Spring 2016 • vol 62 • num 3

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Focus 1

focus•advertisers•focus•features•

ARMC & BPS Strategies

Baker Tilly

Besler

CBIZ KA Consulting Services, LLC

MGMA

McBee Associates, Inc.

William H. Connolly & Assoc.

WithumSmith+Brown

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Photo Courtesy ofFiddlers Elbow Country Club

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Who’s Who in the Chapter ...... 2

The President’s View by Heather Weber ........................ 3

Mark Your Calendar ................ 15

Who’s Who in NJ Chapter Committees ........... 19

Focus on Finance .................... 20

New Members .......................... 21

Certification Corner ................ 22

Movers and Shakers .............. 24

...Also in the News .................. 25

Job Bank Summary ................ 27

Medicare Prescription Drug Costs Accelerate by Robin Zweifel ..................................................................................................................... 6

2015 Retrospective on Meaningful Use, Healthcare Information Technology, and HIPAA by Leonardo M. Tamburello, Esq. & Marissa Koblitz Kingman, Esq. ............................................ 12

Budget Act Limits Payment for New Off-Campus Outpatient Departments by Brian Herdman .................................................................................................................. 17

Hello? Anyone There? .................................................................................................... 18

9 Ways Health Care Will Change in 2016 -- Do you know your next steps? by Andy Bachrodt .................................................................................................................. 23

CMS Issues Long-Awaited Final Regulations for the 60-day Overpayment Rule by Susan Walberg .................................................................................................................. 26

Bringing Certainty to the Hospital Industry by Neil Eicher, M.P.P. & Karen S. Ali, Esq. ................................................................................. 28

Taking Another Look at New Jersey’s Medicaid Program by Linda Schwimmer .............................................................................................................. 30

Recently Overheard ....................................................................................................... 31

Virtual Doctor Visits Offer New Approach to Traditional Health Care by Matt Lindsay & Nick DiIorio ................................................................................................. 32

Save The Date – NJHFMA Annual Golf Outing ..................................................... 35

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focus/hfmaWho’s Who in the Chapter 2015-2016Chapter Website …………………………………..www.hfmanj.org

Communications CommitteeBrian Herdman, Associate Director ......................................................CBIZ KA ConsultingElizabeth G. Litten, Esq., Chair ........................................................... Fox Rothschild LLPAl Rottkamp, MBA, Vice Chair, Website ............................... Princeton Healthcare SystemRhonda Maraziti, Vice Chair, Advertising ................................WithumSmith + Brown, P.C.Mark P. Dougherty, FACHE......................................................................... Blue Pillar, Inc.Laura Hess, FHFMA ............................................................................................ NJHFMAJohn Manzi ................................................................ Panacea Healthcare Solutions, LLCNicole K. Martin, MPH, Esq. ..................................................................... Martin Law, LLCWilliam McCann ................................................................................................HealthfirstDavid A. Mills ..............................................................................Hinduja Global SolutionsAmina Razanica .............................................................New Jersey Hospital AssociationJames A. Robertson, Esq. ..........................McElroy, Deutsch, Mulvaney & Carpenter, LLPRoger D. Sarao, CHFP ................................................... New Jersey Hospital Association

NJ HFMA Chapter OfficersPresident, Heather Weber .......................................................................... Baker Tilly LLPPresident-Elect, Dan Willis ............................................. Sutherland Healthcare Solutions Treasurer, Scott Mariani ........................................................... WithumSmith + Brown, P.C.Secretary, Erica Waller ...........................................................Princeton Healthcare System

Advertising Policy/Annual RatesThe Garden State “FOCUS” reaches over 1,000 healthcare professionals in various fields. If you have a product or service you would like the healthcare financial industry to know

about, please take advantage of this great opportunity!Contact Laura Hess at 888-652-4362 to place your ad or receive a copy of the Chapter’s advertising policy. The Publications Committee reserves the right to refuse any ad not consistent

with the overall mission of the Chapter. Inclusion of an ad in this Newsmagazine does not infer endorsement of the product or service by the Healthcare Financial Management Association or the Publications Committee. Neither the Healthcare Financial Management Association nor the Publications Committee shall be responsible for slight variations in production quality of published advertisements. Effective July 2015 Rates for 4 quarterly issues are as follows:

Ads should be submitted as print ready (CMYK) PDF files along with hard copy. Payment must accompany the ad. Deadline dates are published for the Newsmagazine. Checks must be payable to the New Jersey Chapter - Healthcare Financial Management Association.

DEADLINE FOR SUBMISSION OF MATERIAL Issue Date Submission Deadline Fall August 15 Winter November 1 Spring February 1 Summer May 1

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

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

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

OBJECTIVEOur objective is to provide members with information regarding Chapter and national activities, with

current and useful news of both national and local significance to healthcare financial professionals and as to serve as a forum for the exchange of ideas and information.

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

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

Per issue/Total Per issue/Total Per issue/Total Per issue/TotalBlack & White 1x 2x (10% off) 3x (15% off) Full Run (20% off)Full Page $ 675 $ 607 / $ 1,214 $ 573 / $ 1,719 $ 540 / $ 2,160Half Page $ 450 $ 405 / $ 810 $ 382 / $ 1,146 $ 360 / $ 1,440Quarter Page $ 275 $ 247 / $ 494 $ 233 / $ 699 $ 220 / $ 880

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NJ HFMA Board MembersBelinda Doyle Puglisi ...........................................................Children’s Specialized HospitalBrian Herdman – Associate Board Member .......................................... CBIZ KA Consulting Scott Besler ..............................................................................................Besler ConsultingStacey Bigos ....................................................................New Jersey Hospital AssociationMegan Byrne ..................................................................................................Ernst & YoungDeborah Carlino ........................................................................................................RutgersKevin Joyce .....................................................................................................QualCare Inc.Michael McKeever .............................................................Saint Peter’s University Hospital Anthony J. Panico, CPA, MS......................................................WithumSmith + Brown, P.C.Josette Portalatin ...................................................................................The Valley Hospital Roger Sarao, CHFP – Ex-Officio .......................................New Jersey Hospital AssociationJennifer Shimek ..................................................................................... Ernst & Young, LLPPeter Demos – Associate Board Member ...................................................Meridian Health

NJ HFMA Advisory CouncilTracy Davison-DiCanto, MBA , FHFMA ...................................Princeton Healthcare System David J. Wiessel ................................................................................... Ernst & Young, LLPJohn Brault, FHFMA ................................................................................................ AetnaMichael Alwell, FHFMA ...........................................................................Barnabas Health

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The President’s View . . .

Heather Weber

Hello everyone,

As the President of the HFMA New Jersey Chapter for the 2015-2016 Chapter year, I wanted to welcome everyone to the Spring Edition of the Garden State Focus. Time is going quickly, and I'm glad to see winter is behind us. With improved weather, there are many exciting events and education sessions planned for this spring.

In March alone we held the Medicare cost report preparation course, CARE/Physician Practice Issues Forum meeting and the Finance Education for Clinicians. In April we will be presenting our North/South education session. We heard our members loud and clear on our membership survey, that you want more sessions in the northern and southern ends of the state, so please come out and participate in these FREE education sessions. We will be raffling off a free 2016/17 HFMA paid membership at each session. Our successful Women’s session will also be held again at the Double Tree in April, please come out and see what all the buzz was about after last year’s session.

We are also holding more networking activities through the year. Our Bowling event was held on February 29, 2016, and we hosted about 30 participants. Keep a look out for our future events. Our Golf Outing will be held again this year at Fiddlers Elbow on May 10. This is always a favorite event and an excellent opportunity to network with your colleagues after the long winter. This year we have added a clinic to the golf outing. Those that have always wanted to participate, but don’t know how to play, can come to the 3 hour clinic and learn, and then join the rest of the golfers for cocktails and dinner.

There is a lot going on at NJHFMA. Please stay connected through our weekly Pulse newsletters, the Focus, monthly discussion forums and other events.

I hope that you enjoy this edition of the Focus. I encourage you to flip to the "Who's Who in NJ Chapter Committees" page, pick a forum that may interest you and dial-in or just show up at their next monthly meeting. It is not too late. There is no cost to participate, no advance sign-up or registration required, and the opportunity to learn and network. If you have any questions or ideas, please do not hesitate to reach out to me and the rest of the New Jersey HFMA leadership.

Heather L. Weber

From The Editor . . .

Elizabeth G. Litten

Dear Readers,

It is nearly 6 p.m. the evening before this issue goes to print and the sun is shining brightly outside my office window. Spring is a wonderful season! I am not a particularly enthusiastic (let alone skilled) golfer, but this cover and the Annual Golf Outing Reminder near the back of this issue are conspiring to make me want to sign up this year. Perhaps I will sign up for the golf clinic (a wonderful new alternative to actually playing), so as to spare my fellow golfers the possibility of being hit by my wayward balls!

I seem to say this in nearly every letter I write in this space, but I really appreciate the quality and relevance of the articles included in this issue. We are fortunate to have articles in this issue contributed by two of New Jersey’s leading health care organizations, the New Jersey Hospital Association and the New Jersey Health Care Quality Institute, alongside articles contributed by members that address recent federal reimbursement, compliance, and business issues relevant to our members. You may be familiar with some of these topics and issues, but I am confident readers will learn something new or develop a new or different perspective after reading this magazine.

I have a spring ritual of sorts that involves the New Jersey HFMA. I recently agreed to take on yet another year of editing this magazine and co-chairing the Communications Committee. I joke that I continue in this role because I can’t find anyone willing to take over for me, but each time I see a new issue come together filled with useful and enjoyable articles, it’s like stepping into spring air at 6 p.m. on a weekday evening.

Happy Reading,

Elizabeth G. LittenEditor

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Medicare Prescription Drug Costs Accelerate

by Robin Zweifel

Robin Zweifel

Healthcare costs accelerated at a significant pace in 2014. The underlying cause for this increase varied among payers with impacts related to the Affordable Care Act (ACA) influencing private health plans as well as federal expenditures through the Medicaid program. While growth in Medicaid spending at state and local levels was less than 1 percent, federal Medicaid spend-ing increased by more than 18% in 2014. Coverage of services for newly eligible enrollees of the ACA accounted for the largest portion of the 2014 Medicaid disbursements.

Spending by the Medicare program also reflected rapid growth in 2014. Overall, the 2014 Medicare healthcare spend-ing increased by 5.5% with prescription drugs being attributed as one of the primary factors for this growth.

To better understand and trend this rapid growth in drug spending, the Centers for Medicare & Medicaid Services (CMS) studied 80 drugs that accounted for the most significant increase in dollars spent by CMS. The study compared 40 drugs for Part D spending and 40 drugs for Part B spending. This information is now published and available for review on the new Medicare Drug Spending Dashboard that CMS says will increase trans-parency into the rising prices for prescription drugs.

This article focuses on the Medicare Part B analysis, only.

Basics of Part B AnalysisAnyone involved in managing drug costs, pricing mark-ups and billing of drugs dispensed in the hospital setting will understand the complexities of calculating the average spend-ing per Medicare beneficiary for outpatient Part B prescription drugs. Addition to the list of high-cost drugs to be analyzed required the following:

• A minimum number of beneficiaries prescribed the drug• Total annual minimums for spending • Minimum values for annual changes in average unit cost resulting in cost increases impacting total spending• A change in the percentage of spending and / or • A change in the percentage of the Medicare average sales price (ASP).

Exclusions from calculation included:• Any beneficiaries in the Medicare Advantage Program (~30%)

• Drugs billed using “not otherwise classified” (NOC) codes (e.g., J3490, J3590, or J9999)• Part B claims submitted by critical access hospitals (CAHs), Maryland hospitals and outpatient prospective payment system (OPPS) acute-care hospital claims with zero dollar reimbursement due to the packaging of low- cost drugs into related procedures defined by ambula- tory payment classification (APC) groups.

Once the list was compiled, CMS sorted the drugs from high-est to lowest based on Part B spending, utilization and cost increases and identified the selection criteria for review of the three groupings for drugs reimbursed through Medicare’s fee-for-service Part B program (shown below).

• Selection Criteria: 40 drugs administered by physi- cians and other professionals in the Medicare fee-for- service program under Part B o 15 drugs with high total program spending o 15 drugs with high annual per-user spending o 10 drugs with high unit-cost increases• Dashboard Insights: Additional detail for each drug pro- vides further insight to the beneficiary out of pocket cost as well as Medicare spending o Average Cost per Unit: total Part B drug spending divided by the number of dosage units o Beneficiary Cost Share: the total dollar amount that beneficiaries using the drug paid that was not reim- bursed by a third party o Overall Average Beneficiary Cost Share: the aver- age amount that all beneficiaries using the drug paid out of pocket during the year. Shown for Part B drugs only.

Drugs with the Highest CostThe following drugs took top ranking for dollars spent by

the Medicare Part B program in 2014.

Rituximab ($1,501,312,601) is frequently audited for im-proper billing by the Department of Health & Human Ser-

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vices Office of Inspector General (OIG) as well as payers. It is a monoclonal antibody therapy, not a chemotherapy, and may be used alone or in combination with chemotherapy. Ritux-imab is used in the treatment of certain types of non-Hodg-kin’s lymphoma, chronic lymphocytic leukemia (CLL), and, in some instances, may be administered to treat other conditions or diseases, such as rheumatoid arthritis, when patients have shown no response to other therapies. This drug improves the body’s own defense mechanism by targeting the CD20 antigen on B cells. The targeted cells will be removed from circula-tion when, in response to therapy, the patient’s bone marrow is stimulated and releases new healthy B-cells into circulation.

Paclitaxel protein-bound ($276,345,661) is an antineoplastic medication used in the treatment of breast cancer. This product differs from “regular” paclitaxel in that the particles are bound in albumin (protein) derived from human blood. The protein-bound product allows for administration of higher doses due to the prevention of reactions that may be associated with the preservative used in regular paclitaxel.

Under the OPPS APC reimbursement for outpatient in-fusion therapy, the protein-bound product receives $9.68 per billed unit in comparison to regular paclitaxel, which is uncon-ditionally packaged and, therefore, receives $0.00 payment for the outpatient Medicare encounter.

Arformoterol Tartrate ($148,844,292) is an inhalation so-lution approved by the Food & Drug Administration (FDA) that is used in the treatment of chronic obstructive pulmonary disease (COPD) and typically billed to the Medicare program through the durable medical equipment (DME) regional car-rier. In the United States, chronic lower respiratory tract dis-eases, such as COPD, are diagnosed for as many as 14.2% of the adult population aged 65 and older and has been identified as the third leading cause of death.

A published study comparing 30-day readmission rates dem-onstrated significantly lower rates for patients using arformoterol as opposed to patients prescribed nebulized short acting beta-ag-onists (SABAs). These findings prompt the following questions:

• Does this acute care cost reduction related to readmis- sion compensate for the increased cost of the drug?

• What benefit may be gained through quality improve- ments for hospital value-based purchasing and readmis- sion reduction programs? A common thread is seen in the presence of monoclonal an-

tibody therapy across the categories for drugs with high cost-per-unit, cost-share by the beneficiary and average beneficiary cost-share. Monoclonal antibodies are included in a category of drugs known as targeted therapy. Common therapies for cancer treat-ment (chemotherapy) have focused on killing a cell line when that cell line (e.g., lymphocyte) has mutated within the patient. Typically, the mutated cells begin to grow through rapid division to form new diseased cells. The non-targeted chemotherapy will kill both the cancerous cells and the normal or healthy cells.

The science behind the targeted therapy identifies specific features of the cancer cell that are different from normal healthy cells thereby allowing the treatment to disrupt function only of the cancer or diseased cells.

Another type of targeted therapy is the anti-angiogenesis drugs that target the blood vessels supplying oxygen to the cells within a tumor or mass and starve the cell by removing the oxygen supply.

A Good Reason for Analysis As one of the largest purchasers of prescription drugs in

the United States it is obvious that the CMS must understand the underlying causes of this growth in spending, proactively identify trends and develop methods for protection of program funds while under scrutiny of the public to improve level of care for the nations aging population by providing high qual-ity, high value, efficient care. While some drug costs soar, it is possible that through further study of long-term outcomes, CMS will find that the end justifies the mean for spending on new and improved drug therapy.

As Medicare expands initiatives to control costs, hospitals as well as physicians and other providers should watch for future modifications to the Part B reimbursement of outpatient and prescription drugs including a reduction in ASP-based pay-ment methodology and a move toward flat-fee payment rather than percent reimbursement for drug cost amount above ASP. Other potential changes to payment models include outcome

8 Focus

Opening Keynote Speaker John McNeil, Chief Cultural Officer, Cancer Treatment Centers of America®, presenting Creating World-Class Excellence

Keynote Series by The Ritz-Carlton Leadership Center: • Excellence in the Patient Experience• Motivating Employees• Memorable Customer Service

Preconference workshop speaker Owen Dahl, MBA, FACHE, LSSMBB, Independent MGMA Consultant and author, presenting Lean Six Sigma White Belt Certification Program.

NJMGMA PMC2016 PROGRAM HIGHLIGHTS:

For more information including the full conference schedule or to register please visit

www.njmgma.com/pmc-2016or call NJMGMA at 609-208-3279

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evaluations for reimbursements based on how effective a drug is shown to be.

The 2016 HHS budget focuses on prescription drug and opioid misuse, abuse, and overdose death prevention. Although much of this $99 million investment will be focused on reduc-ing dollars spent through the Medicaid program, there also will be an impact on Medicare spending through introduction of a Medicare Part D program that is intended to reduce or prevent prescription drug abuse by requiring high-risk beneficiaries to be directed to specified providers and pharmacies to obtain con-trolled substances.

REFERENCESMedicare Drug Spending Dashboard:

• https://www.cms.gov/Newsroom/MediaReleaseDatabase/ Fact-sheets/2015-Fact-sheets-items/2015-12-21.html• https://www.cms.gov/Research-Statistics-Data-and-Sys tems/Statistics-Trends-and-Reports/Dashboard/Medi care-Drug-Spending/Drug_Spending_Dashboard.html

National Health Expenditures 2014 Highlights: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/highlights.pdf

Medicare Guidance for Billing of Rituximab (J9310): https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE1316.pdf

Arformoterol Tartrate: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3858026/

Medicare OPPS Addendum B January 2016: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html

About the authorRobin Zweifel is senior vice president of revenue capture services for Panacea Healthcare Solutions Inc. Her areas of expertise in-clude clinical laboratory and chargemaster management, as well as infusion and pharmacy regulatory compliance. She is lead on the development of Panacea’s CDMAuditor’s CDM Coding & Compliance Module and contributes to a number of publications and Web-based products that help providers maintain regulatory compliance while ensuring positive revenue outcomes. Robin can be reached at rzweifel@panaceainc.com.

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In 2015, the U.S. Department of Health and Human Ser-vices (HHS) continued in its efforts to advance the imple-mentation of Certified Electronic Health Record Technol-ogy (CEHRT) throughout the healthcare industry, primar-ily through the Centers for Medicare & Medicaid Services’ (CMS’) “Meaningful Use” program. Simultaneously, HHS’s Office for Civil Rights (OCR) continued with its mission to enforce and ensure compliance with existing requirements for the use, disclosure, storage, and dissemination of protected health information (PHI). Mostly through these key programs, 2015 likely foreshadows major changes in 21st century health information technology in the United States.

Meaningful Use Stage 3 Final Rule and BeyondEnacted in 2009 as part of the American Reinvestment

and Recovery Act (ARRA), Meaningful Use, is the Medicare and Medicaid program which incentivizes providers to adopt CEHRT to improve patient care and outcomes.1 Its implemen-tation is designed in three stages: the promotion of basic EHR adoption and data gathering (Stage 1); coordination of care and limited exchange of patient data (Stage 2); and large-scale data sharing, interoperability, leading to improved healthcare outcomes (Stage 3).2 Launched in 2011, Meaningful Use has become the flagship program for the Office for National Co-ordinator for Health Information Technology (ONC), which jointly oversees the program along with HHS.

In September 2014, providers struggling under the weight the Meaningful Use program received welcomed relief when the government extended the Stage 2 deadline for one year. It also required all eligible providers to use the 2014 Edition of CEHRT beginning in 2015 for year-long attestation reporting in 2015.3 Beginning in 2015, providers who failed to demonstrate Meaningful Use faced penalties beginning at 1 percent of Medicare Part B reimbursements,

which would increase in future years up to a maximum of 5 percent.4

Meaningful Use imple-mentation in 2015 did not go as smoothly as hoped. In April of last year, CMS issued its notice of proposed rule-making which, among other things, changed the incen-tive program reporting period from a full year to a 90-day interval aligned with the cal-endar year. It also reduced the number of core objectives that are required to be met for Stage 1 and Stage 2.5 Between the NPRM in April and the Final Rule which was issued in October, a groundswell of opposition began to build from industry stakeholders who considered Meaningful Use un-wieldy, overly burdensome, and inflexible. These efforts cul-minated with a September 28, 2015 letter signed by over one hundred members of Congress to HHS Secretary Burwell urging a delay in Stage 3 implementation and postponement of final Stage 3 rulemaking.6 Among the reasons cited in this letter was the fact that the Meaningful Use program was de-veloped prior to the enactment of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), commonly known as the “doc fix” legislation passed last year.7

Unfazed by industry and Congressional opposition, on Oc-tober 6, 2015, CMS issued its Meaningful Use Stage 3 Final Rule (the “Stage 3 Final Rule”) simultaneously with ONC’s re-lease of the 2015 Edition IT Certification Criteria (the “2015 CEHRT Final Rule”). Among the Stage 3 Final Rule’s most salient features was a delay in mandatory Stage 3 compliance until January 1, 2018, which is a full year later than originally

2015 Retrospective on Meaningful Use, Healthcare Information Technology, and HIPAA

Leonardo M. Tamburelloby Leonardo M. Tamburello, Esq. & Marissa Koblitz Kingman, Esq.

Marissa KoblitzKingman

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indicated in the NPRM a few months prior.8 Other changes to Stage 3 were designed to ease the transition between Stage 2 and Stage 3, including: refocusing the program on quality of care improvement through clinical decision support and in-formation exchange rather than data entry, and aligning Stage 3 reporting requirements with other quality programs, so that providers may now report once and receive credit for multiple programs.9 CMS and ONC appeared to end 2015 on a high note, triumphantly announcing the Stage 3 Final Rule, critics notwithstanding.

In early 2016, CMS abruptly changed course when acting CMS Administrator Andy Slavitt tweeted from the J.P. Mor-gan Healthcare Conference in San Francisco that that, “In 2016, MU as it has existed – with MACRA– will now be ef-fectively over and replaced with something better #JPM16.”10 In his formal remarks at the conference, Slavitt reportedly said that CMS would be providing more details on future health IT incentive programs focusing on patient outcomes rather than technology issues by March 25, 2016.11

Healthcare Data (In)Security and OCR Enforcement EffortsAfter 2015, it is undeniable that both large and small-scale

targeting of healthcare data is taking place. Leading the pack, in February 2015, Anthem Blue Cross announced that approx-imately 78.8 million patient records had been breached, along with an additional 8.8 to 18.8 non-patient records.12 Later in the year, Premera Blue Cross and Excellus Blue Cross Blue Shield would announce that they too suffered attacks which exposed 11 million and 10 million records, respectively.13 Comparatively smaller breaches also occurred at UCLA Health Systems and CareFirst Blue Cross Blue Shield where 4.5 and 1.1 million individuals were affected.

Though large-scale breaches splashed across the head-lines, and were ultimately eclipsed by the “advanced per-sistent threat” hack of the Office of Personnel Management which compromised the information of over 21 million in-dividuals and included over 5 million fingerprint records, targeted attacks on healthcare data also came in smaller sizes.

In February 2015, a former hospital employee in Texas was sentenced to 18 months in federal prison after improperly ob-taining PHI with the intent to use it for personal gain.14 The following month, a Blue Cross Blue Shield of Michigan (BCB-SM) employee (and ten others in multiple states) was indicted on multiple counts of identity theft related crimes based on her alleged theft of BCBSM subscriber information.15 According to the indictment, the BCBSM employee shared subscribers’ personal identifying information and distributed it to others who used it to apply for credit in subscribers’ names and make

purchases across the country. Co-conspirators were arrested in Texas, Ohio and Michigan in possession of BCBSM subscriber information, counterfeit identification cards, and credit cards that were fraudulently obtained in the names of BCBSM sub-scribers. At other suspects’ homes, agents recovered BCBSM subscribers’ names, dates of birth and Social Security numbers in addition to counterfeit and re-encoded credit cards and gift cards. The indictment alleges that three of the co-conspirators used counterfeit credit cards at different stores and fraudulent-ly obtained more than $742,000 worth of merchandise from Sam’s Club alone.16

OCR enforcement of HIPAA requirements resulted in six Resolution Agreements totaling over $6.1 million in penalties collected. Through these Resolution Agreements, OCR high-lighted the importance of timely risk assessments and proper risk management, particularly regarding “cloud” services and applications.17 In addition to the fines assessed, all Resolution Agreements in 2015 required that the allegedly non-compliant party adhere to a monitored “Corrective Action Plan” for be-tween one and three years.18

OCR’s enforcement of HIPAA was criticized by two reports from the Office of Inspector General issued in October 2015. The first of these reports examined OCR’s oversight of covered entities’ compliance with the Privacy Rule.19 The second report looked at OCR’s handling of covered entities’ reported HIPAA breaches.20 Both reports included recommendations to OCR for improvement in these areas. OCR agreed with all of OIG’s recommendations in both reports, suggesting changes to OCR oversight and enforcement activities in the near future.21

The second half of 2015 also saw the implementation of the long-anticipated “Phase 2” HIPAA Audits of both covered entities and business associates. Although OCR remains unclear on the ultimate timeline for these audits, it is likely that these audits will spawn additional enforcement actions and influence OCR investigative and enforcement policy in the future.

OCR also signaled forthcoming rulemaking in the HIPAA arena. Specifically, it has said that covered entities and business associates may expect: (1) a proposed rule that would allow individuals adversely affected by breaches of their protected health information to share in a percentage of the fine assessed by OCR against the party or parties responsible for the breach; (2) additional guidance regarding the “minimum necessary” rule, which OCR views as intended to advance the policy goal that PHI only be used or disclosed when necessary for a particular purpose or to carry out a specific function; (3) further clarification and guidance concerning the use

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of cloud storage and cloud computing services that have proliferated since the last major regulatory pronouncements related to the Security Rule; and (4) rulemaking related to the provision of an accounting of PHI disclosures upon request to individuals.22

Maintaining the security and integrity of electronic medical records will continue to present challenges for the healthcare industry. Healthcare records and information will

continue to be targeted by hackers and criminal elements. The increase in sharing of this information, whether under the flag of Meaningful Use or other similar programs, makes it more important than ever for data controllers and users to secure health information proactively rather than simply seeking to achieve “compliance” with regulatory models such as HIPAA.

About the AuthorsLen Tamburello is an Of Counsel attorney and Marissa Koblitz Kingman is an Associate in the Health Care Practice at McElroy, Deutsch, Mulvaney & Carpenter, LLP. McElroy, Deutsch Mulvaney & Carpenter has twelve offices in New Jersey, New York, Connecticut, Massachusetts, Pennsylvania, Delaware and Colorado.

Footnotes1Centers for Disease Control and Preven- tion, Meaningful Use. http://www.cdc.gov/ehr meaningfuluse/introduction.html2Ibid.3CMS Issues Final Rule To Extend Mean- ingful Use Requirements Tuesday, September 2, 2014. http://www.ihealthbeat.org/articles/ 2014/9/2/cms-releases-final-rule-to-extend-meaningful-use-requirements4An Introduction to the Medicare EHR In-centive Program for Eligible Professionals. https://www.cms.gov/Regulations-and-Guid-ance/Legislation/EHRIncentivePrograms/downloads/beginners_guide.pdf5New CMS NPRM Offers Significant Mean-ingful Use Flexibility in 2015 through 2017 Program Years, April 14, 2015.http://www.himss.org/News/NewsDetail.aspx?ItemNumber=41714 6Letter re: Medicare and Medicaid Electronic Health Record Incentive Program, September 28, 2015. https://ehrintelligence.com/images/site/attachments/Meaningful_Use_Letter.pdf7Ibid.; http://www.medicareadvocacy.org/con gress-passes-doc-fix-senate-unable-to-im-prove-the-bill-for-medicare-beneficiaries/ 8Congress Passes “Doc Fix” – Senate Unable to Improve the Bill for Medicare Beneficiaries,

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of coverage, pricing and risk management.

LOGO A

56 Park Street/Montclair, NJ 07042-2999973.744.8500 fax: 973.744.6021www.whconnolly.com

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Focus 15

April, 2015. https://www.cms.gov/Newsroom/MediaRelease-Database/Fact-sheets/2015-Fact-sheets-items/2015-10-06.html9CMS Issues Stage 3 Meaningful Use Guidelines, October 7, 2015. http://journal.ahima.org/2015/10/07/cms-issues-stage-3-meaningful-use-guidelines/ 10Slavitt: Meaningful Use is all but dead, January 12, 2016. http://medcitynews.com/2016/01/slavitt-meaningful-use-all-but-dead/11Id. 127 largest data breaches of 2015, December 11, 2015. http://www.healthcareitnews.com/news/7-largest-data-breaches-201513Cyberattack exposes data of 11 million Premera Blue Cross members, March 17, 2015 .http://www.modernhealthcare.com/article/20150317/NEWS/150319904; Excellus BlueCross BlueShield hacked; 10.5M patients affected, September 10, 2015. http://www.washingtontimes.com/news/2015/sep/10/excellus-bluecross-blueshield-hacked-105m-patients/ 14Former Hospital Employee Sentenced for HIPAA Violations, February 17, 2015. http://www.justice.gov/usao-edtx/pr/for-mer-hospital-employee-sentenced-hipaa-violations15Eleven Individuals Charged With Stealing And Fraudulently Using Personal Information Of Blue Cross Blue Shield Subscribers, March 11, 2015. http://www.justice.gov/usao-edmi/pr/eleven-

individuals-charged-stealing-and-fraudulently-using-personal-information-blue16Id. 17RESOLUTION AGREEMENT, St. Elizabeth’s Medical Center and the United States Department of Health and Hu-man Services, July 8, 2015. http://www.hhs.gov/sites/default/files/ra.pdf 18See e.g., RESOLUTION AGREEMENT, TRIPLE-S and the United States Department of Health and Human Ser-vices http://www.hhs.gov/sites/default/files/Triple-S%20-%20OCR%20Resolution%20Agreement%20and%20Correc-tive%20Action%20Plan%20in%20Final%20%28508%29.pdf (noting the effective date and term of the CAP). 19OCR Should Strengthen Its Oversight of Covered Entities’ Compliance with the HIPAA Privacy Standards, September 2015. http://oig.hhs.gov/oei/reports/oei-09-10-00510.pdf20OCR Should Strengthen its Follow up of Breaches of Patient Health Information Reported by Covered Entities, September 2015. http://oig.hhs.gov/oei/reports/oei-09-10-00511.pdf21http://oig.hhs.gov/oei/reports/oei-09-10-00510.pdf at Page 11; Id. at 13. 22Jocelyn Samuels Gives Update on OCR Compliance Au-dits, September 4, 2015. http://www.hipaajournal.com/joce-lyn-samuels-update-on-ocr-compliance-audits-8091/

mark your calendar . . .

PLEASE NOTE: NJ HFMA offers a discount for those members who wish to attend Chapter events and who are currently seeking employment. For more information or to take advantage of this discount contact Laura Hess at NJHFMA@aol.com or 888-652-4362. The policy may be viewed at: http://hfmanj.orbius.com/public.assets/A02-Unemployed-Discount/file_168.pdf

April 28, 2016 all dayDoubleTree by Annual Women's LeadershipHilton Hotel Tinton and Development Session

May 10, 2016 all dayFiddler’s Elbow Annual Golf OutingCountry Club

May 24, 2016 all dayRenaissance Woodbridge Bi-monthly MeetingHotel Payer and Provider Collaboration Committee

June 14, 2016 all dayRenaissance Woodbridge Bi-monthly MeetingHotel Revenue Integrity Committee

n Financial Modelingn Clinical Benchmarkingn Revenue Integrity

n Eligibility and DSH Servicesn Charge Evaluationn Risk Reduction (RAC)

The Devil Opportunity is in the Detail.

You have data. You need insight.CBIZ KA Consulting Services, LLC

Information. Not Intuition.

1-800-957-6900 www.kaconsults.com

Spring 2 0 1 6

Focus 17

Budget Act Limits Payment for New Off-Campus Outpatient Departments

by Brian Herdman

Brian Herdman

For many years, MedPAC, the Medicare Payment Advisory Commission, has expressed its concern to Congress about the differences in payment between hospitals and physician offices for similar services. The higher payment in the hospital out-patient payment system (OPPS) compared to the Medicare physician fee schedule (MPFS) creates an incentive for physi-cian practices to convert to hospital outpatient department status. MedPAC raises the issue on behalf of beneficiaries who end up paying higher coinsurance for the same services after conversion.

The Bipartisan Budget Act of 2015 (BBA) signed on No-vember 2, 2015 contains provisions that remove the financial incentive for this status change. The BBA stipulates that off-campus departments are prohibited from hospital outpatient department (HOPD) payment unless already billing as a HOPD prior to passage of the Act.

CMS maintains a definition of “hospital campus” that lim-its the distance from the main campus for an outpatient facility to be considered on-campus. The definition of an on-campus outpatient department is determined by 42 C.F.R. 413.65(a)(2), which states:

Campus means the physical area immediately adjacent to the provider’s main buildings, other areas and structures that are not strictly contiguous to the main buildings but are located within 250 yards of the main buildings, and any other areas determined on an individual case basis, by the CMS regional office, to be part of the provider’s campus.

Therefore, the BBA limits new HOPDs to 250 yards from a hospital’s main campus. The limited exceptions to the 250 yard perimeter apply to off-site locations that provide inpatient or emergency department services.

Interestingly, the Centers for Medicare and Medicaid Ser-vices (CMS) anticipated the need to track on- and off-campus claim activity more than a year before the passing of the BBA. It published two sets of billing changes to begin to track cam-pus status.

The first change, found in the 2015 OPPS final rule, dic-tated the use of modifier PO for a voluntary period until it be-came mandatory on January 1, 2016. The description of this modifier is: “Services, procedures and/or surgeries furnished at off-campus provider-based outpatient departments.” The corresponding change to the Medicare Claims Processing Manual, (Chapter 4, Section 20.6.11) has been updated for this provision via Transmittal 3238 as follows:

Effective January 1, 2015, the definition of modifier -PO is “Services, procedures, and/or surgeries furnished at off-campus provider-based outpatient departments.” This modifier is to be reported with every HCPCS code for outpatient hospital services furnished in an off-campus provider-based department of a hospital. See 42 CFR 413.65(a)(2) for a definition of “campus”.

This modifier should not be reported for remote loca-tions of a hospital (defined at 42 CFR 412.65), satellite facilities of a hospital (defined at 42 CFR 412.22(h)), or for services furnished in an emergency department.

Reporting of this modifier is voluntary for CY 2015; re-porting of this modifier is required beginning January 1, 2016.

CMS later clarified in a Frequently Asked Questions publication in January 2016 that the PO modifier should only be applied if the off-campus service is to be paid via OPPS:

5: Should the PO modifier be applied for off-campus therapy services that are paid under the [Medicare] Phy-sician Fee Schedule (PFS)?

A: No, the PO modifier only applies to services paid under the OPPS. Accordingly, therapy services that are billed under the [Medicare] PFS and have an OPPS status indicator of “A” do not require the PO modifier.

continued on page 18

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18 Focus

There is a corresponding change for professional billing vis-à-vis a new place of service code. In Transmittal 3315 (effective January 1, 2016), CMS added additional distinction to the existing outpatient hospital code and added another place of service code. The updated definitions are as follows:

POS 19: Off Campus-Outpatient HospitalDescriptor: A portion of an off-campus hospital provider based department which provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation ser-vices to sick or injured persons who do not require hospi-talization or institutionalization.

POS 22: On Campus-Outpatient HospitalDescriptor: A portion of a hospital’s main campus which provides diagnostic, therapeutic (both surgical and non-surgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institu-tionalization.

At present time, both places of service will result in the fa-cility rate within the MPFS; there is no reimbursement impact for professional billing in the off-campus setting.

As with any change to billing, CMS will no doubt moni-tor claims activity for patterns. However, the BBA shows that Congressional pressure to reduce spending remains a factor in rate setting. The trend in converting physician practices is such that the Congressional Budget Office projected spending would increase $800 million in FY 2017 and $9.3 billion over the next 10 years if physician practices were allowed to con-tinue to convert to HOPD status. Because of the BBA, this amount is now applied to savings to the Medicare program. Budget stakeholders will consider on- and off-campus status ripe for savings in future years.

About the AuthorBrian Herdman is an Operations Manager for CBIZ KA Consulting Services, LLC. He can be reached at bherdman@cbiz.com

continued from page 17

Hello? Is Anyone There?Email offers a way to commu-

nicate quickly and efficiently. Ex-cept when it doesn’t.

As inboxes become clogged with unwanted offers and scams, junk filters have become more aggressive. It can put a serious

crimp in communications.Often, you don’t know you have a problem until you’ve

already missed something important, so we turned to the sleuths who help us when chapter leaders report that they are not receiving HFMA emails. Below is their step-by-step guide on troubleshooting problems if you are not receiving NJ HFMA emails from hfmanj.org.

1. Check your junk or quarantine folders and ensure that these are not being filtered there. 2. Add info@hfmanj.org to your safe senders list through Outlook by following the steps below: o Select Actions from the toolbar at the top of the screen. o Select Junk E-mail. o Select Junk E-mail Options.

o Click the Safe Sender tab. o Click Add. o Type in the email address you wish to add to your safe sender list. o Click OK.

Email your IT department and ask them to white list the following:

• starchapteremailhost2.com 67.43.2.30• hostemail1.starchapterhost.com 209.59.162.85• hostmailbox1.starchapterhost.com 67.43.7.204• hostapp1.starchapterhost.com 67.43.0.3• hostapp2.starchapterhost.com 209.59.143.168• hostapp3.starchapterhost.com 67.225.172.119• hostapp4.starchapterhost.com 209.59.144.126• starchaptermail.com 69.60.117.130• 166.78.71.148

Messages will have one of two reply-to email address on

them (visible if you start to reply to the message). Adding this address to your address book or contact list can also help ensure delivery. Adding info@hfmanj.org and NJHFMA@aol.com to your address book or contact list can also help.

Spring 2 0 1 6

Focus 19

CHAIRMAN/EMAIL/ CO-CHAIR/EMAIL/ SCHEDULED MEETING MEETING BOARDCOMMITTEE PHONE PHONE DATES*/TIME LOCATION LIASON Susan Hatch Lisa Hartman Weinstein/Deborah Carlino First Thursday of the Month Tony PanicoCARE (Compliance, shatch@virtua.org lisarhartman@hotmail.com / carlindl@ca.rutgers.edu 9:00 AM Conference Calls apanico@withum.comAudit, Risk, & Ethics) (856) 355-0723 (646) 458-5663 / (973) 972-3260 Access Code: 274-926-602 (973) 898-9494

Elizabeth Litten Al Rottkamp First Thursday of each month Fox Rothschild offices Brian HerdmanCommunications ELitten@foxrothschild.com ajcr123@aol.com 9:30 AM 997 Lenox Dr Bldg 3 bherdman@cbiz.com (609) 896-3600 (201) 821-8705 Access Code: 549-853-204 Lawrenceville, NJ (609) 918-0990 x131

Mike McKeever Mary Cronin & Stacey Bigos First Friday of each month Scott MarianiEducation mmckeever@saintpetersuh.com mmcronin@aol.com / Sbigos@njha.com 10:00 AM Conference Calls smariani@withum.com (732) 745-8600 x5089 (732) 839-1217 / (609) 275-4017 Access Code: 207-716-687 (973) 898-9494 x420

Certification Rita Romeu First Friday of each month Mike McKeever(Sub-committee Romeur@comcast.net 10:00 AM Conference Calls mmckeever@saintpetersuh.comof Education) (973) 418-6071 (732) 745-8600 x5089

FACT (Finance, Richard Baum Katie Kelly Second Wednesday of each Month Megan ByrneAccounting, Capital rbaum@pinnaclehealth.org Katie.Kelly@bakertilly.com 8:00 AM Conference Calls megan.byrne@ey.com& Taxes) (848) 467-3866 Access Code: 587-991-674 (732) 516-4696

Jennifer Vanegas Mike McKeever Third Wednesday of each Month Heather L. WeberInstitute 2015 jennifer.vanegas@faef.com mmckeever@saintpetersuh.com 8:00 AM Conference Calls heather.weber@bakertilly.com (585) 643-3377 (732) 745-8600 x5089 Access Code: 408-966-100 (848) 467-3858

Maria Facciponti Peter Demos/Brittany Pickell Call for meeting arrangements Locations alternate Jennifer ShimekMembership Services/ mfacciponti@adreima.com pdemos@meridianhealth.com / Access Code: 808-053-286 by month - jshimek@kpmg.comNetworking (973) 614-9100 BPickell@ConvergentUSA.com please contact the chairs (973) 912-6167 Brittany (732) 221-0785

Dara Derrick Maria Lopes-Tyburczy 6/11/15, 9/10, 11/12, 1/14/16 (SMMC) Aergo Office Belinda PuglisiPatient Access Services dderrick@hch.org MLopes-Tyburczy@smmcnj.org 3/10/16 (TBD), 5/12/16 2:30 PM Iselin, NJ BPuglisi@childrens-specialized.org (908) 850-6870 (973) 887-5303 Access Code: 542-364-749 unless otherwise indicated O: (908) 301-5458 / C: (862) 251-0753

Steven Stadtmauer Marie Smith Second Friday of each Month Josette PortalatinPatient Financial sstadtmauer@csandw-llp.com msmith1@rbmc.org 10:00 AM New Jersey Hospital Association jportal@valleyhealth.comServices (973) 778-1771 Ext. 146 (732) 324-5053 Access Code: 714-898-796 Board Room (201) 291-6017

Jill Squires Mike Ruiz Third Wednesday of each Month alternating locations each month Kevin JoycePayer and Provider Jill.Squiers@AmeriHealth.com mruizdesomocurcio@regionalcancercare.org 2:00 PM United Healthcare, Iselin, NJ kjoyce@qualcareinc.comServices (609) 662-2533 (201) 510-0924 Access Code: 202-013-321 Horizon BCBS, Wall Township, NJ (732) 562-7823

Jennifer Shimek Dara Quinn 11/12/15, 1/14/16, 5/12/16 Conference Calls Deborah CarlinoPhysician Practice jshimek@kpmg.com Dara.Quinn@carepointhealth.org 7/14/16, 9/8/16 9:00 AM room TBD carlindl@ca.rutgers.eduIssues Form (973) 912-6167 (201) 388-0637 Access Code: 703-211-177 (973) 972-3260

Kathryn Gibbons Peter Demos Third Tuesday of each Month Monmouth Shores Corp. Park Scott BeslerRegulatory & kgibbons@meridanhealth.com pdemos@meridanhealth.com 9:00 AM Meridian Conf. Room 1C sbesler@besler.comReimbursement (732) 751-3372 Access Code: 175-802-794 1350 Campus Pkwy, Neptune

Betsy Weiss Eric Shubin First Wednesday of each Month Tracy Davison-DicantoRevenue Integrity BWeiss@stfrancismedical.org E.Shubin@craneware.com 9:00 AM Princeton HealthCare System Tdavison-dicanto@princetonhcs.org (609) 599-5347 (610) 772-1374 Access Code: 351-605-588

Lew BivonaCPE Designation ldbcpa@verizon.net (609) 254-8141

•Who’s Who in NJ Chapter Committees•

2015-2016 Chapter Committees and Scheduled Meeting Dates*NOTE: Committees have use of the NJ HFMA Conference Call line. The Call in number is (712) 432-1212

If the committee uses the conference call line, their respective attendee codes are listed with the meeting date.

PLEASE NOTE THAT THIS IS A PRELIMINARY LIST - CONFIRM MEETINGS WTH COMMITTEE CHAIRS BEFORE ATTENDING.

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20 Focus

A.Q.I understand Governor Christie passed three healthcare related pieces of legislation during the recent State of New Jersey session. Would you please share more about this?

Indeed, Governor Chris Christie, following the State of New Jersey’s session on Monday, January 18th, had until noon on Tuesday, January 19th to take action on 158 pieces of legisla-tion. Any piece of legislation for which no action was taken would expire in the form of a pocket-veto. Three healthcare related pieces of legislation were passed during this session. These included (1) Bill S-3299/A-4903, The Hospital Com-munity Service Contribution Bill, (2) A-4476/S-2876 which requires certain surgical practices and ambulatory care facili-ties licensed in this State to be owned by a hospital or medi-cal school located in the State, and (3) A-4636/S2878 which establishes minimum certified nursing assistant-to-resident ratios in nursing homes.

The Hospital Community Service Contribution BillOn December 7, 2015, Senate President Steve Sweeney

(D-Deptford), Senator Robert Singer (R-Lakewood) and Senator Joe Vitale (D-Woodbridge) introduced The Hospital Community Service Contribution Bill.

On January 19, 2016, the Governor pocket-vetoed The Hospital Community Service Contribution Bill which would have required New Jersey tax-exempt acute-care hospitals to make payments, or annual service contributions, to offset the cost of services provided by the municipality in which they are located. This Bill was introduced in response to the recent Morristown Medical Center tax court decision (“Decision”).

Following the Decision, Atlantic Health, the parent corpo-ration of Morristown Medical Center, settled with the Mor-ristown Town Council agreeing to pay an upfront payment of $10 million and, in addition, annual installments for the next 10 years to cover $5.5 million in penalties and interest for the years 2006 through 2015. In addition, prospectively, approxi-mately one-quarter of the property will be taxed at an assessed value of $40 million from 2015 to 2025 which will approxi-

mate another $1.05 million in annual tax payments; to be shared between the town and the Morris School District.

The Bill would have required New Jersey tax-exempt acute-care hospitals to make an annual service contribution of $2.50 per day for each licensed hospital bed and $250 per day for each facility providing satellite emergency care. The fees collected would have been used to fund services provided by the local municipalities such as emergency services, police and fire protection or to reduce any existing property tax levies. In addition, a hospital would have had the ability to reduce its annual service contribution by any amount that it already contributes to the municipality through a voluntary payment.

New Jersey Hospital Association’s (“NJHA”) President and Chief Executive Officer Betsy Ryan said, “We are disappoint-ed with the pocket veto of The Hospital Community Service Contribution Bill. NJHA, along with its hospital members and both houses of the Legislature, firmly believed the bill provided a consistent statewide approach for hospitals to support their host municipalities with added community contributions.”

Additional Bills Addressed by Governor ChristieBill A-4476/S-2876, which requires certain surgical prac-

tices and ambulatory care facilities licensed in New Jersey to be owned by a hospital or medical school located in the state, was signed into law by Governor Christie. This Bill was sponsored by Assemblyman Herb Conaway and Senator Richard Codey and was strongly supported by NJHA. The Bill was drafted in an effort to prevent out-of-state organizations from opening surgical practices and ambulatory care facilities in New Jersey.

In addition, Governor Christie also pocket-vetoed Bill A-4636/S-2878 which was sponsored by Assemblywoman An-gelica Jimenez (D-West New York) and Senator Brian Stack (D-Jersey City). This Bill would have established strict certi-fied nurse assistant ratios in nursing homes. NJHA testified in opposition to this legislation as it moved through the Leg-islature.

Governor Christie Takes Action on NJ Healthcare Related Bills

John Smith

•Focus on Finance•

By John A. Smith, Jr.

Spring 2 0 1 6

Focus 21

ConclusionVarious opinions as to why The Hospital Community Ser-

vice Contribution Bill was pocket-vetoed by the Governor have been expressed. Senator Robert Singer stated “since there is no more time in the legislative session, the pocket-veto was the only option. He felt that the bill could have been conditionally vetoed if the legislative session were not at its end. Singer also noted a problem with the bill in determining if it really rep-resents a true “payment in lieu of tax”. Vitale and Burzichelli expressed the thought that the bill was pocket-vetoed by the Governor due to the fact that he did not want to sign anything into law that could be seen as an increase in taxes.

We will continue to closely monitor and keep you informed of this situation as future developments occur as Betsy Ryan also stated that, “Now that the bill has been vetoed, we will work to present a constructive and refined approach that will provide certainty to hospitals and municipalities while address-ing any concerns the Governor may have.”

About the AuthorJohn A. Smith, Jr., is a Supervisor at WithumSmith+Brown, Cer-tified Public Accountants and Consultants, and is a member of the firm’s Healthcare Services Group. John can be reached at jsmith@withum.com.

Jordan TerrillRegional Cancer Care Associates LLC CLO(201) 510-0901tjordan@regionalcancercare.org Matthew D. O'DunlamiThe Consortium Inc.Accounting & Finance Management(267) 233-5381modunlami@comcast.net Julie C. Cooke, CHFPA.J. Santye & Co, PADirector, Health Care Services Group(908) 704-1400jcooke@santye.com

Melody R. HsiouKPMGRegulatory Compliance(818) 451-3580melhsiou@gmail.com Marco A. CoelloCBIZ KASenior Manager(609) 918-0990mcoello@cbiz.com

Sheila E. ThomasHealthFirst FinancialAccount Executive(734) 335-6097sthomas@healthfirstfinancial.com

Christina MorrisonEnglewood Hospital & Medical CtrInternal Auditor(201) 894-3000Christina.Morrison@ehmchealth.org

Meghan MackenzieMeridian Health SystemCorporate Director of Clinical Operations, Managed Care(732) 751-3468mmackenzie@meridianhealth.com

Wilbur JohnsonRemex, Inc.Account Manager(800) 562-5158wjohnson@remexinc.com

Jacqueline MintzRWJ Physician EnterpriseDirector, Finance(732) 423-7497jacqueline.mintz@rwjpe.com

Kara M. SullivanCape Regional Medical CenterPatient Access Supervisor(609) 463-2337ksullivan@caperegional.com

Asha SaxenaFTI Catalyst Adjunct Professor(732) 887-0980Asaxena@fticatalyst.com

Patricia A. WilsonShrewsbury Surgery CenterChief Executive Officer(732) 450-6000pwilson@uspi.com

Mitchell Y. SladeMeridian Health SystemManager, Value Based Solutions(732) 765-6328mslade@meridianhealth.com

Akshita Supawala(973) 898-9494asupawala@withum.com

Claudia AlvesSaint Michaels Medical CenterAdmitting Supervisor(973) 877-5102calves@smmcnj.org Benita BrownPrime HealthcareCentral Business Office Directorbrown.benita97@yahoo.com

Lisa Johnson, CRCRAtlantiCare Health SystemPatient Access Manager(609) 484-6416lisa.johnson@atlanticare.org Edlynn LewisRWJUHCorporate CDM Analyst(732) 418-8077edlynn.lewis@rwjuh.edu

Abigail K. MartinClient Relationship Representative(973) 401-2268martin.abigail.k@gmail.com Thomas C. Streko, Jr.KforceClient Relationship Representative(973) 401-2252tstreko@kforce.com

Christopher SalernoCigna(732) 264-3928christopher.salerno@cigna.com

Christine SarvisJewish Home FamilyOffice Manager(201) 666-2370csarvis@jhalnj.org

Melissa A. SchnippHackensack University Health NetworkManager(551) 996-3303Mschnipp@HackensackUMC.org

Vlad EtingerBergen Regional Medical CenterDirector of Reimbursement(201) 225-6574vetinger@bergenregional.com Anthony PuglisiHQSI Inc.Business Development(732) 238-5570apuglisi@hqsi.org

Lili BrillsteinHorizon BCBSNJDirector, Episodes of CareLili_Brillstein@horizonblue.com

Michael CollinsHackensack Univ Medical CenterSr. Accountant(201) 996-4721michaelcollins@humed.com

New Members

Spring 2 0 1 6

22 Focus

•Certification Corner•

Will a Certification Help Me to …

Get a job? Get a promotion? Be noticed?

There are any number of questions that can be posed regarding the role, purpose, and

value of a certification. The answer to these questions is simple: “What do you want?” The answer to this question shapes the value of certification for you. Certification is a strong career success strategy but not a guarantee. A couple of ideas are offered below to help you think about certification and its role in your career. • Remember that not all certifications are the same. They vary in focus, depth, and breadth of knowledge needed, and they vary regarding eligibility re- quirements. When seeking a certification as a means of developing a career, search for the usefulness of the certification in your field — what will it help you to do? The Certified Healthcare Financial Profes- sional (CHFP) builds business savvy within today’s healthcare business environment. This is part of its uniqueness. The other part of its uniqueness is that the CHFP program is structured as a learning program. You do not have to possess vast experience to earn the designation. You do need to be willing to work at learning.

• Browse industry LinkedIn groups; check out pro- fessional groups in your field and observe the frequent reference to the CHFP and FHFMA des- ignations. These are the professional practice busi- ness credentials for healthcare finance leaders. • The most valuable certifications are the advanced certifications that challenge candidates to learn new skills and gain new knowledge. Certification can help fill in the experience gap. Experience is an im- portant factor in hiring and promoting people, but experience can also be over-emphasized. Experience is frequently used as a proxy for knowledgeable. From a bottom-line perspective, an organization is more interested in what you know and can do than in where and when you learned it. • Since the higher-level industry and practice area- specific certifications are the most valuable, the CHFP is a smart personal career strategy. You can start here and then train up into specific management and executive responsibilities.The Bottom Line: Yes, certification can help you get a job and build a career—as long as it is the right certification. There is nothing for healthcare financial professionals that compares to the CHFP for developing business savvy in today’s dynamic health care environment.So, what do you want?

Career Strategies: What Can Certification Do for You? - NfN Feb2016

By Joseph Abel, Cpcc, Acc, PhdDirector, Career Services, Hfma

Spring 2 0 1 6

Focus 23

9 Ways Health Care Will Change in2016 -- Do you know your next steps?

by Andy Bachrodt

1. Put Me in Coach: Mandatory bundled payments will force many provider organizations off of the value-based care sidelines and into the game in 2016. Some will win, most will struggle and many will fail—forcing providers to put into place a true value-based care strategy built upon net-work scale and scope and the clinical and IT infrastructure to successfully manage value-based programs.

2. Penny Wise, Population Health Foolish: Health sys-tem–employed primary care medical groups become the norm—and will continue to drain health system re-sources—whereas achieving real value under population health models remains elusive for many as health systems struggle to manage chronic patient populations and transi-tions into (and from) post-acute environments. Network development across the continuum as well as specialist in-tegration will be seen as equally critical, if not more so, as primary care.

3. Get with the In-Crowd: Successful health systems with regional strength will turn the tables on payors and set the terms for narrow networks and direct-to-employer contracts to secure and grow share, manage appropriate utilization, and take more risk—and share—of the premium dollar.

4. There’s an App for That: In population centers, health systems that embrace retail, digital and telemedicine plat-forms will realize big gains in brand value and set the stage for essentiality to shift from physical assets to service and results.

5. I’ll Sit This Dance Out: Population health is not for ev-eryone or for every organization. The road to value-based care does not require everyone to do the “Hustle” when a simple “Waltz” will do. Listen to the music that is relevant in your market, and pick your dance partners wisely.

6. Back to the Future: Provider merger and acquisition activ-ity will continue to be strong in 2016 as providers con-

tinue to partner in an effort to achieve scale, especially in response to the market transition to value-based care. Fed-eral and payor challenges to hospital asset and even virtual mergers will force many health systems to revisit vertical (payor and medical group) integration as an alternative foundation of their strategy.

7. Child’s Play: Downward financial pressure means com-munity hospitals will face the closure of their NICUs and smaller pediatric programs, and children’s hospitals will step in to either manage these units or create new capacity on their own campuses. Simultaneously, integrated health systems holding on to their pediatric platforms will look to freestanding children’s and academic medical centers for subspecialty support. Partnerships across key pediatric programs—and across state lines—will broaden research populations, and further advances in pediatric research will require a push for even greater collaboration in the future.

8. May–December Romance: Hospitals will develop lasting, meaningful relationships with post-acute care providers, though the match-making will require kissing many frogs along the way.

9. Do the Math: Health systems, newly rich with access to clinical data through investments in EHRs and HIEs, will increasingly invest in data aggregation and predictive analytics—and be soundly disappointed with their efforts. Unleashing the power of big data is not core to most organizations, will be hugely expensive and will require years of effort. It is one thing to do the math, and entirely another to act upon the results.

About the authorAndy Bachrodt is Managing Partner, Health Care with Kurt Salmon.

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24 Focus

As part of Fox Rothschild’s ongoing commitment to protecting the confidential and personal information of clients and employees, the firm has named Partner Elizabeth G. Litten as its first HIPAA Privacy Officer.

“We are committed to taking every step possible to ensure the privacy of health care information in our possession on behalf of our clients and employees,” said Thomas D. Paradise, Fox Rothschild’s General Counsel. “As our health care practice continues to grow nationally, Elizabeth will serve as a valuable resource for our firm’s HIPAA related matters as well as for our clients facing related health law privacy concerns.”

This announcement follows on the heels of the firm naming Mark McCreary as its Chief Privacy Officer. Both positions complement the firm’s robust data privacy and health law practices and further the firm’s mission to protect sensitive data for clients and employees.

Named as one of the leading health care attorneys in New Jersey by Chambers USA, and active in the public and private sectors, Litten serves as national and regional counsel to hospital systems, health care facilities, health plans, technology companies, physicians groups and a wide range of other health care-related organizations and entities. With more than 25 years of experience in the industry, she has become a go-to source for regulatory health care matters throughout the nation.

Margaret Davino JoinsFox Rothschild LLP

Movers and Shakers....Fox Names Elizabeth Litten as Firm’s HIPAA Privacy Officer

Fox Rothschild is pleased to welcome Margaret J. Davino as a partner in the firm’s Health LawPractice Group in the New York and New Jersey offices.

Margaret, a former general counsel to hospitals and medical centers in New York and New Jersey, represents clients facing an array of health care law matters, including transactional, compliance, contractual, corporate, regulatory and risk management issues.

Margaret has been included in Super Lawyers for health law in New York each year since 2007. She is the immediate past chair of the New York State Bar Association’s Health Law Section and also serves on the board of the New Jersey Bar Association's Health Law Section.

Learn more about Margaret and the firm.

Margaret J. Davino, Partner101 Park Avenue, Suite 1700New York NY 10178646.601.7615

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Hackensack University Medical Center became the first health care charter member of the New Jersey Innovation Institute, according to a statement from NJII.

Judith Roman, CEO and president of AmeriHealth New Jersey, is leaving the company after almost 10 years.

AtlantiCare announced its CEO and president, David Tilton, is retiring June 30, and will be succeeded by Executive Vice President Lori Herndon, the CEO and president of AtlantiCare Regional Medical Center.

.... also In The News

NEW JERSEY MEDICAL GROUP MANAGEMENT ASSOCIATION

ANNOUNCES 2016 OFFICERS

Hamilton, NJ – New Jersey Medical Group Management Association (NJMGMA) recently announced its new officers for 2016-17. Following elections held on October 26 2015, and effective January 1, 2016, Alex Binder assumes the role of President, Joan Hendler-Vice President and Thomas Zeug-Secretary/Treasurer.

Alex Binder, of Long Branch, N.J., steps up from his role of Vice President (2013-14) to serve as President of the NJMGMA. Mr. Binder is Vice President of Physician Services at the Visiting Nurse Association of Central Jersey. He is also an adjunct professor at the Leon Hess Business School, Monmouth University, West Long Branch, N.J. Joan Hendler takes over the role of Vice President with the promotion of Alex Binder to President. Ms. Hendler is the EVP for Remex, Inc., an accounts receivable revenue management company. Ms. Hendler has previously served on the Board of Directors for the NJ Healthcare Financial Management Association (HFMA). The position of Secretary/Treasurer will be filled by Tom Zeug, MBA, FACMPE. Mr. Zeug is currently the Chief Operating Officer at Tenafly Pediatrics. He has been an active member of NJMGMA for the last six years serving on its Board of Directors.

New Jersey Medical Group Management Association (NJMGMA), Hamilton, N.J. is made up of more than 450 members representing more than 100 medical groups across New Jersey. NJMGMA is dedicated to providing educational, advocacy, mentoring and networking opportunities to its members which include

supervisors, managers, and administrators of small and large primary care and specialty groups, and full-time students focusing on healthcare administration.

Alex Binder of Long Branch, NJ is the newly elected President of the New Jersey Medical Group Management Association. Mr. Binder is currently the Vice President of Physician Services at the Visiting Nurse Association of Central Jersey.

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CMS Issues Long-Awaited Final Regulations for the 60-day Overpayment Rule

Susan Walberg

by Susan Walberg

On February 11th, 2016, CMS issued final rules clarify-ing the requirements under the 60-day overpayment rule. The overpayment rule, originally found in Part 6402(a) of the Af-fordable Care Act, requires providers and suppliers who have received an overpayment to identify, report, and return the overpayment to the Medicare program no later than the earlier of (a) 60 days after the date on which the overpayment was identified, or (b) the date any corresponding cost report is due, if applicable.

This ‘overpayment rule’ has caused a lot of confusion and concern, especially around the question of what it means to ‘identify’ an overpayment. Most health lawyers and other analysts have posited that an overpayment was identified at the point where it was quantified, but in September of 2015, the New York Southern District Court weighed in. The case, United States ex rel. Kane v. HealthFirst, resulted in the court adopting the Department of Justice’s position, holding that ‘the sixty day clock begins ticking when a provider is put on notice of a potential overpayment.’ This holding was concern-ing because it essentially meant that the entire timeframe from the moment a provider became aware there may be an overpay-ment until the amounts were repaid would be 60 days. That would include any necessary audits and analysis needed to quantify the specific claims affected.

The final rules, issued in the February 11th Federal Regis-ter, clarified that identification occurs when the provider “has, or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.” This clarification is much more reasonable than the previous court’s holding, and may allow providers to breathe a sigh of relief.

Providers need to understand, however, what CMS means by the term ‘reasonable diligence,’ above. CMS made clear that reasonable diligence includes proactive compliance ac-tivities, such as monitoring for potential overpayments, as well as responding to credible reports of potential overpayments.

Specifically, CMS stated, “We believe that undertaking no or minimal compliance activities to monitor the accuracy and appropriateness of a provider or supplier’s Medicare claim s would expose a provider or supplier to liability under the identified standard articulated in this rule based on the failure to exercise reasonable diligence if the pro-vider or supplier received an overpayment.” In other words, CMS is again strongly suggesting that Compliance Programs are a requirement for avoiding liability.

CMS reiterated the definition of overpayments: “Overpay-ments are any funds that a person has received or retained un-der Title XVIII of the Act to which the person, after applicable reconciliation, is not entitled under such title. These funds might be received or retained due to fraud or due to more in-advertent reasons.” This definition is important, as it makes clear that claims that are routinely adjusted or reconciled as part of a normal process are not intended to be categorized as ‘overpayments,’ and would not be considered such unless a provider failed to follow those routine reconciliation processes.

In addition, CMS has adjusted the look-back period, from the original 10 years to 6 years, which is undoubtedly a more reasonable standard. The regulations are effective as of March 14, 2016.

About the authorSusan Walberg, JD, MPA, CHC, is the Vice President/National Director of Compliance for Kohler Healthcare Consulting, Inc. Susan is an award-winning author who has over 25 years’ experi-ence in the healthcare field, both on the provider and the payer side, working as an attorney and a Compliance Officer. For addi-tional information, feel free to contact Kohler Healthcare Consult-ing, Inc., Susan Walberg at swalberg@kohlerhc.com.

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•Focus on...New Jobs in New Jersey•

JOB BANK SUMMARY LISTINGHFMA-NJ’s Publications Committee strives to bring New Jersey Chapter members timely and useful information in a convenient, accessible manner. Thus, this Job Bank Summary listing provides just the key components of each recently-posted position in an easy-to-read format, helping employers reach the most qualified pool of potential candidates, and helping our readers find the best new job opportunities. For more detailed information on any position and the most complete, up-to-date listing, go to HFMA-NJ’s Job Bank Online at www.hfmanj.org.

[Note to employers: please allow five business days for ads to appear on the Web site.]

Job Position and OrganizationInformaties Manager Princeton Healthcare System

Financial Analyst II AtlantiCare

Director, Operations Robert Wood Johnson Physician Enterprise

Contract Analyst Cooper University Healthcare

Director of Revenue Integrity Cooper University Healthcare

Hospital Reimbursement & RegulatoryFinancial Analyst NAVEOS, LLC

Patient Access Manager Adreima

Compliance Auditor Saint Peter's University Hospital

Director Revenue Cycle Management Penn Medicine

Practice Administrator - Primary Care Mount Sinai Health System

Revenue Cycle Director Med-Metrix

Reimbursement - Decision Support Analyst- Full time HackensackUMC Mountainside

Director of Quality Improvement Robert Wood Johnson Physician Enterprise

Senior Accountant Christiana Care Health System

Director of Finance Reconstructive Orthopedics

Financial Analyst Christiana Care Health System

Senior Director of Operations Robert Wood Johnson Physician Enterprise

Primary Care Office Billing Specialist

Compliance Auditor Saint Peter's University Hospital

Marketing Manager Robert Wood Johnson Physician Enterprise

Government, Business & Community Relations Liaison Deborah Heart and Lung

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Bringing Certainty to the Hospital Industry

Neil Eicher, M.P.P.

by Neil Eicher, M.P.P. and Karen S. Ali, Esq.

Karen S. Ali, Esq.

On June 25, 2015, the same day the United States Supreme Court upheld the latest challenge to the Affordable Care Act, a New Jersey tax court handed down a ruling that in some ways was equally momentous for New Jersey hospitals.

The case AHS Hospital Corp., d/b/a Morristown Memorial Hospital v. Town of Morristown, 28 N.J. Tax 456 (Tax Ct. 2015) (“MMH”) examined the property tax exemption of Morris-town Memorial Hospital, a nonprofit hospital in Morristown, New Jersey. Judge Vito Bianco ruled that the hospital had not satisfied the criteria for tax exemption for tax years 2006-2008 and denied its claim for property tax exemption for the major-ity of the hospital property.

The stunning ruling could place many not-for-profit hospi-tals at risk of financial uncertainty. And it has sparked a flurry of legislative activity to address the great uncertainty that now exists, not only for the state’s hospitals, but also municipalities and other nonprofit entities.

In his 88-page written decision, Judge Bianco provided a detailed review of the history of the tax treatment of nonprofit hospitals, including New Jersey’s statutory property tax ex-emption for hospitals. He noted that although “[h]istorically, American hospitals have been exempt from property taxes . . . based upon their origins intricately founded in religious and charitable traditions,”

Non-profit hospitals have changed significantly, how-ever, from their early origins as charitable alms houses providing free basic medical treatment to the infirm poor. Today they are sophisticated centers of medical care, and in some cases, education, providing a litany of medical services regardless of a patient’s ability to pay.

Next, the Court examined the hospital’s operations using the three-part test set forth in Paper Mill Playhouse v. Millburn Town-ship, 95 N.J. 503 (1984) for determining eligibility for property tax exemption: (1) whether the property is owned by an en-tity organized exclusively for a tax-exempt purpose; (2) whether nearly all of the property is actually used for hospital purposes; and (3) whether the operation and use of the remaining areas of the property are not conducted for profit. Failure to comply with one prong of the test precludes tax exemption.

The Court found the hospital had failed to satisfy the third prong of the test, i.e., the “for-profit” test in several areas: (1) its relationships and contracts with physician groups and employed

physicians; (2) its operations and activities with affiliated and non-affiliated for-profit entities; (3) executive compensation; and (4) operation of the gift shop, cafeteria and day care center. In reviewing these areas, the Court found that the hospital oper-ated and used its property for a “profit making purpose” because it commingled its operations and efforts with for-profit entities and allowed its property to be used “for profit” and engaged in profit-making purposes through its contracts with physi-cians and other third parties pro-viding support services (e.g., the cafeteria).

The Court concluded by discussing the future of property tax exemptions for nonprofit hospitals, explaining that “the operation and function of modern non-profit hospitals do not meet the current criteria for property tax exemption under N.J.S.A. 54:4-3.6 and applicable case law.”

We find this entire decision and the analysis provided by the Court to support its position to be extremely troubling. We are particularly concerned with the findings regarding the activity and practices of the physicians in the hospital. The Court found that the hospital had several for-profit physician groups (vol-untary self-employed physicians with privileges and physicians with exclusive contracts who work in radiology, anesthesiology, pathology and emergency services) that practiced in the hos-pital and billed patients for their services. Because the groups engage in for-profit activity, the Court considered whether the physicians practiced in particular areas of the hospital so that those areas could be identified as taxable. The Court found that the physicians “worked throughout the Subject Property without limitation or restriction” and because it was “unable to discern between the non-profit activities carried out by the Hospital . . . and the for-profit activities carried out by private physicians,” the hospital’s tax exemption must be denied.

We believe that this finding was wrong and here’s why: Hospi-

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tals cannot function without physicians. Physicians see patients at the hospital, they generate bills for their services (or provide free care if the patient is uninsured) and the hospital bills for its services provided at the facility. Without a practitioner, a hospital does not and cannot bill for services. Therefore, Judge Bianco’s argument that physicians should somehow be restricted to certain areas in nonprofit hospitals to ensure property tax exemption lacks a basic understanding of the healthcare delivery system in this country.

Although Judge Bianco was ruling on this specific case, he acknowledged that the courts should not be engaged in drafting legislation governing a nonprofit hospital’s property tax-exempt status noting: “[I]f the property tax exemption for modern non-profit hospitals is to exist at all in New Jersey going for-ward, then it is a function of the Legislature and not the courts to promulgate what the terms and conditions will be.”

Consistent with the Judge’s direction, in early December 2015, a bipartisan representation of the state Legislature in-troduced a legislative remedy that would clarify the issue for hospitals and municipalities. S-3299/A-4903, sponsored by Senate President Steve Sweeney (D-West Deptford) and As-semblyman John Burzichelli (D-West Deptford), known com-monly as the “nonprofit hospital community contribution legislation,” clarified nonprofit hospitals’ property tax-exempt status, while acknowledging that hospitals should be required to contribute a reasonable amount to their local communities.

Specifically, the legislation would require a nonprofit hospital to contribute to its municipality an amount equal to $2.50 per licensed bed, per day. Satellite emergency departments would be required to contribute $250 per day to their local munici-palities annually. The municipality would be required to remit 2 percent of this payment to the county in which it resides and must spend the remaining amount of the funds on public safe-ty services. The legislation would permit hospitals that already offer a voluntary payment to the municipality to deduct this amount from their overall contribution and would also provide a path for an exemption for financially distressed hospitals.

Additionally, the legislation would establish a commission to review the impact that the community service contribution would have on both municipalities and hospitals and make recommendations for improvements. The bill was amended during the legislative process to build in an annual 2 percent inflationary increase on the amount owed by the hospital. It is estimated that the bill would have raised $20 million to $25 million annually for the municipalities.

Through the work of the legislative sponsors, and with the help of an impassioned speech by co-sponsor Senator Bob Singer (R-Lakewood) on the Senate floor, the legislation was sent to the Governor’s desk by a vote of 37-0 in the Senate and 61-9 in the As-sembly. However, the Governor used his unique ability to “pocket veto” the legislation, allowing the legislation to expire at the end of the legislative session without taking action on the legislation.

From the hospital community’s perspective, this legislation represented a balanced approach. The legislation would bring

certainty to hospitals and towns by foregoing lengthy and cost-ly litigation between the town and hospital, while still making hospitals contribute their “fair share” to their towns. Consider-ing the difficulty in valuating each individual hospital for what its assessment may be, the legislation created a simple formula that was objective and understandable to all parties involved.

Without a statute in place to clarify a hospital’s property tax exemption, hospitals are faced with a potential tax increase. One-third of New Jersey’s hospitals continue to operate with a negative operating margin, and many of these hospitals serve a disproportionate share of the uninsured and under-insured residents of this state. It’s rare to see an industry unified in asking for legislation to require all members of the industry to pay more to the government. But that is exactly the case here.

The hospital industry is asking the Legislature and the Gov-ernor to bring certainty to the tax requirements for hospitals, while requiring hospitals to contribute more to their local towns. Whether the Legislature and the Governor reexamine this spe-cific piece of legislation, or they pursue solving the issue through another proposal, the hospital industry stands ready in support of solving this problem. One thing is clear though - the Legis-lature and Governor must act before the summer recess, or else the detrimental effects of this court case will soon be realized.

About the AuthorsNeil Eicher serves as the Vice President of Government Relations & Policy at the New Jersey Hospital Association. Neil first came aboard NJHA as a Deputy Director in January 2008. Neil oversees the state advocacy efforts for all 72 acute care hospitals, and over 200 post-acute facilities in Trenton. As part of the leadership team for NJHA, Neil also is the lead staffer of the association’s Policy Development Committee that determines key positions for the industry to take on difficult healthcare issues.

Prior to coming to NJHA, Neil served as the Chief of Staff to State Senator Ellen Karcher where he researched and drafted healthcare legislation. Neil received his Bachelor of Arts degree in Politics and Russian from Juniata College in Huntingdon, PA and his Master of Arts degree in Public Policy from Monmouth University. He currently serves on the Advisory Board of the New Leaders Council of New Jersey – A leadership association that trains and promotes progres-sive entrepreneurs, and also serves as a member of the American College of Healthcare Executives (ACHE). Neil can be reached at NEicher@NJHA.com.

Karen S. Ali, Esq. is the general counsel of New Jersey Hospital Asso-ciation. As general counsel, Karen provides direction on all legal mat-ters to NJHA and its affiliates, including matters of corporate law, health law and litigation. Before coming to NJHA, Karen worked as Director of Diversity for the law firm Pepper Hamilton LLP.

Karen received her bachelors' degree in Sociology, magna cum laude, from Princeton University in Princeton, NJ, and her Juris Doctor degree from the University of Michigan Law School in Ann Arbor, MI. Karen is the President of the New Jersey State Museum Foundation and an administrator for Princeton University’s Fred Fox Class of 1939 Fund. Karen can be reached at KAli@NJHA.com.

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Taking Another Look at New Jersey’s Medicaid Program

Linda Schwimmer

by Linda Schwimmer

Beginning this month, through a grant from The Nicholson Foundation, the New Jersey Health Care Quality Institute (“Quality Institute”) will develop a blueprint for the future of the New Jersey Medicaid program. Over the next 12 months, the Quality Institute along with stakeholders from around the state, will be exploring the next generation of delivery models and programs and making recommendations that will improve the quality of care and lower the costs for an essential program that now covers one of every five New Jersey residents.

Over the last five years Medicaid has undergone historic changes. The Governor’s decision to expand the NJ Medicaid program has added over 500,000 new bene-ficiaries. CMS approved a five year Comprehensive waiver which introduced multiple reforms in New Jersey including the expanded use of managed care for long-term care services, a Delivery System Reform Incentive Payment (DSRIP) program for hospitals and multiple pilot projects such as ACOs, directed at improving care coordination for special high-need populations. The waiver is set to expire in July 2017 and the State has announced plans to seek a five-year renewal.

Despite this progress, significant challenges remain – antiquated enrollment processes hinder continuous cover-age, mental health services for adults remain unmanaged, lack of access to specialty care limits treatment options and for dually eligible (Medicare/Medicaid) individuals care re-mains fragmented between Medicare fee-for-service and NJ Medicaid HMOs.

Through the generosity of The Nicholson Foundation, the Quality Institute will have an opportunity to assess various initiatives now being tested and take a broader look at the increasingly larger role Medicaid plays in New Jersey’s health care system. With this assessment and the input of stakeholders, we will develop a blueprint for the future that builds upon the improvements made over the last five years.

Our specific plan for the project is briefly outlined below: 1. Convene a multi-stakeholder initiative inviting

all key New Jersey stakeholders, including state gov- ernment leadership, safety-net hospitals, physicians and other providers, Federally Qualified Health Centers, Accountable Care Organizations and similar community-based care coalitions, behavioral health and substance abuse providers, long term care and home and community-based aging and disability services, Managed Care Organizations, state and federal level decision-makers, policy experts, state agencies including Human Services, Health, Banking and Insurance and Treasury and consumers.

2. Research other states’ successful innovations to iden- tify best practices in delivery and payment within Medicaid, and

3. Develop a Blueprint for the future of New Jersey’s Medicaid system based on the research findings and stakeholders’ recommendations. This Blueprint will include recommendations to redesign the New Jersey Medicaid system to achieve the “Triple Aim” which is defined as one that improves the patient experience of care (including quality and satisfaction), improves the health of populations, and reduces the per capi-ta cost of health care. The Blueprint will include:a. Payment solutions that streamline processes, in-

centivize quality and improve both patient and provider experience;

b. Payment and procurement changes that better leverage the State’s power as the largest purchaser of health benefits and related social services in the State and that move the State’s Medicaid program towards value based purchasing;

c. Lessons learned from pilot projects borrowed from other states and/or developed from within the New Jersey stakeholder community, focusing on quality care at lower cost;

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d. Solutions for key “pain points” identified during stakeholder sessions, including but not limited to payment disincentives, system flaws and obstruc-tions, inefficiencies and redundancies;

e. Solutions that embrace a broader view of Medi- caid that address social service needs of the population, such as supportive housing and employment assistance and recognize that these issues significantly impact health.

This effort will be led by Quality Institute Senior Fellow Matthew D’Oria, who will serve as the project’s Chief Transformation Officer, as well as the project’s Steering Committee co-chairs Linda Schwimmer, President and CEO

of the Quality Institute and board member Judith Persichilli. The Steering Committee includes Quality Institute Board members Suzanne Miller, PhD, former NJ State Auditor, Richard Fair, former Congressman Rob Andrews, Former NJ Department of Health Commissioner Heather Howard, and Gibbons P.C. Government Affairs Director, Christine Stearns.

About the authorLinda J. Schwimmer, JD, is President and CEO of the New Jersey Health Care Quality Institute. The Quality Institute is the only independent, nonpartisan, multi-stakeholder advocate for health care quality in New Jersey. Linda can be reached at lschwimmer@njhcqi.org

The Revenue Integrity Forum hosted a successful educational event on December 16, 2015 at the New Jersey Hospital Association. The 2016 Chargemaster Update, an annual event discussing coding changes and implications for the new year, was presented by Mike Kovar and Taylor Pedone of WeiserMazars, LLP. The event was well-attended by 75 professionals with 25 health systems represented and 60 hospitals. Many thanks to our sponsors, Craneware, Inc. and The HMC Group who hosted the breakfast. The Revenue Integrity Forum will be hosting their next Educational Event on June 14, 2016 at the Renaissance Woodbridge Hotel in Iselin, New Jersey.

Recently Overheard

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As hospital leadership knows, there is no hard and fast formula for providing the best possible health care to every patient in every situation. However, with the recent onset of telemedicine, rural providers now have a dynamic new tool at their disposal that has the potential to revolution-ize access to care while improving hospital efficiency and profitability.

Telemedicine is defined as the use of telecommunication and information technologies in order to provide clinical health care at a distance. It is most commonly used by rural communities to help eliminate distance barriers and can im-prove access to medical services that would otherwise not be available. However, telemedicine has more recently come to describe a growing genre of specialized applications and ser-vices using two-way video, email, smart phones, wireless tools and other forms of telecommunications technology catering to hospital patients.

Despite its recent rapid growth, telemedicine actually be-gan more than 40 years ago with demonstrations of hospitals extending care to patients in remote areas through telephones. Today, these methods are being readily adopted into the regu-lar operations of hospitals, specialty departments, home health agencies, private physician offices as well as consumer’s homes and workplaces.

Telemedicine and TechnologyThe two primary avenues of implementation of tele-

medicine technologies by healthcare providers is through direct-to-patient services and robotic testing, diagnosis and monitoring. Direct-to-patient services using telemedicine are most often simple health exams (e-visits) conducted over the internet, usually via telephone or webcam, from the con-venience of a patient’s home or easily-accessible community facility. These e-visits are successful because on average 70% of patients do not require a physical exam during office vis-its, limiting the need for a “physical” presence. E-visits allow providers to offer patients the same level of personal connec-tion and care without incurring the typical costs associated

with bringing patients to the facility, including more in-depth scheduling and greater staffing. Additionally, ortho-pedics departments have been experimenting with e-visits at local skilled nursing facilities (SNFs) to reduce transporta- tion costs for patients and leverage existing personnel and equipment already located in the community.

On the other end of the spec-trum, some providers have taken a more high-tech approach to implementing telemedicine services by developing robotic testing, diagnosis and monitoring facilities for patients with more serious health issues. E-ICUs, as these facilities are often called, allow intensive-care patients in small hospitals to receive care from specialists at a tertiary-care facility with-out the burden of having to be transferred to that facility. In practice, e-ICUs developed for rural populations have resulted in significant reductions in mortality rates, ventila-tor-acquired pneumonia and death from sepsis. These results bring immediate and long-term positive financial impacts for hospitals by reducing ICU length of stay and remittance (see chart on next page), which have become increasingly more important measures for reimbursement rates under the Affordable Care Act (ACA).

Benefits and Challenges While the benefits attained by providing these technolo-

gies may seem readily accessible to all hospitals and health care facilities, telemedicine has thus far been primarily a rural phe-nomenon resulting from the unique challenges providers face in these markets. Historical data suggests that rural patients face the greatest outcome disparities in emergency situations because of their isolation and often limited capabilities of small

Virtual Doctor Visits Offer New Approach to Traditional Health Care

Matt Lindsay

by Matt Lindsay & Nick DiIorio

Nick DiIorio

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rural hospitals in treating serious illness or injury. Further, elderly rural patients are more likely to forgo necessary care than their urban counterparts because of travel costs and a lack of social support, even when all of their health care costs would be covered by Medicare. These concerning trends support the notion that rural hospitals have the most to gain from the implementation of telemedicine services designed to ease the barriers to access of quality care. Further, telemedicine allows rural hospitals to improve their fiscal outlook by growing their patient base and reducing costly emergency care while increas-ing their focus on preventative care.

However, there are still myriad challenges facing the rural population surrounding its adoption and effective use of tele-medicine services. For one, high speed internet is unavailable in many rural communities, which affects the quality of tele-medicine programs that can be implemented and provided to patients at reasonable cost. Also, the rural population tends to be older than the typical urban or suburban population and, thus, their adoption of technology has come at a slower pace. This puts stress on the efficiency of telemedicine services for providers and raises the importance of robust educational programs in the community, which can come at significant monetary and time costs. As rural seniors stand the most to gain from the growth of telemedicine services in their com-munities, the thoughtful implementation of these programs by providers is especially important in order for them to achieve the full scope of financial benefits available.

Government and Industry Partner Involvement Naturally, as telemedicine has grown and expanded across

the country, local, state and federal governments as well as major industry players have all become increasingly involved in the implementation of these technologies. Thus far, the majority of actions taken by governments and related industry partners have been largely positive towards encouraging pro-vider adoption of telemedicine, improving access for patients

and requiring fairness of payment across services rendered. For example, 20 states have currently enacted parity laws requir-ing insurers to reimburse for telemedicine services on par with traditional face-to-face services to encourage that these pro-grams be treated seriously by physicians and patients alike. While these parity laws do not necessarily mean a direct boost to hospitals revenues, they do result in a net positive gain to their bottom lines as they receive equal reimbursement for services rendered at a lower cost basis once initial implementa-tion costs are excluded.

As far as state governments supporting telemedicine, the majority of action has been concentrated in the northwest and southwest regions given their more rural demographics. Idaho has been a particularly strong proponent of telemedi-cine services having passed the Idaho Telehealth Access Act this spring aimed at increasing the use of direct-to-patient services via telemedicine for prescriptions, diagnoses and con-sultations. At the federal level, a number of special interest groups have arisen recently aiming to push action in D.C. to increase federal funding for telemedicine programs. Despite the widespread support for telemedicine throughout levels of government and related industries, there are still a number of legal and legislative challenges that remain. The most pressing issue for many early adapters relates to professional licensing for doctors engaging patients via these technologies, as they are currently required to be licensed in the state that the patient is located in. This can defeat the purpose of the care in rural communities near state borders where the closest hospi-tal is in another state or in extreme circumstances that require out-of-state specialists.

Liability is another serious concern being raised by many providers worried that the absence of a physical presence may result in doctors missing medical issues during e-visits and subsequently facing malpractice suits. This worry may be somewhat overblown, however, as many physicians already take certain shortcuts by prescribing medication via tele-phone to patients unable or unwilling to schedule a physi-cal visit and very few substantial liability issues have resulted. Finally, data privacy has also been highlighted as another key potential weakness of telemedicine services given their reli-ance on a technology infrastructure that could open patient health records to the same privacy concerns as email and oth-er online activities. Despite these concerns, there is still far greater potential for telemedicine as a benefit to providers, patients, doctors and insurers as the technology continues to develop and improve.

The Future of TelemedicineWhile telemedicine is just one wave in a sea of transforma-

tive technology platforms seeking to disrupt traditional health continued on page 34

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care, many early adapters strongly believe that these technolo-gies are at the forefront of systemic changes throughout health care. Much still remains to be seen with how telemedicine is treated by governments, entrenched insurers and industry par-ticipants, patients and doctor. However, providers should still explore these opportunities as they can deliver a substantial boost to profitability and ensure the longevity of rural health care systems struggling to compete for market share and facing increased costs of care.

About the AuthorsMatt Lindsay is a senior vice president with Lancaster Pollard and is the regional manager for the Rocky Mountain and Pacific Northwest regions. He oversees all investment banking operations, including the underwriting and closing processes. Since joining Lancaster Pollard, he has focused his efforts on hospital and se-nior living finance, structuring a range of bond transactions and mortgage loans for expansion, new construction, acquisition and

refinance projects. He earned his Masters of Science in Finance (MSF) degree from the University of Denver and a bachelor’s degree in finance from Miami University in Oxford, Ohio. He holds a General Securities Representative license (Series 7) and is a frequent speaker and author on capital funding solutions for health-care and long-term-care providers. Matt can be reached at mlindsay@lancasterpollard.com.

Nick DiIorio is an Investment Banking Analyst at Lancaster Pol-lard in Columbus, Ohio where he leads all phases of the deal cycle from the point of engagement through underwriting and closing. Nick is primarily responsible for financial analysis, credit/risk analysis, and valuation of senior living, health care and affordable housing properties. He earned his Bachelor of Arts degree in Politi-cal Science from Denison University. He has obtained his FINRA Series 52 and 79 Certifications. Nick can be reached at ndiiorio@lancasterpollard.com.

continued from page 33

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Save the Date!

Annual NJ HFMA Golf Outing Tuesday, May 10, 2016

Fiddler’s Elbow Country Club Far Hills, NJ

NEW THIS YEAR – GOLF CLINIC!

Sponsorship opportunities are available. Contact Laura Hess at NJHFMA@aol.com

36 Focus

Advertiser FocusPlease consider supporting our sponsoring companies

Since 1986, BESLER Consulting has been assisting healthcare providers in enhancing revenue, gaining operational efficiencies and achieving compliance. BESLER Consulting clients benefit from a team of highly experienced, dedicated professionals. They bring to each engagement in-depth knowledge in a wide range of financial, operational and compliance issues. Telephone 1.877.4BESLER • Web site Beslerconsulting.com

Established in 1973, McBee Associates, Inc., one of the nation’s largest, independent health care con- sulting practices, provides managerial and financial consulting services to health care organizations. The firm’s consultants maintain an extensive array of financial and managerial expertise, enabling them to resolve any financial chal-lenge that faces a health care provider today. Visit: www.mcbeeassociates.com

For over twenty-five years, CBIZ KA Consulting Services has provided customized financial solutions to healthcare providers. Our staff blends industry knowledge and practical experience to provide services in the fields of reimbursement optimization, Medicare and Medicaid recovery, managed care, decision support, benchmarking and clinical resource management. For informa-tion, visit www.kaconsults.com.

Founded in 1974, Withum is one of the largest regional public accounting and consulting firms in the country with over 700 staff members in six states,

ranking among the top 30 CPA firms nationally. Withum services hundreds of healthcare providers in the areas of accounting & auditing, consulting, tax, corpo-rate governance and risk management. Contact Scott Mariani smariani@withum.com or 973.898.9494. www.withum.com

new jersey chapter

Editorial Calendar and Ad Rates 2016Editorial Calendar and Ad Rates 2016

To advertise, please contact Laura Hess :: 888To advertise, please contact Laura Hess :: 888--652652--4362 :: NJHFMA@aol.com4362 :: NJHFMA@aol.com

Winter Issue—December/January/February Deadline December 1

Spring Issue—March/April/May Deadline March 1

Fall Issue—September/October/November Deadline September 1 *Special ANNUAL INSTITUTE Issue*

Bonus Distribution at HFMA-NJ’s 40th Annual Institute in Atlantic City, October 5-7, 2016! Spotlighting issues and topics shared by the Institute presenters.

Summer Issue—June/July/August Deadline 1 May

Published 4x a year, Garden State Focus is the premier publication reaching over 1,200 Healthcare Industry influencers and decision makers behind New Jersey’s prominent hospitals and healthcare systems. Advertisers also receive complimentary website presence on HFMANJ.org with 2,500 impressions monthly.

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

Black & White 1x 2x (10% disc) 3x (15% disc) 4x (20% disc)

Full Page $675.00 $607.50 $573.75 $540.00

Half Page $450.00 $405.00 $382.50 $360.00

Quarter Page $275.00 $247.50 $233.75 $220.00

Color 1x 2x (10% disc) 3x (15% disc) 4x (20% disc)

Back Cover—Full Page $1,450.00 $1,305.00 $1,232.50 $1,160.00

Inside Front Cover—Full Page $1,350.00 $1,215.00 $1,147.50 $1,080.00

Inside Back Cover—Full Page $1,350.00 $1,215.00 $1,147.50 $1,080.00

First Inside Ad—Full Page $1,300.00 $1,170.00 $1,105.00 $1,040.00

Full Page $1,100.00 $990.00 $935.00 $880.00

Half Page $800.00 $720.00 $680.00 $640.00

Per issue/Total Per issue/Total Per issue/Total Per issue/TotalBlack & White 1x 2x (10% off) 3x (15% off) Full Run (20% off)

Full Page $ 675 $ 607 / $ 1,214 $ 573 / $ 1,719 $ 540 / $ 2,160

Half Page $ 450 $ 405 / $ 810 $ 382 / $ 1,146 $ 360 / $ 1,440

Quarter Page $ 275 $ 247 / $ 494 $ 233 / $ 699 $ 220 / $ 880

Color

Back Cover – Full Page $ 1,450 $ 1,305 / $ 2,610 $ 1,232 / $ 3,696 $ 1,160 / $ 4,640

Inside Front Cover – Full Page $ 1,350 $ 1,215 / $ 2,430 $ 1,147 / $ 3,441 $ 1,080 / $ 4,320

Inside Back Cover – Full Page $ 1,350 $ 1,215 / $ 2,430 $ 1,147 / $ 3,441 $ 1,080 / $ 4,320

First Inside Ad – Full Page $ 1,300 $ 1,170 / $ 2,340 $ 1,105 / $ 3,315 $ 1,040 / $ 4,160

Full Page $ 1,100 $ 990 / $ 1,980 $ 935 / $ 2,805 $ 880 / $ 3,520

Half Page $ 800 $ 720 / $ 1,440 $ 680 / $ 2,040 $ 640 / $ 2,560

Whether you are a CJR participant or planning for it, understanding your exposure and strategic position is key to success in this new era of mandatory bundled payment models.

BESLER’s CJR Analysis & Risk Assessment service examines the drivers that impact bundled payment success for you and identifies key performance indicators and risk factors including:

· Target price analysis, discharge trends, provider utilization and readmissions· Analysis of quality measures including HCAHPS and complication rates· Post-acute care summary and identification of potential collaborators· Quarterly data analysis and year-end reconciliation

(877) 4BESLER | www.besler.com | @BeslerDotComEnhancing and protecting Medicare revenue for hospitals

Visit besler.com/CJR to download a Special Report that explains how CJR works and what your responsibilities are in this new environment.

Are you ready for CJR?