HFMA NJ Garden State Focus

new jersey chapterMarch/April 2008 • vol 54 • num 5• Medical Identity TheftMore than just a financial nightmare,It can also pose a threat to a patient’s lifeSee page 7• Data Encryption – Look Before You LeapSee page 11• A Recap on our January Quarterly MeetingSee page 44

focus•advertisers•Amper, Politziner & MattiaARMDSBeslerCBIZ KA Consulting Services, Inc.Executive Resources, LLCExpeditiveFox Rothschild LLPHBCSHealth Ware ConceptsHealthcare Financial Services, Inc.IMA ConsultingJH Cohn, LLPMedical Account SolutionsMcBee Associates, Inc.Norris, McLaughin & Marcus, P.A.Parente Randolph, LLCWilliam H. Connolly & Co.WithumSmith+Brownfocus•features•Medical Identity Theft:More than just a financial nightmare,it can also pose a threat to a patient’s lifeby Barry Shapiro, CPA and Helen Oscislawski, Esq. ........................................................................ 7Data Encryption – Look Before You Leapby Jack Tenerelli, CISSP, CHSS, CHP................................................................................................ 11NJHCFFA Policy on Derivativesby Stephanie Bilovsky...................................................................................................................... 13Hospitals Turn Their Attention to Medicaid’sTEFRA Update Factor Errorby James A. Robertson, Esq., and Philip A. Besler, CHFP, CPA ......................................................... 15A Team Approach to Craniofacial Anomalies:Making a Family Wholeby William J. Roche, MS, CCC, BRS-S ............................................................................................. 18Corporate Wellness – Is it Healthy For Employers?by Anne Ciesla Bancroft, Esq. ......................................................................................................... 22Taking on Medicare’s Recovery Audit Contractor (RAC) Projectby Learning from Example: The Big Debridement Issueby Kathi Johnson and Ellen Scott, RN.............................................................................................. 25CFO Spotlight:Bob Glenning, Hackensack University Medical Center.............................. 32Member Spotlight: Deborah Shapiroby James Yarsinsky, CPAM ......................................................................................................... 33The Organizational Benefits of Employee Wellnessby Robert D. Sutton ........................................................................................................................ 34The Reinhardt Commission Report:A Good Start in Need of Long Term Solutionsby Sean J. Hopkins.......................................................................................................................... 37January Quarterly Meeting: Recapby Bill McCann ............................................................................................................................... 44Who’s Who in the Chapter ....................2The President’s Viewby Cheryl H. Cohen .....................................3From the Editorby Elizabeth G. Litten, Esq. ..........................4Certification Corner ..............................24Focus on Ethics .....................................29focus•points•Focus on Finance..................................38Focus on Members...............................40Meet Some of Our New Members....41New Members................................42, 50Job Bank Summary..............................43Mark Your Calendar..............................50Advertiser Focus ...................................52focus•cover•Cover courtesy ofHermitage Press, Inc.Focus 1

March/April 2008Publications CommitteeDennis P. Hancock, Director . . . . . . . . . .New Jersey Healthcare Facilities Financing AuthorityElizabeth G. Litten, Esq., Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fox Rothschild LLPJoan Hendler, Vice Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Remex, Inc.Lynn Chiantese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .New Jersey Hospital AssociationMark P. Dougherty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Johnson Controls, Inc.Laura Hess, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NJHFMAJohn Manzi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .CBIZ KA Consulting Services, Inc.Rhonda Maraziti . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .WithumSmith + BrownWilliam McCann . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Smith BarneyDavid A. Mills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Deloitte ConsultingHelen Oscislawski, Esq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Fox Rothschild LLPErum Raza, Esq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Fox Rothschild LLPJames A. Robertson, Esq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Kalison McBrideAl Rottkamp, MBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Professional ServicesRoger D. Sarao, CHFP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . New Jersey Hospital AssociationJames Yarsinsky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ExpeditiveNJ HFMA Chapter OfficersPresident, Cheryl H. Cohen, FHFMA, MBA . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pantheon CapitalPresident-Elect, Joseph J. Dobosh, Jr., MBA . . . . . . . . . . . . . . . Children’s Specialized HospitalVice President, Brian P. Sherin, FHFMA, MBA . . . . . . . . . . . . . . . . . . . . . . . . Besler ConsultingSecretary, Robert C. Peterson, CPA . . . . . . . . . . . . . . Hackettstown Regional Medical CenterTreasurer, Mary T. Taylor, FHFMA, MBA . . . . . . . . . . . . . . . . Southern Ocean County Hospitalfocus/hfmaChapter Website . . . . . . . . . . . . . . . . . . . . . . . .www.hfmanj.orgWho’s Who in the Chapter 2007-2008NJ HFMA Board MembersJohn Brault, CHFP – Junior Board Member . . . . . . . . . .Englewood Hospital & Medical CenterLindsey S. Colombo, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Raritan Bay Medical CenterMary M. Cronin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Besler ConsultingTracy Davison-DiCanto – Junior Board Member . . . . . . . . . . . . .Princeton Healthcare SystemDennis P. Hancock . . . . . . . . . . . . . . . . . .New Jersey Healthcare Facilities Financing AuthorityLisa R. Hartman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Princeton Healthcare SystemMarilyn A. Koczan, FHFMA, MPA, CPAM . . . . . . . . . . . . . . . . . . . . . . . . .Meridian Health SystemAnthony T. Orlando . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Englewood Hospital & Medical CenterMichael A. Richetti, CPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chilton Memorial Medical CenterJohn B. Reiss, PhD, JD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Saul Ewing LLPDavid J. Wiessel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Ernst & Young, LLPCaitlin C. Zulla, CHFP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .MD-X SolutionsSean J. Hopkins – Ex-Officio . . . . . . . . . . . . . . . . . . . . . . . . . .New Jersey Hospital AssociationNJ HFMA Advisory CouncilDorothy Lindstrom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Somerset Medical CenterJohn Manzi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .CBIZ KA Consulting ServicesRichard C. Parker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .CBIZ KA Consulting ServicesStella M. Visaggio, FHFMA, CPA . . . . . . . . . . . . . . . . . . . .Hackensack Regional Medical CenterJohn Calandriello, FHFMA, CPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Palisades Medical CenterAdvertising Policy/Annual RatesThe Garden State “FOCUS” reaches over 1,000 healthcare professionals in various fields. If you have a product or service you would like the healthcare financial industry to knowabout, please take advantage of this great opportunity!Contact Joan Hendler at 609-921-8950 to place your ad or receive a copy of the Chapter’s advertising policy. The Publications Committee reserves the right to refuse any ad not consistentwith the overall mission of the Chapter. Inclusion of an ad in this Newsmagazine does not infer endorsement of the product or service by the Healthcare Financial ManagementAssociation or the Publications Committee. Neither the Healthcare Financial Management Association nor the Publications Committee shall be responsible for slight variations in productionquality of published advertisements. Effective July 2006 Rates for 6 bi-monthly issues are as follows:Display Full Page Half Page Quarter PageBack Cover – Full Page Color $4,600 NA NAInside Back & Front Covers – Full Page, Color $4,350 NA NAFirst Inside Ad – Full Page, Color $4,250 NA NAFirst Inside Ad – Full Page, Black & White $3,450 NA NAInside Ad – Color $3,450 $2,600 NAInside Ad – Black & White $2,150 $1,450 $875Center Spread – 2 Full Pages, Color $5,900 NA NACenter Spread – 2 Full Pages, Black & White $3,800 NA NAAds should be submitted as print ready (CMYK) PDF files along with hard copy. Payment must accompany the ad. Deadline dates are published for the Newsmagazine. Checks must be payable to theNew Jersey Chapter - Healthcare Financial Management Association.DEADLINE FOR SUBMISSION OF MATERIALIssue DateSubmission DeadlineJanuary/February December 15March/ April February 15May/June April 15July/August June 15September/October August 15November/December October 15IDENTIFICATION STATEMENTGarden State “FOCUS” (ISSN#1078-7038; USPS #003-208) is published bimonthly by the New JerseyChapter of the Healthcare Financial Management Association, c/o Elizabeth G. Litten, Esq., Fox Rothschild,LLP, 997 Lenox Drive, Building 3, Lawrenceville, NJ 08648-2311Periodical postage paid at Trenton, NJ 08650. POSTMASTER: Send address change to Garden State“FOCUS” c/o Elizabeth G. Litten, Esq., Fox Rothschild, LLP, 997 Lenox Drive, Building 3, Lawrenceville, NJ08648-2311OBJECTIVEOur objective is to provide members with information regarding Chapter and national activities,with current and useful news of both national and local significance to healthcare financial professionalsand as to serve as a forum for the exchange of ideas and information.2 FocusEDITORIAL POLICYOpinions expressed in articles or features are those of the author(s) and do not necessarily reflectthe view of the New Jersey Chapter of the Healthcare Financial Management Association, or thePublications Committee. Questions regarding articles or features should be addressed to theauthor(s). The Healthcare Financial Management Association and Publications Committee assumeno responsibility for the accuracy or content of any articles or features published in theNewsmagazine.The Publications Committee reserves the right to accept or reject contributions whether solicitedor not. All correspondence is assumed to be a release for publication unless otherwise indicated. Allarticle submissions must be typed, double-spaced, and submitted as a Microsoft Word document.Please email your submission to:Elizabeth G. Litten, Esq.elitten@foxrothschild.comREPRINT POLICYThe New Jersey Chapter of the HFMA will not reprint articles published in Garden State FOCUSNewsmagazine. Individuals wishing to obtain reprint authorization must obtain it directly from theauthor(s) of the article. The cover of the FOCUS may not be used in the reprint; however, the reprintmay note that the article was published in a specific issue. The reprint may not imply endorsementby the HFMA, directly or indirectly.

March/April 2008The President’s View . . .A nurse took the tired, anxious serviceman to the bedside.“Your son is here,” she said to the old man.She had to repeat the words several times before the patient’s eyes opened.He was heavily sedated because of the pain of his heart attack, he dimly saw the young uniformedMarine standing outside the oxygen tent. He reached out his hand. The Marine wrapped his toughenedfingers around the old man’s limp ones, squeezing a message of love and encouragement.The nurse brought a chair so that the Marine could sit beside the bed. All through the night, theyoung Marine sat there in the poorly lighted ward, holding the old man’s hand and offering himwords of love and strength. Occasionally, the nurse suggested that the Marine move away and restawhile. He refused. Whenever the nurse came into the ward, the Marine was oblivious of her and ofthe night noises of the hospital - the clanking of the oxygen tank, the laughter of the night staffmembers exchanging greetings, the cries and moans of the other patients.Cheryl H. CohenNow and then she heard him say a few gentle words. The dying man said nothing, only held tightly to his son all through the night.Along towards dawn, the old man died. The Marine released the now lifeless hand he had been holding and went to tell the nurse. Whileshe did what she had to do, he waited.Finally, she returned. She started to offer words of sympathy, but the Marine interrupted her.“Who was that man?” he asked. The nurse was startled, “He was your father,” she answered. “No, he wasn’t,” the Marine replied. “Inever saw him before in my life.”“Then why didn’t you say something when I took you to him?”“I knew right away there had been a mistake, but I also knew he needed his son, and his son just wasn’t here. When I realized that hewas too sick to tell whether or not I was his son, knowing how much he needed me, I stayed.” Author unknown.The next time someone needs you ... just be there. Make a difference in someone’s life.When I reflect upon the past few months, focusing on how HFMA has made a difference, a few accomplishments come to mind.First, the speakers at the January quarterly meeting were of the highest caliber, thanks to the dedication of the PFS Forum co-chairs,Laurie Grey and Ann Goodwill-Pritchett, (and the rest of the forum members). It was a tremendous effort coordinating this session.Also at this quarterly meeting, the Events/Networking Committee arranged for a pick-up of toner cartridges. All proceeds from thisevent were distributed to two charities: Food Bank of NJ and Habitat for Humanity. Thank you to Lori Dietch and Jeff Weinstein, andthe rest of the Events/Networking committee, for creating a way to ‘Make a Difference’ at our quarterly meetings.The Education Committee presented a series of sessions geared towards the physician community. Thank you to Rita Romeu and SueBonfield, and the rest of the Education Committee, for coordinating this event.Also, the March quarterly meeting was held. Thank you to Tom Flynn and Nancy Graham, co-chairs of the C.A.R.E. Forum (and therest of the forum members) for managing this agenda, and offering excellent speakers for our members’ benefit. And again, theEvents/Networking Committee arranged for a clothing/cash drive to benefit Dress for Success, the Jersey City Chapter. This was alsosuccessful in ‘Making a Difference’ in people’s lives.What have you done recently to ‘Make a Difference?’Respectfully submitted,Cheryl H. CohenPresident, New Jersey Chapter of the Healthcare Financial Management AssociationFocus 3

March/April 2008From the Editor . . .Dear Readers:I was standing at the Moorestown Mall recently, watching my daughter andother kids from the Moorestown Rowing Club take 8-minute rowing shifts duringtheir all day “Erg-A-Thon” fundraiser (who knew rowing was such an expensivesport!), and I noticed several parents trying to figure out how to use their kids’cell phones to take pictures. I couldn’t offer much help, since my blackberry doesn’thave a photo-taking feature, but did have a sudden realization: our kids taketechnology for granted. Not just the fact or existence of it, but their ability to useit easily and quickly. They expect to be able to share words, pictures, and music Elizabeth G. Litteninstantaneously, perhaps the way I expected a light to turn on when I flipped aswitch, or expected to hear a dial tone when I picked up a telephone when I was a kid. For my daughter and herfriends, the physical, low-tech activities (like rowing) are just as tangible, just as obvious, and just as natural as thevirtual, high-tech activities that connect them to each other and the world.Perhaps our children will one day read articles on identity theft and encryption, and roll their eyes in the same waythe Moorestown Rowing Club kids rolled their eyes at their inept cell-phone-photo-taking parents, wondering howsociety could have survived before protective tools were fully developed and implemented. Let’s hope they have thatluxury – and can rely on both the ease of using technology for communication, and on the safety of doing so.Regards,Elizabeth G. LittenEditor4 Focus

THE RISING TIDES OF NEW JERSEY’S MURKYREGULATORY WATERS CAN SINK YOU.HOW CAN YOU KEEP YOUR HEAD ABOVE WATER?Having the right counsel canmake all the difference.Fox Rothschild can help. Withthe largest Health Law group inthe Mid-Atlantic region, ourHealth Law lawyers are on thepulse of government regulations,trends, and forecast.They will guide your strategicvision, protect your institution,and help you build a profitableand secure future.Let Our Experience Be Your Guide SMElizabeth G. Litten, Esq.609.895.3320elitten@foxrothschild.comPrinceton OfficePrinceton Pike Corporate Center997 Lenox Drive, Building 3Lawrenceville, NJ 08648-2311www.foxrothschild.comCALIFORNIA FLORIDA DELAWARE NEVADA NEW JERSEY NEW YORK PENNSYLVANIA

Medical Identity Theft:More than just a financial nightmare,it can also pose a threat to a patient’s lifeMarch/April 2008by Barry Shapiro, CPA, and Helen Oscislawski, Esq.Helen OscislawskiBarry ShapiroSay the words “identity theft,” and maybe thoughts ofhumorous credit card commercials come to mind, like theone where a burly male biker-type, speaking in a grandmotherlyvoice, purchases motorcycle parts for his brand newHarley… paying for everything with the credit card numberhe stole from an unsuspecting elderly lady three states away.The scenario ultimately underscores the need for consumersto subscribe to a credit card offering fraud protection.A new form of identity theft is emerging, with very littleavailable in the way of fraud protection. With ramificationsthat can prove far more damaging than a bad credit report,medical identity theft is on the rise across the country, andhospitals and health care providers are beginning to takenotice.Medical identity theft can occur when a perpetrator stealsthe Social Security number or insurance information of anotherperson, in order to acquire medical services and treatment andto avoid paying the bill. When the crime has finally been recognized,the thief is likely long gone and the health careprovider is forced to write-off the bad debt that was incurredfrom the services.Meanwhile, the victim whose information was stolen nowhas to argue against having to pay those bills. Even worse, thethief’s medical data is reflected within the victim’s own personalmedical records, which could lead to possible inaccuratemedical diagnoses and treatment. And because of HIPAA’sprivacy protections, the health care provider may not fullydisclose the medical records to the victim in order to decipherwhich data is hers and which belong to the perpetrator of thecrime, out of fear of liability issues.People can die from this crime,” says Pam Dixon, executivedirector of the World Privacy Forum, a privacy rights group.“It is a potentially huge issue. It’s an incredibly intransigentproblem and victims are finding that they have to sue healthcare providers to have their records corrected.”As the world is heading toward a paperless environmentand records of any kind are in digital format, stealing thisinformation in bulk is more easily attained. In one instance,it was a hospital employee who left work with a thousandmedical records loaded on an iPod.“Our research found that there is a huge black market formedical records. Police tell us such records go for $50 each onthe street, compared to Social Security numbers that go for adollar or two,” Dixon says.Regulating the CrimeLike many states, New Jersey has adopted “Security BreachNotification Laws”. In short, statutes 56:8-161-166 state thatany business maintaining personal information in electronicform (including hospitals) may be required to give specificnotice to the individual (depending on the specific circumstances)if the person’s information has been accessed by anunauthorized individual due to a breach of security and misuseof that information if “reasonably possible.” The law aimsto try and give the victim the opportunity to take steps toprotect himself/herself as soon as possible.New Jersey has also enacted an Identity Theft Preventionstatute 56:11-30-50, which aims to ensure that companieshave minimum safeguards in place to try to thwart identitytheft. In addition, a health care facility should have strongpolicies and procedures developed and implemented tocomply with the HIPAA Security Rule requirements. Theaim here is, of course, to assure that systems are “secured” inthe first place to prevent and/or immediately identify breachesthat could lead to things like medical identity theft.Best PracticesUnder HIPAA law, if a patient receives a bill that is notrightfully theirs, meaning it is indicating services which thatperson did not receive, he/she does have the right to ask for alisting of the medical services provided. However, the hospitalor healthcare facility may request for that person to physicallycome in to collect the information, with ample identificationto verify that person’s identity.In order to prevent misidentification, it is recommendedthat patients are asked for three types of identification duringany phase of their relationship with the hospital or facility.This is common practice in many facilities, but it is worthnoting that these items should include: 1. a medical card withfull name and account information; 2. a New Jersey driverscontinued on page 9Focus 7

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March/April 2008continued from page 7license with photo (or if no photo on the license, a secondform of I.D. with a photo), and 3. a third piece of identification,preferably a social security card, but often times a creditcard is acceptable, too.The World Privacy Forum has outlined eight best practicesto respond to the crime of medical identity theft, and to discusswhat needs to be done by the health care sector in orderto prevent the crime and to also help those who fall victimof the crime. That list can be found at worldprivacyforum.org/medicalidtheftresponses.html.National level proceduresThere is a need for a national level of set procedures to standardizehow providers and insurers should handle medicalidentity theft. The procedures should come from a consensusprocess that includes health information management professionals,patient representatives, consumer groups, insurers, privacygroups, and other interested parties. The standards needto address how to help victims recover from this crime.There is a need for uniform but appropriately flexibleanswers to the following questions:• What do we do when a patient claims fraud is in theirfiles?• What do we do when a patient says the bills are for serviceshe or she did not receive?• What do we do for patients and other impacted victimswhen we uncover a fraudulent operation?• When we have a real case of medical identity theft, howcan we work with patients to fix the records and limitfuture damages?• What do we do when a provider has altered the patientrecords?• How do we handle police reports and requests for investigationfrom victims?Red flag alertsRed flag alerts in the financial context compel financialinstitutions to affirmatively react to the potential presence offraud in order to protect consumers and themselves. Financialfraud red flag alerts have applicability to medical identitytheft. In the medical identity theft context, a red flag alertwould be placed in a victim’s health care records to alertproviders and insurers of potential fraudulent activity. Thehealth care sector needs to create specific red flag guidelinesfor use in the medical identity theft context.John or Jane Doe file extractionHealth information managers will likely be familiar withthis concept already. If fraud can be substantiated, the victim’sfile is purged of all information that was entered as a result ofthe fraud. Sometimes, this may be part of the file, in somecases the entire file may belong to the thief. If the thief isunknown, the fraudulent information is completely removedfrom the victim’s file and held separately so there is no dangerof mis-treatment due to factual error in the file. That separatefile is the Jane or John Doe file. The victim’s file and theextracted file are then cross referenced, allowing for a retraceabledata trail for any audits.Dedicated, trained personnel availableDedicated personnel trained to respond to this crimeshould be available at each facility. Small providers can havededicated regional personnel to help. It is in providers’ orinsurers’ best interest to resolve this crime, and it is in the victims’best interests to be able to actually talk to a person aboutwhat has happened. There needs to be a designated persontrained in the complexities of medical identity theft on handto help both the victim and the institution.Focus on the right approach: Insider, not outsiderThe preponderance of medical identity theft occursthrough insider methods that are extremely difficult forproviders to detect, even after the fact. Even when internal filebrowser controls and other controls are in place, unless thereare safeguards with extensive checks, then bad actors on theinside of institutions can commit this crime on a grand scale.For example, in the Cleveland Clinic/Machado case, therewere existing controls on downloads of files. The criminal stillwas able to exceed her download limit regularly, and she soldin excess of 1,100 patient files.Many institutions have been focusing on checking patientIDs as the primary solution to medical identity theft. Whilechecking patient IDs will help with the one-to-two personand familial types of medical identity theft, it will not addressthe type of crimes most frequently committed. There is significantvariability between providers and situations, it is thereforecrucial to accurately assess and focus on all aspects ofwhere the crime is occurring. Checking patient IDs will notstop insiders, and this needs to be taken into careful considerationby stakeholders.Risk assessments specifically for medical identity theftMost health care institutions already have risk assessmentsin place. The risk assessments need to be expanded to includemedical identity theft scenarios. The assessment shouldinclude outsider threats, but should also have a strong focuson the insider threat scenario as well.continued on page 10Focus 9

March/April 2008continued from page 9Training materials and education for the health caresectorMany individuals and institutions working in the health caresector are not yet aware of the severity of the problem with medicalidentity theft. Health care sector leaders need to beginhealth care sector-focused education focused on increasingawareness of the crime, how it is perpetrated, and how itimpacts R victims. Ideally, an education plan would be able to alsoWe know the risksdiscuss a national set of standards for dealing with the aftermathof medical identity theft with the purpose of helping victims.Education for patients and victimsProviders and other stakeholders in the health care sectoralso need to be involved with educating patients and victimsregarding medical identity theft. The education should focuson increasing:• Awareness of the crime;• Awareness of the benefits of requestinga full copy of the healthcare filesfrom all providers proactively;• Awareness of the need to guard insuranceand Medicare/Medicaid cardnumbers as carefully as social securitynumbers;• Awareness of the need to pro-activelyrequest an annual listing of all benefitspaid by insurers; and• Awareness of the need to educate databreach and financial identity theft victimsabout the potential for medicalidentity theft variations of the crime.We have the solutionsNew Jersey’s LeadingHospital/Healthcare Insurance BrokerWe provide our clients with the best combinationof coverage, pricing and risk management.About the AuthorsBarry Shapiro, CPA, is a partner withWithumSmith+Brown, Certified PublicAccountants and Consultants. Based in thefirm’s Red Bank office, he specializes inaccounting for the health care and not-forprofitindustries. Barry can be reached at732.842.3113 or bshapiro@withum.com.Helen Oscislawski, Esq., is an associate withFoxRothschild, Attorneys at Law. Based inthe Lawrenceville office, she concentrates herpractice in the areas of general corporateand health care law. Helen can be reachedat 609.895.3310 or hoscislawski@foxrothschild.com.56 Park Street / Montclair, NJ 07042-2999 / 973.744.850010 Focus

March/April 2008Data Encryption – Look Before You Leapby Jack Tenerelli, CISSP, CHSS, CHPI’m going to start off this article by saying that there isalmost no excuse or reason left not to encrypt data.The reason for this is that the level of scrutiny that databreaches have received over the years has promoted a plethoraof encryption products. Companies like the storage giantEMC have made purchases like RSA in order to add securityto their storage products. Unfortunately many organizationsand individuals are still waiting until either someone tellsthem that they have to implement security (HIPAA, SOX) or,even worse, until there is a security incident.Data encryption can be a very daunting topic. It’s whymost people (including IT professionals) shy away from it. AsI began working on this article I immediately started researchingsome of the various encryption models. I very quicklyremembered what a dry subject it can be. I envisioned headshitting desks with a loud thud, and reader’s eyes glazing overjust before drifting off.Instead what I decided to do was to go over some things toconsider when deciding on implementing data encryption.As I mentioned earlier, there is no shortage of encryptionproducts on the market. So the dilemma is not finding one,it’s finding one that truly fits your needs, fits your culture, andfits your budget.Let’s get the definition over with: the simple explanation ofencryption is the process of taking data (plain text), andscrambling that data so that it is unintelligible (cipher text).It remains that way until someone uses the key to unscrambleit (decryption). It starts to get complicated when you get intothe algorithms used to scramble the information. Add to thatall the different flavors that encryption algorithms come in.That’s simple enough. So let’s encrypt our data, all of it.Well, let’s think about that for a minute. Do you reallywant to encrypt all of your data? Do you really need toencrypt Aunt Betsy’s recipe for “Fireball Chicken Wings”?Remember, encryption and decryption are processes. Thatmeans that it takes resources to encrypt and decrypt data. Insome cases it can lead to performance degradation issues.When preparing to undertake encryption, you need to askyourself a few questions about your data:• First, where is it?• Does all of your data sit on your network?■ If so, which servers and which volumes?• Is any of your data on a desktop, laptop or a PDA?■ If it is on a laptop, do you know who has the laptop?■ Does the laptop leave your facility?• Is your data flying through the air with the greatest ofease on your wireless network?• This is also where it would be helpful to have a goodunderstanding of how your organization works.■ You need to know how data flows.■ Which departments use what part of the data?• What type of data is it?• Again, are you going to spend $100,000 to protect arecipe?• How is the data being used?• Are you using it in a database or is it in a spreadsheet?■ Are you running reports on this data?■ If so who is getting those reports and what are theydoing with them?Questions like this can help you to decide what encryptionsolution will work best for you.You have to do your research before implementing encryption.The reason is that the technology you implement to helpprotect your data can cause you to lose it. That’s right. Forinstance, if your encryption solution for laptops is dependenton a user’s password and the user leaves without giving youthe password or forgets it, how will you get at the data. If yoursolution included a backdoor for the administrator then youshould be ok (as long as the administrator remembers thepassword).Ok, so let’s take a look at some things to consider whenencrypting data.• While on the subject of laptops here are some otherthings to consider when encrypting data laptops/desktops:• Who will be in charge of deciding what to encrypt.■ Generally you don’t want to use an ad hoc encryptingsolution. This is because the more you leave inthe hands of users, the less that will get encrypted.■ Choose a solution that lets administrators defineattributes for encryption like the location of files(folders), type of file.■ If you are going to leave things like deciding whatto encrypt and what not to encrypt and passwordcreation to your users, make sure that you havegood policies in place.• Full-disk encryption.• This encrypts the entire hard disk, including boot sectors,swap files, OS files, temporary files and user data.continued on page 12Focus 11

March/April 2008continued from page 11• This can be either a laptop/desktop hard drive orserver volume. One of the things to consider here isthe stress on server and/or PC processors.• Take into consideration the time for initial encryption.This can take hours.• Always create a full system backup before encrypting.• As mentioned before, there should be a backdoor inthe event a password or key is lost or forgotten.• Some things to consider with backups:• Encrypting your backups will extend the time it takesto complete a backup. This is important if you needto stay within a window.• Hardware vs. Software encryption. One factor whenchoosing a solution is speed. Generally hardware encryptionis faster. But the more important issue hereis the ability to be able to read data that is encryptedfrom older hardware or software.■ Here is a scenario to consider:• You have been creating backup tapes for a fewyears. During that time you have upgraded thebackup software you use. Newer is always better,right? More than likely the vendor is now usinga stronger encryption algorithm to keep yourdata more secure.• Now you need to restore something from a tapefrom about five years ago. There’s a good chancethat you will not be able to read that data withthe new software, or hardware.• If you have more than one site you may want to considera site to site type of backup. This is also a goodsolution for disaster recovery.• Flash Drive / Removable media.• This is a real threat because this is a popular way totransport data between computers and people use itto bypass your security systems and to remove confidentialfiles from your network. The intent here maynot necessarily be malicious, but the threat to yourdata is real.• If you have to use these devices, there are productsthat will encrypt the data while sitting on thesedevices. They usually come with software that is installedduring the first use. You are asked to provide apassword. You can then take the device from computerto computer to share information. Without the passwordyou cannot get to the information.• Of course this goes back to enforcing good passwordpractices.I know that I said I would not get too technical in this article(then again this is an election year, and I did wait until theend), but I have to touch a very important topic when it cometo encryption and that’s keys. The key is what the encryptionalgorithm uses to make mish mash out of data so that the badguys can’t read it. There are two types of key algorithms:• Symmetric Key algorithms – use the same key for bothencryption and decryption. This is the type of algorithmthat is used in disk encryption and in programs likeWinZip.• If you are going to use this on your hard disk, thenthe only issue is keeping the key safe and ensuringthat it is strong enough so that it can’t be easilycracked.• The concern here is when you have to share the informationusing this type of key. You now have to find away to get the key safely to the person who needs it toread the information.• There are ways to do this, but it’s an extra step. Forinstance, you can call the person and give them thepassword. But again you are hoping that people willtake the extra step, especially if it’s the night beforethey go on vacation and they haven’t packed yet.• Asymmetric algorithms require two keys, one unguardedpublic key and one guarded private key. In this case thepublic key is used to encrypt the data, and the privatekey is used to decrypt the data. The two keys are mathematicallyrelated, but cannot be deduced from oneanother.• The encrypting key is called the public key. This keyis shared. Anyone having this key can send messagesto the owner of the secret key.• The decrypting key is usually kept secret and is calledthe “private key”.• Believe me, it works! However, asymmetric is muchslower than symmetric. So you would not want to usethis on large blocks of data.Since both algorithms have their strengths and weaknessesmany real world applications use a combination of the two.An example of this would be to use the asymmetric key forauthentication, and then use the symmetric keys generatedfrom this to encrypt the rest of the session.Whatever encryption option you choose, make sure thatyou keep keys safe and update any old keys. An interestingfact about encryption algorithms is that they are mostly in thepublic domain. This means that the bad guys know how theywork and that security is dependent on the key. The longerthe key, the more difficult it is to crack.There are also other places to consider using encryptionlike in databases e-mail, and data transfer (over a VPN orwireless on your network). Here you also need to think aboutwhat you want to encrypt and the impact on performance.My last point is that it’s important to remember that securityis a layered approach. While it’s important to encryptdata, it’s just as important to control what data is allowed togo onto a laptop to begin with, and to control who is allowedto access the data.Don’t just rely on encryption.12 Focus

NJHCFFA Policy OnDerivativesby Stephanie BilovskyMarch/April 2008In the September/October issue of FOCUS, an articleoutlined some of the issues surrounding the use of derivativeproducts by the state’s hospitals. Noting severalways that derivatives add risk to borrowers and bondholders,the New Jersey Health Care Facilities FinancingAuthority had, at a recent retreat, questioned whether itshould implement a policy specific to these products,which could then be used to form the basis for a covenantin loan agreements between the Authority and itsborrowers. Following a recommendation from the NewJersey Hospital Association, the Authority authorizedstaff to convene an industry working group to considerthe issues and provide suggestions to the Authority forconsideration.The working group was formed consisting of: Authoritystaff; two chief financial officers of New Jersey hospitals; tworepresentatives of investment banking firms; a swap advisor;an attorney experienced as borrower, underwriter and bondcounsel; and a representative of the Hospital Association.The breadth of experience of the working group membersensured that a wide range of interests were represented anddiffering viewpoints would be aired. The working group metin September for an extended meeting to discuss, in detail,Donovan and Shapiroderivatives and associated issuesincluding, but not limited to:financial risks, disclosure, reporting,market considerations, Stephanie Bilovskyand the impact of imposing limitationson borrowers. Authority staff used the array of inputfrom this meeting to create a draft of “Derivative Policy Considerations”identifying proposed derivative contract requirements,security provisions, and reporting and disclosure requirements.These Considerations were then presented to the workinggroup, who reviewed the draft and engaged in a collaborativeredraft. During the redrafting, the working group acknowledgedthat there would be disagreements among the participantsbecause of their varied constituencies; however, the partiesunderstood that the issues needed to be addressed and thefinal draft would be a compromise representing the needsexpressed by all parties. After considerable discussion, a finaldraft of Considerations was prepared for distribution to theAuthority Board Members for their review. The Board Membersdiscussed the Considerations at its December meeting,but tabled action until January, giving the Board Membersmore time to become familiar with the entire package of Considerations.At the January meeting, the Board Members approvedthe use of the proposed Considerations to establish aderivative covenant for Authority financings.The key provisions in the Considerations include:• the covenant will only be applied to publicly sold unenhancedbond issues;• derivatives used for hedging purposes may be used if: 1)the counterparty is rated “AA” or better; 2) the borrowerprovides certain information to the Trustee andAuthority; and, 3) there is no event of default, eitherexisting or expected;• derivatives for speculative purposes can only be enteredinto by borrowers meeting specific financial criteria;• security of equal benefit to that provided to bondholderscan be given to derivative counterparties only if certainfinancial criteria can be met;• collateral requirements of the derivative agreement canonly be met if the borrower complies with establishedfinancial criteria; andcontinued on page 14Focus 13

March/April 2008continued from page 13• the borrower will be required to provide ongoing informationto the Authority such as “market-to-market”values, copies of the borrower’s “derivative policy”, and alisting of the borrower’s outstanding derivative agreements.The Authority Members recognize that the derivative marketplaceis constantly changing and instructed staff to monitorthe proposed covenant and report how the requirementsare affecting borrowers and whether modifications are necessary.At the same time, the Board Members commended theworking group participants for dealing with a difficult issue.If you would like a copy of the full set of Derivative PolicyConsiderations please contact Dennis Hancock(dhancock@njhcffa.com) at the Authority.About the AuthorStephanie Bilovsky is the Communications Specialist for the NewJersey Health Care Facilities Financing Authority. A graduate ofPenn State School of Communications, Stephanie has spent thelast decade working in public relations, journalism and freelancewriting for print and television media. She has been with theAuthority MAS since Ad v2.pdf 2001. 2/12/2008 9:56:06 AMSean Hopkins (NJHA), Dan Deets (Hunterdon MC), andChris McCann (Wachovia).CMYCMMYCYCMYK14 Focus

Hospitals Turn TheirAttention To Medicaid’sTEFRA Update Factor ErrorMarch/April 2008by James A. Robertson, Esq. and Philip A. Besler, CHFP, CPAWith the recent New Jersey Supreme Court’s refusal toreview the hospitals’ challenge to the 2005 adoption of theamendments to the Marginal Loss and Calculation ErrorRegulation, hospitals are turning their attention to the morethan 200 Calculation Error Appeals pending in the Office ofAdministrative Law, but currently on the inactive list. Thesecases cover rate years from 1995 through 2007. The hospitalsare hoping that these cases could finally bring some desperatelyneeded rate relief.A. The TEFRA Update FactorA component of the formula used to calculate a hospital’sMedicaid rates is something known as the “TEFRA UpdateFactor.” TEFRA is an acronym that stands for the Tax Equityand Fiscal Responsibility Act of 1982, found at 42 U.S.C.A.§1395ww. The purpose of the TEFRA Update Factor is toprovide an adjustment to the general inflation rate (i.e., theeconomic factor), which is tied to both a hospital’s costs andefficiency.The way the TEFRA adjustment works is as follows.Medicare regulations establish a limit, known as the TEFRAlimit, on the rate of increase in hospital inpatient operatingcosts that will be recognized as reasonable for the purpose ofdetermining Medicare payment. See 42 C.F.R. §413.40. Thelimit is determined for each cost reporting period by multiplyinga hospitals’ TEFRA target amount by the number ofMedicare patients discharged by the hospital during the period.See 42 C.F.R. §413.40(a)(3). The target amount is the per dischargelimit derived from the hospital’s allowable net inpatientoperating costs in its TEFRA base year, updated for inflationby the annual rate of increase percentage published by theCMS. Under TEFRA, a hospital is entitled to a TEFRA bonusor incentive payment if its operating costs are less than the targetamount. See 42 U.S.C. §1395ww(b)(1)(A).Although originally developed for use in connection withthe calculation of a hospital’s Medicare rates only, the Divisionsubsequently decided to use the TEFRA factor in calculatinga hospital’s Medicaid rates as well. Thus the Division’sown regulations require it to use the economic factor recognizedunder the TEFRA targetlimitations:The economic factor isthe measure of the change inprices of goods and servicesused by New Jersey hospitals.The economic factorwill be the factor recognizedunder the TEFRA targetlimitation. N.J.A.C. 10:52-5.13(a).James A. RobertsonPhilip A. BeslerB. The Division’s Calculation ErrorThe hospitals have pointed out to the Division that it hasmade two calculation errors when applying the TEFRAUpdate Factor. First, the Division used the wrong economicfactor for the years 1994 through 1998. Instead of using theTEFRA factor, as required by regulation, the Division used afactor that was lower than the TEFRA factor. Thus, in 1994through 1998, the difference in the TEFRA factor (i.e., thefactor the Division should have used) and the economic factthe Division actually used was as follows on next page.In 1999, the Division corrected its error and began applyingan economic update factor equal to the TEFRA factor.However, while the Division fixed the error prospectivelystarting in 1999, it did not correct the error retrospectively to1994 by making additional payments or rebasing. Therefore,the errors that existed since 1994 continued to compound.The estimated potential financial impact of these TEFRAfactor errors for each hospital is not insignificant. Table 1 (nextcolumn) summarizes the estimated potential impact of thesetwo issues for each New Jersey hospital. 1 The column labeled“1994-07 Total DPC Impact” shows the compounded dollarimpact of the 1% differential error from 1994 through 2007.The column identified as “1994-07 Total DPC Impactwith 1.028%” shows what the combined financial impact ofboth errors would be from 1994 through 2007. In the aggrecontinuedon page 16Focus 15

March/April 2008continued from page 15MedicaidRate Year TEFRA Factor Economic Factor Difference1994 4.3% 3.3% - 1.0%1995 3.7% 2.7% - 1.0%1996 3.4% 2.4% - 1.0%1997 2.5% 1.5% - 1.0%Further, in 1998, the Division used no economic factor eventhough the TEFRA factor was 2.8% as follows:MedicaidRate Year TEFRA Factor Economic Factor Difference1998 2.8% 0.0% - 2.8%gate, the total estimated financial impact that the 1.0% issue has on allhospitals comes to approximately $80,241,097. The total estimated aggregateimpact of both the 1.0% and the 2.8% issues have on the hospitalindustry is approximately $205,574,883.These calculation error appeals will be progressing through theadministrative hearing process throughout the Fall. New Jersey hospitalshave been patiently waiting for the State to recognize that, for over adecade, New Jersey’s hospitals have been grossly underpaid for the essentialservices they provide to the poor, underserved and uninsured residentsof this State. We will keep the industry updated on how these casesare progressing in future articles.About the AuthorsJames A. Robertson is the Managing Director of Kalison, McBride, Jackson& Murphy, P.A., a 15-attorney health care law firm based in Warren, NewJersey, representing health care providers in New Jersey and New York.Philip A. Besler is the President and Chief Executive Officer of BeslerConsulting, providers of financial and operational consulting services tohealthcare organizations.Footnote1Not all hospitals, however, have appeals pending and, no doubt, the Statewill take issue with the amount the hospitals are claiming.Table 11988 - 2007 Economic Factor IMPACTFor Medicaid Rate-Setting(Base Year of 1988) w/ 1.028 Adjustment1994-07 1994-07TotalTotalHosp DPC Impact DPC Impact# Hospital Name w/ 1.028%1 Hackensack Medical Center 1,949,186 3,137,4562 Newark Beth Israel Medical Center - 6,559,8153 Palisades Medical Center 2,143,688 3,450,5305 Hunterdon Medical Center - 256,5506 St. Mary's Hospital (Passaic) - 598,2478 Holy Name Hospital 1,100,353 1,771,1539 Clara Maass Medical Center - 879,96910 Medical Center at Princeton - 260,31811 Burdette Tomlin Memorial Hospital - 864,19412 Valley Hospital 248,218 561,30013 Irvington General Hospital - 465,68014 Cooper Hospital/Univ. Medical Center - 6,696,53115 Morristown Memorial Hospital - 1,090,32216 Christ Hospital - 2,450,46517 Chilton Memorial Hospital - 254,97119 St. Joseph's Hospital - 4,813,39720 Beth Israel Hospital (Passaic) - 503,39221 St. Francis Medical Center (Trenton) - 838,09522 Virtua, West Jersey Health System 3,219,772 5,182,62024 Rahway Hospital - 371,42425 Bayonne Hospital - 537,55726 Barnert Memorial Hospital - 2,176,67327 Trinitas, Elizabeth General Medical Center - 3,362,17628 Newton Memorial Hospital - 345,59129 Lourdes Medical Center of Camden County 2,329,003 4,982,08331 Deborah Heart & Lung Center - 859,14832 South Jersey Hospital System 2,822,319 4,542,87034 Riverview Medical Center - 722,36336 South Amboy Memorial Hospital - 214,22337 Pascack Valley Hospital - 118,41138 Robert Wood Johnson Univ. Hospital - 2,175,24439 Raritan Bay Medical Center - 1,816,89540 Bon Secours, St. Mary's Hospital (Hoboken) - 2,158,78041 Community Medical Center 1,559,194 2,509,71442 West Hudson Hospital - 151,86843 Montclair Community Hospital - 44,54644 Capital Health System at Mercer - 2,004,96745 Englewood Hospital - 777,87047 Shore Memorial Hospital 1,635,939 2,633,24648 Somerset Medical Center - 531,05749 Bon Secours, St. Francis Hosp (Jersey City) - 895,90750 St. Clare's Hospital - Denville - 876,02651 Overlook Hospital 671,109 1,080,23352 Medical Center of Ocean County 801,481 1,290,08254 Mountainside Hospital 554,321 1,051,43656 Lourdes-Burlington (formerly Zurburgg) 1,650,437 2,656,58157 Memorial Hospital of Burlington County 1,948,038 3,135,60658 Bergen Pines County Hospital 1,361,615 2,191,68760 Warren Hospital 102,675 556,29762 United Healthcare System 8,591,689 13,829,38163 Muhlenberg Regional Medical Center - 1,788,87864 Atlantic City Medical Center - 3,336,09567 St. Clare's Hospital - Dover 678,853 1,092,69869 South Jersey Hospital, Elmer - 108,89970 St. Peter's Medical Center - 2,320,68072 Trinitas, St. Elizabeth Hospital - 1,483,44773 Jersey Shore Medical Center - 2,162,69074 Jersey City Medical Center 13,748,462 22,129,84375 Monmouth Medical Center 4,392,888 7,070,89576 St. Barnabas Medical Center 1,472,972 2,370,93077 General Hospital Center at Passaic - 1,073,31878 Hospital Center at Orange - 1,722,51981 Underwood-Memorial Hospital 1,407,013 2,264,76283 East Orange General Hospital - 2,103,00084 Kimball Medical Center 1,370,470 2,205,94186 Kennedy Memorial Hospitals - UMC - 2,481,86487 South Jersey Hospital, Newcomb 1,891,437 3,044,50188 Wm. B. Kessler Memorial Hospital - 430,70090 Union Hospital - 393,80591 Memorial Hospital of Salem County 1,344,553 2,164,22492 Capital Health System at Fuld 1,588,305 3,121,41593 Columbus Hospital 2,709,346 4,361,02696 Cathedral Healthcare System - 5,746,569105 Greenville Hospital - 380,277108 JFK Medical Center (Edison) 1,553,783 2,501,006110 R.W. Johnson Univ. Hospital at Hamilton - 104,044111 Centrastate Medical Center - 561,395112 Bayshore Community Hospital - 269,380113 Southern Ocean County Hospital - 104,777115 Hackettstown Community Hospital - 163,064116 St. Joseph's Wayne Hospital 1,350,947 2,174,516118 Meadowlands Hospital-Medical Center - 320,033119 University Hospital (UMDNJ) 14,043,029 22,603,985120 St. Clare's Hospital - Sussex - 178,756Total $80,241,097 $205,574,88316 Focus

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March/April 2008A Team Approach to CraniofacialAnomalies: Making a Family Wholeby William J. Roche, MS, CCC, BRS-SPATERSON, NEW JERSEY [FEBRUARY 14, 2008] - June9, 2006. It was the day I had waited for my entire life. The daythat I saw the second line appear on the home pregnancy test.I was overjoyed and ran excitedly from the bathroom to tell mysleeping husband. The following weeks and months passed ina blur of nausea and the excitement of sharing our good news.My husband and I were eagerly waiting September 12...theday of our initial ultrasound. The joyful news that we werehaving a girl was blunted by our sense that the ultrasoundtechnician was spending what seemed to be an inordinateamount of time on one area of my belly. We sensed somethingwas wrong and shortly thereafter we heard the words from thephysician, “your baby girl has a cleft lip and probably a cleftpalate.” I burst into tears and whatever verbiage followed fellon parents who were numb to any more news.Those words “cleft lip and palate” thrust the three of usinto the world of a high-risk pregnancy. By profession, I am aspeech-language pathologist at a children’s hospital who happenedto have a well-respected craniofacial team. Some saythat my familiarity regarding cleft lip and palate should havebeen helpful, but actually it enhanced the anxiety and initiallyadded to some very long sleepless nights.We expected what every parent hopes for, a smoothuneventful nine months. However, the remaining weeks of thepregnancy were spent with fetal MRI’s, ultrasounds, echocardiogramsand genetic appointments. Our families were supportive,and I knew that cleft lip and palate were a correctableanomaly, but it would be an untruth to write that I did not feelsad for my baby and myself. Knowing that our little girl had adiagnosis long before she had a name was heartbreaking.On February 5, 2007, our baby, Jillian Frances, graced uswith her presence through C-section. We realized very quicklythat we DID get the baby we were expecting: a beautiful,perfect little girl who is the joy of our lives. Members of thecraniofacial team educated us as to the habilitation process ofcleft lip and palate all the while instilling in us that the teamexisted to treat the “whole” child and not the just “hole”Jillian was born with. We were integral members of this team.Counseling, feeding, hearing, anesthesia, insurance and surgerieswere among the issues that, with the team (Table 1),our family was prepared to face.Jillian was one of five thousand babies born in 2007 with acleft and/or palate. Approximately one newborn in every 750Jillian and her mother, Jeannette Wesseldyke, with CraniofacialSurgeon Silvio Podda, MD, at St. Joseph’s Children’s Hospital inPaterson, New Jersey.live births presents with an incomplete development of theupper lip and/or palate (roof of the mouth). The lip forms duringthe 4th to the 8th week of the pregnancy. While the hardthen soft palates fuse during the 9th to 12th weeks. A newbornwhose structures do not merge and fuse leave an opening onone (unilateral) or both (bilateral) sides of the face.Like Jillian, many babies are identified as having a cleftduring the routine ultrasound appointment. “This is a time ofgreat anxiety for families,” states Jennifer Ibrahim, MD, themedical geneticist on the Craniofacial Team at St. Joseph’sChildren’s Hospital. The geneticist and genetic counselor pro-Table 1St. Joseph’s Children’s HospitalCore Craniofacial Team MembersGeneticistGenetic CounselorPlastic SurgeonPediatricianNurseOral Maxillofacial SurgeonFamily CounselorParentsSpeech PathologistAudiologistNeurosurgeonFeeding SpecialistPediatric DentistOrthodontistProsthodontistRadiologistOtolaryngologist (ENT)18 Focus

March/April 2008Silvio Podda MD, the craniofacial surgeonon The Regional Craniofacial CenterTeam at St. Joseph’s Children’s Hospital,surgically paired the two sides of Jillian’slip that failed to fuse during the first 8weeks of the pregnancy. This series ofthree photos show Jillian’s progress, beforeand after surgery performed by Dr. Poddaand the pediatric surgical team.vide the education of how clefts develop or if other conditions may exist relatedto the cleft opening,” added Dr. Ibrahim. The causes for a cleft of the facialstructures are multi-factorial. This underdevelopment of the lip and palateand failure to fuse sometimes run in families but are usually a combination ofgenetic and in utero environmental issues.Parents need to be educated as to the nature of the cleft and the multidimensionalaspects of care the child will require (Table 2). The most visiblesymptom may be the opening in the face or palate but children with cleft lipand palate are predisposed to feeding, hearing, speech, dental, developmentaland educational issues.Hillel Ephros, DMD, MD, Medical Director of The Regional CraniofacialCenter at St. Joseph’s Children’s Hospital notes, “parents and children still sufferthe experience of being shuttled from doctor to therapist, to another doctorin an exhausting effort to manage all the sequelae of the child’s cleft. Thisapproach is not acceptable. The Regional Craniofacial Team at St. Joseph’sChildren’s Hospital was established in 1977 and is a committed and dedicatedgroup of physicians and clinicians whose charge is to evaluate and care for childrenand adults with craniofacial deformities and to lend support to their families.The care must be timely, efficient and as atraumatic as possible. This isaccomplished by a collaborative bi-monthly team meeting to discuss thepatients, plan treatment and counsel family members.”As Jillian came to term and was born at St. Joseph’s Regional MedicalCenter, she became part of a healthcare system family. Although it will takePrenatalNewbornTable 2Timeline for Cleft Lip and Palate Interventionscontinued on page 20Ultrasounds, genetic consult, coordinator meetingsGenetic follow-up, feeding consult, hearing screen, plasticsurgery consult, maxillofacial prosthodontic consult3 months Surgical repair of the lip and nose, ongoing hearingevaluations9 months Surgical closure of the palates, ear tubes placed if needed12 months Speech evaluation, family counseling if indicated oralhygiene consult18 months Pediatric dentist, ongoing speech, hearing and growth anddevelopment interventions when warranted3 years Evaluation of the speech muscles by x-ray and scopeif indicated7 years Oral surgery and orthodontic consults and follow up9 years Placent of bone graft to the gum ridge to unit it andorthodontic braces and spacers and retainers10-18 years Plastic surgery consult for consideration for a time frame forsurgical revisions of lip/nose, oral surgery consult for reviewof jaw alignment and indication for surgeryFocus 19

March/April 2008continued from page 19well over $120,000.00 of medical care and technology to treatJillian, she will be dependent on a team of specialists with theexpertise to provide timely cutting edge interventions. Jillian’sparents resolved her feeding issues with the help of nursingand feeding team members. Her hearing was monitored and,at 3 months of age, Silvio Podda MD, the craniofacial surgeonon the team, surgically paired the two sides of Jillian’s lipthat failed to fuse during the first 8 weeks of the pregnancy.Hearing was a problem for Jillian and when Dr. Podda surgicallyunited the muscles of her palate at 9 months of life, eartubes were placed. Jillian now moves through the team whereher ears, oral hygiene, speech and language,growth and development will beevaluated, treated and monitored by avariety of professionals of the CraniofacialCenter Team.Jillian is one of 1,400 children whoreceived care provided by The RegionalCraniofacial Center at St. Joseph’s Children’sHospital in 2007. Her positiveoutcomes reflect the skill set of 54 pediatricsub-specialists on the CraniofacialTeam. Her smile, however, represents themission, the values and the vision of aChildren’s Hospital that makes the differenceby placing the patient first.One of the first pediatric hospitals designatedby the State of New Jersey, St.Joseph’s Children’s Hospital is an acutecare specialized children’s hospital locatedat St. Joseph’s Regional Medical Centerin Paterson, New Jersey. With approximately200 pediatric physician-specialistson staff, a nursing team that has receivedthe American Nurse Credentialing Center’shighest honor, The Magnet Awardfor Nursing Excellence – twice, skilledclinicians and support staff, St. Joseph’sChildren’s Hospital prides itself on caringfor the “whole child” and his or her family.Sponsored by the Sisters of Charityof Saint Elizabeth, St. Joseph’s Children’sHospital is a member of St. Joseph’sHealthcare System. For more informationabout the comprehensive pediatricservices available at St. Joseph’s Children’sHospital, call 973.754.2500.About the AuthorWilliam J. Roche, MS, CCC, BRS-S, Clinical Director, TheRegional Craniofacial Center and the Center for Pediatric Feedingand Swallowing at St. Joseph’s Regional Medical Center/St.Joseph’s Children’s Hospital, and Jeannette Wesseldyke, MA,CCC-SLP, speech-language pathologist at St. Joseph’s RegionalMedical Center, Paterson, New Jersey, and the mother of Jillian.WANTEDJunior Board MemberAre you driven, innovative, and committed to promoting thehealth care financial management field?The NJ Chapter of HFMA is currently seeking individuals that are interestedin becoming Junior Members of the Board of Directors.As a Junior Board Member you will bring new vision and energy into HFMA, andin return, receive mentoring by seasoned professionals resulting in invaluableexperience and an in-depth knowledge of the workings of HFMA.The requirements for application include:* Current Membership in HFMA* The New Jersey Chapter of HFMA Selected as Your Primary Chapter* Membership in HFMA 5 Years or Less* A Referral from a Senior Administrator* A Letter Stating Why You Would Like to be a Junior Board Member of the Board ofDirectors* Copy of Your Resume* Willingness/Ability to Attend the Majority of the Monthly Board Meetings held at theWoodbridge Hilton on the Second Tuesday of the Month from 7:30am - 9:00am.* Willingness to Participate in a New Jersey Chapter CommitteeThere are two Junior Board Member positions on the New Jersey Chapter Boardof Directors. Each position has a two year appointment. The Junior Board Memberposition is a non-voting position. There is one Junior Board Member positioncurrently vacant.If interested, please forward the above requested requirements toDeborah Shapiro dshapiro@wfs-services.com or Roe Nuzzo rosemary.nuzzo@atlanticare.orgno later than April 30, 2008.20 Focus

At Amper...we focus onyour needs,build trustand assist inyour success.Amper’s HealthcareServices Group iscommitted to helping ourhospital, ambulatorysurgery center andphysician clients meet thechallenges of today'shealthcare environment.Michael J. McLaffertyCPA, MBA, CHFP, FACMPEMaureen A. DohertyCPC, CPC-H(732) 287-1000“Seeing Beyond the Numbers...”www.amper.comSteven BiscielloFocus 21

March/April 2008Corporate Wellness –Is it Healthy For Employers?by Anne Ciesla Bancroft, Esq.Article reprinted with permission from Employment Law 360There are many benefits to having a healthier workforce.Healthy employees may be absent less, take fewer leaves ofabsence, be more productive, work longer, and have a betteroverall quality of life. In addition, employers may pay less forhealth insurance. With these goals in mind, many employersare implementing corporate wellness initiatives. Effective corporatewellness programs identify and reduce risks and educateand motivate employees to improve individual health.Discounts or penalties on health care premiums, health examsand screenings, health coaches, energy management exercises,weight-loss and smoking cessation programs, and rewards suchas gift cards or vacations are a few approaches used by employers.Some employers go even further and implement outrightrestrictions on employment or health insurance based onweight, smoking, and even hazardous activities, such as skydiving.While the results may be beneficial to both employers oremployees, the end won’t necessarily justify the means. Unlessimplemented properly, efforts to improve employee health canface challenges from several fronts, including claims of invasionof privacy and unlawful discrimination.It’s None of Your BusinessMany corporate wellness initiatives are about behavior thatoccurs outside of work. Most workplaces are non-smoking, butmany employers don’t want their employees to smoke at all.Employers can offer only healthy food and snacks in the cafeteria,but that doesn’t help if the employee eats junk and fast foodthe rest of the time. But employer attempts to regulate or prohibitsuch “outside” behavior and to monitor employee compliancecan give rise to claims for invasion of privacy.Privacy rights can be found in the federal or a state constitution;a federal or state statute; or under “common law.”Although not specifically mentioned, the right to privacy in thepublic sector is found in the search and seizure provisions of theFourth Amendment to the U.S. Constitution. Employees inthe private sector may find a right of privacy in their state constitutions,and courts have held that such constitutional privacyprotections can form the basis for a clear mandate of publicpolicy supporting a wrongful discharge claim against a privateemployer. Both “outside” activity restrictions and tests to monitorcompliance, such as urine,blood or breathalyzer tests,could violate an employee’sright to privacy.One recent case filed in federalcourt in Massachusettstests these theories. In Rodriguesv. EG Systems, Inc., d/b/aAnne Ciesla BancroftScotts LawnService, Scott Rodrigues claimed that ScottLawnService violated his common law right to privacy and civilrights by requiring him to take a urine test for the presence ofnicotine and by terminating his employment because he failedit due to his off-duty and off-premises smoking. Rodrigues furtherclaimed that his discharge constituted a wrongful terminationand discriminatory denial of benefits under the EmployeeRetirement Income Security Act (“ERISA”).Notably, the complaint questions Scott LawnServices’ prohibitionon smoking but not other “unhealthy practices” such as“obesity, consumption of alcohol, failure to exercise, skydiving,excessive television viewing, eating processed sugar, owningdangerous pets, flying private aircraft, mountain climbing,downhill skiing, single-handed sailing, or spreading toxic chemicalson lawns.” “What’s next?” is a question employers implementingworkplace wellness programs can be expected to face.HIPAAAnother potential source of privacy rights for employees isthe Health Insurance Portability and Accountability Act(“HIPAA”), which protects the privacy of personal healthinformation. HIPAA nondiscrimination regulations regarding“bona fide wellness programs” require that wellness programsbe designed to promote good health; allow for annual qualification;make awards available to all similarly-situated individuals;and, provide a reasonable alternative, and notice thereof, toemployees unable to comply with program requirements dueto a medical condition. Under the recently promulgated regulations,the value of rewards (such as discounts, contributionrebates, or waiver of cost-sharing requirements) for the wellnessprogram is limited to 20% of the unsubsidized cost of employee-onlycoverage under the health insurance plan. Compliancewith HIPAA, however, does not mean a program will survivechallenges on other grounds, such as discrimination.22 Focus

March/April 2008Why Me?Some employees may feel harassed or discriminated againstwhen faced with healthy workplace initiatives. Employeesmay claim that they are treated differently because of theirprotected status (“disparate treatment”), or that their employer’spolicy or practice adversely impacts a protected group(“disparate impact”). Accordingly, wellness program participation,use and confidentiality of employee health information,and screening must be consistent with federal, state andlocal anti-discrimination laws.The Americans with Disabilities Act (“ADA”), for example,prohibits discrimination against a qualified individual with adisability who can perform the essential functions of the jobwith or without reasonable accommodation. A disability isdefined as a physical or mental impairment that substantiallylimits a major life activity. Employees also are protected fromdiscrimination if they are “regarded as” or “have a record” of adisability – even if they are not currently disabled – and if theyassociate with a disabled person. Employers should avoid makingassumptions about employee health based on appearance,age, or any other criteria. In addition, under the ADA, employershave an obligation to provide a reasonable accommodationto a disabled employee who can perform the essential functionsof the job. This obligation would apply to an employee’s participationin a corporate wellness program.The Equal Employment Opportunity Commission(“EEOC”) has indicated, with qualifications, that voluntarywellness programs do not violate the ADA. Penalizing employeesfor not participating, such as through higher insurance premiums,can render a program involuntary, however.In addition, the ADA limits the use of medical examinationsand inquiries in hiring and employment. Generally, employersare not permitted to make disability-related inquiries or to conductmedical examinations unless job-related and consistentwith business necessity. Many wellness initiatives use HealthRisk Assessments (“HRAs”) to obtain employee health information.The EEOC has indicated that HRAs are permissible wherethey are part of a voluntary wellness program - but may be discriminatoryif completion is required in order to participate inthe program. However, behavioral questions regarding eating,sleeping, exercise and other habits, may fall outside the scope ofADA restrictions. Health information obtained from HRAsmust be kept confidential.Some state or local anti-discrimination laws also prohibit discriminationon the basis of “disability” and/or “handicap,” andmay define those conditions more broadly than a “disability”under the ADA. Weight is an area of focus for many wellnessprograms. Obesity, usually where morbid or caused by anothermedical condition, may be a disability under ADA or state lawif it meets the statutory definition, and some local ordinancesspecifically prohibit discrimination on the basis of weight.Corporate wellness programs also could be subject to challengeon the basis of other protected classifications, such asrace, national origin, gender and age, if employers screen orpenalize employees for conditions more prevalent among thoseprotected groups. Certain health conditions may be exhibitedmore frequently in older workers or employees of a particularrace or national origin. Some states also prohibit discriminationon the basis of atypical cellular or blood trait or geneticinformation, which could also constitute a basis for challengingcorporate wellness initiatives such as health screenings.Many states, including New York, New Jersey and Colorado,also restrict employers from engaging in “lifestyle discrimination”which can range from discrimination against smokers todiscrimination based on any lawful activity off employer premisesduring working hours. Employers attempting to regulateout-of-work activity may run afoul of these laws.Employers who use physical characteristics in employmentdecisions, such as hiring, could be subject to claims for discrimination.Employers should avoid disability-related inquiries;health or physical-related criteria; restrictions on personalactivities; and physical or medical testing unless workrelatedand applied consistently across employees in a job categoryand not just to members of one protected class.Health Insurance AuditsWhile there are many benefits to improving employeehealth, reducing the cost of health insurance is a primary consideration.Some employers impose surcharges or higher premiumson employees who do not meet the company wellnessthresholds or who refuse to participate in wellness initiatives.But there are other alternatives that can significantly reducecosts without employer involvement in employee health. Forexample, audits of health plans to determine whether enrolledemployees and dependents are eligible – such as confirmingcurrent employment, marital, domestic partner or civil unionstatus, and dependant age and relationship – can significantlyreduce costs. Higher deductibles and health savingsaccounts (“HSAs”) can make employees more financiallyresponsible, and thus provide incentives for employees toimprove their own health.What can employers do?More and more employers are beginning to take aggressivesteps to improve the health of their employees, and benefitingfrom the results. Companies interested in implementing wellnessprograms should keep the following guidelines in mind:• Maintain safe and healthy work environments.• Use a third party to implement corporate wellness programs.continued on page 24Focus 23

March/April 2008Did you know:83% of those who responded to the Certification AwarenessSurvey pursue HFMA Certification for a sense of personalachievement or an increase in career knowledge??Don’t Forget…The NJ HFMA Board has agreed to fund a drawing raffle thisyear with $50 per person that achieves the CHFP or FHFMAdesignation (up to a maximum of $500). If you achieve yourcertification between June 1, 2007 and May 31, 2008, youwill automatically be entered into the June 2008 drawing andcould be the lucky winner of up to $500.00.•Certification Corner•For the answer and more information about the HFMA certificationprogram go to: www.hfmanj.org/CertificationNJ Chapter Certification Contacts:Michael Alwell, FHFMA, (973) 656-6949Email: mike.alwell@atlantichealth.orgKevin Lenahan, FHFMA, (973) 451-2085Email: kevin.lenahan@atlantichealth.orgLindsey S. Colombo, FHFMA, (732) 324-6031Email: lcolombo@rbmc.orgTest your Knowledge:Responsibility reports require those responsible for budgetentities to provide:A. Capital budgeting responsibilities.B. Lists of budget responsibilities.C. Explanations for their budget variances.D. Justifications for operating expenses.AD HFMA Mag 10/8/07 10:39 AM Page 1Your Complete Source forReceivables Management• Electronic Claims Processing• Third Party Follow Up and Adjudication• Self Pay Processing• Bad Debt Collections• AR Purchasing• Full Business Office OutsourcingFor more information or to join ourNot-for-Profit Cooperative contactKarl Hellerich at 732-296-0641 orhellerkv@hbcs.org118 Lukens Dr.,New Castle, DE19720701 Edgewater Dr.,Suite 250,Wakefield, MA018805615 Corporate Blvd,Suite 5,Baton Rouge, LA70808Newly Certified!!!Congratulations to Mary Cronin, CHFPcontinued from page 23• Use voluntary programs, such as employer-paid physicals,on-site exercise facilities and personal trainers, wellnessreimbursements, smoking cessation and weight-lossprograms, health coaches, and healthy food options inthe cafeteria/vending machines.Audit health plan participation.• Aggregate data and trends.• Maintain confidentiality of individual health information.Incentivize don’t penalize.• Focus on education.• Corporate wellness and employment decisions need tobe separate.• Train employees who implement corporate wellnessprograms to comply with the law and company policy.Properly implemented wellness programs that are voluntary;motivate through incentives rather than penalties; usehealth information in a permissible way; maintain confidentialityof health information; operate at arms length from hiringand employment decisions; and, focus on education andbehavior can achieve the goals of a healthier and more productiveworkforce and lower health insurance costs without subjectingemployers to liability.About the AuthorAnne Ciesla Bancroft is a partner in Fox Rothschild LLP’s Laborand Employment Department, resident in the Princeton, NJoffice. She has extensive experience in employment training,including diversity and interviewing, employment litigation,drafting employment policies and agreements, and counselingemployers on day-to-day employment issues.24 Focus

Taking on Medicare’s Recovery AuditContractor (RAC) Projectby Learning from Example:The Big Debridement Issueby Kathi Johnson and Ellen Scott, RNMarch/April 2008When the American Hospital Association (AHA)announced that CMS (Center for Medicare and MedicaidServices) would be rolling out the RAC program to all 50states by March, 2008, it wasn’t the first article in the October“AHA News Now” bulletin. Well, it sure should have been,and here’s why.The Tax Relief and Healthcare Act of 2006 (Section 302)requires the establishment of a permanent and nationwideRAC program by no later than 2010, but because CMS andthe Congress believe that the Medicare Recovery Audit Contractordemonstration project (pursuant to Section 306 of theMedicare Modernization Act) initiated in 2005 went so wellin New York State, California and Florida, CMS escalated itslaunch date for the rest of the country. The remaining 47states may not know what is to come, that is until they haveexperienced the significant dollar take backs from Medicare.Just ask New York, California and Florida.Scope of the InitiativeUnder the scope of this cost containment initiative, thedemonstration RACs have been reviewing Medicare claimsup to four years from the claim payment date (claims thathave not already been audited by Medicare or their agents).Once the permanent RACs are in place, claims up to threeyears from the date of payment will be open to review. RACshave been authorized to identify improper payments, impropercoding, and non-covered or not medically necessary services,which were not identified through the prepayment reviewprocess. RACs were instructed to identify both overpaymentsand underpayments.The demonstration project was officially begun on March28, 2005 with the announcement of the state specific contractorsand will conclude on March 27, 2008. ConnollyConsulting was awarded the contract in New York State andby September of 2005, began requesting medical records.The Initial ProcessThe RAC process begins with requests for provider medicalrecords. If a requested medical record is not received in 45days, CMS has instructed the RACs to classify the account asan overpayment. This is the first stumbling block, as requestedmedical records may be up to 4 years old and may behoused in off-site storage.Once medical records have been received by the RAC, adetermination is to be made in writing to the provider within60 days, stating whether an underpayment or overpaymentoccurred, or no further action is required. All notices of overpaymentsare payment denials and should be treated by theprovider as a liability and a potential appeal issue. Like otherdenials that may require appeal, the RAC appeals process istime sensitive. The RAC will notify the Fiscal Intermediary(FI) to initiate a take-back of a provider’s payment 31 daysfrom the notice of overpayment.Appeal RightsThe most critical area of provider preparation for theonslaught of RAC overpayment denials is gearing up to aggressivelyappeal. CMS has determined that Medicare appealrights are applicable for this program, and hospitals should beaware of the requirements and appeal opportunities (see Table1). And just as important, providers should be ready to go thedistance to preserve their original Medicare payments. It maybe necessary to pursue provider appeal rights through theAdministrative Law Judgment (ALJ) level. Each successivelevel of appeal allows the provider another step towards winning.Remember when it comes to RAC appeals, timid appealsdon’t get results; assertiveness and perseverance do.If a provider prevails in the appeal process, not only willthe funds be repaid, CMS is required to pay interest to theprovider on recouped revenue if the denial is overturned.Contingent PaymentThe RAC is paid on a contingency basis with a percentageof the cited overpayment amount collected from the deniedservices (estimated to be 25%). In the event that a providerfiles an appeal disputing the overpayment and the appeal iscontinued on page 26Focus 25

March/April 2008continued from page 25Table 1LEVEL LEVEL OF TIMEFRAME TO APPEAL TO BASIS FOR CRITERIA CONTRACTORAPPEAL SUBMIT APPEAL WHOM? APPEAL USES FOR APPEALREVIEW AND RESPONSE1 Internal 15 Calendar Days Directly Medical Interqual and CodingRAC From The Date Back to Necessity; ClinicAppeal of Denial The RAC Reassignments;TechnicalIrregularities2 Fiscal 120 Calendar Directly To Medical Interqual; Coding Clinic,Intermediary Days From The The FI Necessity; Medicare Regulations(FI) Appeal Original Date of CodingDenialReassignments;TechnicalIrregularities3 Qualified 180 Calendar Directly To Medical All Evidence Must BeIndependent Days From The The QIC Necessity; Presented Or It Will BeContractor Date of FI Coding Inadmissible for Successive(QIC) Upheld Reassign- Appeal LevelsAppeal Determination ments;TechnicalIrregularities4 Administrative 60 Calendar Days Directly To Medical Judicial Review;Law Judge From The Date The ALJ Necessity; Opportunity To Appeal(ALJ) of The QIC Coding Directly To The Judge VIAUpheld Reassign- Telecomference Or InDetermination ments; PersonTechnicalIrregularities;Legality ofThe Denial5 Medicare 60 Calendar Days Medicare Review Of Review Of The LegalAppeals From The Date Appeals The ALJ DecisionCouncil Of The ALJ Council, DecisionUpheldWashington, (CMS MayDetermination D.C. Also RequestA ReviewOf TheDecision)Medicare, and almost never “under-billing.” Thepremise of this conclusion can be supported bythe CMS FY 2006 data. Yet, is the initiativestructured to favor the finding of overpaymentsand thus perpetuation of the RAC program? Thenet result is the return of provider payments tothe Medicare coffers and lost provider revenue.There are no RAC program provisions forproviders to identify underpayments throughself audit. Therefore, CMS and the RACs mustbe correct (as their data supports) that providersare over-billing the Medicare Program predicatedon the large amount of overpayments identifiedand small amount of underpayments identifiedby the RAC.The initial RAC focus in New York State washospital inpatient and outpatient claims, withan average overpayment per provider for inpatientclaims, of just $164,372 in fiscal year2006. However, actual overpayment denials todate have been reported (per hospital provider)to have reached in the millions of dollars sincethe inception of the demonstration project.FY 2006 reporting also shows that theRACs thus far have aggressively focused onselected issues with significant financial impactper case. They include:❏ “Excisional debridement” incorrectlycoded ($17.8 million recovered)❏ Medical back problems cited as not medicallynecessary ($2 million recovered)decided in the provider’s favor at the first level of appeal, theRAC is to refund the contingency fee to the Medicare Program.There are no penalty fees for the RAC. However, if theappeal is upheld or decided in the provider’s favor after thefirst level appeal process, the RAC keeps the contingency fee.As of March 1, 2006, the RAC will also receive a contingencyfee for underpayments identified.Most Recovery from Inpatient CasesThe CMS report showing the status of the RACs for fiscalyear 2006 reveals that to date, most overpayments identifiedwere from inpatient hospitals and SNF providers, and the significantmajority of the overpayments were due to inpatientdenial issues. Interestingly, 97% of the improper paymentsidentified by the RAC in FY 2006 were overpayments and just3% were underpayments. If the RACs are correct, the conclusionis that providers are systematically “overcharging”Despite full Medicare appeal rights, CMS reports that inFY 2006, only 398 SNF and Inpatient hospital appeals werefiled in New York. Providers were caught off guard by the volumeand complexity of the RAC process that they were illequippedand unprepared to mount a defense. In fact, theappeals process is so multi-tiered that actual CMS statisticspursuant to any overturn of denials are not yet available as themajority of the appeals in 2006 were probably still inprogress.Learning by ExampleIn developing a strategy to manage the RAC process, hospitalscan learn a lot from the experience of the “big issue”denials. The excisional debridement issue was felt by most, ifnot all, New York providers and will likely continue to be akey RAC focus since this coding dilemma still exists in MS-DRGs, launched in October 2007.26 Focus

March/April 2008In ICD-9-CM coding methodology there are two codesavailable for skin debridement, code 86.28 for “non-excisional”debridement and code 86.22 for “excisional debridement.”Assignment of code 86.22 is a heavily weighted surgeryin DRG grouper methodology and will assign a “surgical”DRG even though the procedure may have been performedat the bedside, while code 86.28 does not affect theDRG at all. The value of the excisional code can representmore than $10,000 difference in reimbursement for somecases.The providers that have been most affected by RAC excisionaldebridement coding denials tend to be hospitals with:❏ high Medicare populations❏ chronically ill patients❏ elderly nursing home patients❏ active wound care centers and surgery servicesIn recent years, several guidelines related to the coding ofdebridements have been issued in the Coding Clinic, the technicalcoding reference acknowledged by CMS. And still thereis confusion among coders about how to interpret physiciandocumentation on debridement cases. The RACs have beencapitalizing on this confusion. Unless the medical record clearlydocuments the phrase “excisional debridement”, the RAChas been re-coding the claim to non-excisional debridement.As an example, the RAC recently denied the coding of86.22 in the following case, arguably because the word, “excisional”was not present in the documentation:A 90 year old diabetic male, was admitted as an inpatientwith an incidental finding of multiple lower extremityulcers. Podiatry was consulted and treated the patient, documenting,“new left ankle ulcer covered by black/yellownectrotic tissue…sharply debrided to full thickness with a#15 blade…”To a surgeon or podiatrist, this clinical documentationdefinitively describes an excisional debridement, but, not tothe RAC.In some instances, operative reports are available to substantiatethe coding of 86.22, in other instances there may bea progress record or consultation record. But regardless ofwhat documentation is available, providers should aggressivelyappeal these cases if the physician responds upon query thatan excisional debridement was performed.Benefiting from AddendaIn response to a RAC denial on this issue, providers shouldinclude additional documentation by the physician (medicalrecord addendum) with the appeal. Such documentationshould specify that an excisional debridement was performed.An “addendum” is standard practice in health informationmanagement (HIM) departments and widely accepted as partof good documentation standards in the healthcare industry.The American Health Information Management Association(AHIMA) supports the use of addenda and clarificationnotes in specific circumstances. AHIMA defines an addendumas a “type of a late entry that is used to provide additionalinformation in conjunction with a previous entry”. Itshould not be used to correct an erroneous note. A clarificationnote is defined as an entry “to avoid incorrect interpretationof information that has been previously documented”.AHIMA requirements include:❏ Physician signature and current date and time of theentry;❏ Documenting “addendum” or “clarification” with thereason for same, referring back to the original note (e.g.addendum to provide additional information to thePodiatry consultation 1-20-07 for patient X);❏ Identify (if applicable) any source of information usedin the addendum/clarification; and❏ Complete the addendum/clarification as soon as possibleafter the original noteIf completed according to these recognized standards,addenda and clarifications can be useful tools in managingthe documentation requirements for “excisional” debridementcoding. However, clinicians should not complete anaddendum/clarification, if there is any doubt as to the procedurepreformed. The addendum must only be completed bya “treating” physician - the same clinician who performed orsupervised the procedure.Disadvantage of Going BackwardsThere is a significant disadvantage for providers when theRAC reviews records which have aged up to four years afterbilling. It is certainly more difficult to retrieve archived recordsin a timely manner and such records may be reviewed thoughthe prism of current clinical standards. In addition, physicianswho preformed the care might no longer be on staff and thereforeunavailable to complete addenda or clarifications. However,appeals and addenda, if needed, should be aggressively pursued.In the process of appealing RAC excisional debridementcoding denials, most physicians who have been queried haveindicated that they were able to rely on their previous medicalrecord notations (as in the documentation example above) inorder to confidently draft a medical record addendum attestingthat the procedure was indeed “excisional” (meeting the codingdefinition of the procedure). When addenda are provided ascontinued on page 28Focus 27

March/April 2008continued from page 27part of the appeal (along with operative reports, pathologyreports, consultations and procedure notes), it has proven to bean extremely effective part of the supportive documentation.If a physician completes an addendum, the appeal will likelybe won.For all hospitals, especially those with wound care sensitivepopulations, providers should pursue all levels of Medicareappeal. Simply responding to the RAC with a rebuttal shouldbe a hospital’s first step in the appeals process, not theonly step.Hospitals must create a plan to manage and appeal RACdenials as the first step in pushing back this CMS initiative.Prospectively, hospitals have to change patterns which exposethem to denials. Clearly on just this one issue, going forwardall surgeons and podiatrists should always use the term, “excisional”to document a procedure that meets the codingdefinition of excisional debridement. HIM professionals andEXECUTIVE RESOURCES, LLCIS YOUR BOTTOM LINE NAGGING YOU?coders also need to be versed in the coding of 86.22, to accuratelycode and query clinicians.The future of the RAC program will involve providersnationwide. By 2010, CMS plans to have 4 regional RACsto divide the country into approximate quarters. Providersin other states should be preparing now for the nationwide rollout.*About the AuthorsKathi Johnson, is Executive Vice President of Health/ROI, ahealthcare recovery and consulting firm, serving New York andNew Jersey Hospital clients. Kathi has more than 30 years ofexperience in health data management and physician documentationissues.Ellen Scott, RN and Elizabeth Flood, RN are Clinical Directorsfor Health/ROI’s PARR denials management program. Ellen andLiz are specialists in utilization management,healthcare insurance and arbitrationissues.*Future articles are planned and willaddress evolving RAC review issues andimportant revenue recovery informationfor provider appeals.PROFESSIONAL HEALTH CARE CONSULTING SERVICES TOHOSPITALS AND PHYSICIANSSELECT PRODUCT LINES:Environmental ScanHospital Revenue Budget & Impact AnalysisPhysician Need AssessmentForensic Audit & ComplianceFQHC Development1955 State Highway 34, Suite 3-B, Wall, NJ 07719Tel 732-974-7200, Fax 732-974-7299Email execresources@msn.com(Harry Wright, Bill Cusick, Larry Sargent)1. The Centers for Medicare and MedicaidServices (CMS) Recovery AuditContract (RAC) Initiative. MLN Matters,No: SE0469. Retrieved April 17, 2007from www.hhs.gov.2. The Centers for Medicare and MedicaidServices Frequently Asked Questions.ID#7730. Retrieved April 17, 2007from www.hhs.gov.3. The Centers for Medicare and MedicaidServices. CMS RAC Status Document,Fiscal Year 2006. Retrieved April17, 2007 from www.hhs.gov4. Medicare Administrative Memorandum#2007-01 Re: Clarification of ExcisionalDebridement Coding. January 5,2007.5. American Health Information ManagementAssociation. Legal DocumentationStandards. Retrieved March 27,2007 from www.ahima.org28 Focus

March/April 2008•Focus on Ethics•Ask the Ethics Guy ® !How to Get a Good Night’s Sleepby Bruce Weinstein, Ph.D., The Ethics Guy ® continued on page 31Forget taking pills or counting sheep. Just make sure you cananswer yes to five simple questions.Do you have trouble sleeping?If so, you’re not alone—and the price you pay can be significant.Think about how irritable you can be and howpoorly you perform at work after you haven’t slept well. It’snot just your mood and performance that are at risk, either.Chronic sleep deprivation has been linked to such healthproblems as heart disease, diabetes, and obesity. The afflictedturn to a wide range of antidotes, including over-the-counterand prescription medication and a wide range of therapies.People in the United States spend $4.5 billion a year on sleepmedications alone, according to a recent New York Timesarticle by Stephanie Saul.However, there is one potential solution to sleeping problemsthat hasn’t been mentioned in television news programs,radio talk shows, magazine articles, or newspaper reports.It has, however, come up at every single lecture I’ve evergiven when I ask: “Why should we be ethical?”Invariably, someone will answer: “So I can sleep better atnight.”As you will see, it makes perfect sense to discuss in anethics column how you can be assured of a good night’s sleepevery night.This evening, before you go to bed, ask yourself the followingfive questions:1. Did I avoid causing harm?2. Did I make things better?3. Did I respect others?4. Was I fair?5. Was I compassionate?If you can answer “yes” to all five questions, you will almostbe guaranteed to have peaceful, uninterrupted slumber (assuming,of course, that you have no physical problems that are preventingyou from sleeping well). You will deserve this pleasantreward, because you will have shown that you took the highroad when it might have been easier to take the low one.In looking back on the day, your commitment to “do noharm” showed that you refused to give in to the harsherimpulses we all have, such lashing out Bruce Weinsteinat others after they have lashed out atus. Anyone can tear down. It’s not so easy to rise above.By making things better, you went beyond what the law oryour company’s policies required of you. After all, no statute orinstitutional rule tells you that you must enrich the lives of others.You could have done just enough to fulfill your job description.Even if your job involves benefiting others directly, it isalways possible to go beyond what is asked of you. If you didmore than just what you needed to do to satisfy the minimumrequirements of your job, you should be proud of yourself.Your choice to respect others, with all that this implies,may have been challenging at times. When your boss askedyou why you made a mistake that you know was your ownfault, it would have been easier to lie, but you had the courageto be truthful. When you were in a position to reveal a secretentrusted to you, it might have been fun to gossip, but youdid the right thing and kept the secret to yourself. Perhapsyou had the opportunity to break a promise to a friendbecause something better came along, but you kept yourword and revealed yourself to be a person of integrity.Treating others fairly is fraught with the temptation to takeinto account things that we shouldn’t but too often do. Wegive a job to a friend or family member instead of to someonewho is better qualified, or we don’t give a job to someonebecause of a personal prejudice of ours. We choose a certainpunishment not because it is just, but because anger andother emotions get the best of us. We fail to take action whenwe encounter a social or economic injustice. Today, however,when you were able to answer “yes” to question #4, you overcameall of these obstacles.Most importantly of all, you treated others with compassion,kindness, and love. The people who received your giftmay not have told you that they appreciated what you did,but you can bet that your actions made a difference. It mightseem strange to talk about love in publication devoted tobusiness and finance, but without love, how meaningfulwould our success really be?Focus 29

Financially TroubledHealth Care Facilities GroupTo assist our health care facilities clients who may beexperiencing severe financial pressure, members of theNorris McLaughlin & Marcus Health Care and Creditors'Rights & Bankruptcy Practice Groups formed a team tohelp financially troubled health care facilities. Servicesprovided by the Group include:J. Anthony MangerGary N. MarksIra S. NovakBruce J. WisotskyMorris S. BauerLarry K. Lesnik• Serve as counsel and health care consultants to troubled health care facilities and institutionsconsidering filing for reorganization or liquidation under the federal Bankruptcy Code or stateinsolvency laws.• Provide advice and counsel to entities seeking to take over targets which are financiallytroubled health care facilities and institutions.• Analyze and advise new venture capital groups involving the takeover and mergers offinancially troubled health care facilities and institutions.• Serve as regulatory and litigation counsel, and regulatory consultants, to hospitals andtheir affiliated corporations, hospital medical staffs and medical staff members, nursinghomes and other long-term care facilities, professional practices and other providers of healthcare services.• Assist health care facilities that are the target of federal program fraud investigations, whistlebloweractions, and other federal and state compliance actions which may involve emergentcriminal and civil defense support.• Accept appointments by the Bankruptcy Judges in the District of New Jersey, the Commissionerof the New Jersey Department of Health and Senior Services, and New Jersey ChanceryJudges to serve as Trustees, Assignees for the Benefit of Creditors, Rehabilitators for NewJersey and New York health care facilities and institutions.721 Route 202-206P.O. Box 1018Somerville, NJ 08876-1018908-722-0700 tel908-722-0755 faxwww.nmmlaw.cominfo@nmmlaw.com875 Third Avenue18th FloorNew York, NY 10022212-808-0700 tel212-808-0844 faxA full-service law firm serving the New Jersey community for over 50 years.30 Focus

March/April 2008continued from page 29By answering all of the above five questions affirmatively,you affirmed your commitment to the five fundamental principlesof ethics:• Do No Harm• Make Things Better• Respect Others• Be Fair• Be LovingYes, there are serious health issues that can prevent us fromsleeping, and even the most rigorous adherence to the principlesof ethics won’t overcome these sorts of problems.Medical conditions such as sleep apnea require the interventionof a health care professional, which I am not. Nevertheless,much of the psychological conflict that keeps us up atnight can indeed be traced to choices we have deliberatelymade during the day. If we can choose to take the low roadand are willing to accept the consequences for doing so, wecan also choose to take the high road—and be rewarded witha peaceful night’s slumber, amongother benefits.It is also the case that, no matterhow hard we try to the do right thing,or how often we set out to be the bestwe can be, we fail, over and over again.We respond to a nasty remark withmore nastiness.We are in a position to be a force forgood, but we choose to do otherwise.We lie instead of telling the truth,simply because it is easier to do so.We allow anger to get the best of usand determine how we mete out punishment,even though we know thatthis isn’t right.We have the opportunity to showloving kindness to someone, but wekeep that feeling bottled up, perhapsout of fear of appearing weak or makingourselves vulnerable.In other words, when we gothrough the checklist above, we are notalways able to answer “yes” to everyone of the five questions.But let’s cut ourselves some slack.After all, there’s always tomorrow.And the day after that, and the dayafter that.Our lives are a work in progress, and by striving to live ethically,we seek to bring out the best in ourselves. In so doing,we may very well bring out the best in others. It bears repeating:the reason to do the right thing is simply because it is theright thing to do. Nevertheless, we reap many professionaland personal rewards by taking ethics seriously in all that wedo. Enjoying deep, restful, restorative slumber is one of thosedividends.May you have a good night’s sleep tonight, tomorrow, andevery night.This article appeared originally on BusinessWeek.com.About the AuthorDr. Bruce Weinstein is the public speaker and corporate consultantknown as The Ethics Guy®. Visit his website,TheEthicsGuy.comSave the Date!Annual NJ HFMA Golf OutingMay 1, 2008Fiddler’s Elbow Country ClubFar Hills, NJFocus 31

March/April 2008CFO Spotlight:Bob Glenning, HackensackUniversity Medical CenterFOCUS: CFO Backgrounds are diverse; please tell us aboutyours. How did you get started? What is your education andprofessional background?BOB: Prior to joining Hackensack University MedicalCenter, my position was Executive Vice President and ChiefFinancial Officer at Kaleida Health in Buffalo, New Yorkwhere I worked from 2001-2007. Kaleida is the largesthealthcare system in western New York, consisting of five hospitals,four long-term care centers, an ambulatory surgicalcenter, homecare and a regional lab. Prior to my tenure atKaleida, I served as the CFO of Albany Memorial Hospitaland Samaritan Hospital for over 10 years. Prior to this andjust out of graduate school I was with Coopers and Lybrandfor five and a half years.My undergraduate degree is from Siena College and MBAis from Clarkson University.FOCUS: Did you ever think, all those years ago, that youwould be here, doing this today?BOB: No, I have been very fortunate in my career and havehad opportunities that I did not expect when I left graduateschool. This is from having the benefit of working with severalgreat mentors whom I learned from and provided me manyof these opportunities.FOCUS: What new skills do you think are needed for risingCFOs?BOB: A CFO today needs to be more and know more thanjust the numbers. Today’s CFO really needs to understand thebusiness we are in and to interpret trends and numbers in away that allows Management and a Board of Trustees to makeinformed decisions. This requires two way communicationamong the folks in Finance and the folks in Operations, weneed to learn from each other and understand the perspectivesof the entire organization.FOCUS: What are your hospital’s specifics – are you a singlefacility or part of a system? Do you have a religious affiliation?Please describe your location, demographics and theservices offered at your hospital.BOB: Hackensack University Medical Center, a 781-bed teachingand research hospital affiliated with the University ofMedicine and Dentistry of New Jersey – New Jersey MedicalSchool, is the largest provider of inpatient and outpatient servicesin the state of New Jersey. There is no religious affiliation. Ourhospital excels in a number of areasincluding the following specialties: Cancertreatment, Cardiac, Robotic Surgery,Stroke Care, Pulmonary Care, General Bob GlenningSurgery, Orthopaedic Care, VascularSurgery, Gastrointestinal Care (GI), Critical Care, Prostatectomyand Bariatric SurgeryFOCUS: Can you tell us about your hospital’s new buildingprogram?BOB: Certainly. We are looking to consolidate all of our servicesfor treating patients with cancer in one location. (After anumber of years of growth and expansion we are located inseven different areas of the Hospital. Outstanding Nursing andPhysician support has made this work, but we feel and want todo more for the patients who come to us for their care.) Thenew building will be approximately 155,000 square feet in sizewith an attached parking facility to ensure a convenient experiencefor our patients. The new facility will provide state of theart equipment configured towards the patients needs versushow the hospital may currently be configured. This buildinghas been designed to meet or exceed LEED guidelines as we arevery conscious of our impact on the environment.FOCUS: What types of financing are utilized to meet thehospital’s goals?BOB: To ensure that we are good stewards of the organizationwe are always open to exploring different financingoptions in order to meet our goals. This includes traditionalfixed rate and variable rate debt and swaps as well as capitaland operating leases.FOCUS: What are your spare time activities?BOB: Family. Given the level of focus and the time commitmentbeing a CFO requires I like to have my spare time availablefor the family.FOCUS: What are your professional memberships?BOB: I am a member of the AICPA.FOCUS: You are told you have 30 minutes to pack – you aregoing to a sparsely populated island. What would you bring,besides food, clothes, hygiene products, etc?BOB: My family. I can be pretty much happy anywhere myfamily is.32 Focus

Member Spotlight:Deborah Shapiroby James Yarsinsky, CPAMFOCUS: Deborah, please provide a summary of yourself andyour career below:DEBORAH: I was born in New Orleans, LA, grew up inNew York, went to Barnard College, Columbia University formy bachelors, and got my MBA at The Ohio State Universityin Columbus, before moving to New Jersey – moving aroundso much gave me great perspective on life outside of the Tri-State Area! I married my college sweetheart (28 years andgoing strong), have 3 boys (21, 20, and 18), and have workedin a number of different industries including manufacturing,banking, retail, and finally, healthcare. Prior to my currentposition with WFS Services, Inc., I ‘made my bones’ withDeloitte & Touche in their consulting division where I beganmy healthcare odyssey. While at Deloitte & Touche, I wasresponsible for managing the Revenue Maximization/Revenue Enhancement project for the Office of Hospitalswithin the State of Louisiana. The Office of Hospitals comprisedeight State-owned charity hospitals within the State.As part of the project, I was responsible for recommendingand implementing new processes and procedures within thehospitals to streamline operations, improving efficiency andeffectiveness of the financial operations (including Admissions,Patient Accounts, Medical Records, and Hospital InformationSystems) and ensuring maximum cash recoveries. It was a greatsegue into my position as Chief Operating Officer at WFS in1992 – and then later into President & CEO.FOCUS: Deborah, please talk about your employer andyour duties within the organization.March/April 2008DEBORAH: I became President of WFS in 1993 and then,about 15 months ago, consummated the deal to buy the company.I think we’re a great employer! But seriously, we have amarvelous team of professionals through whom we provide ourservices to hospitals and physicians across the country. WFS is atechnology based full service receivables management company.Our services are specifically designed for managing the HealthcareRevenue Cycle. They range from Day 1 Billing, to Followup for patient pay portions, to Customer Service Bureau, WebHelp Desk, Denial Management, Special Projects, Systems conversion,and proactive consulting with all of our clients.My primary function is to serve as WFS’ “cheerleader” bothto our employees and our clients. I am very involved in relationshipmanagement with ourclients and work hard at maintainingthat relationship as a partnershiprather than vendor/client. I amDeborah Shapiroalso cognizant that, as our industrygrows and changes, we must change with it. As such, I amfocused on bringing new products and services to our clientbase, forging strategic alliances with other companies who provide“best of breed” complementary services, and work hard tomake sure that both our staff and our clients are kept abreastof industry changes that will impact them. I also share thatknowledge through my role as a member of the editorial advisoryboard for HARA (Hospital Accounts Receivable Analysis)and The Receivables Report as well as the Health Care Billingand Collections Manual.FOCUS: Name a few of the special challenges you face inyour position.DEBORAH: Business ownership, as you are aware, has itsown unique challenges. I was a management science major ingraduate school and learned all about the organization chartpyramid. Well, it is a pyramid, but I’m on the bottom! I makeit a point to lead by example and it is important that my staffknows that I’ve performed the same functions they perform andwill pitch in to help if needed. Also, I recognize that I am WFSto the industry and that puts added pressure to make sure thatI can always be accessible to clients and potential clients.FOCUS: What are the greatest changes have you witnessedin patient accounting since you started your career?DEBORAH: Hands down it is the complexity of coding andreimbursement. The whole rise of managed care has been like“Terminator 3: Rise of the Machines”! In ‘the old days’ hospitalsand physicians could bill for services and have a reasonableexpectation of getting paid in somewhat of a timely fashion.Now, the proliferation of insurance companies, managed careregulations, processing differences – you have to run just to stayin place. Also, in the last 10 years we’ve seen a worsening of personaleconomy, the rise of uninsured, and shrinking governmentaldollars with which to support the providers. Hospitals anddoctors are caught in a vise that is tightening almost unbearably!continued on page 42Focus 33

March/April 2008The OrganizationalBenefits of EmployeeWellnessby Robert D. SuttonEven the best and most innovative employers areexperiencing the impact of worker well-being on theirorganizations’ performance. The bad news is that manyof these employers are unaware of the extent to whichless-than-optimal employee health and well-being isimpacting workforce capacity and performance. Thegoods news is that there is an increasing body of researchand practice than can help employers mitigate this oftenunseen issue and create significant opportunities forimproved workforce attraction, retention, and performance!The Problems of Chronic DiseaseAccording to the World Economic Council (WEC), 60percent of deaths in 2005 could be attributed to chronic disease(cardiovascular disease, cancer, chronic respiratory diseases,and diabetes). The largest attributing factors to thechronic diseases include smoking, physical activity, and diet.The costs of these diseases are staggering. For example, ifthere were a 10 percent reduction in mortality from heart diseaseand cancer, it could save the US $10.4 trillion annually. 1Further, the WEC projects that over 80 percent of the USpopulation will be either considered overweight or obese bythe year 2015.The Problems of Financial Distress and DissatisfactionAs hard as it may be to fathom, a 2004 study found that67% of U.S. Workers are dealing with personal financialissues. 2 In another study, it was found that these issues canexist in all segments of any workforce, regardless of income,education, or position level.3 Couple these facts with ourhealthcare workforce reality:➣ The healthcare workforce is aging and demand for nuringand allied professionals continue to exceed the supply– and will for the foreseeable future.➣ Due to the shortages of quality personnel, the stress onour current workforce is increasing.Robert Sutton➣ With these shortages of personnel, hospitals cannotcontinue to pay spiraling market prices for nursingand allied professionals because of declining reimbursement.➣ Lastly, those attributes that make hospital professionalsgreat caregivers also tend to make them less apt to focuson matters of personal financial management.The Return on InvestmentOther than the societal responsibility hospitals share inimproving employee health and well-being, there are othersignificant reasons why hospitals should employ strategies toimplement physical and financial wellness programs for theiremployees:➣ Improve productivity, including reductions in healthcareand workers compensation claims, absenteeism,and presenteeism.➣ Reduce employer paid healthcare and re-insurancespremiums.➣ Increase employee, physician, and patient satisfaction.➣ Increase staff retention and productivity.The following two charts reflect the annual cost peremployee of chronic disease in productivity and medicalcosts.As the following chart reflects, five percent of employeestypically represent 55 percent of medical costs to employers.Further, a recent Towers Perrin case study found that a tenpercentage point improvement on employee engagement waslinked to a 4.6 percentage point improvement on customersatisfaction and revenue growth and labor cost improvementsequal to a 2.8 percent impact on controllable margin.What all this shows is that offering workplace physical andfinancial wellness initiatives and incentives is more than just“the right thing to do.” Rather, there is a profound businesscase. As workforce capacity and engagement increase, abottoms-up cultural change takes place in your organization.These changes drive improvements in customer satisfaction,34 Focus

March/April 2008Annual cost per employCosts of chronic disease in productivity and medial costs400350300250200150100500ProductivityMedical CostHeart Disease Hypertension CancerRespiratoryInfectionsDiabetes$102.62 $300.88 $82.62 $71.98 $182.16$265.71 $91.44 $61.39 $61.87 $74.76ComplexWell Low Moderate High &Members Risk Risk Risk IntensiveCare% of employees 50% 25% 20% 4% 1%% of healthcarecosts 10% 10% 25% 30% 25%Source: “Seven Ways to Demonstrate ROI: A Sherpa Model”, byMichael Samuelson, MA, Vice President, Health & Wellness Services,Blue Cross and Blue Shield of Rhode Island, Achieving Return onInvestment for Wellness Conference, San Diego, October 23-25, 2006.productivity, absenteeism, and presenteeism – all of whichdrive improvements in profitability.The Course of ChangeAs a major employer in the community, you can have atremendous impact on physical and financial wellness, especiallywith the resources so readily available. Here are a fewsuggestions on how you can engage your employees:1. Define the plan - determine if you have the internalresource availability and knowledge to develop a formalprogram for both physical and financial wellness. Manyorganizations, due to confidentiality, legal, and otherreasons, choose to engage outside partners to managethese processes.2. Communication - once you have developed the plan,communicate the plan to all employees…using multiplemedia and approaches.3. Lead by example - begin wellness initiates at the top(walk the walk). Allow yourselves the opportunity to gothrough a health risk assessment and a financial assessment.If you can, communicate your results and youraction steps to staff.4. Develop incentives for staff participation - here are acouple of financial incentives you can provide staff thatare low cost and optimally have a return on investment:a. Pay employees to take a risk assessment.b.Lower employee contributions to the medical planfor those who agree to engage in a program of wellness.5. Offer personal risk assessment counseling - offer resourcesthat can meet one-on-one with each employeeto understand both their physical and financial wellnessrisks and opportunities.6. Eliminate trans-fat from your dietary offerings - if youhaven’t been required by legislative statute, you shouldeliminate trans-fatty oils from the employee cafeteriaand patient meals.7. Eliminate smoking areas for employees - as hospitalshave always been non-smoking, there are now numeroushospitals that bar smoking on the entire campus.8. Provide proper monitoring programs - probably thehardest part of the plan, the ongoing monitoring is critical.Hospitals can use their own or build wellness centers,but most employees feel ashamed to use them.Typically, the users of wellness centers are those least inneed. There are many external and online tools andoptions that are available today.9. Arm local businesses with their own physical wellnessprogram - there are options where this can even generaterevenue and/or deepen relationships with the communitiesyou serve.Legal IssuesWhen thinking about an employer-based physical wellnessprogram, one must take into account certain requirementsunder ERISA, the Internal Revenue Code (Code), and thePublic Health Service Act (PHSA). All three laws were amendedby the Health Insurance Portability and Accountability Actof 1996 (HIPAA) to provide for improved portability and continuityof health coverage. HIPAA also added Code Section9802, ERISA section 702, and PHSA section 2702, each ofcontinued on page 36Focus 35

March/April 2008continued from page 35which prohibits discrimination in health coverage based onhealth status.To be a bona fide wellness program, the plan must satisfythe following requirements:• An individual's total reward must be limited. A limit of10 to 20 percent of the total cost of employee-only coveragemay be appropriate, according to the DOL.• The program must be reasonably designed to promotegood health or prevent disease.• The reward must be available to all similarly situatedindividuals. The program must allow any individual forwhom it is unreasonably difficult because of a medicalcondition to meet the wellness program standard (or forwhom it is medically inadvisable to attempt to meet thewellness program standard) an opportunity to satisfy areasonable alternative standard.About the AuthorRobert D. Sutton, Partner/Owner – Rob is the founding partnerof IMA Consulting. He has helped hospitals, health systems, andphysician networks improve their operating performance for overtwenty years. Rob is a business graduate from the University ofDelaware with a Masters in Business Administration from WestChester University. He is a Certified Healthcare Executive(CHE) with the American College of Healthcare Executives anda Certified Healthcare Financial Professional – Patient Accounts(CHFP) with the Healthcare Financial ManagementAssociation.1 Page 10 of WEC report2 2004 Employer/Employee Equation Research on WorkerTypes, Preferences and Engagement Issues – Concours Group,Age Wave and Harris Poll3 1997 Neal E. Cutler, Ph.D.HEALTHCARE FINANCIAL SERVICES INC-HFS-For over 20 years, serving the New York and New Jersey healthcare community with comprehensive programs that provide an effective andprofessional approach to the collection of delinquent receivables –• Customized Letter Series• Skip Tracing• Insurance Verification and Processing• Asset Location and Verification• Legal Processing• Comprehensive ReportingHFS is a collection agency authorized by local authority to perform collection services within the States of New York and New Jersey. We areproud of our excellent reputation, and we invite you to check with any of our valued client references. HFS remains constantly focused on HIPAAcompliance, regulatory compliance, and customer service while utilizing all available resources to secure payment of accounts due. HFS personnelpossess a vast degree of experience and training in effective client service, account collection practices, and in third party insurance claimpreparation and follow-up. The staff enjoys the functionality of technology that provides sophisticated debt tracking, and an array of tools thatmaximize collection results. The company executive management team is comprised on individuals with over 990 years combined healthcarefinance experience.If you would like to know more about our services please contact Larry Friia anytime at 973-429-8530 x7116 or at lfriia@hcfs.org, or JerryCastoria at x7191 or at jcastoria@hcfs.org. We will schedule a meeting at your convenience. Meanwhile please visit our web-site atwww.hcfs.orgHealthcare Financial Services Inc.600 Bloomfield Avenue • Bloomfield, New Jersey 076003973-429-853036 Focus

The ReinhardtCommission Report:A Good Start in Need ofLong Term Solutionsby Sean J. HopkinsMarch/April 2008The New Jersey Commission on Rationalizing Health CareResources released its long-awaited final report in January. TheCommission, created by Governor Jon S. Corzine in October2006, was charged with evaluating the economics of the acutecare hospital sector in New Jersey and providing recommendationsto the Governor on how the state might support financiallydistressed hospitals going forward.The Commission’s final report provides a thorough andcandid explanation of the fiscal crisis currently gripping NewJersey’s hospitals, but from the hospitals’ perspective fallsshort on delivering solutions that would address the industry’sunderlying need for additional and appropriate levels of funding.In a nutshell, the report generates an “A” for effort butin the grand scheme of things fails to offer quantifiable solutionsand therefore receives an overall grade of “Incomplete.”As with any report of this magnitude, there will be areas inwhich all are in agreement and other areas where there is a significantdifference of opinion. The Commission should beapplauded for its recognition of the severe financial distressbesetting hospitals in New Jersey. The report openly states,“The Commission has closely examined the current financialcondition of New Jersey hospitals, which seem out of step withfinancial conditions of hospitals elsewhere in the nation. A largenumber of hospitals appear headed toward distress in the nextfew years.” The report cites chronic underpayments from governmentalpayers as one of many causes that contribute tohospitals’ financial distress, stating that while governmentalunderpayment is not unique to New Jersey, it “appears to bemore pronounced here.”The report provides compelling insight into not only thefactors that have driven hospitals to the brink, but also howthese problems have had a ripple effect on the cost of deliveringhospital care, the overutilization of hospital emergencyrooms and other issues confronting the residents of NewJersey. Unfortunately, the Commission missed an opportunityto address some of the healthcare system’s most urgentneeds. The report made no recommendations on how thestate should provide sufficient charity care funding whichwould require new monies, not simply a shift of existing dollars.Equally absent from the report was any recommendationon how to infuse additional funds into the Medicaid programwhich currently reimburses hospitals just 69 percent ofthe cost of inpatient care andprovides woefully inadequate Sean Hopkinspayments to physicians.The Commission chose to narrowly focus its examinationon hospitals rather than acutely exploring all components ofthe continuum of care, including the role of federally qualifiedhealth centers, ambulatory care facilities, long term care, homehealth, assisted living and other types of providers. While thereport recognized the adverse financial impact ambulatory carecenters are having on hospitals and recommended better oversightand transparency for those facilities, it was silent on therole of health plans and managed care in New Jersey and theirability to alleviate the financial stress on hospitals.The Commission’s report also took several strong positionsrelated to hospital governance and the work of our industry’smany volunteer trustees. The report states “a majority of hospitalsare nonprofit institutions (and) many of these respectiveinstitutions have not generally kept pace with changes in bestpractices for governance despite the increasing complexity andscope of health care institutions.” On the contrary, most boardsalready strive to meet educational standards, and NJHA continuesto work with hospital boards across the state offeringeducation, as well as programs centered on assessment, facilitation,best practices, orientation and more, all in an effort toimprove trustee effectiveness and oversight.It is certainly not the perspective of NJHA that the workof the Commission should be diminished or dismissed.Rather, we view the report as a starting point. It provides athoughtful explanation of the factors leading to hospitals’financial crisis, as well as a number of sound recommendationsthat could help improve New Jersey’s healthcare system.Unfortunately, despite the efforts of the Commission, thecurrent environment of economic instability will continue ifthe state does not address the critical shortcomings that remain.As an industry we must be prepared to help by providinginsight and expertise as state policymakers and legislatorswork toward developing recommendations and reforms.About the AuthorSean Hopkins is a Senior Vice President with the New JerseyHospital Association. He has more than 25 years of finance andadvocacy experience working on behalf of New Jersey’s hospitals.Focus 37

March/April 2008Q.A.Q.A.•Focus on Finance•Answers to your Accounting and Tax QuestionsOutsourcing or Co-Sourcing Your Internal Audit FunctionOur facility is thinking about co-sourcing, or possibly completelyoutsourcing, the internal audit function, in order tobetter meet its corporate governance objectives. Whatshould we be considering at this point?The Institute of Internal Auditors (IIA) defines internal auditingas “an independent, objective assurance and consultingactivity designed to add value and improve an organization’soperations. It helps an organization accomplish its objectivesby bringing a systematic, disciplined approach to evaluate andimprove the effectiveness of risk management, control andgovernance processes.”Taking this into account, the real value of internal audit isto go beyond financial reporting and gain an understandingof the overall risk environment.Outsourcing the internal audit function does not have tobe an overwhelming experience for a healthcare facility. Bothfinancial and operational efficiency benefits to your facilitycan result from outsourcing. With the current high demandfor accountants and internal auditors it can be more efficientand cost effective to draw upon resources from outside thefacility. The hospital can, in effect, “borrow” high cost andscarce resources that would not otherwise be available. Evenif you have a strong in-house internal audit department, hiringan outside internal auditor to provide an objective opinion,as well as lend additional experience, can be beneficial.What qualifications should we seek in an outsourcedinternal audit firm?When selecting an internal audit firm, the firm’s resourcesshould have the ability to:• Design a strategic plan for the internal audit function• Evaluate processes and procedures• Reengineer existing departments, if required• Provide specialized resources, including information technology• Conduct quality assurance reviews of existing audit programs• Perform operational audits of current processes• Execute financial reporting process audits• Understand the regulatory environmentQ.How do we maximize the benefitsfrom an outsourced internalauditor?A.In order to gain the most benefitfrom the internal audit function,understand that management canoutsource the audit function, butnot the responsibility for the function.Use the internal audit firm asan information resource, as well as apersonnel resource. It is likely thatRay Broekmembers of the outsourced firm willhave experience in many other audit areas and have the abilityto see past internal issues. Look to that experience to add valueto management’s risk assessments and control evaluations.Additionally, your facility should also consider the externalauditor’s expectations in an attempt to coordinate the entireaudit process. Management should:• Show evidence of understanding the internal control assessmentprocess.• Determine what procedures performed by management orothers can be relied upon by the external auditors.• Understand the external auditor’s methodology for evaluatingcontrols and control deficiencies, if any.• Generate documentation and reports in the formatsrequested by the external auditors.• Maintain open communication with the external auditorsat all times.Integration of duties, processes and objectives along with clearcommunication and planning are critical components for ahealth care facility or hospital to maximize the benefits of itstotal audit relationships and achieve its objectives in the mostcost efficient manner.About the AuthorRay Broek, CPA, MBA, is an Executive Vice President ofWithumSmith+Brown Global Assurance, www.wsbga.com. Hecan be reached at rbroek@withum.com.If you have a question related to accounting or tax that you wouldlike answered in the next issue of Garden State Focus, please e-mailit to elitten@foxrothschild.com. Your questions are greatly encouraged!38 Focus

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March/April 2008•Focus on Members•NATIONAL ADVISORY COUNCIL APPOINTMENT:Cheryl H. Cohen, MBA, FHFMACheryl H. Cohen has been appointed to a two-year termon the National Advisory Council as of June 1, 2008.Cheryl has more than twenty-five years experience inhealthcare finance. She is currently a Vice President withPantheon Capital LLC. Pantheon Capital is a leading providerof innovative, cost effective solutions for the financingneeds of healthcare organizations.Prior to joining Pantheon Capital, Cheryl was a RegionalVice President for a large healthcare equipment finance organization.She also spent several years as Director of Finance for amajor northeast Health Maintenance Organization. In that role,she was responsible for managing daily financial operations.As a former Vice President of Finance for a New Jersey hospital,Cheryl was responsible for all aspects of the hospital’sfinancial operations. During her tenure, she developed andimplemented strategic plans, converted financial and clinicalinformation systems, and substantially improved the hospital’sfinancial condition. Cheryl’s earliest healthcare experiencewas with a consulting firm specializing in hospital revenuemaximization.Cheryl holds the distinction of Fellow in the HealthcareFinancial Management Association (HFMA). She earned aMaster’s Degree in Business Administration from RiderEXECUTIVE MOVESLewis D. Bivona, CPA, AFE, joinsWithumSmith+Brown, P.C.WithumSmith+Brown (WS+B), Certified Public Accountantsand Consultants, is pleased to announce the addition ofLewis D. Bivona CPA, AFE, as Principal in the firm’s Princetonoffice.With over 27 years of experience in the insurance andhealth care fields, Lew’s areas of expertise include insurancecompany management and technical services to insurers, hospitals,physicians and managed care regulatory agencies.Lew is a member of the American Institute of CPAs(AICPA), sitting on the Virtual Health Care Industry Paneland the Virtual Industry Insurance Panel; the New JerseySociety of CPAs (NJSCPA), serving as chair of the HealthCare Interest Group; and the New Jersey chapter ofHealthcare Financial Management Association (HFMA),serving as a CPE coordinator and as a member of the ReimbursementCommittee.Lew was recently awarded the Accredited FinancialExaminer (AFE) designation by the Society of FinancialUniversity and a Bachelor of Science degree from StocktonState College.Cheryl is President on the HFMA Board of Directors,New Jersey Chapter, where she has been a Board member forthe past six years. She also held the positions of President-Elect, Vice President, and Treasurer. During her tenure asTreasurer, she automated the accounting system. She haschaired the Women’s Initiative, the Annual Institute, and theProAction/Managed Care Committees. Cheryl has been recognizedwith the Medal of Honor, Muncie Gold, ReevesSilver, and Follmer Bronze Merit Awards and the President’sAward resulting from her active role in HFMA.The responsibilities and objectives of the NationalAdvisory Council are to provide “voice-of-the-member” feedbackon HFMA position statements through leadershipstrategies, as well as advise the HFMA Board and managementon key issues including:Providing forward looking perspectives on issues that areimportant to key segments of HFMA membership;Helping management and the Board to remain marketfocusedand nimble;Helping staff assess and interpret market research and feedback;andMeeting its member and customer needs.Please join the Chapter on congratulating Cheryl on herwell-deserved appointment!Examiners (SOFE), a professional society for examiners ofinsurance companies, banks, savings and loans, and creditunions with a membership of over 1,600 representing 50states, Canada, Aruba and Netherlands Antilles. To earn thisdesignation, he had to successfully complete the four AFEexaminations administered by the SOFE, including: Life andHealth Insurance Fundamentals; Property and LiabilityInsurance Fundamentals; Life and Health InsuranceAccounting; and Property and Liability Insurance Accounting.About WS+BFounded in 1974, WithumSmith+Brown is one of thelargest regional public accounting and consulting firms alongthe mid-Atlantic corridor. The firm provides audit, tax andconsulting services to many organizations and individualswithin the health care industry, including physicians andphysicians’ groups, long-term care facilities, hospitals andmedical centers, MSOs, IPAs, nursing homes, insurance companiesand other medical-related organizations. With over375 employees in 11 offices, the firm ranks among the top 35CPA firms nationwide and in the top 10 in New Jersey. Formore information, please visit www.withum.com.40 Focus

March/April 2008Meet Some of ourNew MembersAlexis Sipinick Frank Ciufo David PerezWho is your employer, Southern Ocean County Hospital, I am President of THE PUG GROUP INC. St. Barnabus HC System,and what is your position? Patient Access Assistant Manager Hospital Consultant Collections Rep II. I've recentlyobtained my BBA in HealthcareMgmt and am currently biddingon Supervisory/Mgmt positionsin SBHCS.What was your first job as Working at Burger King making Worked for Simon's Vegetable Truck, I worked as a clerical volunteera teen? burgers and singing “hold the pickles running vegetable orders from the at North Central Bronx Hospital.hold the lettuce”.truck into the apartments in StatenIsland, NYWhat do you like best about Seeing the growth of our registrars as Being able to lend a helping hand to The opportunity to serve ouryour work responsibilities? they go throught training and develop hospitals redesigning their tasks patient population as a healthindependent working abilities. It is and bringing profitability. care professional; something inquite a challenge and very rewardingwhich I have a passion for.when it is accomplished.A job I would enjoy doing Fundraising and planning for our Firefighter. I am a volunteer now A healthcare related job thatwithout pay is... Holiday Party, which I already do. It's and if I didn't need the money would enhance my careera committee of wonderful people who I'd be involved more.skills.work very well together having lots offun developing our end of year“Extravaganza”.My favorite place is... Home with my family. Spring Lake, NJ (where I live) Puerto RicoI will not eat... Okra. YUCK!!! Cabbage Pigs feetIf I’m not at work, you will Either home reading, painting, With my wonderful family, at the At home with my family.find me…firehouse, working out, on my boat,playing guitar or at Joe's Deli inSpring Lake talking with the locals!Darlene Mitchell Rose Carrozza Mary Whelan-HohlWho is your employer, Hunterson Healthcare System, Virtua Health EMS, Billing Supervisor Princeton Healthcare System,and what is your position? Director, Corporate Compliance & Billing Follow Up RepresentativeInternal AuditWhat was your first job as My first paying job was at 19 as a Secretarial position I worked at Italian People's Bakerya teen?college tutor, tutoring algebra,calculus, introductory accounting andFrench 101.What do you like best about I like the interaction I have with so I enjoy collecting moneyyour work responsibilities? many individuals -- from entry levelstaff members to the CEO and Board.A job I would enjoy doing Television broadcasting, hosting a Movie critic Working in a nursing home aswithout pay is... consumer news show or talk show. an event plannerMy favorite place is... Anywhere fun and relaxing! The Jersey Shore Any beachI will not eat... Exotic foods that are considered Raw fish Lima beansdelicacies in countries outside the U.S.If I’m not at work, you will Enjoying quiet time at home, doing Spending time with my grandkids. Enjoying my family lifefind me…something relaxing (exercising orhobbies), or doing volunteer work.Focus 41

March/April 2008continued from page 33FOCUS: What advice can you give other patient accountingprofessionals that they can do to favorably impact patientaccounts departments?DEBORAH: First, stay up to date with the changing rulesand regulations. The best way to do that is through participationin HFMA and AAHAM training sessions as well asthrough forum membership, payer seminars, vendor seminars,and keeping current with the literature. Second, wherepossible, automate. Without up to date technology, the PAprofessional will have little chance to keep up with the changingenvironment. Third, outsource! Vendors typically canprovide their services at a more cost effective rate than a hospital.And managing cost while maintaining/improving revenuerecovery is key. Finally, establish benchmarking protocolseither through Six Sigma or other QA sources. You firsthave to know where you are before you can develop strategiesto get where you want to be.FOCUS: What are your hobbies and outside interests?DEBORAH: Horseback riding (jumping and dressage) andreading are my hobbies – but my main outside interest is myfamily and my alma mater. I am fortunate that my adult childrenstill like to hang out with ‘Mom and Dad’ and we’vefound new ground on which to connect – Xbox’s Rock Band![I can fake a mean bass guitar!]FOCUS: Thank you Deborah for taking time out of yourbusy schedule to be interviewed for this edition of FOCUS.About the AuthorJim Yarsinsky, CPAM, is president of Expeditive, a BESLERaffiliated company. He can be reached at jyarsinsky@expeditive.com.New MembersAnnette WalshVirtua Health SystemManager(856) 322-2123awalsh@virtua.orgDavid PerezSt. Barnabas Healthcare SystemCollections Rep(732) 923-8346davep199@verizon.netMichele DeCastroSt. Joseph’s Regional Medical CenterAppeals & Denials NCM(973) 754-3268decastrom@sjhmc.orgDonna HeringesPrinceton Healthcare SystemContract Management Specialist(609) 430-7769dheringes@princetonhcs.orgDeneen BuckleySaint Barnabas Health Care SystemSupervisor(908) 240-8213dneenie28@aol.comDonna A. WintersSaint Barnabas Health Care SystemCash Application Manager(732) 923-8229dowinters@sbhcs.comJennifer WhiteUnderwood-Memorial HospitalSenior Accountant(856) 845-0100jenniferwhitecpa@aol.comJane HoffmanPrinceton Healthcare SystemSupervisor(609) 620-8331jhoffman@princetonhcs.orgGina MayerUnderwood Memorial HospitalGeneral Ledger Accountant(856) 628-1205mayerg@umhospital.orgMary Whelan HohlPrinceton Healthcare SystemFollow Up Representative(609) 620-8337mwhelan-hohl@princetonhcs.orgBrad E. RadosevichSaint Peter’s University HospitalManager of Decision Support(732) 745-8600bradosevich@saintpetersuh.comAustin DuusFox RehabilitationChief Finance Officer(877) 407-3422austin.duus@foxrehab.orgRyan LegatoFox RehabilitationAdministrative Director(877) 407-3422ryan.legato@foxrehab.orgAlexis M. SipinickSouthern Ocean County HospitalPatient Access Assistant Manager(609) 978-4187asipinick@soch.comClinton J. AckermanNewton Memorial HospitalDirector Of Business Development(973) 579-8809cackerman@nmhnj.orgCarolyn E. ScottBesler ConsultingHR Director(732) 839-3895cscott@beslerconsulting.comAlan CieslakDeco Business Strategies LlcBusiness Development Manager(800) 355-9440acieslak@decorm.comSean T. KellySaint Barnabas Medical CenterDirector(973) 322-6410skelly@sbhcs.comElizabeth S. ScholzSenior Consulting Manager(484) 653-9750lizscholz@comcast.netStephen J. MartoranoOperational Management SystemsConsultant(215) 393-9360stevano99@verizon.netKathryn Coyle(908) 380-2525coyle_kathryn@bah.comDanielle M. HofferBesler ConsultingMarketing Coordinator(732) 392-8308dhoffer@beslerconsulting.comJeffrey D. KolmerCBIZ KA Consulting ServicesSr. Manager(609) 918-0990jkolmer@cbiz.comMichael S. RoseFox RehabilitationPractice Administrator(877) 407-3422Robin RossiAtlanticare Regional Medical CenterPFS Training Manager(609) 272-6254robin.rossi@atlanticcare.orgcontinued on page 5042 Focus

•Focus on...New Jobs in New Jersey•JOB BANK SUMMARY LISTINGMarch/April 2008HFMA-NJ’s Publications Committee strives to bring New Jersey Chapter members timely and useful information in a convenient, accessible manner. Thus,this Job Bank Summary listing provides just the key components of each recently-posted position in an easy-to-read format, helping employers reach the mostqualified pool of potential candidates, and helping our readers find the best new job opportunities. For more detailed information on any position and the mostcomplete, up-to-date listing, go to HFMA-NJ’s Job Bank Online at www.hfmanj.org.[Note to employers: please allow five business days for ads to appear on the Web site.]Job Position and OrganizationACCOUNTANTSamaritan HospitalSTAFF CONSULTANT - ENTRY LEVEL,HEALTH CARE FINANCIAL CONSULTINGMcBee Associates, Inc.REIMBURSEMENT SPECIALISTBergen Regional Medical CenterREVENUE INTEGRITY DIRECTORLibertyHealthSTAFF ACCOUNTANTFrankford HospitalMANAGER OF REIMBURSEMENTFrankford HospitalDIRECTOR OF FINANCE & CLINICAL SUPPORTKennedy Health SystemSENIOR VICE PRESIDENT OF FINANCE & CFOA premier New England healthcare facilitySENIOR FINANCIAL ANALYSTPrinceton HealthCare SystemCARDIOLOGY BILLING MANGERUniversity of Pennsylvania Health SystemDIRECTOR OF PROFESSIONAL FEE BILLINGCooper Health SystemREIMBURSEMENT/BUDGET ANALYSTSt. Francis Medical CenterINTERNAL AUDITORSUniversity of Medicine & Dentistry of New JerseyREVENUE CYCLE AUDITORSt. Francis Medical CenterASSOCIATE DIRECTOR, CLINICAL ENTERPRISETemple UniversityDIRECTOR OF NATIONAL SALESHBCSMANAGER, NETWORK MGMT.UnitedHealthcareFocus 43

March/April 2008January Quarterly Meeting:Recapby Bill McCannIn the spirit of renewal that typically marks the start of aNew Year, the January Quarterly Meeting at the WoodbridgeHilton gave NJ HFMA members a chance to take the pulseof healthcare in our state, and explore ways to “Stay Ahead ofthe Curve” in 2008.The meeting, sponsored by the NJ HFMA PatientFinancial Services and tended to by committee chair AnneGoodwill Pritchett and her co-chair Laurie Grey, was originallymeant to focus on the report of the Committee on HealthCare Rationalization of Resources; but report had not beenreleased. Still there was much to discuss about the ever-changingbusiness of healthcare.Roger D. Sarao, CHFP, Assistant Vice President of HealthEconomics, NJ Hospital Association, kicked off the day witha regulatory briefing, including CMS’ agreement to a twoyeartransition to the new MS-DRG system. The transition,NJHA estimates, will result in NJ hospitals realizing a statewidetotal of $26 million in additional inpatient Medicarepayments, with increases in drug, alcohol and mental disorderservice reimbursements countered by decreases in paymentsfor oncology and cardiac services.Hospitals around the state are operating at a margin ofabout 0.5 percent, down from the one percent reported at theend of 2006, and nearly half of all NJ hospitals are operatingat a loss. This thin margin, and the difficult landscape forhealthcare in New Jersey, would be the thread woven throughthe remainder of the day.HFMA Healthcare Outlook“A crisis is brewing,” saidRichard L. Clarke, DHA,FHMA, President and CEO,Healthcare Financial ManagementAssociation, “and wehave our backs against the wall.The country is broke, andwithout a huge infusion of cashand an uptick in the economy,we should base our [income]projections on nearly flat annualincreases” from CMS.A key issue, according toDick ClarkeMr. Clarke, was creating a more rational, transparent pricingsystem. “This will increasingly be demanded of us if we are tomaintain public support.”HFMA released in December the “Healthcare FinanceOutlook 2008-13,” a forward-looking projection that examinedthe factors affecting our industry. Healthcare leaders andindustry experts pointed to four key areas that will significantlyimpact our business over the next five years:Medicare/Medicaid Spending, Increasing Cost of Capital,Threats to Tax-Exempt Status, and Physician Integration.Hospital volumes will be affected by shifts in lower levelservices as patients seek care in neighborhood clinics operatedby big-box retailers, a trend that should also create greaterprice transparency and give patients the opportunity to “shoparound” for the lowest prices. He urged hospitals to exploredeeper hospital/physician integration and align physicianincentives with business goals; if done poorly, this could createa competitive situation that will only exacerbate the negativeoutlook.A changing regulatory environment was cited as the keydriver related to costs, and most hospital finance professionalsquestioned in the study felt this would drive all other costs.They added that states’ Attorneys General, especially thosewho choose to focus on healthcare, would be the individualsmost capable of pushing increased regulations that would havethe greatest impact. Costs are also going to be driven by theincreasing costs in pharmaceuticals, especially “physician preference”items that could not only affect hospital/physicianintegration, but have severe supply chain repercussions.Anyone with their finger on the pulse of the capital marketscan tell you that the costs related to acquiring capital is risingas credit tightens, and those costs were on the minds of healthcontinued on page 4744 Focus

March/April 2008continued from page 44care leaders. Furthermore, the advent of the new IRS Form990 and its focus on defining “community benefit” in orderfor hospitals to maintain their tax exempt status will have a significantimpact on existing debt and future capital needs.All the news was not so grim; many factors are now workingin our favor, Mr. Clarke said. There is an unprecedentedamount of energy being devoted right now to solving thehealth system’s problems. Clinical and business interests areconverging around the quest for high value which, when coupledwith a more transparent pricing structure, will ultimatelyprovide a better product.Most importantly, healthcare finance professionals areshowing how dedicated they are to making a difference in thelives of others on a daily basis.Future Vision: Access Management in 2012 to 2020Hans Morefield, SCI SolutionsContinuing on our theme oflooking ahead, Hans Morefield ofSCI Solutions discussed the issuessurrounding access management,and how the front-end processesassociated with the healthcareindustry will change dramatically.Hans MorefieldThe trend toward consumerdirectedhealthcare has meant thatfinancial incentives—and responsibilities—are graduallybeing pushed down to the consumer. Plans such as HealthSavings Accounts and High Deductible Health Plans thatmake consumers responsible for more of the cost has helpedkeep employer premiums lower, but that has some significantimplications for the future.If consumers are paying a greater share of the cost, Mr.Morefield stated, they will want greater price transparency.This will require health providers to find ways to deal withcompetition on price but, with the financial constraints weMarilyn Rohrbach, Director Patient Access, Carrier Clinic, and thefollowing ladies from PHCS: Carol Burkhead, A/R Manager; SheilaArchibald, Supervisor - Government Team; Lauie Grey, Director,Revenue Cycle Management; Kathleen Donnelly, Manager, PatientAccess Services, UMCP; and Erica Waller, Technical Manager.face, this may require some out of the box thinking. Providingdiscounts based on locations or time of day, for instance,could provide some competitive advantages while allowinghospitals to direct more traffic to underutilized facilities.The marketplace is also being affected by technology, especiallywhen that technology allows previously inpatient-only careto be delivered elsewhere. As more care moves out of the hospital,Mr. Morefield said, competition with facilities like rehabilitationcenters, ASCs, imaging centers—anything profitable—will rise. To compete, he said, could mean that hospitals willneed to build and operate more of these facilities themselves.Patient Portal—Patient Self-Service Portal andRegistration KiosksDo you remember when youused to have to stand on line atthe bank to cash your check, orbook a trip to a far-off city byvisiting a travel agent? Both nowseem almost quaint in the face ofATMs and online travel sites, buthow can we apply the lessonslearned elsewhere to healthcare?Ryan Sorrels, Director ofChannel Partnerships, Galvanon,highlighted how is demandingmore streamlined processesand options, and he positedRyan Sorrelsthat incorporating more self-service options would not only improvepatient interaction, but reduce costs and improve ourmanagement of the revenue cycle.The consumer, he said, is looking for companies that meettheir needs, understand their preferences and make themcomfortable. This can include providing options in variouslanguages, or being available at a time and place convenientfor them—maybe even from their own home computer. Thecustomer experience needs to be seamless; a value Mr. Sorrels’company found in a survey was preferred by up to 92 percentof customers questioned.What does this have to do with healthcare? The maturingtechnology around patient portals and kiosks is allowing us tobetter control the revenue cycle. Collecting copayments electronically,with real-time identification of the amount neededto be collected, is estimated by his company to result in a 30percent reduction in outstanding balances.In short, Mr. Sorrels said, patients are looking for a customizedand comfortable experience, whether it’s withdrawingcash from a drive up ATM or checking in to the emergencydepartment.continued on page 48Focus 47

March/April 2008continued from page 47Present and Future: Gary Carter and Betsy RyanGary Carter, President of theNew Jersey Hospital Association,joined his heir and theassociation’s current Chief OperatingOfficer and GeneralCounsel, Elizabeth “Betsy”Ryan, Esq., to give the group’stake on the healthcare landscape,and what they saw as some sig-Gary Carternificant—and painful—challengeson the horizon.“I spent a career in advocacy,”said Mr. Carter, “and as an advocate I believe hospitals in NewJersey must close.” He cited length of stay (LOS) figures and“bad physician practice patterns” as key factors in why theaverage hospital operating margin has declined from 4.4 percentin 1993 to the currently anemic 0.5 percent.“If you close hospitals, admissions will rise because you willget control of the doctors,” he added, citing his extensive experienceat hospital systems around the nation where survivinginstitutions thrived. Still, he was not optimistic about thefuture of healthcare in New Jersey because, in his opinion,there is “a lack of leadership in the Governor’s Office and in theHealth Commissioner’s Office. There is just no plan to allocateresources effectively.”One strategic effort that must be undertaken, Mr. Carterclaimed, was to “drive more solo practitioners into groupswhere they can work together and rein in bad habits” thatdrive up costs. “We must work together with the physiciancommunity now to deal with our industry’s issues before thelegislature acts against us.”Ms. Ryan echoed Mr. Carter’s concern over the futurehealth of NJ hospitals, and said that The Governor's Commissionon Rationalizing Healthcare Resources (also knownas the Reinhardt Commission which, as of this meeting, wasstill formulating its report) will have failed if they did notaddress four main concerns:1) The chronic underpayment to hospitals for charity careservices;2) The chronic underpayment by all other governmentpayors;3) The proliferation of ambulatory care centers whichenjoy the competitive advantage of playing on unlevel playingfield—they are not held to the same quality, reporting andservice standards as hospitals; and4) The chronic overutilization of care rendered at hospitals.A member of the audience asked about statewide healthinsurance mandates, such as the program in Massachusetts, aprogram Mr. Carter said he “could not see” working in NewJersey. According to Mr. Carter, programs for the uninsuredin New Jersey expend their entire federal funding allotmentwithin the first quarter of the year, and “clearly there is nomoney in New Jersey to do something seismic to reduce theranks of the uninsured.”Ms. Ryan added that while she, too, saw problems withextending the Massachusetts model to NJ, she would be infavor of some mandates so long as all the key players cametogether; until then—and only when a critical mass of peopledemand change—only “incremental changes” to healthcarecan be accomplished.Still, the Reinhardt Commission was the original topic fortheir presentation, and they circled back to it before closing.“I would urge you and your staff to read the whole report,”said Ms. Ryan, “and then make an informed decision to supportthose recommendations we believe are beneficial.”Federal Regulatory Update: Major Policy Changes in theMedicare IPPSKaren S. Heller, MBA, Senior Vice President andExecutive Director for THEORI (The Health Economics andOutcomes Research Institute) at The Greater New YorkHospital Association, discussed her group’s analysis of the2008 IPPS Final Rule’s impact on hospitals and the reimbursementsthat are the lifeblood of the industry.In short, hospitals must effectively utilize the new codes toprevent underpayment. The cost could be in the millions ofdollars unless we become proficient in the new system andproperly code for all primary and secondary diagnoses.Under the previous system, there were about 25 MajorDiagnostic Categories that were further classified into 334 baseDRGs, and then into 539 CMS-DRGs. Under the new MS-DRG system, there will still be the 334 base DRGs, but theseare further divided into 745MS-DRGs which allow forfurther classification by severity.It’s getting each patientproperly classified—andproperly reimbursed for—that will determine the healthof a hospital’s bottom line.Fortunately, this significantchange is not going tobe implemented overnight; atwo year phase in that providesfor a 50/50 blend ofcoding in FY 2008 before John Dalton48 Focus

March/April 2008transitioning to all cases to thenew MS-DRG system in 2010.For many, the changes willrequire some adjustments. Somehigh-volume codes have beendeleted but, in their place, othershave been added that—whencomorbidities and major comorbiditiesare properly documented—willbetter define the medicalcondition and give opportunitiesfor improved reimbursements.The challenge to hospitalKaren Hellermanagement will be to ensurethat all legitimate secondary diagnoses on the new list arecompletely documented and properly coded.Ms. Heller highlighted some significant changes in the areaof preventable hospital-acquired conditions, an issue that hadenormous play in the general media but, according to her,CMS did not expect to see a great deal of savings in this area.Hospitals should still be vigilant in detecting and documentingconditions that are present on admission, and they shouldprevent conditions—infections, accidents, etc.—from arisingduring hospitalization.Still, there will be winners and there will be losers underthe new payment system. The three percent capital adjustmentfor large, urban hospitals has been eliminated for 2008;50 percent of the IME adjustments will be eliminated in2009, and completely eliminated the following year. Theimpact of these changes will affect major teaching and urbanhospitals the most, while leaving rural institutions relativelyunscathed.NJ Hospitals Face the RACSandy Newstein, RN, CPC, CPC-P, CPC-H, AHFI, fromIMA Consultinggave a status updateof the RecoveryAuditContractor Programthat will bemoving from thedemonstrationphase to nationwidefull implementation.Recovery AuditSandy NewsteinContractors,or RACs, are organizations paid a contingency fee for identifyingand helping CMS recover under and overpayments inMedicare reimbursements to providers. Of course, overpaymentsrepresent the lion’s share of the money—and a significanteconomic threat to providers—but underpayments werepreviously completely ignored until we as an industry spokeup and demanded that these mistakes be part of the RAC’sresponsibilities.For us here in New Jersey, this program is expected toarrive no earlier than January 2009, but we stand to benefitfrom many of the lessons learned—and the mistakes corrected—duringthe initial demonstration project.A few of the “significant” changes that are being rolled outin the new Statement of Work are, in Ms. Newstein’s opinion,“more provider-friendly and fair.” Some of the highlightsinclude:1) Medical records will be reviewed by someone with clinicalexperience, rather than the more general requirement of“review by a human eye.” Furthermore, a medical directorwill be hired to oversee the process and provide the opportunityfor clinician-to-clinician interaction.2) The RACs will only be able to go back three years,rather than the four in the demonstration project. New Jerseywill fare better since, as one of the new states, only claims afterOctober 1, 2007 (when the new MS-DRGs became effective)can be reviewed.3) Limits have been established on the number of medicalrecords a RAC can request.4) Safeguards have been put in place for any new auditareas so that expansions in scope must follow a prescribedprocess that provides additional protections for providers.So what should those of us in the healthcare finance fielddo in the meantime? Ms. Newstein strongly suggested that wekeep abreast of announcements, new Statements of Work andstatus documents by regularly reviewing the CMS website; “Ifit’s on the CMS website, you can hang your hat on it!”About the AuthorWilliam McCann is in his sixth year as a financial advisor andis currently with Smith Barney in New Brunswick. He has 11years experience as a hospital administrator, and served as aregional director with St. Vincent Catholic Medical Centers inNYC.A special thank you to Steve Aaron of ARC Group Associates forserving as our chapter photographer for the day!Focus 49

March/April 2008 continued from page 42Stacy Semco3M Health Information SystemAssociate(732) 414-1120slsemco@mmm.comDavid Scott, MDPrinceton Anesthesia Services, PCMedical Staff Officer(609) 497-4000 Ext 6255DScott@princetonhcs.orgCindy T. KottlerSt. Peter’s University HospitalIT Applications Manager(732) 745-8600 x6776ckottler@saintpetersuh.comChristine StuhlmillerUMDNJFinancial Administrator(973) 972-1222stuhlmcm@umdnj.eduBrian J. WeisAdvantedge Healthcare SolutionsDirector Of Business Development(908) 279-8111 ext 8239bweis1@optonline.netDouglas JeffreyRecondo TechnologyRegional Director(917) 592-1810doug.jeffrey@recondotech.comLaura CarmodyBon Securs Health System Inc.Director Financial Services,Information Services(201) 934-4107Lcarmody2@aol.comSteven F. MartinMD-X SolutionsClient Service Associate(201) 786-6026smartin@md-x.comSean E. GillIkariaNational Accounts Manager(732) 921-8224Sean.Gill@Ikaria.comJosh A. GinsbergCardiovascular AssociatesOf The Delaware ValleyExecutive Director(856) 546-3006jginsberg@cadvhearthouse.comAlan HoughtonLpciminelli Svp(716) 855-1200ahoughton@lpciminelli.com✔ Mark Your CalendarMay 1, 2008 all day Annual Golf Outing Fiddler’s Elbow CCJune 11, 2008 all day Quarterly Meeting – Finance, Woodbridge HiltonAccounting, Capital & TaxOctober 15-17, 2008 NJ HFMA Annual Institute The Borgata, Atlantic City50 Focus

ima_ad_1007.qxd 10/11/07 11:51 AM Page 1You keep the patients healthy.We’ll make sure you get paid.IMA Consulting helps our clients leverage reimbursement rules, ensure proper coding,and develop billing strategies to increase reimbursements. We help hospitals recover morerevenue, modernize billing practices, and better leverage government and private regulations,so you can focus more attention on the important business of caring for patients.Many of the country’s largest hospitals and health systems choose IMA Consultingbecause they trust our senior level experts and know that our team approach empowersstaff to improve financial and operational outcomes. We can help you, too. Call1-866-840-0151 to learn more or visit us online at www.ima-consulting.com.Operations Improvement, Financial Services,Revenue Management & Educational Services2 CHRISTY DRIVE, SUITE 219, CHADDS FORD, PA 19317 — WWW.IMA-CONSULTING.COM1-484-840-1984 OR TOLL FREE 1-866-840-0151Focus 51

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