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The Edge_March 2009 -

The Edge

Fifth Issue - FY08-09 March 2009

CHA Update

Reprint of CHA’s memo

to its members

pertaining to a proposed

fee which aims to

increase Medi-Cal

payments to hospitals.

Page 2

Health Regulatory


Update on RAC; CMS

Transmittal on

Medicare Cost Report

Page 3

You Need to Know ...

Why a perfect Charge

Description Master

isn’t enough and Tim

Brady shares the results

of OIG’s evaluation of

Physician Owned

Specialty Hospitals

Page 4-5

A Practical Approach to

Hiring Your Next

Business Consultant

“ is essential that

organizations create

criteria to ensure that

they are hiring the best

possible person or

persons for their


Page 6-7

Chapter News

Chuck Acquisto and

Cindy Rudow provide a

recap of the Region 11

Symposium; Walt Luke

writes about the

challenges faced by

Region 11 chapters in

educating their


Pages 2, 8 - 10

Membership News

New Chapter Members,

Member Get a Member

Campaign, Newly

Elected Officers,

Education Events and

Job Opportunities

Pages 10-12



Chuck Acquisto




To truly understand

the public’s

perception of

health care in the

United States, just

ask your neighbors

their thoughts on the system. Based upon

what I read in the daily newspaper and

hear on television, the reported news is

usually not good for Hospitals. Excessive

charges, poor care, emergency room closures,

and billing problems are just a few

of the many negative stories headlining

newspapers’ front pages as well as lead

stories on the nightly news.


John Stossel, the co-host of ABC News’ 20/

20 television program, did not mince

words when he spoke to the HFMA Region

11 audience last month in Las Vegas.

The Hospital Industry does a very poor job

of telling its story. The media loves the

negative story. It sells papers. It improves

TV ratings. It gets people talking at the

water cooler.

Is there a cure?

Yes, there is a cure to this growing problem.

Public Relations Departments are one

area Hospitals should consider allotting

more budget money in the immediate future.

With Public Relations firms laying off

highly qualified individuals, the time is

right for many hospitals to hire talented

people with access to the most powerful

media figures in the local press.

Mr. Stossel compared the health care

industry to the once besieged chemical

industry. He reminded the audience how

the media negatively portrayed chemicals

in the 1970s and 1980s. Newspapers and

television news ran horror stories about

the “bad” chemicals ruining our environment,

our health, and our lives. What did

the chemical companies do, Stossel asked?

They fought back with a storm of positive

public relations releases, commercials and

stories to be consumed by the general public.

As members of HFMA, we are all spokespeople

for the health care industry. We all

need to be proactive in making sure our

neighbors, our community and our local

media understand the good hospitals do.

We need to make sure the positive stories

reach the air waves and the news print.

While it is helpful to toot our horn in hfm,

Modern Healthcare and the many other

healthcare publications, we must realize

those who utilize the hospital services are

not subscribers to these health care industry

media outlets.

Having an informative health care website

is a start, but it is not the cure. Many people

do not surf the Internet to learn what

services hospitals have or what good their

local hospital is doing. In addition, the

public has a high trust in the media assuming

the press scrutinizes any story to make

sure it is “fair and balanced.” Many of you

are still laughing at that last sentence, but

having worked in the newspaper industry

for more than seven years in the 1990s I

can assure you the public places a great

deal of credence in everything the media


Mr. Stossel also blamed our lack of communication

skills with the public as a big

part of the problem. We use the word

“provider”, instead of “hospital.” If I ask

my neighbor Bob if he went to his local

provider, he would have no clue if I meant

the bank, the bar, or the local grocery store.

According to Mr. Stossel, public opinion

polls find the word “Hospital” generally

has a positive image. We should use

“Hospital” as often as possible.

Hospitals also fire off press releases and

provide sound bites for television news

with highly technical jargon fit for doctors,

nurses, CFOs, CEOs and MBAs. The proverbial

Joe the Plummer cannot connect

with the story unless we speak in medical

terms we all understand.

As we undertake a difficult economic time,

we all need to help answer the call for the

health care industry. We need to be proactive

in getting the positive message out on

behalf of hospitals and the health care industry.

Yes, there are flaws, but we know

forces are at work to eliminate the problems

and issues as they crop up in the


So I ask you, what can you do to spread

the good news of health care in the United


The Edge - Northern California Chapter’s Newsletter 1


“You’re Screwed!”

ABC’s Stossel Addresses HFMA

Region 11 Audience

Reprint of CHA’s Memo to

Its Members

February 6, 2009

TO: CHA Members

FROM: C. Duane Dauner, President

SUBJECT: CHA Board of Trustees Action

Today, the CHA Board of Trustees engaged in an extensive

discussion of the concept of a fee on hospitals that would be used

for the purpose of obtaining federal matching funds to increase

Medi-Cal payments to hospitals. Numerous points were made on

all sides of the issue. Management was directed to explore

options and prepare one or more proposals for consideration by

the Board.

The formal motion unanimously adopted by the Board follows:


In light of the state’s financial crisis and catastrophic

Medi-Cal payment shortfalls to hospitals, the CHA

Board of Trustees endorses the general concept proposed

by the Daughters of Charity Health System for a fee on

hospitals for the purpose of increasing Medi-Cal

payments to hospitals, provided that the proposal can be

developed or modified under the leadership and

management of CHA with full member participation to

acceptably meet the five criteria adopted by the CHA

Board in 2007 and made a part of this action, and

provided further that such a proposal be brought back to

the CHA Board of Trustees for consideration, including a

complete evaluation of the model, permanent

protections for hospitals, diversion of funds, agreements

or other means to balance the program for hospitals.


1. Hospitals must be permanently protected with respect to

payments and the amount of the tax.

2. Hospitals must be paid by Medi-Cal at the highest level

allowed under federal law.

3. The state must be required to ensure that criterion 2 is

met, even if new General Fund (GF) money is required

(state maintenance of effort).

4. All of the money generated from the hospital tax must be

used solely to benefit hospitals.

5. Only the voters can change the program (that is, neither

the Legislature nor the Governor could modify the

program), however, the Legislature could modify the

program by a super majority but only in furtherance of

the program and its intent.

More detailed information will be distributed next week. This

memorandum is being sent to members today because of the

importance of the topic to all hospitals. Research and

development work will begin on Monday. The membership’s

involvement is critical during this process. Please attend the area

and section meetings of your Regional Association to

Continued on page 5

John Stossel did his homework. The ABC

News investigative reporter, best-selling

author and 20/20 co-host, who has won 11

Emmys, read the piles of newspaper articles

concerning modern health care. He discussed

Hospital business office issues on a

conference call with select Region 11 Hospital

CFOs, which included HFMA of Northern

California’s Ken Jensen of ValleyCare Health

System. The evening before his speech to the Region 11 audience, Stossel

went to dinner with HFMA President Richard Clarke and other select

HFMA National and Region 11 Committee members.

Stossel came to a conclusion.

“You’re screwed!” he told the capacity crowd at Las Vegas’ Caesar’s Palace.

Using a multi-media form to get his message across, Stossel provided his

insight to what he sees as the problem with the modern Hospital business

model. With reliance on third-party payers, the system is ripe for

breakdown and inefficiency. Using a popular example, Stossel asked the

audience to imagine the Restaurant business establishing a similar

payment system. Imagine all the free meals that would be written off to

charity? Imagine restaurant managers battling months to receive 60 percent

reimbursement? Which is why, Stossel, reminded the audience, the dining

customer pays at the restaurant and not a third-party payer or, even worse,

the government.

Stossel said the country often takes for granted the miracles of capitalism.

Certainly, said Stossel, the government does not bring us competence. As

an example, Stossel highlighted the United States pharmaceutical industry

that produces roughly 95% of the world’s new drugs and medical devices.

As to the health care reform being discussed, Stossel certainly hopes there

is less government involvement.

The government can’t even count votes accurately, yet people say

government should run health care,” said Stossel.

Stossel warned the audience that the country’s Founding Fathers fought

the Revolutionary War for Liberty and this country is slowly giving it back

bit by bit.

As for what the Hospitals can do in the interim, Stossel advocated business

offices using the wonders of modern technology and to emulate the

chemical industry who fought back the bad press of the 1970s with a

stronger public relations battle. Stossel said if the news will not cover the

good Hospital stories or the Hospital side, then Hospitals can take their

compelling stories to YouTube and other website portals.

Finally, Stossel relayed how he nearly joined the HFMA rank-and-file by

going straight from Princeton University to Graduate School to major in

medicine/health policy. However, a summer job as a research intern at

KGW-TV in Portland, Oregon derailed his education plans and set him on

a different career path.

Reported by Chuck Acquisto, Chapter President; Senior Legal Counsel,

Law Offices of Stephenson, Acquisto & Colman

The Edge - Northern California Chapter’s Newsletter

RAC Is Now Moving Forward

Gloryanne Bryant, BS, RHIA, CCS

CHW Senior Director Corporate Coding HIM Compliance

Well, after having the Medicare RAC (Recovery Audit Contractor) program go into a “pause” in November, we all

learned on February 6, 2009 via a CMS announcement that the two protesting companies had removed their protest

bids and an agreement had been reached. This agreement allows Viant, Inc and PRG-Schultz, Inc., who had bid to

be one of the final four selected recovery audit contractors, now to be a subcontractor.

So this means that the four RACs will contract or have an agreement with these two subcontractors to supplement

their efforts. PRG-Schultz, Inc. will serve as a subcontractor to HDI, DCS, and CGI in regions A, B, and D. Viant

Payment Systems, Inc. will serve as a subcontractor to Connolly Consulting in region C. Each subcontractor has

negotiated different responsibilities in each region, including

some claim review.

The RAC in each jurisdiction is as follows:

Region A: Diversified Collection Services (DCS)

Region B: CGI

Region C: Connolly Consulting, Inc.

Region D: HealthDataInsights, Inc.

Each RAC will be responsible for identifying overpayment and

underpayments in approximately ¼ of the country. By 2010,

CMS plans to have four RACs in place nationally.

Provider “outreach” meetings will be scheduled using the assistance

of the specific state hospital associations. The timeline for

the national rollout has been revised somewhat (see map and

timeline from the CMS site).


Be sure to go to the CMS website: Another recommendation is

to talk with your state hospital association about the provider

outreach meetings coming soon; gather your internal RAC

Response Team together; test your RAC tracking software and review the denial and appeal process thoroughly. Stay tuned as the healthcare

industry prepares for this major initiative which will impact many healthcare settings, not just acute care.

CMS Transmittal 362 on

Medicare Cost Report

CMS reminds their Medicare contractors

(and the providers) that the Medicare Cost

Report (MCR) is crucial. They pass the

responsibility on but not the buck.

CMS by Transmittal 362 of August 1, 2008

informed the Medicare contractors including

NGS, PBGA, and CAHABA, that "It is the

responsibility of Medicare contractors to

supply information to providers regarding

how CMS uses the MCR data to update

future Prospective Payment System (PPS)

payments. It is crucial that Medicare

providers fill out these reports with complete

and valid data."

CMS goes on to state, "In reviewing the MCR

data submitted by providers, it appears that

many are failing to completely fill out their

MCR with valid data likely due to the

misconception that the data submitted on

the MCR do not impact their payments.

It is crucial that Medicare providers learn

how CMS uses the MCR data and that they

understand the importance of filling out

these reports with complete and valid data.

The MCRs play a central role in CMS’

development of the input price indexes (or

market baskets) used to update PPS

payments. Similarly, they are essential in

evaluating Medicare payment adequacy in

aggregate and for subclasses of providers.

CMS, as well as the Medicare Payment

Advisory Commission (MedPAC), rely

heavily on complete, valid, and up-to-date

MCR data to evaluate the adequacy of PPS

payments—i.e., determining whether

Medicare is paying its ‘fair share’ to

providers in aggregate and in a variety of

subclasses ..."

In the transmittal CMS cited the same

regulations that existed in the last

century, an aspect that many Medicare

providers overlook. If you are a Medicare

certified provider, you are still required to

complete the MCR with valid data and in

conformity with the regulations regarding

allowable and non-allowable costs.

In addition, the MCR and the CMS 339,

provider cost report questionnaire, both

require a signature that states that the report

is true, correct and complete, in accordance

with instructions, laws, and regulations.

"Misrepresentation or falsification of any of

any information contained in this cost report

may be punishable by criminal, civil, and

administrative action, fine and/or

imprisonment under federal law."

CMS, in reminding or informing the

Medicare contractors of their responsibility

to educate the providers, also states that no

additional funding will be provided;

activities are to be carried out within their

operating budgets (an experience many

Medicare providers can relate to).

Look for provider education articles from

your Medicare contractor or Medicare

Administrative Contactor (MAC) to be on

their web sites in the coming weeks. You can

contact Tom Boyd at Boyd & Nicholas Inc.,, 1-877-424-6527

and request a copy of our Whitepaper on the

HHA Medicare cost report.


The Edge - Northern California Chapter’s Newsletter



Physician Owned Specialty Hospitals:

Quality of Care?

Timothy S. Brady, Ph.D., FACHE, FHFMA

Regional Inspector General

US Department of Health and Human Services

In the January 2009 issue of HFM, Debbie Welle-Powell wrote a

“Views” article entitled, “Physician-Owned Specialty Hospitals: friend,

foe-or (System) failure?” regarding the debate over physician-owned

specialty hospitals. It was a summary of the issue that was debated at

the 2008 ANI. While the panelists debated and agreed on a number of

points, there seemed to be a sense that the specialty hospitals provided a

good alternative to community hospitals in many areas. Welle-Powell

stated that both panelists “agreed …specialty hospitals provide the

same if not better quality of care than community hospitals.” While the

panelists believe that the quality of care is good, serious weaknesses

exist in these facilities that could affect the overall patient safety and


Public concerns expressed to Congress led the Senate Finance Committee

to request that OIG conduct an evaluation of patient safety and care

in these facilities. The published Office of Inspector General evaluation,

“Physician-Owned Specialty Hospitals’ Ability to Manage Medical

Emergencies,” assessed the emergency departments, staffing patterns,

and policies for managing medical emergencies. The evaluation was

based on data from 109 specialty hospitals. It consisted of a review of

staffing schedules, an analysis of staffing policies and policies for managing

medical emergencies, and structured interviews with administrators

at each hospital.

The evaluators found that 55 percent of the hospitals have an emergency

department. However, more than half of those had only one emergency

bed. While Medicare does not require emergency departments, some

states do, and the requirements vary among states.

For at least one of eight sampled days, seven of the hospitals failed to

have a registered nurse on duty and one did not have a physician on call

or on duty. Less than one-third of the specialty hospitals have a physician

on-site 24 hours, 7 days a week. This lack of coverage is a violation

of the Medicare Conditions of Participation.

According to administrators and policies, 71 of the 109 hospitals evaluated,

instruct staff to call 9-1-1 as part of their emergency medial protocols.

One-third use 9-1-1 assistance to stabilize a patient and half of the

hospitals use 9-1-1 to transfer patients to general acute or tertiary care


Approximately 25 percent of the surveyed physician owned specialty

hospitals lack policies for initial treatment of emergencies, or referral

and transfer of emergency patients. Some of the policies lack information

on the use of emergency equipment or life-saving protocols.

The OIG recommended CMS take appropriate action to ensure that the

specialty hospitals meet the Conditions of Participation and that they

require the hospitals to include protocols for managing medical emergencies

in their written operating policies.

This evaluation represents the results of an evaluation of only 109 hospitals.

It is significant in its findings of the potential weaknesses regarding

patient safety. While the quality of care may be perceived to be better in

physician owned specialty hospitals, the overall care of the patient may

need additional scrutiny.

A Perfect Charge

Description Master Isn’t


Rob Smull

Practice Leader, Hospital Revenue Cycle

Consulting Services; Senior Manager,

Health Care Consulting Group

Moss Adams LLP

What happens when you cross a perfect Charge Description

Master (CDM) with imperfect charging processes in your clinical


You lose money. Often lots of it. Conversely, you may get paid

too much and run the risk of having to self-report overpayments

or even deal with the OIG. Or, you simply are charging for services

you shouldn’t even if no additional payment is received

from Medicare, which can result in an overstatement of charging.

What’s the solution? The best way to address this challenge is to

integrate outpatient charge capture reviews with the CDM management


Your CDM is Perfect!

You employ motivated individuals who are highly skilled in

coding and have strong interpersonal skills. You are doing everything

according to best practices. In addition:

• You use an electronic resource which helps you to ensure that

the right codes are used, and prompts you to check for other


• Your CDM manager meets with each clinical supervisor to

make sure every charge requiring a HCPCS code has one that

correctly reflects the service provided, is accurate, and is applied

appropriately in accordance with regulatory guidelines.

• All your revenue codes are correct.

• Your CDM manager works closely with a CDM committee and

the Compliance Director.

• You have charges in your CDM for everything you can think

of and they all make sense.

• Your CDM manager acts quickly to make sure codes are revised

based on regulatory updates.

• Your finance department has policies in place to establish


• Your Business Office no longer assigns CPT codes and modifiers

on their own to get charges through the Medicare edits.

• You check to make sure your charges are consistently passing

your Medicare edits.

• You assess the accuracy of your outpatient payments.

What’s Left?

That’s all great, but is it enough? Have you done everything you

need to do to make sure you are paid correctly? The answer is a

resounding, “No.” The CDM is just one piece in a continuum of

processes, otherwise known as “the revenue cycle,” governing

how and how much you get paid. CDM management and clinical

department charge processes fall into the Middle process,

between the Front End (often referred to as Patient Access) and

the Back End of the Revenue Cycle, including billing, denials and


The Edge - Northern California Chapter’s Newsletter


What Lurks Between

Consider the following scenario: you are the hospital CFO; your

hospital handles the billing for the technical and professional components

for all radiology services, except for CT Scan where the professional

component is billed by the CT Scan physician group. Your

Radiology Department Administrator works closely with your CDM

manager and tells you everything related to coding and charging is

fine. The August radiology statistics indicate that the volume for CT

department activity has increased, but revenue dropped significantly.

Your department director looks into this. By the time she

gets back to you to let you know that she is as puzzled as you, September’s

statistics are out and you see the same issue. So what is


Here is the answer:

The Medical Director for Imaging Services, who also serves as the

Medical Director for CT Scan, has been receiving over-utilization

notices from a major payer regarding the physician group’s claim

submissions for CT Extremity Angiography. To deal with the

notices, he instructs the hospital’s lead CT tech to charge only for

a CT Extremity whenever the hospital performs a CT Extremity

Angiography, since the physician group’s CT billing is driven by

the hospital’s charge. Unfortunately, the lead tech does not inform

his supervisor, who is the hospital’s Radiology Administrator

of the requested change, and the Radiology Administrator

cannot inform her boss, the CFO.

The CT department performs about 10 CT Extremity Angiographies

a week or about 500 per year at $3,200 per procedure (as

opposed to $1,800 for a CT Extremity). As a result, the hospital’s

annual gross charges decrease by roughly $700,000.

The above scenario is only one of many occurrences in clinical departments

that can significantly affect revenue. Below are a few

other examples of clinical department charging processes affecting


• Hospitals can have the appropriate emergency department infusion

charges established in their CDM, but no charge can be generated

if infusion start and stop times are not documented in the

patient’s record.

• A patient visits the hospital for a treadmill stress test but is

charged for an EKG. Medicare reimbursements for the stress tests

and EKGs are around $163 and $25, respectively. The incorrect

charge could occur with incorrect clinical and hospital information

system charge alignment. Further, it is likely the ICD-9 diagnosis

code used will support either charge, so the EKG charge

will pass the hospital’s edit system and the hospital will be paid

accordingly. Even if the hospital remittance advices identify the

HCPCS code billed, a review of the remittance advice would typically

not reveal the problem.

• In an effort to avoid losing hundreds of thousands of dollars in

the cardiac catheterization department, a hospital may link or

“explode” the cardiology, radiology and surgical components of

cardiac catheterization procedures. It is not uncommon for the

HIM department to manually code the surgical components for

these procedures. However, it may be possible for the hospital to

charge and be paid for the surgical component charges that are

“hard” coded in the CDM in addition to those that are “soft”

coded by HIM, leading to overpayments.

Outpatient Charge Capture Reviews

Best practices to ensure appropriate charging, billing, and payment

include the performance of charge capture reviews or audits. The

CDM management department is usually the most practical resource

to do this. Effective review processes should be established

and consistently performed. Results should first be reported to the

Compliance Director in the event seriously non-compliant events are

discovered. Results should then be reported to financial management

and the CDM management committee.

Outpatient charge capture reviews consist of the following steps:

• Identify patient accounts to be reviewed. This can be determined

based on procedure frequency or randomly, depending on the

resources available to perform the review and the level of confidence

in the results required by management.

• Obtain the following for each account:

‣ Patient bill with detailed charges

‣ UB-04 claim form

‣ Patient medical record

‣ Biller notes

‣ Remittance Advice

• CDM management staff should review each account to confirm

that all services performed were documented, coded, charged,

billed, and paid appropriately.

• Include the results of each review in a consistent matrix format

that will serve as your work papers.

• Include copies of any regulatory transmittals or correspondence

supporting your findings and recommendations

• Summarize the results into categories of issues such as “incorrect

revenue codes,” “missed charges,” “medical necessity criteria not

met,” and so on.

• Recommend the correct charge capture procedures and timing of

implementation and testing.

What’s Left – in a Nutshell

In today’s environment, it is important to realize that an effective

charge capture review consists of more than confirming the effectiveness

of Patient Access processes, a great CDM, and best practice

back end billing and collection processes. Hospital clinical departments

are often home to elusive, behind-the-scenes issues that can

significantly impact the hospital’s bottom line and should be addressed

in all charge capture reviews.

Memo from CHA

Continued from page 2

discuss concepts, principles and options, and provide

comments to the CHA Board of Trustees.

We look forward to several weeks of intensive work. Your

advice and counsel are vital to the task.

Thank you for your participation.

If you have any questions or require additional

information please contact:

Anne McLeod, Vice President, Reimbursement and

Economic Analysis, at (916) 552-7536 or (916) 552-7547. You

can also email at

C. Duane Dauner, CHA President at

Steven R Blake, CFO Integrated Healthcare Holdings, Inc.,

at (714) 953-3536 or email at

The Edge - Northern California Chapter’s Newsletter 5


A Practical Approach to Hiring Your Next Business Consultant

Thomas E. Boyd, Principal

Boyd & Nicholas

For more than thirty years I have

observed health care organizations

as they hire various business

consultants. Unfortunately, there

have been many occasions where

I have wondered about the

method used to identify and hire

their chosen consultant. Reasons

can be as shallow as a shared passion

for golf, mutual friends, a

great sales pitch, or even drinking

buddies. In each scenario, little

attention is paid to the consultant’s

references, experience, education,

professional associations,

certifications, code of ethics, and

mission statement.

The reality – most organizations

spend more time selecting office

furniture than choosing a consultant.


As a Medicare intermediary auditor

and a financial consultant, I

have observed the process of hiring

a consultant for many years.

It is not entirely uncommon to

find organizations spending

$5,000 or more per month on

“accountants” at a rate of $25 an


hour (200 hours). While the

hourly rate might be viewed as a

“deal,” the agency ends up with

poor work product that could

have been completed by a professional

accounting firm in less than

20 hours at a cost of $2,000 ($100/


What’s more, I have seen organizations

hire CPAs and MBAs

without the hired consultant

being able to inform them when

and where they obtained the designation.

I have watched as

organizations hire consultants

simply because their office is

located nearby.

I even had a client hire me

because of the crazy tie I wore at a

NAHC presentation. While it was

a good decision for his organization,

it is important to note that

his decision was largely made

based upon personality and mutual



When selecting a consultant, it is

essential that organizations create

criteria to ensure that they are

hiring the best possible person or

persons for their business. I advocate

the use of a simple priority

matrix approach that removes

some of the personal aspects and

gives weight to other important


The following section offers an

outline of the criteria that should

be considered when evaluating

potential consultants for your



A. Current clients

B. Associations

C. Your peers

D. Consultant’s peers

E. Past clients

Let’s start with the obvious – if

you ask for a reference, it is likely

that the potential consultant will

only send you references who will

speak positively about his or her

experience. This is especially true

if you ask to speak with a current


However, check that you are

comparing “apples to apples”. If

you have a defined need, like

starting an IV Therapy company,

ask for a reference that has engaged

the consultant for a similar

assignment. With larger firms,

ensure that you are speaking with

a reference for the person that will

actually be working on your project.

The other references that should

be checked, as much as may be

possible, to also get a feel about

the consultant’s reputation.


A. Experience

B. Education

C. Professional organizations

D. Certifications

E. Trade associations

Is the consultant’s prior experience

relevant to your needs? Consider

education and certifications

as factors that can show a consultant’s

willingness and commitment

to continued professional


In addition, would you not want a

consultant who is a member of his

The Edge - Northern California Chapter’s Newsletter


or her professional organizations and your trade associations? This

membership may be a good indicator of their dedication to the industry

and desire to increase their industry-specific knowledge.

Project B below demonstrates a priority matrix for an agency that

needs an interim CFO while the organization engages in an executive

search for a new CFO.


A. Firm size

B. Web site

C. Mission statement

D. Code of ethics

E. Availability

F. Location

G. Personality

If you are considering hiring a firm with many employees, it is important

to ensure that you evaluate the specific person that will manage

your project. Remember, however, that you must do so in the context

of the larger consulting firm. With that in mind, you may benefit from

learning about their mission statement and code of ethics.

Is the consultant’s location of any importance to you? Location becomes

especially relevant if it is a barrier to timely on site meetings.

The consultant’s web site can tell you about the firm’s employees and

their background. It can also tell you if their expertise includes the

services that you are interested in obtaining.

PERSONALITY is the # 1 factor for most people in their current hiring

practices. While important, it needs to be placed within the context of

the project at hand. If you are installing a new accounting system, for

example, the consultant’s interaction with you as the CEO may be less

important than their interaction with your CFO and the accounting



A. Importance

B. Weighting

C. Matrix

Once you have evaluated the factors above, you need to determine

their relative importance. The use of a priority matrix can be helpful.

For example, Project A reflects a priority matrix for an agency in the

process of hiring a clinical consulting firm to educate clinical staff

about PPS.

In this example, Firm # 3 has a slight advantage due to their preferred

location and association affiliation.

If more than one person is doing the interviewing or taking part in

the selection process, then the organization will need to have a

common matrix to be used by all.



B. Contracts

C. Scope of work


E. Deadlines

F. Money

It is common for people to wonder how any consultants should be

interviewed to ensure that they are performing their due diligence.

I recommend no less than three and no more than five unless

using an RFP. A RFP is a request for proposal and is usually an

open or general call to receive proposals from the consulting

community for the organization’s specific project. A RFP is recommended

for more expensive projects (i.e. IT conversions) in

such instances where the project can be clearly defined and does

not require immediate completion. The project timeline needs to

allow for writing the RFP, the RFP being sent out to the consulting

community, and receiving and evaluating responses. A consultant

agreement should be a written contract with scope of work, interim

timelines, deadlines, and fees, including treatment of travel

and support costs, clearly stated.


Having presented a logical approach to the hiring of a business

consultant, I have one last recommendation to help deal with

“ties,” or an inability to decide between two consultants. Flip a

coin. While the coin is in the air your mind will become clear on

whom you wish to hire, as your sense of “personality” will become

a tiebreaker. Personality or compatibility may still be the

single most important factor in the hiring of a consultant but it

should not be the only factor.

As demonstrated above, Firm # 1 has its biggest advantage in costs

and location. Given the nature of the assignment, they may be closer to

the hiring organization and less expensive.

Let’s go to RENO!

The Northern California PFS Committee is packing their bags and

getting ready to hit the road again. This time we are stretching

beyond California borders and heading to Reno, Nevada. The

Nevada Chapter has requested that we share in an educational

opportunity to cross the borders and strengthen the bonds of

friendship and affiliation.

We are also going to use this Road Show as our pilot for a full

Webinar presentation, which will allow members and guests who

are not able to attend to view it on their PC at work or home. In

addition, we will be archiving this presentation on our web page

where it will be available 24/7 at a modest fee for viewing.

The Road Show will be held at St. Mary’s Regional Medical

Center on March 27, 2009. More details to follow, but we welcome

all of you to come and join us in the mountains and the casinos.

The Edge - Northern California Chapter’s Newsletter 7


Region 11 Symposium Highlights

Cindy Rudow, FHFMA, Director of Patient Financial Services

ValleyCare Health Systems

The Region 11 Committee Members

Deborah Knight and Mary Ackley Theresa Mathew and Steve Thompson Blues Brothers impersonators sing the blues

The 11 th annual Region 11 Symposium

was held on January 25-

28, 2009 at Caesars Palace in Las

Vegas, Nevada. Region 11 is

composed of HFMA chapters

from Hawaii, Alaska, Nevada,

Oregon, Washington, and California.

The Symposium is

HFMA’s largest volunteer event

(second only in attendance to the

Annual National Institute, ANI,

where paid staff plan the event).

As all of us in healthcare understand

– we are experiencing some

tough economic times. In fact,

many planned Symposium

attendees had to cancel their reservation

at the last moment due

to budgetary constraints. The

resounding theme of the Symposium

clearly addressed the challenges

we are all facing so we

thought it would be advantageous

to share the highlights of


the Symposium with our members

who were not able to attend

this wonderful educational and

networking event. This year’s

event was kicked off in style by

The Blues Brothers who successfully

encouraged hundreds of

financial managers to stand up

and join in the fun even though

we may all be experiencing

our own version of “the blues”.

The symposium consisted of six

general sessions and sixteen

educational breakout sessions.

The informative handouts from

the breakout sessions can be

obtained at:



Following are some highlights

from the general sessions.

American Healthcare – in Critical

Condition by John Stossel –


Award-winning news correspondent

John Stossel is the co-anchor

of ABC News’ 20/20 and has

thoroughly researched the challenges

healthcare providers are

currently facing.

This is a man who has a very

clear understanding of the English

language and chose the following

words to summarize our

situation…“you’re screwed.”

Mr. Stossel recognized that

healthcare needs the innovation

of capitalism to stay on the

cutting edge and doesn’t think

government will find a solution

to our challenges via universal

healthcare. In fact, he stated the

difference between drunken sailors

and the government is that

drunken sailors spend their own

money; government spends ours!

Mr. Stossel also acknowledged

the challenges healthcare providers

have with third party payers.

We currently don’t have an insurance

system that works.

In summary, the healthcare sector

needs to get our story out to the

American people to advise them

of the challenges we are all facing.

Healthcare in the Hot Seat –


An esteemed panel of healthcare

experts discussed hot topics in

healthcare. Richard Clarke,

President and CEO of HFMA,

stated that we need to keep what

is best in US healthcare and fix

what is wrong. We need to reform

how healthcare is reimbursed

with a logical payment

system. Healthcare is the busi-

The Edge - Northern California Chapter’s Official Newsletter


ness of caring, but it is a complicated

industry. The US has the

best physicians and facilities in

the world and we serve 350 million

people. Healthcare is 16% of

the GDP (Gross Domestic Product).

William Jessee who is the President

& CEO of MGMA stated that

we need to cut waste. “Thirty

percent of the total healthcare cost

is due to administrative cost and

half of that is due to waste. For

example, why can’t insurance

cards have a magnetic stripe like

Mastercard or Visa? This would

significantly decrease the administrative

costs associated with

incorrect and inaccurate insurance

information at the time of service.”

Unfortunately, none of the panel

members were optimistic that

enough change would be able to

happen in the near future because

Washington likes “simple solutions

for complex programs” and

there aren’t any simply solutions.

The first question that needs to be

answered is this: is some level of

health care a right or just a commodity

in the United States of


Top 100 Hospitals from Modern

Healthcare – 1/27/09

Modern Healthcare annually recognizes

the top 100 hospitals in the

USA. Representatives from four

of the top 100 hospitals shared

their insights:

• If a hospital wants to make

changes in quality, the medical

staff must be on board;

• Hospitals must have cost containment


• Mission versus Margin…hospitals

must make profits to keep

their doors open;

These are tough economic

times and healthcare is NOT

recession free;

• Many hospitals have placed a

hold on capital purchases;

• Hospitals need to rethink how

they run their operations. Is

there an opportunity to cut


• Hospitals need to communicate

their economic challenges to

their community.

Four Generations in the Workplace

– Cam Marston – 1/27/09

There are four distinct generations

of employees that need to work

together even though they have

very different perspectives. This

can be a challenge for management

so here is a summary of the

generations to help understand

their various characteristics:

The Matures – (born prior to 1946)

or >63 years old

Duty; Honor country; Dedicated;

Sacrifice; “We First”; National

pride; Age = seniority

Dominos Pizza has a plan to find

this group to hire as pizza delivery

employees because

1) They show up for work and

2) They don’t look like they’ve

fallen in a tackle box

The Baby Boomers (born 1946 –

1964) Ages 45 – 63

Workaholic (measure work in

how many hours they put in);

Competitive; Success visible (i.e.

display trophies or awards); Defined

by work; “We are the World,

We are the Children”; Influential –

running the show. This is the last

generation who paid their dues

the old fashioned way. Apprentice

to Master model.

Generation X (born 1965 – 1979)

Ages 30 – 44

First generation to question

authorities; they don’t believe

their leaders (i.e former presidents

Nixon and Clinton); Heroes

are people they’ve met; They

“seize the day,” i.e. go out and

find a good job to make them

happy; Most loyal in the workforce;

They work for people;

Most loyal patient; Always need a

Plan B.

Generation Y/Millennial (born 1980

or later) Ages 29 and younger

Individuals within a group;

Optimistic; Well looked after;

Busy and stressed at a young age

(i.e. stress class for girl scouts)

What Keeps a CFO Up at Night –


Four CFO’s from Hawaii, California,

Oregon, & Louisiana shared

their concerns:

• Lehman’s impact is fifty times

worse than Enron;

• September/October was the

meltdown of the financial markets;

• Record pension declines;

• Legacy HIT systems installations

have been put on hold;

• Bad debt substantially up in

the last 6 – 12 months and will

continue to increase;

• Days cash on hand is significantly


• Lower bond ratings;

• California hospitals have unfunded

seismic mandates;

From the Patient’s Perspective –

Dr. Bertice Berry – 1/28/09

After all of the “gloom and

doom” of the challenges healthcare

providers face – Dr. Berry

was the perfect keynote speaker

to close the Symposium. She

stated that financial managers are

the “most important care givers of

all” because without money, care

can’t be given. Dr. Berry stated

that the world is connected by

stories, and then shared many

entertaining stories to illustrate

the following points:

1) Clean out your life’s filter (i.e.

don’t carry around grudges);

2) Life can’t be a formula;

3) The bigger the insecurity – the

bigger the “attitude”;

4) When you walk with purpose

you collide with destiny;

5) Stay focused;

6) Stay connected;

7) Teach gratitude (collect hospital

stories to share in hospital


8) Pass on what you know (young

kids have knowledge – not


Congratulations to the Symposium

Committee and to the host

chapter of Nevada for an outstanding

conference. Next year’s

Region 11 Symposium will be

held on January 24-27, 2010 and

San Diego will be the host chapter.

HFMA Northern California 2009 Spring Conference

April 30 - May 1, 2009 | Sacramento Marriott Hotel, Rancho Cordova


✦ Keynote Addresses

✦ Future of Hospital/Physician Relations - Joseph Dunn, Esq.,

Chief Executive Officer of California Medical Association

✦ Leadership in an Era of Change and Uncertainty - MarieAnn

North, MBA, FACMPE, Chief Executive Officer, Posada

Consulting, Inc.

✦ Multiple tracks and 16 break out sessions specifically designed

to meet the education needs of healthcare professionals!

✦ C-Level Executive/Leadership Track

✦ A full day of Back 2 Basics session on Todayʼs Revenue Cycle:

A One-Day Interactive Format for Staff and Revenue Cycle Staff

✦ Two days of networking including Casino Night

✦ Continuing Education Credits

Group discounts are available for regular programs and Back

2 Basics.

For more information, visit, call (925) 828-4532

or email

Reserve your hotel room by April 8, 2009 to avail of the group

rate ($169/night). Call (916) 638-1100 or visit the Sacramento

Marriott Rancho Cordova website. Reservation code: heaheaa

The Edge - Northern California Chapter’s Newsletter 9



Jeremiah Ascherman - Business

Office Manager, Modoc Medical


Wesley Burwell - Sr. Consultant

Kevin Clougherty - Finance

Manager/Senior Analyst, St.

Joseph Health System Humboldt


Janine Cohen - Reimbursement

Specialist, Sonoma Valley


Ty Conner - Sidley Austin LLP

Norma Davis - Controller, Sante

Health System

Debbie Esparza - Manager,

Managed Care Recovery, Catholic

Healthcare West

Christine Jones

Adriana Littrell - Patient Services

Rep, Mills-Peninsula Health


Melanie Meyer - Project

Manager, PFS, Stanford Medical


Ife Maduchukwu - Chief, Cost

Accounting & Support, California

Dept. Veterans Affairs

Michael Mulkey - Director Of

Cardiovascular Services,

Regional Medical Center Of San


Kathy Musson - PFS Analyst,

Ridgecrest Community Hospital

Nancy Oswald - Executive

Director, Redwood Community

Health Coalition

Brian Thygesen - Strategy

Consultant Healthcare, Kurt

Salmon Associates, Inc.

Inez Wondeh - Manager,

Sacramento ENT

Gary Whitehouse - Manager,

Triage Consulting


HFMA Region 11 Chapters

Deal with the Changing Faces

of Providing Educational

Programs to their


Walton Luke, FHFMA, MBA, Region 11

Executive-Northern California Chapter

L.H. & Associates, LLC

Thank You for Attending The 11 th Annual

HFMA Region 11 Healthcare Symposium

First of all, the 7 HFMA Region 11 Chapters of

Nevada (Host Chapter), San Diego & Imperial

County, Washington~ Alaska, Hawaii, Oregon,

Southern California and Northern California

thank all of the Sponsors and Conference Registrants

for attending this year’s Symposium in

Las Vegas, Nevada. As usual, the “Special”

Southern California Committee and other Chapter

Member Volunteer Leaders led by Chairman

Susan Labow put together an excellent educational

program as well as an outstanding Sponsorship

Trade Faire. Everyone I spoke to in

attendance thought highly of this conference.

In 2010, the Region 11 Symposium Planning

Committee with San Diego & Imperial County

as Host Chapter, have more involvement by

every chapter in the region and will be led by

Vicki Morgan, Past Region 11 Executive. The

Core Committee, with key, experienced Chapter

Voluntary Leaders, some from last year’s group,

will play a vital role in keeping to the high standards

set by past Region 11 Symposiums.

Providing “The Best of The Best” Healthcare

Symposium and Provider Added Incentives

Several months before the conference, economic

conditions warranted Healthcare Providers to

review their education budgets and either

freeze, cut or hold-the-line-but… We all held our

collective breaths as to attendance and were rewarded

that the symposium attracted well over

300+ attendees plus all the Sponsors expected at

the Trade Faire. But as we all know, there will

continue to be a lot to plan for 2010 and holding

another “Best of The Best” Region 11 Symposiums.

For 2009, many of the Region 11 Chapters provided

to their membership either a registration

per member discount of $300, a rebate ranging

from $100 to $300, or even a raffle for 5 free registrations.

This was in addition to the early registration

rebate of $100 per registrant.

When this was discussed at the Regional Presidents’

Meeting on Sunday at Caesars Palace

before the CFO/PFS Forum at 3:00 p.m., those

Healthcare Provider VPs of Finance/CFOs who

were part of the meeting, all agreed that we had

to develop a plan of action to assist Providers or

Providers’ Management Staff in getting to the

2010 Region 11 Symposium. There was currently

nothing planned to add to the Providers’ education


As part of our planning process for next years’

symposium, the Region 11 Chapter Presidents’

Meeting will have on their agenda, recommendations

on incentivizing Providers to continue

attending the Healthcare Symposium. One of the

discussions tabled for future discussion is “Provider

Scholarships” as well as the continued

discounts, rebates or raffles.

But we still need to remember that providing

The Best of The Best” Region 11 Symposium

speakers and getting back to what Providers

want in terms of education programs is still the

main objective.

Looking at 24/7 Educational Programming/

Video Webinar Housed on A Chapter Website

In August 2008 at the Region 11 Fall Presidents’

Meeting, Mickey Duke, Region 11 Executive-

Elect, voiced his concern for having 24/7 educational

programming as another venue for continued

education meeting the members’ needs.

The initial condition was for the “insomniac”

member who sometime after midnight, wanted

to view an education program available on the

Chapter’s website for a nominal fee. This was to

be in preparation for the 2009 Fall Presidents’

Meeting on the Big Island of Hawaii for the Hawaii

Chapter membership, using the expertise of

the Chapter Presidents or President-Elects as

Presenters, and “video mainstreamed” to other

interested Chapter members in the region.

In order to begin this process, the Northern California

and Nevada Chapters have volunteered

to “Beta Site” the video mainstreaming process

in Reno, Nevada for 1-day seminar on March 27,

2009. The Northern California chapter elected to

utilize the PFS Road Show Series, a continued

Yerger Award winning Education Program. This

program is further enhanced due to the generous

donation of space and time by St. Mary’s

Regional Medical Center and a special thanks to

Sam King, CFO. The Nevada chapter co chair is

David Samuels, President-Elect, with additional

assistance from Mickey Duke, Region 11

Executive-Elect. The Northern California Chapter

is represented by the PFS Co Chair, Lynn

Kelly with assistance from Steve Thompson,

PFS Past-Chairman and Walton Luke, Region 11


We are all excited by the prospect of presenting

future, web based Programs in this new format

and look forward to uncovering the hidden

Educational opportunities for our Chapter



The Edge - Northern California Chapter’s Official Newsletter


Member-Get-a-Member Program

As a current HFMA member, you are in the best possible position to share your experience as a member and help impact HFMA’s



• Recruit one or two new members who begin their membership between June 1, 2008, and April 30, 2009, or former* HFMA members who

reactivate their membership between August 1, 2008, and April 30, 2009, and you will win your choice of an HFMA apparel item (approximate

retail value of $25) or a $25 Fuel Visa® Prepaid Card.** Fuel cards can be used at the gas station of your choice or anywhere Visa debit

cards are accepted worldwide.

• Recruit three or four new and/or former* HFMA members and you will receive a $100 Visa prepaid card good anywhere Visa debit cards are

accepted worldwide. You will also be entered into a drawing among all those recruiting three or four members to receive a $1,000 cash prize.

• Recruit five or more new and/or former* members and you will receive a $150 Visa prepaid card. You will also be entered into a drawing

among all those recruiting five or more to receive a $2,500 cash prize.


• For every new or former* member you recruit, you will receive one entry into the drawing for the Member-Get-A-Member Make A Difference

Grand Prize worth $5,000. You will receive $3,000 in cash for yourself and a $2,000 donation in your name to the charity organization of your


• You will receive one entry in the drawing for each new member or former* HFMA member you bring in (or bring back).

*Sponsors will receive credit in the Member-Get-A-Member campaign for former members who reinstate

(reactivate) their memberships between August 1, 2008, and April 30, 2009. Sponsors will also

continue to receive credit in the Member-Get-A-Member campaign for new members who join (or

have joined) between June 1, 2008 and April 30, 2009.

** Cards are issued by Citibank, N.A. pursuant to a license from Visa U.S.A. Inc. and managed by

Ecount, a Citi company.

The more members you sponsor, the greater your chance to win!


Lisa Stark

PFS Director

Fremont Rideout Health


For any questions, call Ramona Hernandez at (510) 860-7442 or send an email to

Please Welcome the Newly Elected

Chapter Officers and Board of Directors

President-Elect (2009-2010)

Kathleen Cain


Saint Agnes Medical Center

Secretary (2009-2010)

Stephen R. Thompson, FHFMA

Director, PFS

Sutter Marin Support Services

Treasurer (2009-2010)

Jayne Kroner, CHFP

VP Business Development

Cirius Group, Inc.

In Accordance with Chapter

Bylaws, the 2008-2009 President-

Elect, Ken Jensen, automatically

becomes the President for


Board of Directors (2009-2012)

Barry Brown

VP Marketing

Rash Curtis & Associates

Gloryanne Bryant, BS, RHIA,


Senior Director Corporate Coding

HIM Compliance

Catholic Healthcare West

Will McCammon, CHFP

Senior Revenue Analyst

Hill Physicians Medical Group

Matt Morgan

Director, Financial Services

Community Hospital of the

Monterey Peninsula



Visit for details

✦ Save the Date: March 27 - Northern California

and Nevada Chapters present Revenue Cycle

Practicality Seminar

Two ways to attend: Saint Maryʼs Regional Medical

Center, Reno Nevada or Live Internet Video


✦ April 30-May 1, 2009 - Northern California

Spring Conference in Rancho Cordova,


Features multiple tracks and 16 breakout sessions;

C-Level/Executive Leadership Track; Back 2 Basics

for Staff and Revenue Cycle Staff; Two days of

networking including Casino Night; and Continuing

Education Credits

✦ June 14-17 - 2009 ANI in Seattle, Washington

✦ June 18 - Whatʼs Cooking in Sacramento? A

Morning with DMHC in Sacramento, California

✦ September 13-15 - California Fall Conference in

Monterey, California

The Edge - Northern California Chapter’s Newsletter 11

In Appreciation


Thank you to our Corporate Sponsors for their continuing support of the Northern California chapter











Job Opportunities

Visit the chapter website (

for details and a complete listing of job openings

CFO - San Mateo County Health Center (posted 3/2/09)

Director of Finance, Muir Lab - John Muir Health (posted 3/2/09)

Director of Finance, Walnut Creek Campus - John Muir Health (posted 3/2/09)

Director of General Accounting - John Muir Health (posted 3/2/09)

Patient Accounting Rep - Govt Follow Up - John Muir Health (posted 3/2/09)

Supervisor, Patient Accounting - John Muir Health (posted 3/2/09)

Director of Finance - ValleyCare Health System (posted 2/23/09)

Director, Patient Access - Regional Medical Center in San Jose (posted 2/13/09)

Budget Manager - Healthcare System in Arizona (posted 2/13/09)

Healthcare Financial Professional/CPA (posted 2/12/09)

Corporate Director, Business Office - Community Medical Centers Fresno (posted


Business Devt and Contracting Associate, Community Hospital of the Monterey

Peninsula (posted 1/28/09)

Northern California Chapter

Board of Directors

Chuck Acquisto - President

Kenneth Jensen - President-Elect

Jayne Kroner - Secretary

Kathleen Cain - Treasurer

Mary Ackley

Aimee Arata

Barry Brown

Dan Dreblow

Maria Dryden

Ramona Hernandez

Peter Hugenroth

Deborah Knight

Brian Marrs

Terry Paff

Cindy Rudow

Jack Ruzic

Christine Sarrico

Steve Thompson

Newsletter Committee

Terry Paff - Committee Chair

Walt Luke - Co-Chair

Mary Ackley

Geli Argao

Gloryanne Bryant

Kathleen Cain

Ramona Hernandez

Arlette Kendall

Deborah Knight

Jayne Kroner

Frank Fedor

Kathryn Leppert

Brian Marrs

Kim Miranda

Cindy Rudow

Steve Thompson


The Edge - Northern California Chapter’s Newsletter

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