Volume 5, Issue 4

Physician Advocate (ISSN 1555-5054) is published quarterly (winter, spring, fall, summer) by the Medical Society of New Jersey (MSNJ),2 Princess Road, Lawrenceville, NJ 08648. Free to MSNJ Members. Periodicals postage paid at Trenton, NJ, and at additional mailingoffices. POSTMASTER: send address changes to Physician Advocate, 2 Princess Road, Lawrenceville, NJ 08648

For more information visit: www.msnjia.com or call 866-963-0698

“Global resources for NJ’s insurance needs”

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Michael T. KornettChief Executive Officer

hen our country selected its new President, BarackObama, his message during his two-year campaign was simply, “change.”

What I see after one year into his administration is muchactivity, but – “same circus, different clowns” and notenough change. There has been so much debate on the fixfor the unsustainable cost of healthcare, the continued accel-eration of a war that we cannot walk away from and thefinancial bailouts that go beyond our ability of even the bestfiscal pathologists to comprehend. But what has changed?

Several years from now, all this rushful activity will have to bereconciled, and I pray that the slack we cut to our 44th pres-ident turns out favorably. However, thus far it appears to methat the word “change” is turning to “High Hopes.”

You may ask “how did Senator Harry Reid (D-Nevada) get 60votes to pass the 2,000-page Health Reform Bill?” Simple –he bought them.

Your Senate at WorkThe following are examples of special provisions added tothe Senate healthcare bill, some at the last minute, to win 60 votes to allow the bill to proceed to debate and passage:

Connecticut: $100 million for the University ofConnecticut medical center.

Florida:Grandfather clause that exempts Florida residentsfrom losing Medicare Advantage benefits. Cost: $3 billionto $5 billion.

Louisiana: $300 million in Medicaid subsidies to “certainstates recovering from a medical disaster” (i.e., Katrina).

Massachusetts, Vermont: $500 million and $600 million,respectively, in higher Medicaid reimbursements.

Michigan: Exemption from the insurance fee for MichiganBlue Cross/Blue Shield.

Montana, North and South Dakota, Wyoming:HigherMedicare payments to “frontier” hospitals and doctors.

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“High Hopes.”— Frank Sinatra

Montana:Medicare coverage for individuals exposedto environmental health hazards in or around Libby, an asbestos superfund site.

Nebraska: Exemption from the insurance fee forNebraska Blue Cross/Blue Shield and Mutual ofOmaha; and 100% federal payment for new Medicaidcoverage, at a cost of $100 million.

Vermont: $10 million for community health-care centers.

Source: Senate Finance Committee

By the time you read this article, “change” will beoccurring in New Jersey’s political landscape and wewill usher in the era of the Christie administration.Right now, it’s too soon to tell how the new changeswill benefit New Jerseyans, but if “hope” is the word“du jour,” then it is safe to say that it can only get betterfrom here.

Our state and federal budgets are going to be majorchallenges, and we will be witnessing politics beingplayed at a completely different level. I firmly believethat there will be no place for any legislator to hide whenthey face the election in the fall. And we, as the MedicalSociety of New Jersey will have no shortage of issues thatwe will face. MSNJ is communicating daily with ourmember-physicians as well as the legislature to clearlyarticulate where we stand on healthcare issues locallyand nationally. We encourage you to participate andcommunicate actively with MSNJ to make sure that wecan have an impact in 2010.

Happy New Year!Michael T. Kornett Chief Executive Officer

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Supporting Legislative EffortsThere was a time when MSNJ would have to send written correspondence to members to rally support for a legislativeeffort in Trenton. Letters would be typed and placed carefullyin an envelope and a stamp was affixed in the upper righthand corner to be mailed.

Much like everything else in the world, we’ve evolved.

Today, physicians can log in to the Advocacy section atwww.msnj.org, click on the Political Action Center link, copyand paste text into an email and send thousands of letters tostate and U.S. elected officials. Resources such as this onehave allowed us to mobilize our physicians for grassrootsadvocacy via the World Wide Web. On issues such as therepeal of the Sustainable Growth Rate, MSNJ members sentthousands of letters to their Congressional representatives allat the click of button.

Today’s Internet allows users to watch live congressionaltestimony from a laptop and wireless connection or downloada 2,000 page House of Representatives bill in a matter ofminutes and have an opinion about it posted for the worldto see. You couldn’t do that in 1994 during the last health-care reform attempt.

Real-time newsGone are the days of picking up the morningnewspaper to read about current events.When news breaks now, there is usually abattle amongst websites as to who can pro-duce information the fastest and most accu-rate.

MSNJ has launched a major effort to com-municate with the physicians, practice man-agers, patients and the government in real-

time so that all interested parties know where we stand onhealthcare issues in New Jersey.

MSNJ e-NewsMSNJ’s e-News provides members with information abouthealthcare on a local and national level, various events fromstate and county medical societies as well as specialty soci-eties, member benefits and ways to save money, practice

At one time or another many of us have done our research bydriving to the local library, utilizing the card catalog or DeweyDecimal System, finding relevant information and photocopy-ing the page at $.05 a copy.

Today, we can “Google” it.

Do you remember the typewriter? It’s been long replaced bysoftware programs such as Microsoft Word and all of theamenities that come with it like “spell-check” and“WordArt”. It’ll even provide you with the Word Count inyour document.

Business (and medicine) is moving with lightning speed thesedays and those that don’t keep up get left behind. What wasconsidered cutting edge technology 10 years ago is now out-dated and irrelevant. Think about how big and bulky mobilephones used to be; now, they fit in the palm of your handwhere you can send text messages, check your email, visit theWorld Wide Web, download applications (known as apps), listento music, play games, organize your contacts, e-Prescribe,view your patients’ records…oh, and you can still make aphone call from these devices.

And while all of this may seem overwhelming to those thatdon’t have the experience or the time to keep up with thechanges, the Medical Society of NewJersey is here to assist in providingyou with timely resources through aseries of simplistic technological toolsthat will allow you to maximize yourmembership and keep up on the ever-changing healthcare landscape.

“The goal is to create the opportuni-ties for people in the medical profes-sion to find the traditional sense ofcommunity that MSNJ historically pro-vided, and now find the community in the connected world ofthe Internet,” stated social media expert Howard Yermish.“The more support for doctors from the community, the morepowerful MSNJ can be in its legislative efforts.”

MSNJ is committed to respecting and preserving our long andrich history. But without adaption there is disintegration. Ourgoal is to evolve along with the technology.

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management information and much more. It shows up regu-larly in your inbox each week unless, of course, you haven’tprovided MSNJ with your email address. (If you haven’t yet,visit www.msnj.org and log into the membership section.)

MSNJ.wordpress.com – The official blog of the Medical Society of New JerseyMSNJ’s blog acts as a central point of public communicationsfrom MSNJ to everyone in New Jersey regardless of member-ship status.

The blog is used toissue public statementson healthcare-relatedissues in and aroundNew Jersey as well asto highlight MSNJ’slegislative and regula-tory activities, businesstips for running aphysician practice,

insurance updates and MSNJ legal outcomes. Articles andlinks relative to MSNJ are also posted on a regular basis.Readers should visit our blog once or twice a week to checkfor updates.

Twitter.com/MSNJ1766For public updates on MSNJ, youcan subscribe to our page on the popular website Twitter. When MSNJ takes a positionon a particular issue or appears on News12 NJ or New JerseyNetwork we post what is called a “tweet”. A tweet is a brief,succinct message of no more than 140 characters that providesa reader with information and links relevant to MSNJ and itsmembers. MSNJsends “tweets” ona daily basis toinform membersand subscribers of our daily opera-tions and issuesthat we areengaged in.Individuals andmedical societiesfrom all around theUnited States follow what MSNJ does.

To see what all the “tweeting” is about simply visit us athttp://twitter.com/MSNJ1766.

FacebookWhat has arguably become today’s dominant social media forum is the website known asFacebook. People, companies, social groups, fans, medicalsocieties have all created pages to convey their message andamass a following. MSNJ nowhas a public Facebook pagewhere people can view pictures of MSNJ events, read news clips where MSNJ has been quoted and interviewed, watch video clips and engage in an online forum to discuss hot topics such as nationalhealthcare reform and the“public option”.

Embracing the TechnologyThe Medical Society of New Jersey has the distinction of beingthe oldest professional organization in the United States. Yet,the Society continues to evolve providing a communicationand information on a variety of platforms to inform the physi-cian-members of New Jersey. In a content-crazy, web-basedworld, if MSNJ solely relied on the traditional daily newspaperto communicate, we’d be old news.

MSNJ communicates with its members now more than everbefore. We are transparent and timely on issues at state andfederal levels; we’re working daily to provide members withnews as soon as it is made available to us. So if a nonmember(or even a member) comes up to you and says “What hasMSNJ done for us?” you can respond by saying that MSNJcommunicates everyday to educate and enlighten physiciansabout their profession. And if they’re not satisfied with thatanswer you can tell them to visit:

MSNJ’s website at www.msnj.org; or

read MSNJ weekly e-News; or

read the blog at msnj.wordpress.com; or

check our twitter.com/MSNJ1766; or

the MSNJ Facebook page

And yes, a few times a month we still show up in your favorite New Jersey newspaper.

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Statement of Ownership, Management, and CirculationRequired by 39 U.S.C. 3685

1. Title of Publication: Physician Advocate

2. Publication No.: 1555-5054

3. Date of Filing: October 1, 2009

4. Frequency of Issue: Four times each year.

5. No. of Issues Published Annually: Four

6. Annual Subscription Price: $35

7. Complete Mailing Address of Known Office of Publication: 2 Princess Road, Lawrenceville, Mercer County, NJ 08648

8. Complete Mailing Address of the Headquarters of General Business Office of the Publisher: 2 Princess Road, Lawrenceville, Mercer County, NJ 08648

9. Names and addresses of publisher, editor, and managing editor: Publisher: Medical Society of New Jersey, 2 Princess Road, Lawrenceville, NJ 08648. Editor: Daniel Klim, 2 Princess Road, Lawrenceville, NJ 08648

10. Owner (if owned by a corporation, its name and address must be stated and also immedi- ately there under the names and addresses of stockholders owning or holding 1% or more of total amount of stock. If not owned by a corporation, the names and addresses of the individual owners must be given. If owned by a partnership or other unincorporated firm, its name and address, as well as that of each individual must be given. If the publication is published by a nonprofit organization, its name and address must be stated): Medical Society of New Jersey, 2 Princess Road, Lawrenceville, NJ 08648

11. Known bondholders, mortgagees, and other security holders owning or holding 1% or more of total amount of bonds, mortagages, or other securities: None (a nonprofit corporation of New Jersey).

12. For completion by nonprofit organizations authorized to mail at special rates (dmm Section 423.12 only). The purpose, function, and nonprofit status of this organization and the exempt status for federal income tax purposes have not changed during preceding 12 months.

Extent and Nature of Circulation

a. Total number of copies (net press run) 7,275 6,245

b. Paid and/or requested circulation 5,477 5,194 1. and 2. Paid/Requested Mail Subscriptions Stated on Form 3541 3. Sales through Dealers and Carriers, Street Vendors, Counter Sales, and other non-USPS — — Paid Distribution 4. Other Classes Mailed through the USPS — —

c. Total paid and/or requested circulation 5,477 5,194 (sum of b1, b2, b3 & b4)

d. Free distribution by mail 1,798 1,051 (samples, complimentary, and other free)

e. Free distribution outside the mail — — (carriers or other means)

f. Total free distribution (sum of d and e) 1,798 1,051

g. Total distribution (sum of c and f) 7,275 6,245

h. Copies not distributed 0 0 1. Office use, leftovers, spoiled 2. Returns from news agents — —

i. Total (sum of g, h1, and h2) 7,275 6,245 Percent paid and/or requested circulation 75.29% 83.17% (c/g x 100)

13. I certify that the statements made by me above are correct and complete. (signed) Daniel Klim

AVERAGE NO.COPIES EACHISSUE DURING

PRECEDING12 MONTHS

ACTUAL NO. OFCOPIES OF SINGLEISSUE PUBLISHED

NEAREST TO FILINGDATE

County Executive of the Year – Linda McGhee (L-R, MSNJ CEO, Michael T. Kornett, Mercer County Medical Society Executive

Linda McGhee and MSNJ 217th President Joseph H. Reichman, M.D.)

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Congratulations to this year’s MSNJ Photo Contest Winner, Mark R. Schwartz MD.Dr. Schwartz’s photo “Brig Egret at the Edward B. Forsythe National Wildlife

Refuge” in Brigantine earned complimentary MSNJ dues for 2010.

MSNJ Photo Contest Winner

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As everyone in healthcare is aware, six hospitals in the Stateof New Jersey have recently filed bankruptcy petitions,some of which have resulted in the reorganization of thehospital, such as Kessler Memorial Hospital in Hammontonbefore it subsequently closed, or the acquisition of a hospitalfrom the bankruptcy estate, such as Bayonne MedicalCenter, while others resulted in the closure of the hospital,as in the case of Barnert Hospital or Pascack Valley Hospital.

This article applies to those situations where you or yourpractice is paid as an independent contractor, not as anemployee, by a hospital which subsequently goes bankrupt.An independent contractor receives a 1099 at the end ofthe year, whereas an employee receives a W-2.

If you received payments from a hospital which subse-quently files for bankruptcy, you most likely will receive aletter which reads, in part:

The Debtor’s books and records reveal

that you received from the Debtor pay-

ments within [ninety (90) days or a

year] prior to the Petition Date as

reflected in the attached Schedule.

Under Section 547 of the Bankruptcy

Code, the Trustee may avoid and recover

such transfers as preferential.

Accordingly, the Trustee hereby demands

repayment of the payments you received.

Kindly forward a check in that amount

payable to the Trustee. If we do not

hear from you within fifteen (15) days,

the Trustee will file a complaint

against you in the Bankruptcy Court to

avoid and recover the amount of the

preferential transfer.

This letter will likely come within a year to two years afterthe hospital has filed for bankruptcy. You cannot ignorethis letter.

Payments made by a hospital just prior to filing for bankruptcy,commonly referred to as the “preference period,” are consid-ered “preference payments.” In most situations, the preferenceperiod is a ninety (90) day period; however, the preference peri-od for payments made to an “insider” would be a year.Payments made during this preference period are subject torecapture by the bankrupt estate.

ESTATE’S RIGHT TO AVOID TRANSFERS

Section 547 of the Bankruptcy Code empowers the bankruptcyTrustee with the ability to recover assets transferred to creditorsduring the ninety (90) day “preference period” immediatelyprior to the debtor hospital’s bankruptcy filing. These actionsmay be referred to as “preference” or “avoidance” actions,“clawbacks,” “recapture proceedings,” and the like. The con-cept behind the estate’s right to recapture preferential transfersunder provisions of the Bankruptcy Code is to avoid pre-peti-tion transfers that increase the creditor’s recovery over othersimilarly situated creditors. Intent of the parties is irrelevant. Itis the effect the transfers have on the entire class of unsecuredcreditors that matters. The Trustee’s ability to recapture transfersto creditors during the preference period is an attempt by theBankruptcy Code to promote a fair and balanced distribution ofassets to creditors. It also is intended to act as a deterrence tocreditors that may be overly aggressive in collection efforts asopposed to those creditors who work with the hospital while inthe zone of insolvency.

ANATOMY OF A PREFERENCE

The elements of a preference are straight forward. In order toestablish whether a particular transfer is a preference, the Trusteeneed only show that the transfer was: (1) to or for the benefit ofa creditor; (2) for a pre-existing debt owed by the debtor; (3)made while the debtor was insolvent; (4) made within ninety(90) days of the filing of the bankruptcy petition; and (5) enablesthe creditor to receive more than the creditor would havereceived under a liquidation of the debtor at the time the trans-fer was made. 11 U.S.C. § 547(b)(1)-(5). Typically, the Trustee

By Frank R. Ciesla, Chair, Healthcare Practice; Giordano, Halleran & Ciesla

Donald F. Campbell, Jr., Bankruptcy Attorney; Giordano, Halleran & Ciesla

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can easily establish the five elements of a preference.Payments from the debtor are invariably made to creditorsand are for payment of a liability already owed by thedebtor. The Bankruptcy Code presumes the debtor isinsolvent during the ninety (90) day preference period and,finally, it is highly unusual for a creditor to receive a pay-ment during the ninety (90) day preference period that he would have been entitled to had the debtor’s estatebeen liquidated at the time of the transfer. Payments tophysicians under contract with the hospital are almostalways deemed preferential.

THE INSIDER PREFERENCE

The preference period can be expanded to include anypayments received by creditors who are deemed “insiders.”An insider under the Bankruptcy Code is typically anyperson or entity that has control over the debtor whichincludes an officer, director, partner, managing agent, affili-ate, or even a relative of an insider. See 11 U.S.C. §101(31). Clearly if considered an insider, the creditor has agreat deal more exposure; however, the Trustee’s burden toprove the transfers were fraudulent increases because theTrustee will need to establish, not only the insider status ofthe creditor, but also prove the debtorwas, in fact, insolvent before the ninety(90) day preference period and willhave to establish that the paymentsmade within the year period weregreater than the creditor would beable to receive if the debtor were liq-uidated at the time of the transfer.Physicians are rarely in this class unlessthey are members of the hospitalboard or hold another position of control.

AVAILABLE DEFENSES

Though a Trustee may easily establish a preference claim,there are a number of defenses available to prevent aTrustee from collecting on the preference claim. The twomost common defenses are the “Subsequent New Value”Defense and the “Ordinary Course of Business” Defense.The subsequent new value defense entitles a creditor tooffset the Trustee’s preference claim with any additionalgoods or services provided to the debtor after receiving the preferential transfer from the debtor. This defense isintended to encourage creditors to continue to work withthe debtor so the debtor may avoid bankruptcy altogether.The “ordinary course of business” defense provides thecreditor an opportunity to show that the Trustee may notavoid a preferential transfer if the transfer was either madein the ordinary course of business between the parties ormade according to ordinary business terms. This defense

has also been created to encourage creditors not to altertheir collection effort or put unreasonable pressure on thedebtor while in the zone of insolvency.

These and other available defenses provide creditors withan opportunity to significantly reduce, if not eliminate, aTrustee’s preference claim; however, in order to establishthese or other defenses, it is imperative that the creditormaintain complete business records to establish the defens-es. A creditor cannot rely upon the debtor’s records sincethe Trustee of a hospital often does not have control oraccess to the records, which have been abandoned or trans-ferred to the purchaser of the hospital. Because it is thecreditor’s burden to prove the defenses, it is important tokeep complete and accurate business records including, butnot limited to, any contracts or other agreements, copies ofany checks from the debtor or bank statements evidencingthe receipt of payments from the hospital, invoices or otherrecords establishing the quantity of goods or services per-formed and the date such goods or services were receivedby the hospital, and any relevant communications with hos-pital management regarding payments received and goodsand services provided. Without the proper documentation,

a hospital creditor will have a difficulttime establishing a defense and may beforced to either settle with the Trusteefor a larger sum or attempt to resolve thedispute before the bankruptcy court.With accurate documentation establish-ing any available defenses, most prefer-ence actions can be settled for a smallpercentage of the original claim or alto-gether avoided. This documentation

must be created simultaneously with the provision of goodsor services, not after the hospital files for bankruptcy.

In those situations where the hospital is a debtor in posses-sion, the hospital is still operating under the supervision ofits Board of Trustees or Directors, and an attempt is madeto reorganize the hospital to keep it open. The debtor inpossession hospital will do everything legally within itspower to maintain a cordial relationship with physicians onits medical staff. Such physicians will generally continue tobe the medical staff, who will be treating their patients atthe hospital. To this extent, prior to attempting to recovera preference payment, such bankrupt hospital will look atthe situation, it still has and is maintaining its books andrecords and, if from its own records and the knowledge ofits employees, it appears that the doctor was paid on a cur-rent regular basis for services rendered, or the doctor subse-quently rendered services for which he has not been paid,

Continued on page 8

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it will not pursue the doctor. This will save the doctorfrom spending money on hiring a lawyer and provingthat the payments met the bankruptcy test and need notbe repaid. The hospital hopes this course of conduct willmaintain the loyalty of the doctor.

In those situations where the hospital either closes itsdoors, or the hospital is sold in the bankruptcy, a Chapter7 Trustee or Creditors Committee will very aggressivelyseek to recover payments made by the hospital during thepreference period. This will cover all payments, includ-ing payments made to physicians for services rendered. Inthe sale of the hospital, the buyer, unlike a debtor in pos-session, has little influence on the actions of the CreditorsCommittee.

The fact that the doctor provided services to the bank-rupt hospital, in and of itself, does not prevent recapture,by the Trustee or Creditors Committee, from the doctorof payments made during the “preference period” to thedoctor. The Creditors Committee may not have access tothe hospital’s documents as to why the payment wasmade or access to the hospital’s employees. Further, theCreditors Committee may not care, it only incurs thecost of sending the recapture letter. The physician musthire an attorney and the burden is on the physician toprove he is entitled to keep the payments.

However, there are steps which the doctor can take dur-ing the period of time that the doctor is actually per-forming the services, not subsequent to the bankruptcy, todocument in a way that the doctor can defeat any prefer-ence claims. Regrettably, the doctor will also have to hirean attorney to initially work with the doctor to gatherthe relevant documentation, and then present the docu-mentation to the attorneys for the Creditors Committee.If there is proper documentation, generally the attempt atrecapture ends at that point. If there is incomplete docu-mentation, generally a compromise can be negotiated bythe attorneys. If neither of these avenues are successful,then a proceeding in the Bankruptcy Court, known as anadversary hearing, occurs. This is in effect a non-jury trialbefore the Bankruptcy Judge.

SUMMARY

To protect yourself, keep documentation and make sureyou are paid on a current or, at the very least, a consistentbasis. If you receive a letter demanding the return of apayment, immediately contact an attorney with expertisein defending preference actions.

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Burt Eichler, Friend of MSNJ Dies at 76Burton L. (Burt) Eichler, a member of the law firm BrachEichler L.L.C. and friend ofmedicine for over 35 years, died suddenlywhile visiting his son in New Orleans onThanksgiving Day.

“Burt defended many physicians over thepast 35 years and personally helped theMSNJ organization during some very difficult

times recently,” stated Dr. Robert Rigolosi, Treasurer and PastPresident of MSNJ. “Because of Burt, the BrachEichler firm and its current successors will forever be remembered for theircontribution to the Medical Society of New Jersey.”

Eichler co-founded the firm of BrachEichler Rosenberg SilverBernstein Hammer & Gladstone PC in 1967 in Newark, NJ. The firm, which had since relocated to East Orange and thenRoseland, NJ, later merged with WolfBlock Schorr & Solis-CohenLLP in 2003. In April 2009, the Roseland attorneys of WolfBlockformed BrachEichler after WolfBlock announced its plans to disband earlier last spring.

“The Medical Society of New Jersey (MSNJ) is deeply saddenedabout the loss of Burt and remembers him for the impact hemade on physicians in the state,” said Michael T. Kornett,MSNJ’s chief executive officer.

In the early 1970s, Eichler paved the way for the establishmentof many New Jersey healthcare “firsts” by shepherding thelicensing of the first non-hospital-owned, free-standing dialysisfacility, the first MRI, the first free-standing ambulatory surgicalcenter, and the first lithotripter. He was also the first attorney torepresent a medical staff in New Jersey.

Most notable among Eichler’s published opinions was Marsh v.Finley, 160 N.J. Super., 193 (App. Div. 1978), certif. den. 78 N.J.396 (1978), which allowed physicians engaged in the private practice of medicine to operate a CT scanner.

Other notable decisions in which he played a role were Desaiv. St. Barnabas Medical Center, 103 N.J. 79 (1986); Paul KimballHospital Inc. v. Brick Twp. Hospital, Inc. , 86 N.J. 429 (1981);Women’s Medical Center at Howell v. Finley, 192 N.J. Super. 44,certif. den. 96 N.J. 279 (1984); St. Joseph’s Hospital and MedicalCenter v. Finley, 153 N.J. Super. 214 (App. Div. 1977); andRadiological Society of N.J. v. Sheeran, 175 N.J. Super. 367 (App.Div. 1980) certif. den. 87 N.J. 311;

Eichler earned his L.L.B. from Rutgers University School of Law in 1957 and his B.S. from Ohio State University in 1954. Hewas a member of the Bars of New Jersey and New York.

“In speaking for all of the physicians in New Jersey, Burt will surely be missed,” added Dr. Rigolosi.

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IS YOUR PRACTICE TRAINED AND PREPARED TO MEET THE REQUIREMENTS OF THE

Fast Facts:♦ Physician practices are considered “creditors” under the current definition

set forth by the FTC. A business that provides a service and then bills thepatient and receives compensation for that service later is considered acreditor. Practices that also assist in the securing of financing for a patient(i.e. Using Care Credit) are also considered creditors.

♦ All staff that has contact with a patient must be trained on what the “RedFlags Rule” is and how to detect, prevent, and mitigate red flags.

♦ Physician practices must have a written program on how the practice han-dles training and executing the reduction of identity theft for their patients.

♦ Fines imposed by the FTC start at $2,500. Individual state and civil courtsare also enforcing compliance.

Proposed Implementation Date: June 1, 2010

Medical Society of New Jersey (MSNJ) and Medical Society of New Jersey Insurance Agency (MSNJIA) are providing a 45-minute educational session to staff at physician practices to be educated on the Red Flags Rule and assist in preparing a procedure. The educational session

meets the FTC requirement that staff be trained on the Red Flags Rule and detection.

There is no cost to the practice for this seminar.

CONTACT:Sharon Ruth, Senior Account Executive, MSNJIA

866-963-0698

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In a letter dated December 1, 2009, United Healthcare (Oxford HealthPlan) advised physicians that “beginning January 2010 . . .the reimburse-ment for all services [Oxford Liberty subscribers] received from out-of-network providers will be calculated as a percentage of Medicare insteadof the charge based methodology to which you [the provider] may be accustomed”. The letter goes on to advise that the percentage is generally set at 140 percent of the published rates allowed by Medicare.

MSNJ has had several inquiries from members regardingthe impact of this new policy. In New Jersey, the normalout-of network benefit payments do not generally apply inemergency or urgent care situations where the patient hasno control over whether he or she receives services from anon-contracted physician. Moreover, in cases in which apatient requires a level of care that is not available in-net-work, the patient liability is limited to the amount theywould pay if the service was performed by a participatingphysician. As a result, the insurer will need to pay thenon-participating physician an amount which causes a balance bill NOT to be issued to the patient.

In addition, some regulated benefit plans (e.g. SmallEmployer Health policies) generally provide for a level of out-of-network benefit that is greater than 140% ofMedicare and not tied to Medicare rates.

Therefore the new limitation on reimbursements for out-of-network physician services will probably only be applicable to outpatient care in some cases. In thatinstance the physician is free to exercise their right to collect the balance of the fee from the patient.

We understand that the Oxford letter has caused confusionand concern among many members. We hope this guidancewill clarify the consumer protections in place under statelaw. If you have questions kindly contact the member resourcecenter at 609-896-1766 ext. 299.

Announcement by Oxford Regarding Changes to Out of Network Payments

Lawrence Downs, General Counsel

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Advanced Orthopaedic Center

Bayshore Community Hospital

Community Medical Center

Englewood Hospital & Medical Center

Hackensack University Medical Center

Holy Name Hospital

Jersey City Medical Center

Jersey Shore Medical Center

Kimball Medical Center

Lourdes Medical Center Burlington County

Our Lady of Lourdes Hospital

Overlook Hospital

Raritan Bay Medical Center

Riverview Medical Center

Robert Wood Johnson University Hospital – New Brunswick

Saint Barnabas Medical Center

Saint Mary’s Hospital

Saint Peter’s University Hospital

Somerset Medical Center

South Jersey Healthcare Regional Medical Center

Southern Ocean County Hospital

Underwood Memorial Hospital

Valley Hospital

Virtua Memorial Hospital – Burlington County

Warren Hospital

Healthcare Facility Contributors to the

MSNJ Advocacy Fund 2008/2009

Errata: Capitol Club amendmentIn the Fall 2009 "MSNJ Spotlight": Michael Schoppmann, Esq. was accidentally omitted from the list of 2009

Capitol Club members. We thank Mr. Schoppmann for his contribution to organized medicine.

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Kevin Zraly is one of the world’s foremost experts on wine. He is the founder and teacher of the immensely popularWindows on the World Wine School that has graduated over 19,000 students since its inception. He has been teaching winefor over 30 years, beginning at the age of 20, and has studied wine-making techniques in California and all the great wineregions of Europe.Acclaimed as the creator of the famous wine list at Windows on the World (which sold more wine than any restaurant in theUnited States), he also designed the training program for the most knowledgeable wine-service staff in America.The recipient of the James Beard Award as the Wine and Spirits Professional of the Year and the Food and BeverageAssociation’s Man of the Year Award, Kevin is a member of the Board of Trustees of the Culinary Institute of America andhas been featured in The New York Times, People magazine, The Wall Street Journal, GQ magazine, Newsweek, and USAToday, among others. Kevin has co-hosted the Food Network’s Wine A to Z and his charisma, engagingly breezy style, andlove of wine captivate everyone he teaches.PA What do you like to do when you are not sipping wine? KZ Spend as much time with my children.PA What’s the most exotic (or your favorite) place that your

travels in the wine industry has taken you to? KZ South AfricaPA Do you have a favorite Bruce Springsteen tune? KZ Jersey GirlPA What was your first job? KZ Paper boyPA Who was the one person that had the most impact on how

you carry yourself both personally and professionally?KZ My parentsPA Pork roll or Tomato Pie? KZ Pork rollPA If you could have lunch with anybody who would you

choose? KZ GodPA Favorite NJ Landmark? KZ Long Beach IslandPA This is a magazine geared towards physicians. Can you give

us some of the health benefits to drinking wine, if any? KZ Reservatrol has been proven as an antioxidant. Wine is a

relaxant and a natural product.PA So many wines are now going to screw tops rather than

cork. Are there advantages and disadvantages to each? KZ 90% of all wines made in the world today are made to be

consumed within 1 year. 9% are made to be consumedwithin 5 years. So therefore 99% of all wines could usescrewcaps which have been proven effective over a 5-8year timespan. For wines that will age over 8 years corkshould still be used.

PA Aside from Window on the World: Complete Wine Course (by Kevin Zraly) what book would you recommend?

KZ Wine Bible by Karen MacNeil and Wine for Dummies byMary Ewing Mulligan and Ed McCarthy.

PA Are you musically inclined? If so, what instrument doyou play?

KZ For many years I had a rock n roll band called theWinettes. All of the musicians were involved in the winebusiness. In the band I played guitar, piano, and drumsbut they would only let me sing, “Louie, Louie!” onlybecause I knew the words.

PA Tell us something that no one might know about you? KZ I am recovering from cancer.PA Is there a philosophy or quote that you live by or try to

model your behavior after? If so, please elaborate. KZ There is a quote by Saint Thomas Aquinas. “It is easier

to seek forgiveness than to ask permission.”PA Tell us how someone can get involved in your

Windows on the World Wine School. KZ They can visit the website at www.kevinzraly.com or call

the office at 845-255-1456. The next semester begins onMondays, March 8 – May 3 (skipping March 29).

See Kevin Zraly at MSNJ’s 2ND ANNUAL WINTER FOOD & WINE TASTING

To Benefit The IOMPHNJ, The MSNJ Foundation

sponsored by

Saturday, February 6, 2010TPC Jasna Polana, Princeton, NJ

cocktail hour: 6:00 p.m.dinner: 7:00 p.m.

Tickets: $250 per person

For more information visit www.msnj.org

Kevin Zraly

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Save the date...

Member Event

Saturday, February 6, 2010TPC Jasna Polana, Princeton, NJ

6:00 p.m.Tickets: $250 per personVisit msnj.org to register

Benefits the Institute of Medicine & Public Health

of New Jersey, the MSNJ Foundation

2010 MSNJ Annual MeetingMay 14 – 16, 2010 | Westin Forrestal Village | Princeton, NJ

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P R E L I M I N A R Y P R O G R A MFriday, May 14

8:00 am – 9:00 am Registration and Exhibitors9:00 am – 10:00 am General Session I

Speaker: David Finegold, PhDDean of the School of Management and Labor RelationsRutgers University, the State University of New Jersey

10:00 am – 10:30 am Exhibitors10:30 am – 11:45 am AM Breakout Sessions

Topics may include: ICD-10, Healthcare Reform, Transition from Paper

11:45 am – 1:00 pm Lunch1:00 pm – 2:15 pm PM Breakout Sessions

Topics may include: ICD-10, Healthcare Reform, Transition from Paper

2:15 pm – 2:45 pm Exhibitors2:45 pm – 4:00 pm Special Event – Healthcare Roundtable5:00 pm – 7:00 pm MSNJ Foundation, the Institute of Medicine & Public

Health of New Jersey Board of Directors Meeting (by invi-tation only)

7:00 pm – 11:00 pm “GREETINGS FROM MSNJ”A Jersey Shore Party in PrincetonFood, Drinks, Karaoke, Music, and PrizesMSNJ Member Social Event

Saturday, May 157:30 am – 8:30 am Breakfast Roundtable – Healthcare Reform

and French Toast8:00 am – 9:00 am Exhibitors8:00 am – 1:30 pm MSNJ House of Delegates (Sessions 1 & 2)

Welcome & Opening RemarksBusiness Meeting and Elections Outgoing Presidential AddressJoseph H. Reichman, MD, 217th President (Camden)

Installation Ceremony & Incoming Presidential AddressDonald J. Cinotti, MD, 218th President (Hudson)

12:30 pm – 2:00 pm Lunch & Exhibitors2:00 pm – 3:00 pm Judicial Council Meeting1:00 pm – 4:00 pm MSNJ Foundation, the Institute of Medicine & Public

Health of New Jersey presents Continuing MedicalEducation

1:00 pm – 4:00 pm CAPITOL CLUB RECEPTION7:00 pm – 11:00 pm Inaugural Reception & Dinner Dance honoring

Donald J. Cinotti, MD featuring the music of Escapade

Sunday, May 167:00 am – 9:00 am County Medical Society Breakfast Meetings7:30 am – 11:30 am Registration8:00 am – 9:00 am Breakfast9:00 am – 2:00 pm MSNJ House of Delegates (Session 3)

*Program & Schedule of Events subject to change. Please visit www.msnj.org for more updates

Keynote Speaker: Professor David Finegold

Dean of the School of Management and Labor Relations

Rutgers, the State University of New Jersey

Prof. David Finegold is the Dean of the School of Management andLabor Relations at Rutgers, the StateUniversity of New Jersey, a world-leading source of expertise on thechanging nature of work, buildingeffective organizations and the

changing employment relationship. Prof. Finegold’swork focuses on understanding and comparing education and training systems and how they relatedto economic performance. He is the developer ofthe low-skill equilibrium and high-skill ecosystemframeworks. Since joining Rutgers in Fall 2007,Prof. Finegold has led efforts to build a biosciencecluster in central New Jersey (www.bio-one.org)and to develop a new statewide set of ProfessionalScience Master’s (PSM) degrees to develop leaderswho can integrate science and business for the bioscience industry. Prior to joining Rutgers, Dr.Finegold was a professor at the Keck GraduateInstitute in Claremont, CA, where he was the firstmanagement professor, and created the business andethics curriculum for this pioneering PSM programand at USC’s Marshall School of Business. He is the author of more than 70 journal articles andbook chapters and has written or edited six books,including Are Skills the Answer? (with Colin Crouchand Mario Sako, 1999), Corporate Boards: AddingValue at the Top (with Jay Conger and Ed Lawler)and BioIndustry Ethics (Elsevier Academic Press,2005). He consults and provides executive educationand coaching to public and private sector organiza-tions on issues about skill development, talentmanagement and employee development, corporategovernance, integrating ethics into strategic decision-making, and designing effective organizations. In 2006,he was a special advisor to the British Governmenton an Atlantic Fellowship, working on a nationalskills strategy through the year 2020 for the LeitchReview. (taken from http://best.rutgers.edu/Finegold)

In April 2009, Dean Finegold was inducted into theNew Jersey High-Tech Hall of Fame.

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