFMA 38th Annual Institute_FULL.indd

SIZE TRIM: 3.5625” W x 4.6875” L OUTPUT AT 100%INK: 4c-Process FONTS: Frutiger LT 57 Condensed; Frutiger LT 67 Bold Condensed

CLIENT: AmeriHealth

ELEMENT: Ad PUBLICATION: FULL PAGE Ad

AD: PM PRODUCTION: PM

49 Richmondville Ave. Suite 300Westport, CT 06880TEL: 203 - 489-0101

APPLICATION: Adobe inDesignVERSION: CS/6

AE: RR / ER

Understanding the new health care law can leave even the most experienced

benefits professional confused and stressed.

That’s why AmeriHealth New Jersey has you covered with the answers

you need about how the law is changing the way individuals, families and

businesses buy health insurance.

To find out how AmeriHealth New Jersey can help you and your business,

visit us on Facebook or at amerihealthnj.com.

Know more.Stress less.

Health insurance that pays.SM

© 2014 AmeriHealthAmeriHealth Insurance Company of New Jersey | AmeriHealth HMO, Inc.

NJ HFMA 38th Annual Institute_FULL.indd 1 9/9/14 10:01 AM

*Source: Kaiser Health News

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Welcomes You to€¦ · Welcomes You to... Schedule Inside Institute page 32-33. QUALITY SERVICE...

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