may/june 2009 • vol 55 • num 6...of the rac’s initial determination. cms has published a form...
TRANSCRIPT
May/June 2009 • vol 55 • num 6
RAC Appeals: An Overview of the Five Levelspage 7
RAC Internal Monitoring and Auditing:A Critical Step in Your Preparationpage 7
ARMDS
Besler
CBIZ KA Consulting
JH Cohn
Executive Resources, LLC
Fox Rothschild LLP
Healthcare Financial Services
Health Ware Concepts
Health/ROI
IMA Consulting
Medical Account Solutions
McBee Associates, Inc.
Mountainside Hospital
Norris, McLaughin & Marcus, P.A.
Parente Randolph, LLC
William H. Connolly & Assoc.
WithumSmith+Brown
Who’s Who in the Chapter ...............2The President’s View
by Joe Dobosh, MBA ............................3From the Editor
by Elizabeth G. Litten, Esq......................4Focus on Ethics................................25Focus on Finance ............................28Certification Corner.........................36Industry News ..................................36New Members ..................................37Job Bank Summary ........................39Mark Your Calendar ........................39Advertiser Focus..............................48
focus•advertisers•
focus•features•
focus•points•
focus•cover•
RAC Appeals: An Overview of the Five Levelsby Barry Liss, Esq. and Paul W. Kim, Esq. ...................................................................................... 7
RAC Internal Monitoring and Auditing:A Critical Step in Your Preparation
by Bret S. Bissey, MBA, FACHE ....................................................................................................... 7
Hospitals Benefit from Timely Changes to Federal MortgageInsurance Program: Close on financings despitetight credit market
by Alan J. Spidel, Vice President, Lancaster Pollard ......................................................................... 11
Compliance…it’s not just financial anymoreby Thomas Flynn, MBA, FACHE ....................................................................................................... 16
Hospitals May Submit Supplemental Data in Responseto Highmark’s NCPRs for 2004 Cost Reports
by Robert Gricius, CPA and James A. Robertson, Esq. .................................................................... 18
Bill Expands Hospital Reporting Requirements;Prohibits Payment of “Never Events”
by Patricia McManus....................................................................................................................... 20
Mission Impossible Made PossibleRead This Before You Launch Your Billing System Conversion
by Eric Greenberg & Wendy Young .................................................................................................. 22
CFO Spotlightby Themselves ................................................................................................................................ 30
After Madoff: What Should Charities and Their StakeholdersBe Doing in a New World of IRS Transparency?
by Michael J. Kline, Esq. ................................................................................................................ 32
HFMA National Founders Merit Award Program ........................................... 40
A Photo Recap of the 2009 NJ HFMA Annual Golf OutingPhotos by Steve Aaron and Ed Magram, ARC Group Associates ..................................................... 41
Annual Institute Sponsorship Registration Form ..................................... 44
Speed Networking at 2009 Annual Institute ............................................... 45
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Lindsey Colombo and Jim Penderanalyze a putt at our
2009 NJ HFMA Golf Outing.
Photo courtesy of ARC Group Associates;Steve Aaron and Ed Magram,photographers for the event.
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Publications CommitteeJohn Manzi, Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .IMA ConsultingElizabeth G. Litten, Esq., Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fox Rothschild LLPAl Rottkamp,MBA,Vice Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CrothallSteve Aaron . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ARC Group AssociatesLynn Chiantese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .New Jersey Hospital AssociationMark P. Dougherty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Johnson Controls, Inc.Joan Hendler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Remex, Inc.Laura Hess, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NJHFMARhonda Maraziti . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .WithumSmith + BrownWilliam McCann . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Healthfirst NYDavid A. Mills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Deloitte ConsultingHelen Oscislawski, Esq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Fox Rothschild LLPErum Raza, Esq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Fox Rothschild LLPJames A. Robertson, Esq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Kalison McBrideRoger D. Sarao, CHFP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . New Jersey Hospital Association
NJ HFMA Chapter OfficersPresident, Joseph J. Dobosh, Jr., MBA . . . . . . . . . . . . . . . . . . . Children’s Specialized HospitalPresident-Elect, Brian P. Sherin, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . Besler ConsultingSecretary, Mary T. Taylor, MBA, FHFMA . . . . . . . . . . . . . . . . Southern Ocean County HospitalTreasurer, Michael Alwell, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . Atlantic Health Systems
NJ HFMA Board MembersJohn Brault, CHFP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Englewood Hospital & Medical Center
Lindsey S. Colombo, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Raritan Bay Medical Center
Mary M. Cronin, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Besler Consulting
Tracy Davison-DiCanto, CHFP . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Princeton Healthcare System
Lisa R. Hartman,MPH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Princeton Healthcare System
Marilyn A. Koczan, FHFMA,MPA, CPAM . . . . . . . . . . . . . . . . . . . . . . . . .Meridian Health System
Anthony T. Orlando . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Englewood Hospital & Medical Center
Michael A. Richetti, CPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chilton Memorial Medical Center
David J.Wiessel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Ernst & Young, LLP
DanWillis – Junior Board Member . . . . . . . . . . . . . . . . . . . . . . .Children’s Specialized Hospital
Caitlin C. Zulla, CHFP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Med Assets
Sean J. Hopkins – Ex-Officio . . . . . . . . . . . . . . . . . . . . . . . . . .New Jersey Hospital Association
NJ HFMA Advisory CouncilCheryl H. Cohen, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Pantheon Capital
Dorothy Lindstrom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Somerset Medical Center
John Manzi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .IMA Consulting
Richard C. Parker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .CBIZ KA Consulting Services
Who’s Who in the Chapter 2008-2009ChapterWebsite . . . . . . . . . . . . . . . . . . . . . . . .www.hfmanj.org
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The President’s View . . .
This will be my last President’s View article as my term ends as the NJ Chapter Presidentat the end of May. I would like to take this opportunity to mention some of our achieve-ments this past year. From successful education sessions both monthly and quarterly, to therevamping of the Chapter’s website, to an amazing and record setting turnout for ourAnnual Institute in Atlantic City, and despite the current recession, we had anothersuccessful golf outing. None of these achievements could have occurred without the volun-teerism and the talents of our membership.
In June, I will be attending the National ANI, proudly representing the New Jerseychapter accepting numerous awards such as bronze award for excellence in education; thesilver award for certification exams passed; the bronze award for membership growth andretention and hopefully four Yerger awards.
This was the first year National HFMA utilized a Chapter Balanced Scorecard with various measures and assigned points toeach metric. National required each chapter to achieve a minimum of 40 points. I am happy to report that the New Jersey chap-ter achieved 100 points! Again, all due to the efforts of our membership who volunteer their time and talents to achieve aperfect score.
There are so many people I would like to thank for making my year as President enjoyable and rewarding. First to myofficers, Brian Sherin, Mary Taylor and Lisa Hartman, thank you for your guidance and support. To the Directors, for theirquality input at our monthly Board meetings. To all of the committee Chairs and Co-chairs for their tireless efforts in runningtheir respective committees and making a huge contribution to the chapter. To Laura Hess, who took on many tasks andran with them to completion. To the vendors who continually support the events and give of their time and money. To myemployer, Children’s Specialized Hospital and my boss Amy Mansue for allowing me to take on this time-consuming role andresponsibilities as the Chapter President. I am very proud of our achievements as a chapter this past year and hopefully ourmembership is just as proud.
I would like to wish Brian Sherin, who takes over on June 1st as the Chapter’s President continued success. Thank you allagain, it has been an extreme honor and privilege to serve as your Chapter President.
Regards,
Joe Dobosh, MBA
Joe Dobosh
makingconnections
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Dear Readers:
We are at that time again – our HFMA year end (and beginning). Thank youto outgoing Chapter President Joe Dobosh for his sense of humor, his commit-ment, his participation (he even attended the Women’s Leadership Initiativeevent), and his well-written letters. I am very appreciative of financial typeswho can communicate clearly and whose writing requires very little editing!John Manzi, our Board liaison for the past year, may be stepping down in hisofficial liaison capacity, but Al and I will not let him off that easily – our com-mittee meetings simply wouldn’t be the same without him. Laura Hess mightbe willing to see him go, but that’s another story … (I’m only kidding, ofcourse).
Brian Sherin steps up as Chapter President, and I am sure he will build upon the success that Joe and his predeces-sors have had in leading the Chapter, and will take us to the next level. Brian, good luck, and please know that youare surrounded by many smart, fun, dedicated Board members, committee chairs and co-chairs, and members. Thoseof you reading this magazine who are not active Chapter participants, watch out: I know the “Making it Count”theme for the upcoming year means we will be out recruiting and involving you. Your ideas and experiences are need-ed to make the membership in HFMA as meaningful as possible.
If you have time this summer to get a bit more involved in our Chapter, please consider writing an article, checkingout our website (www.hfmanj.org), or joining the publications committee. We usually meet on the first Thursday ofeach month and you can participate by conference call – simply email me and I will be happy to provide you withmore information. I can be reached at [email protected].
Regards and happy summer!
Elizabeth G. LittenEditor
From the Editor . . .
4 Focus
Elizabeth G. Litten
6 Focus
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continued on page 10continued on page 8
RAC Appeals:An Overview ofthe Five Levels
by Barry Liss, Esq. and Paul W. Kim, Esq.
by Bret S. Bissey, MBA, FACHE
I would like to present a thesis that the elements of aModel Compliance Program, as detailed to us on numerousoccasions by the Department of Health and Human Services,Office of Inspector General’s office, does provide to health-care providers an appropriate structure from which to preparefor RAC. As a refresher, the seven elements of a model com-pliance program are as follows:
• Designation of a compliance officer and compliancecommittee;
• Development of compliance policies and procedures,including standards of conduct;
• Development of open lines of communication;• Appropriate training and education;• Internal monitoring and auditing;• Response to Detected Deficiencies• Enforcement of disciplinary actions
I am asked frequently, “which is most important element?”or “do I really need to complete all elements?” My responsesinclude that I don’t think you can say that one element isalways most important and certainly “yes” you need toaddress each element or you are opening your organizationup to increased risk. Having said this, I must comment thata very important element for all of your compliance efforts is
Bret S. Bissey
Barry Liss Paul W. Kim
I. IntroductionAs corporate compliance officers throughout New Jersey
hospitals brace themselves for the so-called RAC-attacks thatmay start this August, their planning must take into accountthe handling of RAC appeals.
According to a recent update on CMS’s 3-year RACdemonstration, approximately one-third of all appealedclaims resulted in a decision in the provider’s favor. However,that statistic, published by CMS, is deceptively difficult tointerpret. For example, the final dispositions of all pendingappeals are not reflected. If providers are more successfulthan the contractors in those pending appeal, the reversal ratewill be even higher.
The amount that will be recoverable under the appealsprocess may be significant. For example, CMS found that7.6% of all claims were overturned on appeal. If the demon-stration is a guide, perhaps 7% – 8% of initially identifiedrepayments can be reversed in the appeals process. On theother hand, based upon changes to the RAC program dis-cussed below, the appeal rate under the permanent programmay be lower when compared to the demonstration program.
In any case, the amount recoverable by the appeal processwill be substantial. Accordingly, understanding the RACappeals structure and delegating responsibilities for filing time-ly, effective appeals is a planning necessity for the RAC team.
RAC InternalMonitoring andAuditing: A CriticalStep in Your Preparation
RAC Appeals continued from page 7
II. The Five LevelsRAC determinations are generally subject to five levels ofappeals1:
First Level of Appeal: RedeterminationRequests for Redetermination must be filed within 120 days
of the RAC’s initial determination. CMS has published a form(CMS-20027) that may be used to file a Request for Redeter-mination. This request is submitted to the local Medicare Ad-ministrative Contractor that made the initial determination, andmust include the beneficiary’s name, the Medicare claim number,the specific service for which the redetermination is requested,the specific date(s) of service and the name and signature of theparty (or the party’s representative.)
Additionally, the appellant should attach any documenta-tion in support of this request.
Second Level of Appeal: ReconsiderationIf a party is dissatisfied with the results of a Request for
Redetermination they may proceed to the next level of appeal,referred to as a “Reconsideration.” This is arguably the singlemost important appeal tribunal for two reasons: First, it isdecided by an independent third party, referred to as aQualified Independent Contractor or “QIC”; and second, itmay be the last opportunity you will have to submit evidence
into the appeal record.Providers must file a Request for Reconsideration with the
appropriate QIC within 180 days of receipt of the results of theRequest for Redetermination. (The QIC is identified in thedocument referred to as the Medicare Redetermination Notice,or “MRN.”) Providers may use CMS Form CMS-20033 forthese Reconsiderations. In any event, the Request for Recon-sideration must include the following information: beneficiaryname, Medicare claim number, the specific service for whichreconsideration is requested, date of service, the name and sig-nature of the party (or representative), and the name of the con-tractor that issued the redetermination decision. The Requestfor Reconsideration should explain why you disagree with thecontractor’s redetermination decision and should include all rel-evant information in support of your argument. Documen-tation that is not submitted with the Request for Reconsider-ation may not be submitted with a subsequent level of appealunless “good cause” can be demonstrated.
According to CMS, QICs will issue their decisions within 60days “in most cases.” The QIC’s decision will include furtherinstructions for subsequent appeals to the Administrative LawJudge, i.e., the next level of appeal. If the QIC cannot completeits decision within 60 days, it will provide instructions for esca-lating to the next level of appeal with the Administrative LawJudge.
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Third Level of Appeal: Administrative Law Judge(“ALJ”) Hearing
Appeals at this level require a minimum amount at stake ofapproximately $120. (This amount increases annually accord-ing to the medical care component of the consumer priceindex.) Requests for an ALJ hearing must be made within 60days of receipt of the outcome of the Request for Reconsidera-tion. ALJ hearings are typically held via video or teleconferenc-ing, although in-person hearings are also an option if the appel-lant can demonstrate good cause. (The Administrative LawJudge determines if the appellant has met the burden of demon-strating good cause.) It is also possible to request the Adminis-trative Law Judge to make a decision “on the papers,” i.e., with-out a hearing of any kind.
The Administrative Law Judge will typically render a deci-sion within 90 days, according to CMS, however, that time-frame may be extended for various reasons (e.g., issues relat-ing to additional discovery, responding to requests for an in-person hearing, etc.). If the Administrative Law Judge fails torender a decision within the applicable time frame, the appel-lant may request that the matter be escalated to the next levelof appeal, i.e., the Medicare Appeals Council or “MAC.”
Fourth Level of Appeal: The Medicare Appeals Council(“MAC”)
If a party elects to appeal the decision of the ALJ, the nextlevel of appeal is the Medicare Appeals Council, or “MAC.”The request to have your appeal decided by the MAC mustbe made within 60 days of receipt of the ALJ’s decision. Thesubmission to the MAC must set forth the basis for theappeal, i.e., the issues involved in the appeal and the reasonswhy the appellant believes the ALJ decision was wronglydecided. According to CMS, the ALJ decision will set forthprocedures for filing the appeal with the MAC. No appear-ance is required for a MAC appeal. Also, it should be notedthat the MAC may review the previous ALJ decision on itsown motion or at the request of CMS.
The timeframe for the MAC to issue its determination is90 days. If that period has expired without the MAC havingmade a determination, the appellant may ask to escalate theappeal to the next level of appeal, i.e., federal district court.
Fifth Level of Appeal: Federal District CourtIf the contested amount is approximately $1,180 or more,
the matter may proceed to federal district court. (The amountin controversy increases annually with the medical care com-ponent of the consumer price index.) Appeals to the federaldistrict court must be filed within 60 days of the MAC’s deci-sion. Further instructions regarding procedures for filing willbe provided by the MAC in its decisions.
III. What to Expect Under the Permanent ProgramMuch of what we know about the appeals process is based
upon CMS’s written evaluation of the 3-year RAC Demon-
stration program, published in January of this year. However,it remains to be seen if appeals data from the Demonstrationwill be accurate predictors of the appeals process under thepermanent program.
Based upon provider input, CMS incorporated severalchanges to the permanent RAC program which are intendedto increase the transparency and validity of RAC requests. Tothe extent the RAC audits are more carefully developed, theinitial RAC determinations requests may result in fewerappeals and may lead to a lower success rate for appellants.For example, unlike the RAC demonstration program:
1. RACs must return contingency fees if their determina-tions are reversed on appeal;
2. RACs must have: (A) physician medical directors whomust be available, upon request, to discuss denials withprovider; and (B) certified coders. Additionally, the cre-dentials of RAC reviewers must be available upon request;
3. RACs must publicly report problem areas that are sub-ject to audits and RAC denials will be independentlyaudited for accuracy; and
4. Requests for records and overpayment letters will bestandardized and must include the reason for the review/overpayment.
Accordingly, based upon CMS’s reaction to provider inputarising from the RAC demonstration, it is possible that RACswill be reigned in to some extent, compared to how they oper-ated during the demonstration. This may result in a lower rateof appeals and of those filed, a lower success rate, comparedto the demonstration period.
Whether the “appeals percentage rate” will be higher orlower than the rate observed during the demonstration, how-ever, does not diminish the need to understand the appealsprocess and to have in place the appropriate mix of individu-als needed to prosecute them.
UPCOMING CONFERENCE:MARK YOUR CALENDAR FOR THE JUNE 30TH CON-FERENCE SPONSORED BY THE NEW JERSEY HOSPI-TAL ASSOCIATION: “KEY STEPS FOR RAC READI-NESS” WHERE THIS TOPIC AND OTHER TOPICSRELATING TO RAC AUDITS WILL BE DISCUSSED.REGISTER ON-LINE VIA THE NJHA WEBSITE.
About the AuthorsBarry Liss is a Principal of Kalison, McBride, Jackson & Hetzel,P.C., a 16-attorney boutique health care law firm located inWarren,New Jersey, representing health care providers throughout New Jersey,and specializing in reimbursement issues for the hospital industry.
Paul W. Kim is a Principal in the Health Law Practice Group ofOBER KALER, a national law firm located in Baltimore, Mary-land, representing health care providers, manufacturers, and re-searchers and advising clients in all aspects of health law, from cor-porate compliance counseling to reimbursement litigation.
1 Determinations made at the fifth level of appeal, i.e., federal district court, are subjectto applicable appellate review of that court’s decision within the federal court system.
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always your ability to do accomplish effective internal moni-toring and auditing.
Auditing/Monitoring and RACFor those of us assigned to manage or prepare our organi-
zations for RAC, one of things that keep us up at night is ask-ing the question, “how much risk do we have with RAC?”Similar to all risk areas, the way to answer the question withclarity and a sense of validation is to perform an assessment.This does not just apply to healthcare, but many other areasof life as well. Has anyone added a teenage driver to theirinsurance policy lately? Your coverage rates increase signifi-cantly because the insurance company knows (statistically,based upon data) that there is an increased likelihood of atraffic accident occurring with this driver on your policy. Inorder for the insurance company to make that determinationregarding how much risk that young driver presents, theyneed to perform an assessment of their historical claims data.
Back to healthcare and RACs – one of the methods thathealthcare systems are adopting to assess their RAC risk is toperform reviews. When performing reviews, there are a num-ber of different factors to consider (sample size, focus, who isthe reviewer, time period, etc). However, I would suggest that,before those items are addressed in your organization, you needto answer a very important question: “What are you going to dowith your review results?” Many organizations understand that,via their contract with Medicare (called the “Conditions ofParticipation”) and their Compliance Program framework,that, if they find (have knowledge of ) a billing inconsistency orclaims that don’t comply with the Medicare rules, they mustrepay the owed monies and put a process in place to assure cor-rect claims are being submitted in the future. Understandingthis requirement, some organizations and many in the legalprofession routinely advise that, when performing reviews, thefindings of which may potentially present a financial risk to theorganization, that the practice of engaging the review throughan attorney who represents the organization be considered.This is called “Attorney-Client Privilege.” When performingRAC or other reviews, we are routinely asked our opinion ofthis concept, we consistently respond that this is a matter youshould discuss with your Counsel.
There are several considerations to think about in regardsto initiating a RAC review. What is the focus of your review?Do you have the internal expertise to decide that focus? Willyou use the findings of the RAC Demonstration Project todirect that focus on cases to validate medical necessity andproper coding? There are many alternatives to discuss. Oneconsideration is to review available data mining tools to try
and identify your cases which may also be identified by theRAC when they visit your town.
You will need to determine how many accounts to review,whether this number is representative of your billing universe orjust a random sample. These are questions which need to bedecided and reviewed to ensure that you are making the properdecisions. There is no perfect answer for every provider. Myexperience is that these decisions always are unique to each dif-ferent facility. However, the key point is that these questionsneed to be asked so that your institution is proceeding on theproper path in developing your RAC review plan.
One thing that is not unique to each facility is that you mustbe confident that your reviews are being performed by individu-als that are “independent.” Many hospitals have developed inter-nal audit departments that are able to perform reviews that aredefined and structured as being independent. In addition, youmust be confident that your internal audit team has the appro-priate skill set to perform the varied RAC related reviews. Forthose facilities that do not have the resources to perform thereviews internally, consideration should be given to sub-contract-ing this function or a portion of this function. When selecting avendor, you want to make sure you are engaging a firm that hasRAC experience and the skill set of certified clinical reviewerswho will provide the service and skill set you need. You will wantto make sure your review results can be matched with confidenceagainst the RAC just in case any review findings differ.
Hopefully, this information can assist you to serve as astarting or refresher point for the goals of your RAC prepara-tion efforts.
About the AuthorBret is a nationally recognized expert in healthcare compliance. Heis the author of the Compliance Officer’s Handbook, published in2006, and has presented at 50+ regional and national industryconferences/meetings on numerous compliance topics. He has over25 years of diversified health care management, operations andcompliance experience. He has presented compliance-focused educa-tion sessions to numerous audiences in the last 10 years.
During Bret’s nine year tenure as the Chief Compliance andPrivacy Officer at Deborah Heart and Lung Center, he oversawthe institution’s successful adherence to the defined requirementsof a three-year (1999–2001) Corporate Integrity Agreementwith the Department of Health and Human Services/Office ofInspector General, which resulted from the nation’s first volun-tary disclosure settlement in October, 1998. He also led the hos-pitals’ initiative on OIG Advisory Opinion No. 01-07 whichanalyzed Deborah’s “Insurance Only Billing Policy.”
Bret can be reached at [email protected].
RAC Internal Monitoringcontinued from page 7
May/June 2 0 0 9
Focus 11
Hospitals Benefit from TimelyChanges to Federal MortgageInsurance Program:Close on financings despite tightcredit market
by Alan J. Spidel, Vice President, Lancaster Pollard
Hospitals that need to borrow money in today’s tight cred-it market are finding the financing solution they need in a 40-year-old federal program - one that has been seeking toincrease awareness at the same time access to other financingoptions is decreasing.
The Federal Housing Administration’s Section 242hospital mortgage insurance pro-gram works in much the same wayas homeowner mortgage insurance:if the hospital defaults, the investorwill still be paid because the gov-ernment has backed the loan. Withthe full support of the government,the hospital borrower appears lessrisky, and will be able to attractinvestors at a lower interest rate. Inthe past 6 months of tight credit,several hospitals have closed onfinancing transactions under thisprogram, and many more haveapplied. Because the program isself-sustaining, the pool of funds isunlimited and not subject to a dol-lar cap like other federal programs.
The FHA is working to improve program awareness andefficiency. The addition of former hospital leadership to FHAstaff, the streamlining of the application and improvement inprocessing times, and a national marketing campaign toincrease program use coincide with a credit crunch that couldhave more hospitals of all sizes turning to the Section 242financing option.
One example is Gooding County Memorial Hospital inIdaho. It had an outdated layout, a flat roof and limited spacefor necessary service lines. Renovating the landlocked 1969
facility would have been more expensive than replacing it.Lancaster Pollard determined that the interest rate environ-ment at the time would have made using unenhanced bondsprohibitively expensive, so the firm evaluated multiple creditenhancement strategies at once, including bank letters ofcredit, USDA loans and other options.
Gooding and Lancaster Pollardselected FHA Section 242 hospitalmortgage insurance to enhance$27.6 million in taxable notes.Using taxable notes reduced thehospital’s up-front cash require-ments, and the notes also pricedmore favorably than tax-exemptbonds at the time. The financingclosed in March, and the new hos-pital will be called North CanyonMedical Center.
How It WorksThe FHA Section 242 program
generally is available to fund newfacilities, acquisitions or substantial
renovation. Hospitals may refinance debt through the pro-gram as long as at least 20 percent of the insured funding paysfor new projects, though removing this requirement has beensuggested as a way to make refinancing affordable to morehospitals.
The program offers the opportunity to issue taxable or tax-exempt bonds at an AAA-equivalent rating, and interest ratesare fixed. The relatively long amortization of 25 years giveshospitals better opportunities to service their debt, and a highloan-to value ratio can minimize up-front cash requirements.
Alan J. Spidel
continued on page 13
Former hospital CEOs and CFOs
now evaluate loan applications.
Their background knowledge
allows them to jump directly
to issues that matter to the
application, rather than
spending time learning
about health care in general.
12 Focus
May/June 2 0 0 9
Focus 13
In Gooding County Memorial Hospital’s case, the high ratingand low interest rate equated to a savings of $9 million ininterest over the life of the loan compared to unenhanceddebt.
There is no limit to the amount of debt the Section 242program will insure. It allows hospitals to borrow up to 90percent of the project’s value. Project value calculations caninclude existing assets in addition to the actual project costsof new financing or construction so, if the entire project costis 90 percent or less of the project value, the 242 program canactually fund the entire project cost.
FHA-insured obligations are non-recourse to the borrower,which means parent organizations or systems are not liablefor the debt of an individual facility. Subject to attainment ofcertain debt-service coverage and liquidity levels, hospitalsutilizing the program may transfer excess cash flow to parenthealth systems or hospitals.
Program EligibilitySection 242 mortgage insurance has insured nearly 370
mortgages worth over $14 billion since 1968, with an averageof five hospitals insured each year from 1995 to 2006. Projectloans as high as $777 million have been insured; programapplicants have included both a hospital with $265 million incash and a high 224 days cash on hand ratio, as well as sever-al critical access hospitals.
Applicants must:• Principally be an acute care hospital that derives less
than 50 percent of its revenues from chronic convales-cence, drug and alcohol treatment, epileptic treatment,nervous and mental deficiency and tuberculosis treatment.
• Have positive average operating margins.
• Have an average debt-service coverage ratio equal to orgreater than 1.25 for the previous three years.
Critical Access Hospitals are entitled to special underwrit-ing provisions that increase their chances of qualifying for theprogram. The 50 percent rule does not apply to them, andFHA streamlines the application process to speed up consid-eration. They still, however, must meet the operating marginand debt service coverage requirements. Hospitals that onlyrecently received their Critical Access designations are allowedunder the program to calculate their historical pro forma debtservice coverage ratio as if they had been receiving full cost-based Medicare reimbursement for the last three years.
What’s New with 242To increase awareness of the Section 242 program, FHA is
focusing on attracting and educating new lenders (who mustbe FHA-approved to offer the program), working with statehospital associations to explain the program, exhibiting athospital conferences, and advertising in health care maga-zines.
The program has benefited from several changes:It is shaking off its reputation for being a slow and cum-
bersome financial option, processing five of nine 2007 loanswithin its goal of 120 days, down from an average of 265 daysin 2005.
continued from page 11
continued on page 14
Costs & ConsiderationsIssuing debt through the FHA 242 mortgage insur-
ance program can save hospitals a considerable amountof money, but initial costs and the time necessary toapply for the program should be taken into considera-tion as part of the funding option analysis.
Fixed closing costs include:• 0.30% FHA application fee• 0.50% FHA inspection fee
Fixed transaction costs include:• Davis-Bacon construction wages apply
Variable closing costs include:• 2.00% to 5.50% for financing expenses (includ-
ing mortgage bankers, investment bankers, attor-neys and rating agencies), determined by thefinal transaction amount $50,000 to $125,000for an examined financial forecast by a qualifiedaccounting firm Annual expenses (based on out-standing principal amount):
• 0.50% annual FHA mortgage insurance premium
The hospital must grant the 242 program lender afirst mortgage on the entire hospital, including all realestate and improvements. (Exceptions may includeleased equipment, off-site property, capital associatedwith affiliations, city and/or county owned facilities,etc.)
May/June 2 0 0 9
14 Focus
Former hospital CEOs and CFOs now evaluate loan appli-cations. Their background knowledge allows them to jumpdirectly to issues that matter to the application, rather thanspending time learning about health care in general.
As recently as 2000, 89 percent of the program’s outstand-ing mortgage balances were in New York state. While 55 per-cent of the portfolio is still in New York, the program hasexpanded and insured mortgages in 42 states.
FHA has increased program eligibility. It amended its poli-cies to allow hospitals in non-Certificate of Need states toqualify, because most states have repealed the CON require-ments that were in place when Section 242 was written.
In June, HFMA’s Annual National Institute will include aspecial breakout panel called “Creative Capital Access” thatwill explain the 242 program’s inner workings, recentchanges, and client experiences. The session will be held on
Wednesday, June 17, by Tom Green, chiefexecutive officer of financial services firmLancaster Pollard, William J. Lammers ofHUD’s Office of Insured Health CareFacilities, and Rod Owens, partner with lawfirm Krooth & Altman.
Final ConsiderationsKey to a successful financing are the
application’s completeness, which is drivenby the mortgage banker, and the willingnessof the borrower to provide timely responsesto FHA questions. The process can bedelayed if FHA must request additionalinformation following a pre-applicationmeeting. As all of the information from thepre-application goes toward the full applica-tion, there is no duplication of effort on thepart of the hospital, and no reason not toprovide as much information as possible atthat early stage.
The 242 mortgage insurance program isonly one of the options in a toolbox offinancing strategies hospitals should evalu-ate, but given the current markets andrecent program evolution, it is one that maybe called upon more frequently.
About the AuthorAlan J. Spidel is a member of the Coloradochapter of HFMA and a vice president withLancaster Pollard, a leading provider of debtfinancing and investment advisory services tohospitals nationwide. He can be reached [email protected].
For additional information on the FHA 242program and to discuss additional financingoptions, please contact Lancaster Pollard VicePresident Ken Gould at (614) 224-8800 [email protected].
continued from page 13
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May/June 2 0 0 9
16 Focus
Healthcare corporate compliance is on a journey frombeing the responsibility of small departments to establishingcompliance as an organizational approach for how care is pro-vided – and that journey is almost complete. Simultaneously,regulatory oversight and enforcement are becoming bettercoordinated and more sophisticated, adding an organization-al imperative to “get it right” the first time.
The New Jersey Healthcare Financial Management Associa-tion (NJHFMA) Quarterly Meeting, presented jointly by theCompliance, Audit, Risk and Ethics (C.A.R.E.) Forum and theNew Jersey Health Information Management Association(NJHIMA) reflected these transitions. The full-day educationalevent, presented on March 10th at the Woodbridge Hilton, alsomarked a number of “firsts” in doing so.
Thomas Flynn, chairperson of the C.A.R.E. Forum, wel-comed the over 250 attendees (a record for this event) and setthe tone for the day introducing the keynote speaker, andnewly confirmed “first” Medicaid Inspector General (MIG)for the state of New Jersey, Mark Anderson.
In his presentation, Mr. Anderson went into detail regard-ing the New Jersey law that established his office, his role as theNew Jersey Medicaid Inspector General and the approach hewould be taking to achieve compliance. In his background henoted that he had been an Assistant United States Attorney inPhiladelphia, prosecuting cases with James Sheehan, the cur-rent New York MIG. He cited the New York statute establish-ing the Office of the Medicaid Inspector General (OMIG) asthe impetus behind the New Jersey law; however he was quickto point out that the New Jersey mandate did not afford himthe almost 500 FTE dedicated to the New York program, so hewould be taking a slightly different approach. He also notedthat it was unlikely that he would equal Mr. Sheehan’s over$500 million in recoveries in his first full year as MIG.
The New Jersey statute charges the OMIG with the detec-tion, prevention and investigation of fraud and abuse, and therecovery of improperly expended Medicaid funds throughaudit and quality review. While the statutory definitions offraud and abuse are fairly broad, New Jersey providers will berelieved to know that, while his enforcement goals are clear, hisapproach will focus on communication, education and cooper-ation. This was evidenced by the fact that Mr. Anderson gave
his phone number and emailaddress to all the conferenceattendees as part of his closingstatements.
The remainder of the morn-ing’s presenters focused on Health Information Management(HIM) issues having a huge impact on compliance, qualityand reimbursement. Kathleen Frawley, Chair of Health Infor-mation Technology at DeVry University discussed manage-ment of a hybrid medical record. JoAnn Ferrara, Directorof H.I.M at Raritan Bay Medical Center and Cathy Egan,Manager of Clinical Documentation Improvement andInpatient Coding at Bayshore Community Hospital, relatedtheir experiences with clinical documentation improvementprograms.
Ms. Frawley began this segment by describing the currentstatus of the hybrid medical record. Most providers managea system where part of the record is paper and part is electron-ic, presenting challenges for delivering safe care, access forcoding and billing and recovering a complete record for legaland regulatory purposes. To assure a smooth transition to acompletely electronic record, providers must begin by defin-ing their legal record and source system for each part of therecord. As their systems transition to a completely electronicrecord they must validate the integrity of each element. Theelectronic environment also raises questions regarding what toconsider as part of your record, and whether to includeimages, audio files and other retained electronic information.Ms. Frawley closed by discussing changes in the law related toelectronic discovery and what providers may be required toprovide in response to a subpoena or court order.
Ms. Ferrara and Ms. Egan set the stage for clinical docu-ment improvement with a comprehensive discussion of doc-umentation and coding rules and the impact on reimburse-ment. They stated that financial stability, quality initiatives,pay for performance, compliance and defense of reputationsupport the rationale for documentation improvement pro-grams. Ms. Ferrara went on to describe how to form the nec-essary teams, gain the physician buy-in necessary to establisha successful program and to implement the tools needed tomaintain success.
by Thomas Flynn, MBA, FACHE
Compliance…it’s not justfinancial anymore.
Thomas Flynn
May/June 2 0 0 9
Focus 17
New to the March Quarterly was a recovery audit contrac-tor (RAC) exposition presented during lunch and the breaks.The exposition was sponsored by 3M Health InformationSystems, Besler Consulting, CBIZ KA Consulting, IMAConsulting, Wolters Kluwer/MediRegs and the New JerseyHospital Association (“NJHA”). Our industry partners pre-sented both consulting and technology solutions to managethe imminent RAC audits.
The afternoon began with a hot topics discussion of cur-rent compliance and audit issues. Moderated by LisaHartman, Director, Compliance and Audit for the PrincetonHealthcare System, the panel was composed of Bret Bissey,Director, IMA Consulting, Kelly Sauders, Partner, Deloitte &Touche, Peter Hughes, Director, Corporate Compliance atMeridian Health and Darlene Mitchell, Director, InternalAudit and Corporate Compliance at Hunterdon Health. Thepresentation opened with a discussion of OIG enforcementhighlights taken from recent news headlines followed by aQ&A of how this is impacting New Jersey hospitals. This wasfollowed by discussion of recent changes related to conflicts ofinterest, citing that with increased public scrutiny, providersmust reassess how they manage conflict disclosures related toboth research and governance. In closing, the panel touchedbriefly on issues related to hospital and physician relation-ships and strategies to manage compliance.
The next presentation brought a completely new topic tothe March Quarterly. Denise Chicchela, Director – Construc-tion Audit from Control Systems International presented onthe role of compliance and internal audit in constructionproject management. Ms. Chicchela discussed the currentchanges in the construction industry, including the impact ofthe economic crisis, green building standards and new con-struction methodologies. She outlined the key risk areas inconstruction projects, critical success factors for constructionmanagement, common areas of fraud and abuse and de-scribed how to conduct a construction audit.
Then next presentation focused on how recovery auditcontractor (“RAC”) preparation has been a high priority forNew Jersey providers. While providers don’t know exactlywhat the initial RAC focus will be, a solid process to handleRAC requests will be a key to minimizing the financialimpact. Jeanne Haas, Director, Patient Financial Services atSt. Peter’s University Hospital and Tim Keogh, VicePresident, Information Services at NJHA, presented lessonslearned from the New York demonstration project and sug-
gested implementation strategies for New Jersey. From herown experiences, Ms. Haas related strategies that worked, list-ing the required members of the RAC response team with anemphasis on having a single point of contact within theorganization as a critical success factor.
The concluding educational topic for the afternoon delin-eated the new paradigm for a clean claim, presented by a teamfrom Besler Consulting. Christine Cox, Manager, Codingand Chargemaster, Jua’nese Williams, Manager, Coding andChargemaster and Mary Devine, Senior Manager, RevenueCycle discussed the increasing sophistication payers areusing to evaluate claims, beginning with data mining toidentify claims that may not meet payer requirements. Payerfocus is expanding from the use of edits for claims manage-ment to more complex reviews to validate medical necessity.The Besler team outlined what providers need to put inplace to assure that medical necessity is established and docu-mented and that clean claims are submitted. Concluding thissegment were key strategies for denial and appeals manage-ment.
Before the conference attendees moved on to networkingand cocktails, John Dalton, Senior Advisor at Besler Consult-ing and Cheryl Cohen, Vice President at Pantheon Capitolprovided a fascinating look at Russia and the Russian healthcare system. Ms. Cohen and Mr. Dalton visited Russia duringa ten day trip sponsored by People to People. The 39 persondelegation was led by Joyce Zimowski, Senior Vice Presidentat Unity Health System, Rochester, NY and Dr. Joe Abel,Director of Professional Development at HFMA National. Inmeeting with Russian leaders, they were able to compare andcontrast the Russian and U.S. healthcare systems. Their pho-tographic journey provided insight into the Russian health-care system, showing how healthcare is provided to the major-ity of the Russian people as well as concierge medicine andsophisticated specialties available only to the Russian elite.John and Cheryl ended the program day with a hearty vodkatoast - Za Vashezdarov’ya! To Your Health!
About the AuthorThomas Flynn, MBA, FACHE is Administrator, ChiefCompliance Officer at Hackensack University Medical Centerand Chairperson of the NJHFMA C.A.R.E Forum. Tom can bereached at [email protected].
May/June 2 0 0 9
18 Focus
In April 2009 a large number of hospitals in New Jerseyreceived Notices of Corrected Program Reimbursement(“NCPRs”) from HighMark Medicare Services (“Highmark”)seeking repayment of millions of dollars in alleged FederalDSH overpayments for 2004. The NCPRs follow an effortby the New Jersey hospital industry to convince CMS to holdNew Jersey hospitals “harmless” for the overpayments. Todate, this effort has not borne fruit.
Many hospitals have raised the question of what, if any,strategies, short of full-blown litigation, can be pursued torespond to the NCPR. Of course, hospitals may request aformal reopening of its 2004 cost report. However, theNCPRs indicate that the amountassessed as an overpayment isdue, and interest would beassessed on this amount if repay-ment was not received within 30days of the date of the NCPR.Therefore, hospitals are seekingto more rapidly respond to theNCPR.
To add insult to injury,Highmark has suggested that itwill be issuing NPRs for 2005and 2006 very shortly, as well asformal requests to hospitals man-dating the detail Federal DSHlogs required by Highmark tosupport the DSH reimbursement already received byproviders but for which there has not yet been any NPRissued or level of audit review.
There is one silver lining in this otherwise dreary develop-ment. Highmark has communicated to hospitals that it will
accept two different sets of sup-plemental data to accrete tothe New Jersey Medicaid 2004baseline used by Highmark togenerate the amounts owed onthe NCPR. One set will com-prise the “Out-of-State” TitleXIX Days that, by definition,were excluded from Highmark’scalculation. The second is a setof additional Title XIX covereddays from the New Jersey
Medicaid eligibility database thatwere inadvertently excludedfrom the baseline. If adequatelyanalyzed, these supplementaldata should result in a positive(i.e., reduced) adjustment of theoverpayment amounts High-mark demands in the NCPR.
One of three options are avail-able to hospitals to effectively andefficiently identify and documentadditional New Jersey Medicaiddays. A hospital may elect tobecome a direct MEVS NetworkSwitch Vendor itself by meeting
the hardware, telecommunications, and software testing re-quirements set by UNISYS and Riverbend (Highmark’s prede-cessor). Another option is for the hospital to contract with athird-party vendor that already has this direct functionality andelectronic infrastructure in place. Finally, a hospital may con-
Hospitals May SubmitSupplemental Data inResponse To Highmark’sNCPRs for 2004Cost Reports
by Robert Gricius, CPA and James A. Robertson, Esq.
Robert Gricius
James A. Robertson
There is one silver lining in thisotherwise dreary development.Highmark has communicatedto hospitals that it will accept
two different sets of supplemental datato accrete to the New Jersey Medicaid2004 baseline used by Highmark
to generate the amountsowed on the NCPR
tract with a third-party vendor who can subcontract out theTitle XIX eligibility query component of the DSH reimburse-ment calculation to perform the balance of testing, validationand verification.
Hospitals should be aware that once they position them-selves to receive New Jersey Medicaid eligibility data, the datawill include aid category, program codes, duration of eligibili-ty and numerous other meaningful data elements. Hospitalswill need to map these elements to the database structure that,when programmatically configured, will generate the addition-al number of matched New Jersey Medicaid members receiv-ing the covered inpatient services for the period under review.
For Out-of-State Medicaid days, a generally similar, pro-grammatic, communications, hardware and software infra-structure must be established for each separate State in whichthe hospital participates as a Medicaid provider, or in whichthe hospital’s vendor is an approved claims clearinghouse.
Finally, once the total additional Medicaid days has beendetermined, the hospital must either manually, or in an auto-mated fashion, determine the Medicare Part A coverage for allor a portion of each stay so that this filter is properly applied in
the determination of countable days in the numerator of theMedicaid DSH fraction.
Once an appropriate sub-system has been established, anda deliverable prepared, the hospital will be well positioned tosubmit these supplemental data for 2004. The hospital willalso be capable of complying with the mandated DSH Dayslogs for 2005 and 2006 to support the Federal DSH moniesalready received for those years.
About the AuthorsRobert Gricius is the President and Founder of DSH MGMTSolutions, a 20+ person, DSH/340B focused firm with engage-ments in 16 States, including New Jersey, Pennsylvania and NewYork and a claims clearinghouse in more than 25 States andMedicare.
James Robertson is the Managing Partner of Kalison, McBride,Jackson & Hetzel, P.C., a 16-attorney boutique health care lawfirm located in Warren, New Jersey, representing health careproviders throughout New Jersey, and specializing in reimburse-ment issues for the hospital industry.
May/June 2 0 0 9
Focus 19
May/June 2 0 0 9
20 Focus
A bill moving through the New Jersey legislature willrequire the New Jersey Department of Health and SeniorServices (the “Department”) to include in the annual NewJersey Hospital Performance Report hospital-specific data per-taining to certain patient safety indicators and will prohibithospitals from seeking payment for costs associated with cer-tain hospital-acquired conditions. Hospitals are currently re-quired to report certain patient safety data to the Departmentpursuant to the Patient Safety Act, N.J.S.A. §§ 26:2H-12.23-12.25. Under the current system, the Department then pub-lishes the number of statewide preventable errors.
The new bill, S2471/A3633, goes a step further by requiringthe Department to include institution-specific information in itsannual performance report. If the bill becomes law, consumerswill have access to the rates at which specific New Jersey hospi-tals report the following so-called “patient safety indicators”:
(1) Foreign Body Left During Procedure (PSI 5);
(2) Iatrogenic Pneumothorax (PSI 6);
(3) Postoperative Hip Fracture (PSI 8);
(4) Postoperative Hemorrhage or Hematoma (PSI 9);
(5) Postoperative Pulmonary Embolism or Deep VeinThrombosis (PSI 12);
(6) Postoperative Sepsis (PSI 13);
(7) Postoperative Wound Dehiscence (PSI 14);
(8) Accidental Puncture or Laceration (PSI 15);
(9) Transfusion Reaction (PSI 16);
(10) Birth Trauma – Injury to Neonate (PSI 17);
(11) Obstetric Trauma – Vaginal Delivery with Instrument(PSI 18);
(12) Obstetric Trauma – Vaginal Delivery withoutInstrument (PSI 19);
(13) Air embolism; and
(14) Surgery on the wrong side, wrong body part, orwrong person, or wrong surgery performed on apatient.
With the exception of air embolism and wrong-side sur-gery, the list of indicators was developed by the Agency forHealthcare Research and Quality, and is intended to reflectcommon and generally preventable hospital-acquired condi-tions. Air embolism and wrong-side surgery are events thatoccur while a patient is in the hospital, and for which theCenters for Medicare and Medicaid Services (“CMS”) doesnot provide reimbursement.
The bill also permits the Commissioner of Health andSenior Services (the “Commissioner”), in consultation withthe Department’s Quality Improvement Advisory Committee(the “Committee”), to include additional patient safety indi-cators in the annual report by regulation. The bill providesthat the Commissioner shall consider indicators that are:(1) recommended by the federal Agency for Health Researchand Quality or CMS; (2) are suitable for comparative report-ing and public accountability, and are risk adjusted; (3) havea strong evidence base with no substantial evidence againsttheir use for comparative reporting; and (4) can be measuredthrough data that are available through hospital procedureand diagnosis codes. The bill also provides that the Commis-sioner shall request that the Committee study and make rec-ommendations to expand public reporting by the Depart-ment of other common conditions such as patient pressureulcers, patient infections due to hospital care, and patient fallsin hospitals.
While many stakeholders and legislators have expressedgeneral agreement on this portion of the bill, some have raisedconcerns that hospitals handling complex cases will have
by Patricia McManus
Bill Expands HospitalReporting Requirements;Prohibits Payment of“Never Events”
Patricia McManus
May/June 2 0 0 9
Focus 21
skewed data, and that some events are simply not preventableand are not a reflection of any deficiency or error on the partof the hospital.
The second and considerably more complex portion of thebill, would prohibit a hospital from requesting payment forcosts associated with a hospital-acquired condition. Underprior versions of the bill, a physician who “acknowledge[d]responsibility” for a condition for which the hospital couldnot seek reimbursement was similarly prohibited from seek-ing any payment. A proposed Assembly Committee Sub-stitute issued on May 7, 2009, however, omitted the prohibi-tion applicable to physicians. Moreover, where prior versionsof the bill stated only that theconditions for which a hospitalcould not bill were those subjectto the hospital-acquired condi-tion payment policy for theMedicare program establishedby CMS (also known as “neverevents”), the substitute spellsout the specific conditions,which include transfusion reac-tion, air embolism, foreignbody left during the procedure,surgery on the wrong side,wrong body part, or wrong per-son, or wrong surgery per-formed on a patient. Notwithstanding the no-bill mandate,the substitute instructs hospitals to file claim informationthat accurately reflects all services provided and states thatnothing in this subsection of the bill should be construed toprohibit a hospital from seeking payment for services forwhich it is otherwise permitted to seek payment. Addi-tionally, this portion of the bill imposes a patient notificationrequirement and clarifies that nothing in the bill is intendedto deny any party access to any existing payment appealsprocess.
Early Senate Committee amendments to the original billaddressed concerns about legal liability and implementationof the so-called “no bill” mandate. Among other things, theSenate Committee amendments clarified that the bill doesnot modify the requirement for expert testimony in civilactions. The Senate Committee amendments also imposed arequirement that the Commissioners of the Department, the
Department of Banking and Insurance, and the Directorof the Division of Consumer Affairs collaborate in developingstandards for providers and third-party payers to implementthe no bill provisions. Under the Assembly CommitteeSubstitute, only the Commissioners of the Department ofHealth and Senior Services and the Department of Bankingand Insurance are required to collaborate to develop thosestandards.
Most objections to the no bill provisions are based uponthe administrative complexities involved in its implementa-tion. While few stakeholders disagree in principle that hospi-tals should not be enriched for making egregious mistakes or
preventable errors, many arguethat it is simply not administra-tively feasible to implement theno bill policy. Among otherthings, opponents cite concernsabout expanding the non-pay-ment provisions across third-party payers. Opponents arguethat implementing a no bill pol-icy across third-party payers isnot only administratively com-plex, but also creates a bias infavor of payers, who will havemore of an incentive to delay orrefuse payment. In response,
advocates of the no bill provisions point out that other stateshave implemented similar laws and can be used as models forimplementation in New Jersey.
The Assembly Committee Substitute will go before theSenate for a vote on the changes. If the changes are approved,the bill will be sent to the Governor for approval or otheraction.
About the AuthorPatricia McManus is an associate in the Corporate Departmentat Fox Rothschild LLP. She can be reached at [email protected].
With the exception of air embolismand wrong-side surgery, the list ofindicators was developed by the
Agency for Healthcare Research andQuality, and is intended to reflectcommon and generally preventable
hospital-acquired conditions.
May/June 2 0 0 9
22 Focus
by Eric Greenberg and Wendy Young
Mission Impossible...Made PossibleRead This Before You LaunchYour Billing System Conversion
Editor’s note: This article mentions several toolswhich have been developed to assist you in planningyour system conversion. Due to space constraints wehave only been able to publish two here. The rest ofthe tools mentioned, including a revenue cycle readi-ness score card, can be viewed on the ARC web site:www.arcgroup.net.
Hospital financial executives are asked to do the impossi-ble every day. Ongoing economic pressures of declining vol-umes, reduced business margins and tightened credit marketsintensify the challenge. For hospitals currently undertaking asystem conversion, there is the added strain of an average 10to 12 month spike in accounts receivable. Executives are tak-ing on a nearly impossible mission.
Like Agent Phelps in the 1960's television series MissionImpossible or Tom Cruise's Agent Hunt in the 1996 film, yourrole as a hospital executive during a system conversion canseem like the next installment of Mission Impossible. Your mis-sion: convert your system without further affecting the orga-nization's financial position. Your challenge is filled with ten-sion; you can feel the pressure building. In the background,you can hear the clock ticking.
There is help at hand. Take a few minutes and review withus some of the lessons learned in working with hospitals goingthrough these challenges. We will provide you with tips andtools learned over the years from dozens of conversions tohelp avoid some of the tight spots we have seen hospitals getinto during this challenging time period.
Aspects of the original Mission Impossible that we can learnfrom include:
• Understanding the Challenge in total;• Managing and Organizing Your Team;• Handling and Planning for the Unexpected;• Achieving the Impossible; and• Concluding the Mission.
Understanding Your Challenge in TotalYou have become the agent in charge of the latest challenge
at your hospital: The implementation of a new billing system
that the executive and revenue cycleteams have wanted for a long time.Your team has spent a great deal oftime defining the hospital's needs,identifying vendors and evaluatingtheir functionality. You may evenhave selected and negotiated thecontract with your preferred ven-dor. But do you really understandthe challenges ahead of you? Thisconversion may not be like othersyou have done in your career.
We have developed a MissionCritical Countdown to help youthink through the issues and timecommitments that arise withtoday's 4th generation hospitalbilling systems. In your transition to the new system you willhave to address clinical integration, workflow managementfunctionality, automation of previously manual processes, newcapabilities, additional data reporting features, more complexsecurity configuration and a system that demands answers toquestions from billers before it will even drop a bill.* TheMission Critical Countdown can help give surety that yourwork plan includes new aspects that must be addressed, criticalsteps and adequate time so that you are ready to make theimpossible, possible.
Managing and Organizing Your TeamIn Mission Impossible, the agent in charge has unlimited
resources, a dedicated team and wide discretion in selectingteam members to assist him.
You have your team of extraordinary experts for the billingsystem conversion. But unlike the Impossible Missions Force,you do not have unlimited resources. And generally, theexperts assigned to your project are not exclusively assigned toit. In fact, your project team experts must focus on otherneeds in the organization. They may also be responsible foroverseeing changes that occur to your legacy system before itis shut down. And to add to your team's already full work-
Eric Greenberg
Wendy Young
May/June 2 0 0 9
Focus 23
MISSION POSSIBLE:Investigate and solve these questions prior to conversion.
Pre-planning Checklist
1. Current Workload
2. Current Performance
3. Number of Staff
4. Current Planning
5. Leadership Stategy
6. Cash Posting/835 file:
What areas of your department are currently backlogged?
Can these be effectively addressed before the conversion begins? _____ Yes _____ No
Are there other issues/work processes that are not presently being addressed in your department that you need to be aware of?
_____ Yes (if so, list below) _____ No
How will you maintain the current level of cash collections, A/R days and other departmental key performance indicators while dedicating focused resources on the system conversion?
1. ____________________________________________________________________________________
2. ____________________________________________________________________________________
3. ____________________________________________________________________________________
What is the projected impact on your departmental budget for FTE’s and overtime for system design/ build, testing/training, reengineering of processes, and revisions to policy and procedures adapted for the new system?
_______________________________________________________________________________________
_______________________________________________________________________________________
What is your departmental contingency plan if the system conversion contributes to FTE turnover, low employee morale, mid-conversion system delays and service related complaints?
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
Who will lead the system conversion team in your department? Will any of their duties require backfilling for this conversion to succeed? Who will provide ongoing operational leadership? What additional support is required for them to be successful?
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
1. ____________________________________________________________________________________
2. ____________________________________________________________________________________
3. ____________________________________________________________________________________
1. ____________________________________________________________________________________
2. ____________________________________________________________________________________
3. ____________________________________________________________________________________
continued on page 24
load, they must continue to address changes from the exter-nal environment of payor contract requirements and theexternal economic environment at large.
As the executive in charge, you need to be sure that yourteam has the knowledge to identify issues before it is too late.We have developed Pre-Planning Checklist to help your teamanswer some critical questions before the project begins. Byreviewing answers to these questions before moving forwardyou can reduce the chance that your critical mission will fail.
Handling and Planning For the UnexpectedEach episode of Mission Impossible includes unexpected
events that force the team to improvise before they can ac-complish their mission and make their escape. As the lead onthis project, you cannot afford to underestimate or oversim-plify the unexpected twists that lie ahead.
Most executives recall prior system conversions and someof the unexpected bumps along the way. With the automationof previously manual processes, today's system conversionsincrease the potential severity of any unexpected twist in theplot. Current systems with their technical and business com-plexities add to the twists and turns in the road ahead evenwith a well thought out project plan.
To help you minimize the road bumps ahead and theireffect, we have developed a summary of Key Revenue CycleMetrics and best practices to use in maintaining your organi-zation's course. No hospital today can afford unexpectedproblems that reduce cash flow, impact staff productivity oraffect the quality of patient bills produced.
Achieving the ImpossibleBefore you can achieve the benefits of the new system, you
must fully implement its functionality. This requires morethan a short term burst of extra work from existing staff. Itrequires the ability to dedicate experienced resources to thetask ahead while maintaining cash flow from legacy systems.
It is easy to short change the installation of the new systemdue to lack of resources, competing priorities or underesti-mating the complexity of installing today's systems. Providingskilled sufficient resources to the conversion comes at the costof not working current open accounts. How much risk areyou willing to take in completing your mission? Can yourorganization risk a yearlong spike in accounts receivable?
The Conversion Options tool compares the pros and consof four options to address the run out of old accounts receiv-able from your legacy system. There are two fundamentallydifferent approaches to working down your old, openaccounts receivable balance from the legacy system. Each ofthese approaches has two alternatives that can be pursued.
May/June 2 0 0 9
24 Focus
MISSION POSSIBLE:00 50-
+
Mission critical countdown to conversion success.
Timeline
12+ MONTHCOUNTDOWN 9 MONTHS 6 MONTHS 3 MONTHS 30 DAYS
Indicators & Cash Forecasting
Models
Conversion
Committee.
communication plan
conversion budget
and weaknesses
a test
environment
ship
backup plan
team members
processes
Outsourced Vendors
Narrative
GO
LIVE
cesses
is above
targeted goal.
general ledgers
cash posting
continued from page 23
This tool can serve as the foundation for your own detailedassessment of the best alternative for your organization inaddressing the old accounts receivable. By carefully thinkingthrough your alternatives, you will identify where your exist-ing resources will need to be deployed and/or supplemented.
Concluding the MissionEvery episode of Mission Impossible concludes with success.
The agents safely escape and are ready for their next mission,but that is Hollywood, not Healthcare.
Adequate planning and expert resources are needed toachieve the vision and value of the new billing system youhave purchased. Make sure your expectations are realistic. Usethe Mission Possible Toolkit to support the success of your mis-sion impossible.
Your mission, should you choose to accept it, involvesmore challenges and loops than any episode of MissionImpossible. By preparing for the demands and unexpected
twists of your new system, you too can conclude your missionsafely for you, your team and your hospital.
This article will self-destruct in five seconds, unless yousave it for future reference.
About the AuthorsEric Greenberg is the Founder and CEO of ARC Group Associates,a national firm specializing in revenue cycle management. Eric hasover 18 years experience in the Healthcare industry and is a currentmember of HFMA. [email protected]
Wendy Young is a healthcare consultant and executive with over20 years of experience in revenue cycle operations, claims man-agement systems, and business office outsourcing solutions.Wendyhas held Revenue Cycle and Patient Financial Services Directorroles with responsibility for all aspects of the business office.Currently Wendy is the Vice President of Operations for ARCGroup Associates, Inc. She is also an active member of HFMAand AAHAM. [email protected]
*Many of the items shown in the Mission Critical Countdown tool are repeated eachmonth and other key points cannot be displayed due to space constraints of thegraphic. Please contact the authors to get a comprehensive timeline document.
May/June 2 0 0 9
Focus 25
Few Americans rate highly the ethical standards of execu-tives, lawyers, members of Congress, or stockbrokers, reportsBruce Weinstein
Energy Czar. Health Reform Czar. Technology Czar. GreenCzar. President Barack Obama continues to line up an impres-sive array of policy leaders to tackle our ever-mounting socialand economic problems. Tough times call for creative solutions,and the President is right to look for the best and the brightestto heal our battered economy and bruised infrastructure.
But there is one kind of problem the Obama Adminis-tration has yet to tackle, even though it may be the most per-vasive one of all. It is a distressing issue about which everyonecomplains but no one has been able to address effectively: Thewidespread failure of our leaders—and the rest of us—to takeethics seriously.
What we need is an Ethics Czar.According to the annual USA Today/Gallup Poll, less than
one American in four rates highly the ethical standards of busi-ness executives, attorneys, members of Congress, or stock-brokers. Bankers had it especially rough in the latest poll:Their approval rating fell from 35% to 23%. Even before theBlagojevich scandal hit the news, only 22% of Americans heldstate governors in high esteem.
A contempt for ethics lies at the heart of almost every topstory of the day: Yankee hitter Alex Rodriguez admitting tosteroid use, investor Bernard L. Madoff confessing to runningthe largest Ponzi scheme in history, a report by the JosephsonInstitute stating that 64% of high school students cheat and30% steal. As I have argued repeatedly in this column, how-ever, striving to live an ethical life isn’t just the right thing todo; it’s the smart thing to do, too.
I therefore propose my top nominee for Ethics Czar: You.That’s right. Whether you’re the CEO of a global corpora-
tion, a midlevel manager, or an entrepreneur striking out inthis difficult economy, you are the one who should set high
standards in your organization and do your level best to liveup to them.
In fact, being the Ethics Czar applies not just to how youlead your organization, but also to how you lead your life. Ihereby offer six simple rules for ethical leadership at work,with your family and friends, and in your community.
A CODE OF CONDUCT FOR ETHICS CZARS1. LEAD BY EXAMPLE
The most effective way to promote ethical behavior is todemonstrate it in all that you do. When members of yourteam see that you tell the truth when it would be easier to bedishonest, or react to a stressful situation with compassionrather than hostility, or own up to your mistakes rather thanblaming someone else, they not only have a model for mak-ing the right choices—they have the motivation to do it, too.Anyone can take the low road, but it takes a person of char-acter to take the high road consistently, or at least attempt todo so. Show your team that you are such a person.
2. PRAISE GENEROUSLYWhen was the last time you told someone she was doing a
good job? Yes, it’s important for managers to let employeesknow when they’ve gotten off track. But it may be even moreimportant to tell people when they’ve done something right.After all, people will give you their best if they feel appreciat-ed. One of the many useful lessons I picked up at the GallupInstitute for Leadership is the value of writing brief notes tothose who have done something beneficial for me. Even aone-line e-mail saying something like, “You handled that sit-uation brilliantly,” will make someone’s day. As long as itcomes from the heart, a little praise goes a long way.
3. CRITICIZE TO BUILD UP, NOT BREAK DOWNMany of us view criticism as something we’d rather not
give or receive.
•Focus on Ethics•
by Bruce Weinstein, Ph.D., The Ethics Guy®
Ask the Ethics Guy®!We Need an Ethics Czar to Battle aWidespread Breakdown in Standards
Bruce Weinstein
continued on page 26
May/June 2 0 0 9
26 Focus
But this misses its real aim, which is to bring out the bestin others and not merely instill feelings of guilt or remorse. Itis appropriate for people to feel bad when they have donesomething wrong. Good managers know, however, that criti-cism is most effective when it leaves someone inspired to dobetter rather than stuck in feelings of inadequacy. It’s in yourown interest to take meaningful criticism seriously when youreceive it, too.
4. BE KIND, UNWINDThe better angels of our nature are often the first casualties
in the war of economic survival we’re all fighting now. Morethan ever, it makes sense for managers to build stress-bustersinto the work week. Take the group out to lunch or have abrown-bag day for your team in the conference room with nowork allowed. Let the staff go home early from time to timeor celebrate their birthdays away from the office for the fullday. Encourage team members to use, not hoard, their vaca-tion days.
The value of relaxing on a regular basis applies to you aswell. Granting time to unwind to others and yourself isn’t an
option for a good manager; it is an ethical obligation. Afterall, we can’t serve the needs of our clients and employers ifwe’re fried and overdue for a break. Having time to play forawhile is also a great way to apply the ethical principle of loveand compassion to ourselves.
5. PUNISH FAIRLYOne measure of good managers is the extent to which
anger influences the way they punish employees. It is humanto be upset when a person you manage and trust lets youdown, but you can and should rise above that anger, lookobjectively at what has occurred, and decide what the appro-priate response should be. It’s especially important to putaside whatever emotional turmoil you’re going through that isunrelated to the problem at hand.
It’s also critical to avoid favoritism when meting out pun-ishment. There is no surer way to lower your team’s moralethan to give one errant employee a free pass after you havepunished another employee who made the same mistake.
6. IF IT IS TO BE, IT’S UP TO THEEWhen you see people doing things they shouldn’t, take
action. For example, when employee comes to work with theflu, sending them home is fair, it prevents harm, and itdemonstrates that you care. Avoiding the matter helps no one,including you. If you overhear colleagues discussing confiden-tial information in a public place, mention your concernsrather than ignoring the situation. If you get bad customerservice, telling the manager instead of quietly seething aboutmeans you at least have a shot at getting a positive result.
Don’t assume problems will take care of themselves. Theywon’t. It often takes very little effort to make a big difference.It does, however, take courage, and this is where you come in,since others may not step up to the plate.
You can’t solve every problem in the world, but living bythe above guidelines will make your own corner of the worlda more dignified place to be.
You just may end up being the most effective czar of themall.
About the AuthorDr. Bruce Weinstein is the public speaker and corporate consult-ant known as The Ethics Guy®. He writes the ethics column forBusinessWeek.com, and his latest book is, “Is It Still Cheating IfI Don’t Get Caught?” (Macmillan/Roaring Brook Press).
How ethical are you? Take his ethics quiz at TheEthicsGuy.com.
continued from page 25
For over 20 years HFS has been serving the healthcare community withcomprehensive programs that provide an effective and professionalapproach to the management and collection of uninsured and delinquentreceivables-
We are proud of our excellent reputation, and we invite you to checkwith any of our valued client references.
If you would like to know more about our services please visit ourwebsite at www.hcfs.org, or contact Larry Friia at 973-429-8530 x7116or at [email protected], or Jerry Castoria at x7191 or at [email protected] would welcome the opportunity to send you information on ourcompany or schedule a meeting at your convenience.
Healthcare Financial Services Inc.299 GlenwoodAvenue
Bloomfield, New Jersey 07003973-429-8530
H e a l t h c a r e
Fi n a n c i a l
S e r v i c e s , I n c .
Focus 27
Meeting the unique needs of each client
client-focused solutions
J S Vice President - Principal [email protected]
McBeeAssociates.com
Successful solutions produce a significant return on investment, fit within the client’s culture, and provide long-term benefits. McBee Associates’ creates custom solutions that address the unique needs of your facility. Our world-class consulting team carefully balances the need for both short-term fixes and long-term solutions. Create a strong foundation of financial health with our full-service consulting services, including:
Revenue Cycle Enhancement—Improve billing efficiency and accuracy with the help of our knowledgeable health care finance professionals.
Denial Management—Recoup revenue associated with denied claims and reduce denial rates with our successful appeals process and root-cause analysis.
Revenue Recovery—Identify underpayments and recover lost revenue with our proven Revenue Data Mining services.
Regulatory Compliance—Strengthen internal compliance initiatives and reduce risk with the help of our expert consulting team.
Custom consulting services that meet your needs.
May/June 2 0 0 9
28 Focus
A.
Q.It’s that time of year again…time to start preparing my hos-pital’s 2008 Form 990, Return of Organization Exempt FromIncome Tax. What are the key areas I need to pay particular-ly close attention to when working with my tax accountant infiling this year?
As you know by now, the IRS has completely revised theForm 990, Return of Organization Exempt from IncomeTax, which many tax-exempt organizations, including not-for-profit hospitals, are required to file annually. The Form990 has not been significantly revised since 1979. The IRSfelt that the prior Form 990 failed to reflect changes in the lawand the increasing size, diversity and complexity of manytax-exempt organizations. In addition, the prior Form 990no longer served the IRS’ tax compliance interests or metthe transparency and accountability needs of the states,the general public and the community served by the organi-zation.
Outlined below are twelve high level issues from the newForm 990 identified by WS+B. We recommend that even theCEO and COO become familiar with these disclosure issues,in addition to the CFO and/or the Director of Finance. Theinternal working group assigned to prepare the Form 990 andsupplemental schedules, including the finance team oftax-exempt hospitals should review and substantiate these dis-closure issues as they relate to their own organization andrelated organizations for tax reporting purposes:
1. Core Form 990, Part VI, Governance. The determina-tion of how many voting members of the governingbody are not independent. The tax-exempt organizationmust make “reasonable efforts.”
2. Core Form 990, Part VI, Governance.The inquiry andpotential disclosure of certain family and businessarrangements with respect to the organization’s officers,directors, trustees and key employees. The tax-exemptorganization must make “reasonable efforts.”
3. Core Form 990, Part VI,Governance. Describe thereview process (if any) of theorganization’s annual Form990 by the governing bodyof the organization, Boardcommittee and/or seniormanagement.
4. Core Form 990, Part VI,Governance. Does the or-ganization maintain a written conflict of interest policy?Explain how the organization regularly and consistentlymonitors and enforces compliance with the policy.
5. Core Form 990, Part VI, Governance. Describe theorganization’s process with respect to compensation andbenefits of the organization’s officers, directors and keyemployees. Does the organization satisfy the rebuttablepresumption of reasonableness factors?
6. Core Form 990, Part VI, Governance. Did the organi-zation invest in, contribute assets to, or participate inany joint venture or similar arrangement with a taxableentity during the year? If yes, has the organization both(1) adopted a written policy or procedure that requiresthe organization to negotiate in its transactions and ar-rangements with other members of the venture or ar-rangement with such terms and safeguards adequate toensure that the organization’s exempt status is protected,and (2) taken steps to safeguard the organization’sexempt status with respect to the venture or arrange-ment.
7. Core Form 990, Part VII, Compensation. The reviewof an expanded definition for disclosure of who is con-sidered a “key employee” of the organization.
Scott J. Mariani
Answers to your Accounting and Tax Questions
IRS FORM 990 High-Level Issues
•Focus on Finance•
May/June 2 0 0 9
Focus 29
8. Form 990, Supplemental Schedule H. The identifica-tion and quantification of community benefit; charitycare and debt collection policies; community benefitreport; community health needs assessment and othercommunity benefit activity and information.
9. Form 990, Supplemental Schedule J. The disclosureand explanation of officers, directors, trustees and keyemployees certain perquisites and benefits (e.g. com-panion travel, health and fitness club dues, country clubdues, tax indemnification and gross-up payments, discre-tionary spending account) and the disclosure of W-2compensation by element (e.g. base salary, bonus/incentive and other taxable) for these individuals.
10. Form 990, Supplemental Schedule K. Informationrelating to certain tax-exempt bonds of the organization;including information relating to issuances, proceeds,private business use and arbitrage.
11. Form 990, Supplemental Schedule L.The disclosure ofcertain transactions between the organization and certain“interested persons”; including name, type of transac-tion, relationship and $ amount.
12. Form 990, Supplemental Schedule R. The disclosureof related organizations and transactions between relatedorganizations, including type of transaction and dollaramount.
About the AuthorScott J. Mariani, JD, is a tax partner at WithumSmith+Brown,Certified Public Accountants and Consultants, and alsoPractice Leader of the firm’s Healthcare Services Group.Based in the firm’s Morristown, NJ office, he can be reached [email protected].
OUR BENEFITS INCLUDE:
Please send your resume today to: Debra Savage, RN, BA, Manager, Employment and Employee Relations, Mountainside Hospital, One Bay Avenue, Montclair, NJ 07042; or via email: [email protected]. EOE
Mountainside Hospital provides the community with a range of services, all delivered with compassionate care. We are currently seeking an energetic leader to play an instrumental role in helping us build a Central Scheduling section.
MANAGER – CENTRAL SCHEDULING
In this pivotal role, you will supervise the scheduling and diagnostic services for the entire facility. We will look to you to develop and establish scheduling protocols as well as to staff and train Scheduling Coordinators to maximize overall hospital scheduling.
Our ideal candidate will have a Bachelor’s degree in Business Administration or related field, 3 – 5 years of managerial experience and a solid knowledge of the pre-authorization process. The ability to work with hospital information, scheduling and health information management systems is essential to success in this role. Outstanding verbal, written and organizational skills are also required. Two years of hospital or surgical scheduling experience is preferred.
OUR BENEFITS INCLUDE:BENEFITS INCLUDE:
establish scheduling protocols as well as to staff and tr
all delivered with compassion
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May/June 2 0 0 9
30 Focus
$o, OK, we’ve all been there. Sitting across from “them”in the Board room. You can almost feel their cold stare as youreport on this month’s dreaded bottom line. Your Momwarned you there would be days like this. Well, ah. You takea deep breath. “Well Sir, we were slightly over budget.” Youhear the sounds of pencils snapping and hard drives whirling.In your head, you start to rewrite your resume: McDonaldslooks good. You tune out the CFO and practice for your nextjob, “would you like fries with that?” Someone kicks yourfoot and it’s back to reality. “Why are you over budget? Ithought we talked about this, last month.” You produce pageafter page, graph after graph, to substantiate your depart-ment’s future growth. Sweat runs in places you didn’t knowyou had.
The scenario may have a basis in reality, but the stereo-typical image of the demon CFO is false!
Over the years, we have interviewed many CFO’s. We havelistened as they have given us insight into how they started,what it takes to be a CFO today, hospital financing, andthemselves. So, we would like to take this opportunity toreview their responses to one important question:
You are just told you have 30 minutes to pack.You are going to a sparsely populated island.What would you bring, besides food, clothes,hygiene products, etc?
With their sharp focus on the bottom line, you mightthink they would bring their calculators and pencils, but theiranswers indicate otherwise.
We start with our favorite CFO, Sarah Bellum. Sarah isfrom Akesin General and said she would take her musicianboyfriend Phil B. Flat and her crossword puzzle books.
Can you match the person to their answer?
Response1. Of course, I would bring the family along; remember to
grab the dog, a nice bottle of red wine, a computer, cellphone and my guitar.
2. My wife, some wine, a book and arrangements to have asailboat available.
3. My wife (name), my family and the essentials – golf clubs,books, domino’s, wine and my jukebox.
4. My wonderful wife (name) and my fishing pole.
CFO Spotlightby Themselves
A. John Dellocono B. Bill Philips
C. Heather Aaron D. Dave Rikkola
G. Andrew GuarniI. Greg Adams
J. Garrick StoldtK. Bob Glenning
L. Jack Robinson M. John Gantner
May/June 2 0 0 9
Focus 31
5. My family. I can be pretty much happy anywhere my familyis.
6. I would bring my hammock, binoculars, garden tools andabout 100 books that I’ve been meaning to read.
7. My wife (name), my two children (names) and my dogHailey. Oh, and of course my golf clubs.
8. I have extensive camping experience from my days in theBoy Scouts (My two brothers and I are Eagle scouts). Myfirst thoughts are to bring key survival gear. After that Iwould be sure to bring several books (I try to read as oftenas possible) and a short wave radio that will pick up sig-nals from vast places. I don’t believe I can stay disconnect-ed from civilization for too long.
9. Cigars, waterproof matches, satellite phone, batteries,good books, sand wedge, golf balls and pictures of myloved ones.
10. With just 30 minutes to pack to a sparsely populatedisland, other than food, clothes and hygiene products, Iwould bring cash and a good book and let my instincthelp me enjoy the adventure.
11. My wife, my portable satellite radio and assuming it is awarm climate, my suntan lotion and golf clubs.
12. While I enjoy the beach, I prefer more active getaways likemy recent multi sport trip to the Canadian Rockies. Talkabout beautiful scenery. That said, if I were to go to desert-ed island, I would bring my golf clubs, my iPod, my TomClancy book collection and plenty of Captain Morgan.
13. Assuming there is a mode to return home, my iPod, mylaptop, cell phone, a compact satellite dish (all with aux.solar power), some small tools, a beach umbrella andchair…and plenty of sun screen!
14. I guess my first thought would be to make sure I broughtsome way to stay in touch with the outside world, so Iwould bring a satellite phone, laptop and solar batteries torun it. But of course, I would also bring some good books!
15. Since my wife would be coming, so would (her) two cats.Therefore, there better be plenty of sand on those beach-es. Other items would be books, my favorite songs my sonburned for me, a TV under one arm, golf clubs, cigars,fishing poles and cell phone in the other. That’s enoughfor the first week.
16. I would bring the person most responsible for all the trulywonderful things I have in life, my wife (name). I’m surewith her by my side that we could turn any situation intoa most enjoyable situation.
17. Just the essentials. My girlfriend Hanna and her sisters,satellite cell phone, solar cells, laptop, the Bible, aspirinand a skid of Southern Comfort. Who’s paying for all thisanyway?
18. I’d bring an electrical generator, a TV and plenty ofvideos, several cases of Pinot Grigio and lots of dry ice tokeep it chilled. I would also be sure to have plenty of hotItalian food dropped several times a week.
19. Mask, fins, snorkel, spear gun, books, knife, fishing gearand a satellite phone with extra batteries.
20. While I do enjoy skiing, a warm beach side resort ispreferable. With my wife (name) by my side, my threechildren (not sure they would be willing to go along), golfclubs, plenty of nice cigars and Coronas are all I wouldneed.
21. I’m not going. Can I sell my ticket for cash?
N. Joe Dobosh O. Paul Pernice
Q. Rich Smith
Not Pictured:
E. Ronald Guy
F. Michael Keen
H. Grant Leidy
P. Karen Lump
R. Rich Kennan
S. John S. Grywalski
T. Count DeMony
U. Justin Credible
AnswersA - 16 B - 2 C - 10 D - 3 E - 15F - 13 G - 9 H - 14 I - 12 J - 8K - 5 L - 11 M - 4 N - 7 O - 1P - 6 Q - 20 R -19 S - 18 T - 21U -17
May/June 2 0 0 9
32 Focus
After Madoff: What ShouldCharities and TheirStakeholders Be Doing in aNew World of IRSTransparency? Michael J. Kline
by Michael J. Kline, Esq.
One of the most perplexing and disquieting group ofinvestors/victims of the infamous Ponzi scheme of Bernard LMadoff is the long list of charitable organizations, many ofthem large and well-respected, that have reportedly lost manymillions of dollars through investing with him. A number ofthe charitable entities that are tax-exempt under Section501(c)(3) of the Internal Revenue Code have even beenforced to abruptly cease their operations.
This article will examine some of the unique aspects of501(c)(3) tax-exempt charities that made them attractive tar-gets for Madoff, some of the mistakes that were made bythose with responsibility for charitable assets, and opportuni-ties for all charities and their stakeholders to better protectthemselves in the future.
These matters coincide with the new and far more com-prehensive and transparent annual reporting obligations of501(c)(3) organizations on Form 990 with the InternalRevenue Service. While many charities will view the newForm 990 as a burden and extra work, the Form 990 can bea useful vehicle to repair charitable images damaged byMadoff or other events and to bolster charitable governanceand compliance practices and reputations. Filed Forms 990are universally available for review and copying from theinternet. Later in this article information will be providedabout how the new Form 990 can be used advantageously bycharities and how anyone can obtain copies of them.
Who are the Stakeholders that were affected by Madoff?A charity has many stakeholders. For example, a non-prof-
it hospital’s stakeholders may include donors, patients, physi-cians, employees, vendors, the governing board, the commu-nity, government, among others. The primary stakeholdersthat will be a focus of this article are its donors, the intendedbeneficiaries under its mission and the governing board or
other management that is charged with the fiduciary duty ofenabling it to achieve its stated mission. The presence of amission, such as the provision of charity care by a tax-exempthospital, distinguishes a 501(c)(3) organization from a profit-oriented business entity.
Why Were Charities Such Attractive Targets for Madoff?In order to identify mistakes that charities made and sug-
gest proactive responses, it is important to understand someof the reasons why they were primary objectives for Madoffto assist him in lengthening the life span of his Ponzi scheme.They include the following:
• For 50 years Madoff enjoyed the status and reputationof being a leader and innovator in the investment indus-try and had served as Chairman of the NASDAQ StockMarket.
• Madoff created an aura of trust by appearing to be theepitome of the “Three W’s” that are most desirableattributes sought by charities in their board membersand supporters: generosity from Wealth, sharing ofWisdom and performance of Work.
• Madoff ’s reporting of consistently high, stable “returns”over years would encourage charities to limit distribu-tions in favor of rolling over their purported returns toaugment revenues and balance sheet assets; if endow-ment funds were needed, they would use other fundsfirst.
• Charities with large endowments have consistentlyadhered to policies that have limited their spending to asmall percentage of their endowment funds in a givenyear.
• Tax-exempt charities did not need to take any distribu-tions from the Madoff investments to pay income taxeson their returns.
May/June 2 0 0 9
Focus 33
• The fact that respected charities appeared to have beenmaking high returns with Madoff over a long period ledto a desire by other charities to share in the “profits.”
• Madoff operated in a cunning fashion to convinceinvestors that his acceptance of their money made themmembers of a special select group.
• Boards of charities in recent years feel under enormouspressure to generate investment returns that exceedthose of recognized benchmarks and are not less favor-able than their peers.
What Mistakes Did the Charities Make in Investing withMadoff?
The actions of boards, investment committees and advisersof charities in investing with Madoff were questionable in anumber of aspects. Volunteer members of boards of charita-ble organizations with a mission are fiduciaries that shouldgenerally discharge their duties in good faith; in compliancewith law and prevailing business ethics; with the degree ofdiligence, care and skill that an ordinary, prudent personwould exercise under similar circumstances; and withoutundue conflict of interest.
In one or more respects the boards of charities that invest-ed with Madoff fell short on these standards, including thefollowing examples:
• It has been published that Madoff ’s purported invest-ment vehicles were characterized by him as proprietarybut also described as “split-strike conversion productsusing both index options and individual stock options,both with and without index puts.” It would appearthat such obscure and exotic investments are not tradi-tional types that are suitable for tax-exempt organiza-tions with a significant mission other than makingmoney and maximizing revenues. The volunteer boardmembers of non-profits, who are generally earning only“psychic incomes,” often lack the time, background,experience or inclination to be capable of evaluatingsuch investments. Additionally, most states have grantedhigher levels of protection from personal liability forboard actions to uncompensated board members ofcharities than to directors of profit-oriented business entities.
• One or more charities had actual conflicts of interest inthat Madoff was a board member at the same time thatthe organization was investing funds with him for a gen-erous fee. In other cases there may be “perceptual” con-flicts of interest, e.g., where Madoff was not a boardmember of charities that invested with him, but was acontributor or had board members who were otherwiseinvestors with him or had social or business relation-ships.
• A charity has a mission, which transcends merely gener-ating money, that was the basis of its receiving tax-exempt status. Donors are not providing contributionsas seed money for the board to take substantial and un-quantifiable risks to increase endowments. They are giv-ing to a cause that has meaning that they wish to sup-port financially.
• The improvident investment policies of a charity ininvesting with Madoff has subjected it not only to actuallosses of investment value, but also the potential for “claw-back” by the trustee for Madoff assets if the entity did takemonetary distributions and received substantial and dis-proportionate payments as compared to the average cashreturn for all other investors.
What should charitable governing boards do to rehabili-tate relationships with donors and beneficiaries?
The unfortunate experiences with Madoff of many chari-table organizations should be poignant object lessons for allcharitable organizations and their fiduciaries, whether or notthey were victims of Madoff. It has become critical that all501(c)(3) entities review, analyze and reform their operatingpolicies and procedures in areas such as governance, invest-ment policies, education of board members about financialand operational matters, avoidance of conflicts of interest, etc.Only by demonstrating their commitment to best practices ingovernance and operations can they succeed in the increasing-ly competitive environment for shrinking donor dollars in anadverse economic climate.
What is the Form 990 and how can it assist 501(c)(3) enti-ties in achieving governance reforms and demonstratingthese reforms to stakeholders?
For many years Form 990 was viewed as an annual finan-cial report by a 501(c)(3) entity to the IRS for the prior fiscalyear. The financial statements are an important part of theForm 990 and track very closely the annual audited financialreports of the organization. The financial statement in forms990 for 2008 can be expected to be generally dismal becauseof declining contributions due to an adverse economy andsignificant losses in market values of charitable endowmentfunds during 2008, whether or not there were Madoff invest-ments. Most 501(c)(3) organizations will have a need toexplain clearly and carefully in their 2008 filings why losseswere incurred and the steps taken to avoid or reduce a repeti-tion of such losses. The IRS changes in the disclosure require-ments of Form 990 for 2008 encourage that approach.
Form 990 is required to be filed with the IRS by the 15thday of the month following the end of a charity’s fiscal year,
continued on page 34
May/June 2 0 0 9
34 Focus
e.g., May 15, 2009 for a fiscal year ended on December 31,2008. It must be understood that, unlike federal tax returnsfiled by business corporations, Forms 990 can be accessedanonymously by anyone in the world at any time. Websites,perhaps the most well known of which is www.guidestar.org,archive Forms 990 on line, ordinarily within two monthsafter they are filed with the IRS. Potential donors, competi-tors, governmental agencies, beneficiaries and many otherseasily and routinely can access Forms 990.
A charity can have up to two extensions for filing a Form990 that could delay its filing until November 15, 2009. It canbe anticipated that many 501(c)(3) entities will try to extendtheir filing dates as long as they can in order to see what oth-ers are doing with the new Form, to delay disclosing adverseresults in 2008 or to complete changes in governance andoperating policies and procedures prior to filing. There arepotential penalties for a 501(c)(3) entity that fails to file acomplete and correct Form 990 with the IRS on a timely basis.
The Form 990 for 2008 contains new questions thatrequire “yes” or ‘no” answers about governance and businessoperations of 501(c)(3) entities. In some respects it emulatesthe passive regulatory schemes present in Canada and manyEuropean countries to “comply or explain why.” By requiringan explanation if an answer is in the negative, the regulatorpromotes the desired affirmative behavior.
The 2008 Form 990 includes a series of questions, amongothers, as to whether the charity has (i) a conflicts of interest pol-icy, (ii) a whistleblower policy, (iii) an audit committee and (iv)a document retention and destruction policy. The Form 990 alsoasks for information such as whether the audit committee andgoverning board has reviewed the Form before it was filed andexecutive compensation and transactions with insiders.
If the charity answers “yes” to a question, it can go on to thenext question. If the answer is “no,” the charity must explainwhy. Obviously the universal availability of the 2008 Form990 makes it desirable to answer all or almost all of the ques-tions “yes.” Otherwise potential donors and other stakeholdersmay have questions and draw conclusions of their own aboutthe operating practices of the charity and whether it is worthyof a contribution.
It is further interesting to note that the many 501(c)(3)entities, which have fiscal years other than calendar years(“Fiscal Year Charities”), have even longer than May 15, 2009as their initial due date for filing their Forms 990 for 2008.Many nonprofit colleges and universities, for example, are onfiscal years that begin on June 1 or July 1 of each year.
As an illustration, a Fiscal Year Charity for which its currentfiscal year commenced on July 1, 2008, would end such fiscalyear on June 30, 2009. Its 2008 Form 990 for the current fis-cal year will not be initially due until November 15, 2009. If it
were to extend the due date for the 2008 Form 990 by the the-oretical maximum of six additional months discussed earlier,the due date would be May 15, 2010.
A Fiscal Year Charity will have an ample opportunity toacquire samples from the internet of 2008 Forms 990 filed bycalendar-year-end charities. Moreover, it has additional timeto do what it deems necessary and appropriate to implement“best practices” in order to respond “yes” to the questions andanswers posed in the 2008 Form 990.
It is advisable for charities to file Form 990 for 2008 as soonas practicable, so that the initiative for building bridges to stake-holders can be maximized. An early filing of the 2008 Form990 with positive answers to the new schedules and questionscan disclose a strong commitment to a defined mission, appro-priate governance and investment policies, involvement of theboard in preparing the Form 990, a whistleblower policy, amodern and responsible conflicts of interest provision, appro-priate policies for setting executive compensation, etc. The newchanges to Form 990 will allow a charity to use the IRS itemsas a checklist of best practices and tell its story in its own words.Additionally, charities should post their Forms 990 on theirown websites, together with principal governance documentsthat demonstrate their commitment to best practices.
ConclusionThe unfortunate Madoff scandal, an adverse economy and
other events have combined to create challenging times forcharities and their stakeholders. A properly prepared Form990 that reflects recent proactive changes in governance andoperations under the leadership of the governing board willgo far in repairing the damage to the images of those thatinvested with Madoff and to enhance the reputations of thosethat avoided the Madoff morass.
This article is intended for general information only as ofthe date of its publication and does not constitute legaladvice. The reader should consult with knowledgeable legalcounsel to determine how applicable laws apply to specificfacts and situations.
About the AuthorMichael J. Kline is a partner with Fox Rothschild LLP, based intheir Princeton, NJ office, and is former Chair of the firm'sCorporate Department. He concentrates his practice in the areasof corporate and securities law and goverance, as well as healthlaw.
Michael also counsels and assists hospitals, nonprofit foundations,skilled nursing facilities, and others in handling overlappingbusiness, financial goverance, and legal issues.
continued from page 33
May/June 2 0 0 9
36 Focus
Newly Certified!Julius K.Z. Dossen, CHFPSourjya P. Patnaik, CHFP
Congratulations from the Certification Committee!
Did You Know -Activities that contribute to your professional developmentare eligible toward HFMA certification maintenance require-ments. These activities include, but are not limited to:• Attending education programs offered by HFMA National
or local chapters• Attending education programs offered other professional
organizations and possibly your employer• Presenting at HFMA chapter meetings or HFMA National
events• Completing self-study programs• Reviewing or authorizing professional publications
Test your Knowledge:The federally funded and administered health insurance planfor all people over 65 years of age is:
• Medicare.• Blue Cross and Blue Shield.
• Indemnity insurance.• Medicaid.
For the answer and more information about the HFMA cer-tification program go to: www.hfmanj.org/Certification orcontact one of the members below.
NJ Chapter Certification Contacts:Maria Facciponti, FHFMA – Committee ChairWork Phone: (973) 614-9100Email: [email protected]
Jeff Noonan, CHFP – Committee Co-ChairWork Phone: (201) 786-6000 x 6015Email: [email protected]
Mary Cronin, FHFMAWork Phone: (732) 839-1217Email: [email protected]
Michael Alwell, FHFMAWork Phone: (973) 656-6949Email: [email protected]
•Certification Corner•
WithumSmith+Brown, PC, Certified Public Accountantsand Consultants (WS+B), has ranked in the "Best Places toWork in New Jersey" list for a fifth consecutive year, main-taining its position as a Top 5 Company in the “large compa-ny” category in 2009. Rankings were announced during acelebratory dinner at the East Brunswick Hilton on April 22,hosted by NJBIZ, New Jersey’s weekly business publication.The firm placed 4th overall and was a top contender amongNJ accounting firms.
“The Best Places to Work awards program is designed to rec-ognize outstanding places of employment in New Jersey, andwe’re pleased at being listed for the fifth consecutive year,” saysthe firm's managing partner, Ivan Brown, CPA. “No doubt,these are challenging times, but the positive energy, winningspirit and perseverance of our employees is unwavering. It’s acall for us to celebrate. I consider this award as a great honorand testament to the wonderful people of WS+B.”
Coordinated through NJBIZ, the Best Places initiative isdesigned to honor those companies in New Jersey that
demonstrate a commitment to their employees' growth andquality of life. Research was conducted through a two-partsurvey process gathering data from both corporate manage-ment and employees, with two-thirds of the company’s scorebased on the results of the employee surveys.
About WithumSmith+Brown, PC:Founded in 1974, WithumSmith+Brown, PC is one of the largestregional public accounting and consulting firms alongthe mid-Atlantic corridor serving the healthcare community. Withcorporate headquarters based in Princeton, the firm has addition-al offices in Cherry Hill, New Brunswick, Somerville, Morristown,Red Bank and Toms River, NJ; Newtown and Philadelphia, PA;New York City, NY; Silver Spring, MD; Aspen, CO; and WestPalm Beach, FL. WS+B is also a member of HLB International, aworldwide network of independent accounting firms and businessadvisors. With over 400 employees, the firm ranks among the top35 CPA firms nationwide and in the top 10 in New Jersey. Formore information, please visit www.withum.com.
WithumSmith+Brown named in ‘BEST PLACES TO WORK IN NEW JERSEY’list for Fifth Consecutive Year
•Industry News•
May/June 2 0 0 9
Focus 37
New MembersJessica M. AndrisaniMedassetsImplementation Manager(201) [email protected]
Jessica S. OssiMedassetsClient Services-Revenue Cycle Services(201) [email protected]
Cynthia KaufholdDeloitte ConsultingSenior Manager(973) [email protected]
Aurora Rios-MangionePalisades Medical CenterPFS Manager(201) [email protected]
Mary PatSullivanOverlook Hospital(908) [email protected]
Kathleen L. JohnsonSaint Barnabas Health Care SystemCharge Capture Specialist(732) [email protected]
Israel [email protected]
Karen L. HendersonWithumSmith+BrownTax Manager(973) [email protected]
Nelson PedrosaWithumSmith+Brown(973) [email protected]
John A. Smith, Jr.WithumSmith+BrownTax Associate(973) [email protected]
Alexis A. HamiltonSaint Barnabas Healthcare SystemCdm Specialist(732) [email protected]
Antonella SarraThe Valley HospitalFinancial/Budget Analyst(201) [email protected]
John SimkonisFifth Third BankCommercial Banker(513) [email protected]
Rory R. WalkerMedassetsClient Service Associate(201) [email protected]
Karin Chernoff KaplanDGA PartnersDirector(610) [email protected]
Joseph M. Di StefanoChildren's Specialized HospitalSupervisor PAS(732) [email protected]
Nicole F. DimariaWolff & SamsonAssociate(973) [email protected]
Anne Z. HayOnline ResourcesSenior Marketing Manager(609) [email protected]
Heather BecksonPaths, LLCDirector(302) [email protected]
Kelly FleckensteinPaths, LLCManager(302) [email protected]
Kimberly GroomeSanofi-AventisQuality Initiatives Manager(602) [email protected]
Jo Ann HigmanSouthern Ocean Comunity HospitalPatient Accounts Supervisor(609) [email protected]
Jennifer JohnsonMeridian HealthFinancial Analyst(732) 897-7140
Connie LippincottVirtua HealthMgr Patient Accts(856) [email protected]
Alisa A. RobertsAZMCFinance Counsel(609) [email protected]
Shanese ThomasAtlantic Regional MedicalFinancial Specialist(609) [email protected]
Martha VazquezHanticareFinancial Counselor Specialist(609) [email protected]
Philip SalamoneVirtua HealthIS Financial Analyst(856) [email protected]
Matthew GlassMerrill LynchFinancial Advisor(732) [email protected]
Nadene R. TaniguchiCooper University HospitalDirector Of Revenue Integrity(845) [email protected]
Kristen CentinaroVirtua HealthFinancial Analysis Coordinator(856) [email protected]
Darlene LapolaDeputy Attorney General(973) [email protected]
Patrick McDevittVirtua HealthFinancial Analyst(856) 772-5000
Won/Lost Record Price
C.C. Sabathia .616 $181 million A.J. Burnett .534 $82.5 million Batting Avg
Mark Teixeira .290 $180 million
Health/ROI vsthe ALJ RAC Cases
over 90% Priceless
George Steinbrenner,Brian Cashman…Stop wasting your money.
George/Brian,You need to reach us at the following:
Ellen Scott, RN, Clinical Director
(516) 616-0200 Ext. 209
Robert Jacobs, President
(516) 616-0200 Ext. 201
The Yankees should be contracting with
Regarding the RAC
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May/June 2 0 0 9
Focus 39
MANAGER OF AUDITARMDS
MEDICAID/CHARITY CARE SITE MANAGERARMDS
DIRECTOR OF FINANCEUnderwood-Memorial Hospital
ACCOUNTANTSaint Barnabus Medical Center
SENIOR DIRECTORNew York University Langone Medical Center
MANAGER – CENTRAL SCHEDULINGMountainside Hospital
VICE PRESIDENT FOR MEDICAL CENTER FINANCE,BUDGET PLANNING, FINANCIAL ANALYSIS & THIRDPARTY REIMBURSEMENTS
New York University Langone Medical Center
REIMBURSEMENT MANAGERSaint Mary’s MC, Langhorne, PA
JOB BANK SUMMARY LISTING
Job Position and Organization
HFMA-NJ’s Publications Committee strives to bring New Jersey Chapter members timely and useful information in a convenient, accessible manner. Thus,this Job Bank Summary listing provides just the key components of each recently-posted position in an easy-to-read format, helping employers reach the mostqualified pool of potential candidates, and helping our readers find the best new job opportunities. For more detailed information on any position and the mostcomplete, up-to-date listing, go to HFMA-NJ’s Job Bank Online at www.hfmanj.org.
[Note to employers: please allow five business days for ads to appear on the Web site.]
•Focus on...New Jobs in New Jersey•
mark your calendar . . .June 11, 2009 all dayQuarterly MeetingWoodbridge Hilton
October 14-16, 2009 Annual InstituteThe Borgata,Atlantic City, NJ
Don’t forget to checkour website oftenfor the latest newsand information:
www.hfmanj.org
May/June 2 0 0 9
40 Focus
HFMA National FoundersMerit Award Program
The Founders Award program is a personal incentive pro-gram designed to encourage, monitor, and recognize individ-ual volunteer involvement in HFMA. The program providesan equitable way to translate activities into points. Over time,it will measure member involvement by looking at a collectednumber of points to determine how active an individualmember is in HFMA.
The Founders Merit Award program was established in1960 by HFMA to recognize the importance of individualmembers and the contributions theymake to HFMA, on both the chapterand national levels. Points are accumu-lated according to the level of activityan individual holds, thereby encourag-ing members to participate in HFMAfunctions and to hold leadership roleswithin the organization.
The AwardsFour awards can be obtained based
on the point system.
The Follmer Bronze Award is award-ed to an individual who has earned 25 member points. Theaward is named after William G. Follmer, who established theAmerican Association of Hospital Accountants (AAHA) (nowHFMA).
The Reeves Silver Award is awarded to an individual whohas earned 50 member points. This award honors Robert H.Reeves, an organizing member of AAHA who was elected itspresident in 1956.
The third award is presented to a member who has earned75 member points. The Muncie Gold Award honors FredrickT. Muncie, who was an organizing member of the AAHA andthe first president of the association (1947-49).
A fourth award, the Founders Medal of Honor, was added in1986 and is conferred by nomination of the member'sChapter Board of Directors. This award recognizes individualswho have been involved in the association for at least threeyears after earning the Muncie Gold Award, have provided sig-nificant service at the chapter and/or national level in at leasttwo of those years, and remain members in good standing.
How can I earn points?Members can earn points by: volunteering in a chapter or
national committee; writing an article; mentoring a new mem-ber; proctoring a certification exam; speaking at an event; par-ticipating on a panel and participating in a chapter or nationalmeeting in a volunteer role. Chapter members can view theirFounders points in real time, 24/7 on the HFMA National website under activities in their personal profiles in the Membershiparea at: http://www.hfma.org/dual_login.cfm. Members in-
volved in chapter and/or National com-mittees can see their point totals updat-ed in January each year. The chapter’sFounders Contact has the ability to addpoints 24/7 for individual memberactivity, although all points earned bymembers during the fiscal year shouldbe reported to HFMA National byAugust 1 each year. Once complete,HFMA National will process the chap-ter’s file and produce an award list,which will be sent to the chapterFounders Contact.
The chapter president then willapprove the list, and awards will be ordered. It is important toremember that although HFMA National and the chapterstrack these points, each member is responsible for reportingpoints earned to the chapter Founder’s Contact. Membersshould verify their points with their Founders Contact andmake sure corrections are made if necessary. Members canview their points in detail on the HFMA web site by going totheir personal profile. No points are earned for serving termsof office of less than one- half of a chapter’s fiscal year for anycategory; services a member is paid to perform; or for chapterparticipation prior to HFMA membership.
Helpful tools and resources available from HFMA includeFounders Award Merit Award Program: Overview and Pointsbooklet that describes the program and how points can beearned. The booklet is available on the HFMA web site undera members’ personal profile in the Membership area:http://www.hfma.org/access_eseries.cfm.
For more information about the Founders Award pro-gram, please contact Laura Hess at 888-NJC-HFMA, [email protected].
The Founders Merit Award program
was established in 1960 by HFMA
to recognize the importance of
individual members and the
contributions they make to
HFMA, on both the chapter
and national levels.
May/June 2 0 0 9
Focus 41
A Photo Recap of the2009 NJ HFMA Annual Golf Outing
May 7, 2009Fiddler’s Elbow Country Club
Far Hills, NJ
A Special Thank Youto Our Sponsorsfor making this
great day possible:ARMDSApollo HealthBESLER ConsultingCarlisle & AssociatesCBIZ KA Consulting ServicesCertified Credit & CollectionHealth Ware ConceptsHealthcare Employees Federal Credit UnionIMA ConsultingLiberty Billing & ConsultingMedical Data SystemsPanacea Healthcare SolutionsPantheon CapitalSchachter PortnoySearch AmericaWithumSmith+Brown, CPAs
May/June 2 0 0 9
42 Focus
May/June 2 0 0 9
Focus 43
These photos would not have been possible without the wonderful talents of Steve Aaron and Ed Magram of ARC Group Associates.Both donated their time, and took over 1400 fabulous photos of our event!
44 Focus
HFMA-NJ SPONSORSHIP REGISTRATION FORM 33rd Annual Institute of the New Jersey Chapter of HFMA In cooperation with the Metropolitan Philadelphia Chapter The Borgata Hotel, Casino & Spa • October 14 - 16, 2009
Sponsor Contact Information (Person to whom HFMA should contact regarding this application and for future mailings)
COMPANY NAME
CONTACT NAME TITLE
MAILING ADDRESS
CITY, STATE & ZIP
PHONE FAX
Program and Booth Sign Listing Information:
COMPANY NAME
MAILING ADDRESS
CITY, STATE & ZIP
PHONE WEBSITE
DESCRIPTION OF PRODUCTS/SERVICE (30 words or less):
Do you want your exhibit booth to be near a competitor: �Yes �No Competitors’ Name(s):
The undersigned is an officer, agent, or representative of the sponsor authorized to enter into this agreement.
Signature
Date
SPONSORS: Over 500 industry personnel attended the 2008 Institute. You don’t want to miss out on this networking opportunity! Keep checking our chapter website at www.hfmanj.org for up to the minute information regarding programming, registration forms, and speakers. And, do I hear "karaoke"??? Register today! Deadline for sponsorships is
August 31, 2009.
SPONSORS: Over 500 industry personnel attended the 2008 Institute. You don’t want to miss out on this networking opportunity! Keep checking our chapter website at www.hfmanj.org for up to the minute information regarding programming, registration forms, and speakers. And, do I hear "karaoke"??? Register today! Deadline for sponsorships is
August 31, 2009.
Sponsorship Level (please check appropriate box): � Platinum Institute Sponsor
� Gold Institute Sponsor:
� Vendor Fair/Charity Auction Sponsor:
� Keynote Sponsor:
� President’s Reception Sponsor
� Friday Education Panel Sponsor:
$25,000
$18,000
$12,000
$10,000
SOLD
$8,000
� Workshop Wed. Education Sponsor:
� Breakout Education Track Sponsor:
� Exhibit Vendor Sponsor:
� Dessert/Entertainment Sponsor:
� Speed Networking Event Sponsor:
� Speed Networking Participant
$8,000
$5,000
$3,500
$2,500
$2,500
$225
Sponsorships are limited. Registrations received prior to June 1, 2009 must include payment for 10% of the total sponsorship amount to secure the sponsorship level, with balance due 60 days prior to the event (August 1, 2009). Sponsorships valued at $5,000 or above receive priority booth placement based on sponsorship level and date of receipt of application and payment. The 2009 Annual Institute Committee will contact all sponsors to obtain logos and to arrange for all marketing and promotional items included in the sponsorship package. Sponsorship Exhibit Booth Includes: 8’ x 10’ draped booth space, one booth identification sign, one 6’ draped table, two chairs, and a wastebasket. Confirmations will be mailed which will include additional exhibit information. * Speed Networking limited to the first 24 vendors that confirm participation.
Payment Method: �Check made payable to HFMA-NJ Chapter in the amount of $_ . (HFMA-NJ Tax ID #237017021)
�Credit Card* amount to be charged _: �Visa �MasterCard �American Express �Discover
Credit Card No.:_ Exp. Date: _
Name on Credit Card:
Signature: _
Credit Card Billing Address (if not the same as above) *Please note that credit card payments to HFMA-NJ will appear as a purchase from D. Lawrence Planners, LLC on your credit card statement. Cancellation Policy: Cancellations must be in writing. No refunds for cancellations received after August 1, 2009. Please send the completed application, check or credit card information to:
HFMA-NJ Annual Institute Tel: 609-344-1333 c/o D. Lawrence Planners, L.L.C. Fax: 609-348-4433 1125 Atlantic Ave., Suite 634 Email: [email protected] City, NJ 08401
Focus 45
The New Jersey & Metro Philadelphia Chapters of HFMAPresents:
SPEED NETWORKING AT 2009 ANNUAL INSTITUTE
October 14th
The Borgata Hotel Casino & Spa
Get The Most From Your Exhibit Investment
The Institute is providing a unique opportunity for a limited number of vendors (24) to interface with healthcare financial executives and decision makers at our Annual Institute.
Maximize your conference experience by meeting with these healthcare executives from the NJ and Philadelphia provider area during the Vendor Fair on Wednesday, October 14th.
The event provides participants an opportunity to create a dialogue for ongoing discussions throughout the meeting and beyond. Each participant will be given an opportunity to provide a 90 second corporate message to each provider executive.
Where: Borgata Hotel - The Institute Exhibit Hall
Who: 24 Exhibitors and 24 Provider Executives
When: Afternoon of October 14th
How: The first 24 vendors to register as an exhibitor for the Institute and confirm participation in the Speed Networking event. The cost to participate in the Speed Networking event is an additional $225.
Exhibitor participants will receive a business card portfolio of those providers participating in the event
Each provider participant will receive a binder comprising marketing literature from each exhibitor participant
2009 Annual InstituteOctober 14-16The Borgata Hotel Casino & Spa Atlantic City, New Jersey
D
May/June 2 0 0 9
46 Focus
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May/June 2 0 0 9
Focus 47
Recap of the NJ HFMA Annual Women’sLeadership Event – April 16, 2009
On April 16, 2009, theNJ HFMA EducationCommittee presented thechapter’s Annual Women’sLeadership Event whichincluded an ExecutivePanel Discussion. We werevery lucky to have the fol-
lowing ladies share their views on surviving Healthcare in a Down-Turned Economy:
Amy Mansue, President and CEO,Children’s Specialized HospitalBetsy Ryan, President and CEO, NJHAJudy Roman, President and CEO, AmeriHealthMadeline Ferraro, VP Government Affairs,Atlantic Health System
Topics discussed included:Stimulus Rescues for NJ Hospital – With a 70% drop in char-
itable donations NJ hospitals are strapped to provide care with less;50% of the Jersey hospitals are operating in the red. NJ is a right
to care state that does not turn away care, hence, indigent/Charitycare is the highest in the country with the 49th lowest rate of statereimbursement for charity care. Discussion was about how NJ hos-pitals work around the white elephant in the room the under anduninsured.
Senate Bill S2471 – NJ Department of Health and SeniorServices would like to make public information about hospitalmedical errors. The issue at hand is the lack of an agreed uponstandardization of data metrics model to measure the performanceand quality of care taking account patient age, co-morbid condi-tions…
Insurance Companies – are struggling to promote a proactiveprevention approach to their insurance population – focus is tocreate a healthier society to lower the cost of healthcare need
Healthcare Reform – The focus will be to provide basic careand will not truly address specialty care such as the care deliveredat Children’s Specialized – what is going to be the fate of these serv-ices as reform tries to deliver a care to all within a resource poorhealth system.
Special thanks to these ladies for their insight, and to the manyparticipants that attended and made this program so successful!
May/June 2 0 0 9
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