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The Newsletter of the Massachusetts-Rhode Island Chapter Volume XLI • Number 3

MASS MEDIACOMPLIANCE

• Reimbursement Update: Part II

• Top 10 Questions To Ask Your Chief Compliance Officer

• A Summary of the Schedule H Benchmark Report for Tax Years 2009 and 2010

MM ISSUE 3_3.cs5.5 .indd 1 2/19/14 10:03 PM

Mass Media2

On the Cover

Photo taken after the CFO Panel on Finding the Balance Between Finance and Compliance, with Jeff Heidt of Verrill Dana, Glover Taylor, Chief Compliance Officer of Cambridge Health Alliance, and Carol Ann Williams, The Chief Financial Officer of Massachusetts Eye and Ear Infirmary.

PLATINUMAmerican Express • Bank of America Merrill Lynch • Beecher Carlson • BESLER Consulting

Dubraski & Associates Insurance Services • Feeley & Driscoll, P.C. • HBCSLogix Health • MDS (Medical Data Systems, Inc.)

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GOLD Ropes & Gray • The Outsource Group

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THE MASSACHUSETTS - RHODE ISLAND CHAPTER OF HFMAGRATEFULLY ACKNOWLEDGES THE 2013-2014 CORPORATE SPONSORS

Bank of America Merrill Lynch 27

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BESLER Consulting 8

Dubraski & Associates Ins. Serv., LLC 12

Feeley & Driscoll, P.C. 9

HBCS 7

Logix Health 21

Medical Data Systems (MDS) 22

PricewaterhouseCoopers LLP 18

ProMedical, LLC 6

Ropes & Gray 19

TD Bank 15

The Outsource Group 17

Verrill Dana LLP 10

*Half-Year Sponsor


Greetings and best wishes for a New Year well underway. As you plan out your per-sonal calendar for the year ahead, I hope that you will continue to take advantage of all the educational programming that HFMA will be sending your way in 2014.

As you are well aware, HFMA delivers its programs through a variety of channels to meet the needs and demanding schedules of its members. At the national level, HFMA offers the Annual National Institute, which is a major conference with several thou-sand attendees from chapters all across the country. This year the ANI will be held in

Las Vegas in June. If you have never been able to attend an ANI conference, you should try to do so at some point; it’s worth the effort, and it is usually held in a nice warm climate! At the regional level, our chapter, along with the other New England chapters, will join forces to offer the Region 1 Conference, which is a very well attended 2-day regional event. This year the Region 1 Conference will once again be held in May at Mohegan Sun in Connecticut. And of course, we continue to offer excellent in person, live, educational programming throughout the year here in our MA/RI Chapter, with programs that are very familiar to you around the topics of Accounting and Regulatory Updates, Compliance, Managed Care, New to Healthcare, the CFO Forum, and our recently held Revenue Cycle Conference.

Looking ahead, our upcoming combined Physician Practice and Enterprise Performance Management joint program will be held on March 28th at a new location, the Sheraton Four Points in Norwood, MA. We are especially pleased to announce that our Physician Practice and Enterprise Performance Management Com-mittees have joined together to create a great joint program this year. We think it is only fitting that these two teams have come together given the challenges of fee for service reimbursement, the shift to population health management, and new risk bearing and risk sharing arrangements. You are seeing tighter alignment of physicians and hospitals in the real world, and this joint program demonstrates tighter alignment at HFMA as well. We look forward to seeing many of you at the March 28th program.

In addition to superb program content, our in-person meetings provide all of us the opportunity for network-ing and conversation. We are delighted that our membership continues to participate and support our edu-cational programs as they are the foundation of our Chapter’s work, and we are grateful for the diligent efforts of the Committee Chairs and Co-Chairs and their committee members for planning, organizing and running these excellent programs. It is in the work of our dedicated committees that the Chapter’s mission comes to life. We’ll talk more in the months ahead about how you can get more involved in the committee work of the Chapter; it is critical to ensuring quality education programming for the years ahead, and it is a fun and rewarding experience for those involved.

What you may not be as aware of is the growth of webinar offerings and virtual conferences at HFMA over the past couple of years, both regionally and nationally. For example, our Chapter has offered 8 webinars over the past year, almost one per month. At the national level, HFMA’s Virtual Conference Series for 2014 begins on February 5th, followed by a session on April 24th, with other dates later in the year in September and December. These live events promise to offer cutting edge programming that includes a keynote presentation, a session that presents findings from HFMA’s Value project, and a real world case study that provides solu-tions to improve the quality of care and reduce costs. You can check out HFMA.org to register. These Virtual Conferences require no travel, can be accessed from the convenience of your home or office, and are budget friendly as they are free to HFMA members.

As you can see, we are working to make HFMA accessible to you in a variety of ways, and we look forward to your continued participation in the year ahead.

Best regards,

Roger BoucherPresident


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MASS MEDIA is a publication of the Massachusetts - Rhode Island Chapter of the Healthcare Financial Management Association devoted to keeping membership current on national & local healthcare financial topics. Opinions and views expressed in the articles and features of the publication are those of the author(s) and do not necessarily reflect the position of the Massachusetts-Rhode Island Chapter or The National Chapter of Healthcare Financial Management Association. Articles submitted are subject to editorial changes made by the committee. Article submissions, comments and requests for further information and advertising rates may be forwarded to: Jean Schuster and Rosemary Rotty, HFMA Massachusetts-Rhode Island Chapter, 411 Waverley Oaks Road, Suite 331B, Waltham, MA 02452, [email protected]

MASS MEDIAHEALTHCARE FINANCIAL MANAGEMENT ASSOCIATION

ContentsVolume XLI Number 3

N e w s l e t t e r C o m m i t t e e

Jeanne Schuster, Executive Director, Ernst & Young, LLP

Rosemary Rotty, FHFMA, Director of Service Line Finance, UMass Memorial Health Care, Inc.

President’s MessageI by: Roger BoucherGreetings and best wishes for a New Year well underway. As you plan out your personal calendar for the year ahead, I hope that you

will continue to take advantage of all the educational programming that HFMA will be sending your way in 2014.

Compliance Update Synopsis

The HFMA Massachusetts-Rhode Island Chapter hosted its annual Compliance Update seminar on Friday, December 6th at the Doubletree Hotel in Westborough, Massachusetts. We appreciate all those who were able to attend this program.

Reimbursement Part III by: Stephen J. Doneski, CPAFacilities contract with Medicare to furnish acute hospital inpatient care and agree to accept predetermined acute Inpatient Prospective Payment System (IPPS) rates as payment in full..

A Summary of the Schedule H Benchmark Report for Tax Years 2009 and 2010I by: Scott J. Mariani, JD and Allison S. Kimowitz, CPAThis spring the American Hospital Associa-tion (“AHA”) with the assistance of the public accounting firm Ernst & Young (“EY”) released a report entitled “Ernst & Young Schedule H Benchmark Report (“Benchmark Report”) for the American Hospital Association Tax Years 2009 & 2010”.

Top 10 Questions To Ask Your Chief Compliance OfficerI by: Christopher C. Boutin, FHFMA, CPA, CITP, CGRCPHeightened regulations have raised the visibility of the Chief Compliance Officer (CCO). All members of the c-suite especially the Chief Fi-nancial Officer (CFO) should have knowledge of how the CCO has built the compliance program.

New MembersNew Massachusetts-Rhode Island Chapter Members December 1, 2013 – January 31, 2014

CFO ForumThe HFMA Mas-sachusetts-Rhode Island Chapter sponsored its third annual CFO Forum titled “Trends in Healthcare Finance,

M & A and Investment Management” on November 21, 2013.

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OFFICERS & DIRECTORS

PresidentRoger Boucher

President ElectDeborah Wilson, CPA

SecretaryTimothy Hogan, FHFMA

TreasurerBeth O'Toole

Immediate Past PresidentRoberta S. Zysman

DirectorsMarvin Berkowitz, FHFMA

Karen Bowden, RHIAAnne Farmer

Garrett Gillespie Linda Guerra, MBA

Kathleen MaherJohn Minichiello

Laurie Nelle, FHFMA, MBAJohn Reardon, FHFMADeborah Schoenthaler

Rosemary SheehanMichael Souza Gerard Vitti

Ex OfficioJeffrey Dykens, CPA

Gerald O'Neill, FHFMARosemary Rotty, MHA, FHFMA

Jeanne SchusterRichard Wichmann


COMPLIANCECompliance Update Synopsis

December 6, 2013

The HFMA Massachusetts-Rhode Island Chapter hosted its annual Compliance Update seminar on Friday, December 6th at the Doubletree Hotel in Westborough, Massachusetts. We appreciate all those who were able to attend this program. The program began with an interesting and timely presentation on Planning and Executing the Billing Compliance Plan given by Joan Doran, Chief Compliance Officer & Privacy Officer, Jordan Hospital, and Robert Freedman, Director of Business Development, Hayes Management Consulting. Next up, David Tolley, Ropes and Gray, LLP, provided a HIPAA Privacy Update.

Charlie Baker, Past President of Harvard Pilgrim HealthCare and Candidate for Governor of Massachusetts gave a fascinating keynote address regarding the health care industry and his experiences in government and as the head of Harvard Pilgrim. This was followed by the CFO Panel on Finding the Balance Between Finance and Compliance, with Carol Ann Williams, the Chief Financial Officer of Massachusetts Eye and Ear Infirmary, Jeff Heidt of Verrill Dana, and Glover Taylor, Chief Compliance Officer of Cambridge Health Alliance.

The afternoon sessions began with Timothy Hogan, FHFMA, Compliance and Privacy Officer, Harvard Vanguard Medical Associates and Atrius Health, who discussed OIG work plan delays and Effective Strategies to Identify Compliance Risks.

An interesting and detailed presentation on Recent Trends in Healthcare Enforcement was given by Mike Fee, Partner, Ropes & Gray, LLP, and Amanda Strachan, Assistant United States Attorney, Office of the U.S. Attorney, District of Massachusetts.

The afternoon concluded with networking opportunities.

The Chapter would like to thank the speakers, Matt Putvinski, Chris Gingras and Garrett Gillespie who were the Program Coordinators for this year’s event, and the entire Compliance Committee. We’re already looking forward to our program for next year!

L-R Frank Byrne (Beth Israel Deaconess Medical Center) Matt Putvinski (Wolf & Company, P.C.) and Garrett Gillespie (CVS Caremark) manage the welcome table.

L-R Robert Baroutas (Southwest Consulting Associates), Patrick Cerce (Brigham and Women's Faulkner Hospital), William Wheeler (Besler Consulting), Gerald O’Neill, FHFMA (Winchester Hospital), Robert Freedman (Hayes Management Consulting, Inc.) and Tony Slabacheski (Sutherland Global).

L-R Lynn O’Toole (The Outsource Group), Beth O’Toole (Beth Israel Deaconess Medical Center) and Geraldine Geary (Beth Israel Deaconess Medical Center).

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Inpatient Prospective Payment System

Facilities contract with Medicare to furnish acute hospital inpatient care and agree to accept predeter-mined acute Inpatient Prospective Payment System (IPPS) rates as payment in full. The inpatient hospi-tal benefit covers Medicare beneficiaries for 90 days of care per episode of illness with an additional 60 day lifetime reserve. Illness episodes begin when beneficiaries are admitted and end after they have been out of the hospital or Skilled Nursing Facility (SNF) for 60 consecutive days.

Hospitals receive payment on per discharge or per case basis for Medicare beneficiaries with inpatient stays. Related therapeutic outpatient department services provided within three days prior to admis-sion are included in the payment for the inpatient stay and may not be separately billed.

Discharges are assigned to diagnosis-related groups (DRG), a classification system that groups similar clinical conditions (diagnoses) and the procedures furnished by the hospital during the stay. The benefi-ciary’s primary diagnosis and up to eight secondary diagnoses that indicate comorbidities and complica-tions will determine the DRG assignment. Similarly, DRG assignment can be affected by up to six proce-dures furnished during the stay.

The Centers for Medicare & Medicaid Services (CMS) published its final rule for the FY 2014 hospital inpatient prospective payment system in the August 29, 2013 Federal Register. Changes are effective October 1, 2013, unless otherwise noted.

MS-DRG Classifications and Relative WeightsBeginning on October 1, 2007, CMS transitioned to Medical Severity (MS)-DRGs in order to better account for the severity of illness and resource consumption for Medicare beneficiaries. The MS-DRGs includes three severity levels based on secondary diagnosis codes; (i) Major Complication/ Comorbidity (MCC), (ii) Complication/ Comorbid-ity (CC), and (iii) Non-Complication/ Comorbidity (Non-CC).

The transition to MS-DRGs and simultaneous expan-sion of secondary diagnoses that fall under a CC or MCC created more patient categories and greater differentiation in the relative weights and payment rates among cases with and without CCs or MCCs. In

(continued on page 7)

Reimbursement Part IIBy:

Stephen J. Doneski, CPA

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Issue 3 7

COMPLIANCE

addition, these changes created financial incentives and opportunities to document and code diagno-ses more carefully and completely because hospitals receive higher payments when their cases with quali-fying CCs and MCCs are reported accurately.

CMS provided a two-year transition period to MS-DRGs. In conjunction, CMS also began to phase in a cost-based relative weight methodology rule over a period of three years. MS-DRG relative weights are based entirely on hospital costs going forward because FY 2009 was the final year of the transition period.

CMS did not propose and is not adopting any major changes to the MS-DRG classifications and relative weights. For FY 2014, CMS will maintain a total of 751 MS-DRG groupings.

Standardized Amounts CMS rebases the market basket every four years by updating the input price and cost indices used in the calculation. CMS may also revise the market basket

by changing the data sources for price proxies used in the input price index.

The FY 2014 proposed rule sets forth a full market basket update of 2.5% for hospitals in all areas, provided that hospitals submit sufficient quality data in accordance with the rules. Specifically, hospi-tals must report 57 quality measures to receive the full market basket update. Hospitals that are not in compliance or withdraw from the program will receive the market basket rate less 2.0 percentage points. In addition, the update amounts were further reduced by 0.3%, as required by the Affordable Care Act, 0.8% for the American Taxpayer Relief Act (ATRA) retrospective coding adjustment, 0.5% for economy-wide productivity (the MFP adjustment) and 0.2% for the inpatient admission guidance offset.

By law, CMS must adjust the proportion of the standardized amount that is attributable to wages and wage-related costs (known as the labor-related share) by a factor that reflects the relative difference in labor costs among geographic areas (known as the wage index). The standard operating payment rate


(Reimbursement Part II - continued from page 6)


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COMPLIANCE


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per discharge is comprised of an average standardized amount that is divided into a labor-related compo-nent and a non-labor related component. The labor-related share represents the national average propor-tion of operating costs that are related to, influenced by, or varies with the local labor market.

The Final rule for FY 2014 wage index labor-related share increased from the FY 2013 labor-related share of 68.8% to 69.6% for hospitals with a wage index over 1.0. The FY 2014 standard amounts are as follows:


Standard Rate for Hospitals with a Wage Index Greater Than 1.0 (69.6% Labor Share and 30.4% Non-Labor Share)

Standard Rate for Hospitals with a Wage Index Less than or Equal to 1.0 (62.0% Labor Share and 38.0% Non-Labor Share)

Labor-Related Non-Labor-Related

Full Update $ 3,737.71 $ 1,632.57Reduced Update $ 3,664.21 $ 1,600.46

Labor-Related Non-Labor-Related

Full Update $ 3,329.57 $ 2,040.71Reduced Update $ 3,264.10 $ 2,000.57


Issue 3 9

COMPLIANCE

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The FY 2014 federal operating rate is $5,370.28, a 0.4% increase from the FY 2013 rate of $5,348.76. The FY 2014 Federal capital rate is $429.31, a 0.9% increase from the FY 2013 rate of $425.49.

Coding AdjustmentsCMS will adopt its proposal to apply a retrospective coding adjustment of 0.8% to the federal operating rate in FY 2014. The reduction was approved by congress as part of the ATRA to offset a portion of the cost that would have been assumed by the Medi-care physician payment fix. The law will require CMS to reduce inpatient payments by $11 billion (-9.3%) over a four year period (through FY 2017). This legislation allows CMS to retroactively recoup for increases in inpatient payments that the agency asserts occurred during the FY 2008 through FY 2012. Additional ATRA mandated coding adjust-ments will be put into place in future years.

These retrospective coding adjustments are one-time adjustments that will affect hospitals and will not permanently be built into the IPPS rate; CMS will adjust the federal operating rate upward with a positive adjustment once the $11 billion is fully recouped. However, this positive adjustment should not be expected until FY 2018.

Readmissions AdjustmentSimilar to FY 2013, CMS will continue to adjust FY 2014 IPPS payments by 1.0% to account for excess hospital readmissions under the Readmissions Reduction Program. For FY 2014, CMS has imple-mented a modification to the readmission calcula-tion to better account for planned readmissions. This policy change will slightly reduce the current readmission rates for the three conditions evaluated under the program (heart attack, heart failure and




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pneumonia). CMS will evaluate Medicare inpatient claims for FY 2010 – 2012 to calculate excess read-missions for FY 2014.

Reporting of Hospital Quality DataCurrently, hospitals must report 55 quality measures to receive inpatient PPS rate increases equal to the full market basket update. Facilities that do not comply with Medicare’s Reporting Hospital Qual-ity Data for Annual Payment Update (RHQDAPU) will receive a 2.0 percentage point reduction to the market basket increase.

For FY 2015 and FY 2016, CMS will adopt its past proposals to refine and make specification changes to several of the program measures adopted in previ-ous years. FY 2016, CMS is adopting a proposal to add additional and delete certain program require-ments. CMS is adopting its proposal to collect and

publicly report data on: 30-day stroke readmission and mortality rates; 30-day COPD readmission and mortality rates; and payment per episode of care data for AMI patients. In total, hospitals will need to report on 59 quality measures for FY 2015 and 57 measures for FY 2016.

Hospital Wage Index and Geographic Adjustment FactorWhen determining prospective payments to hospi-tals, CMS adjusts the labor-related standardized national reimbursement amounts to account for geographic differences in hospital wage costs. This adjustment is performed by means of a local area wage index (AWI), which acts as a relative measure comparing area average hourly wages to a national average. The FY 2014 wage index was based on data obtained in the FY 2010 cost report and occupa-

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tional mix survey data from calendar year 2011 in order to calculate the wage index for each hospital. This is also the case for FY 2014.

The local AWI, Capital GAF and standardized rates are as shown in chart above:

Application of Rural Floor Budget NeutralityPrior to 2011, CMS provided that the area wage index applicable to any hospital that is located in an urban area of a state may not be less than the area wage index applicable to hospitals located in rural areas of that state (“the rural floor”). Between FY 1998 and FY 2008, the rural floor budget neutrality wage index adjustment was applied to the national standardized amounts. In FY 2009, CMS began applying a state specific rural floor budget neutral-ity adjustment to the wage indexes rather than to the national standardized amount. The state specific area wage adjustment was phased in over a three year period, FY 2009 – FY 2011.

The ACA reversed CMS’ action. CMS is required to restore the budget neutrality adjustment for the rural and imputed floor to the national wage index, rather than state specific. For FY 2014, Massachusetts will continue to receive its rural floor. Rhode Island will

receive the imputed rural floor. There is still signifi-cant national opposition to the existing rules. CMS will not make any changes to the current single hospital Core Based Statistical Areas (CBSAs) for FY 14. CMS states that in the FY 2015 Final Rule that it will pursue a new CBSA definition based on newly available census data. The effect on Massa-chusetts if this proposed CBSA reclassification takes place is that Franklin County will be designated as the new rural floor of the state. This will reduce the AWI throughout the entire state of Massachusetts in FY 2015. This amount will be calculated using previous years cost report data.

Wage Index Reclassifications Hospitals or groups of hospitals (defined by counties) can change to another area for wage index purposes by applying to the Medicare Geographic Classifica-tion Review Board. Hospitals seeking reclassification must meet specific proximity and wage level criteria.

Multi-Campus HospitalsPrior to FY 2011, CMS allowed multi-campus hospi-tals to allocate wage and hour data by either full-


Barnstable 1. 3052 $6,511.03 1.2001 1. 3001 $6,453.11 1.1969 3.59%Boston-Quincy 1. 3052 $6,511.03 1.2001 1. 3001 $6,453.11 1.1969 3.59%Cambridge 1. 3052 $6,511.03 1.2001 1. 3001 $6,453.11 1.1969 3.59%Peabody 1. 3052 $6,511.03 1.2001 1. 3001 $6,453.11 1.1969 3.59%Pittsfield 1.3052 $6,511.03 1.2001 1.3001 $6,453.11 1.1969 3.59%Fall River/New Bedford 1. 3052 $6,511.03 1.2001 1. 3001 $6,453.11 1.1969 3.59%Springfield 1.3052 $6,511.03 1.2001 1.3001 $6,453.11 1.1969 3.59%Worcester 1. 3052 $6,511.03 1.2001 1. 3001 $6,453.11 1.1969 3.59%Providence, RI 1.1333 $5,868.52 1.0895 1.1499 $5,900.38 1.1004 8.46%

2014 2013

Capital Capital Change in County/Wage Area AWI RATE GAF AWI RATE GAF Rate

Massachusetts Rural AWI is 1.3052 for 2014 and was 1.3001 in 2013.

AWI for RI hospitals re-classed to Boston: 1.1333



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time equivalents (FTE’s) or discharges at each hospi-tal campus for wage index purposes. In FY 2012, CMS no longer allowed multi-campus hospitals to use either FTE or discharge data for allocating wage data among its campuses. In FY 2013, CMS used data obtained in the FY 2009 cost report and occu-pational mix survey data from calendar year 2010 in order to calculate the wage index for multi-campus hospitals.

Occupational Mix AdjustmentAs part of the methodology for determining prospec-tive payments to hospitals, standardized amounts must be adjusted for area differences in hospital wage levels to reflect the relative hospital wage level in the geographic area of the hospital, compared to the national average hospital wage level. The occupa-tional mix adjustment controls the effect of hospi-tals’ employment choices on the wage index. For example, hospitals may choose to employ different

combinations of registered nurses (RNs), licensed practical nurses (LPNs), nursing aides, and medical assistants for the purpose of providing nursing care to their patients. The varying costs associated with these choices reflect hospital management decisions rather than geographic differences in the costs of labor. The occupational mix factor is intended to neutralize the effect of employee mix, resulting in a decreased wage adjustment for hospitals with higher skill mixes and an increased wage adjustment for those with lower skill mixes. The law provides for the collection of data on occupational mix every three years.

The FY 2014 occupational mix adjusted national average hourly wage (AHW) is $38.3698. The FY 2013 occupational mix adjusted national average hourly wage (AHW) is $37.46. As required by law, CMS has developed a revised survey tool to collect new occupational mix data for adjustment of the wage index, starting in FY 2013. The new survey collected



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hospital specific wage and hour data from January 1, 2010 through December 31, 2010. The new survey was approved on February 26, 2010 and is available on the CMS Web site. Hospitals were required to submit the 2010 survey to their Fiscal Intermediar-ies (FIs)/Medicare Administrative (MACs) by July 1, 2011. Hospitals that did not complete the 2010 survey are required to submit an explanation for not complying with the submission requirements. FIs/MACs were instructed to gather this information as part of the FY 2013 wage index desk review process.

Outlier ThresholdsTo promote access to high quality inpatient care for seriously ill beneficiaries, Medicare provides addi-tional payments for outlier cases (i.e. cases with extraordinarily high costs). These cases are identi-fied by comparing their estimated operating and capital costs to a fixed loss threshold.

A hospital-specific cost-to-charge ratio (CCR) is applied to the covered charges for a case to deter-mine whether the costs of the case exceed the fixed-loss outlier threshold. Payments for eligible cases are then made based on a marginal cost factor, which is a percentage of the costs above the threshold. Outlier cases are paid 80% of the difference between the estimated cost of the patient case and the outlier threshold.

In order to maintain outlier payments at 5.1% of total payments under the IPPS, the final rule calls for a decrease in the outlier threshold from $21,821 in FY 2013 to $21,748 for FY 2014.

Graduate Medical Education (GME)Direct Medical Education attempts to recognize the direct costs associated with the operation and admin-istration of a GME program. Medicare pays teach-ing hospitals for the direct costs of GME based on a hospital-specific base period per resident amount (PRA). For most hospitals, the base year is FY 1984. PRAs are updated annually for inflation and there is a limit on the number of FTE residents a hospi-tal may include in its resident count for calculating direct GME payments.

CMS regulations allow adjustments to the FTE resi-dent caps for hospitals with newly established medi-cal residency training programs on or after January 1, 1995 if a hospital had no allopathic or osteopathic residents in the base year. The hospital may receive an adjustment to its FTE resident cap if it estab-lishes one or more new medical residency training programs, but only for new programs established within three academic years after residents begin training in the first program.

In the FY 2011 Hospital Outpatient final rule, CMS implemented ACA section 5503. This provided reductions in the statutory full-time equivalent (FTE) resident caps for purposes of determining Direct and Indirect GME payments under Medicare for certain hospitals, and authorizes hospitals to receive a redis-tribution of the estimated number of FTE resident slots resulting from the reductions. This rule is further expanded by the Medicare and Medicaid Extenders Act of 2010. This rule determined that FTE resident caps should be determined by using the aggregate experience of hospitals that are part of the Medicare GME affiliated group.

In FY 2013, CMS modified how resident caps are calculated for new residency training programs for the purposes of direct GME and IME. CMS updated the policies that related to the ACA provisions that allow for redistribution of unused residency slots and the preservation



FY 2012 $ 22,385 -3.00%

FY 2013 $ 21,821 -2.52%

FY 2014 $ 21,748 -.33%

Outlier Threshold Outlier Annual Change Amounts Threshold in Threshold


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of residency slots from closed hospitals. For hospi-tals that achieved additional residency slots, CMS adopted clarifications to the requirements hospitals must meet to maintain those slots.

In FY 2014, CMS is adopting its proposal to include inpatient days for labor and delivery services effec-tive for cost reporting periods beginning on or after October 1, 2013 (FY 2014). CMS has amended this policy for Medicare DSH purposes. This will reduce direct GME payments to hospitals and may impact the eligibility of hospitals seeking SCH status.

Indirect Medical Education (IME) AdjustmentCMS provides an additional payment to teaching hospitals in an effort to recognize the higher costs related to the operation of a GME program. The IME adjustment factor is calculated using a hospi-tal’s ratio of residents to beds and a formula multi-plier, which is represented as “c” in the equation: c x {((1 + ratio of residents to beds) raised to the 0.405 power)-1}. CMS will not change the IME adjustment factor of 1.35 in FY 2013. However, CMS will now include bed days associated with labor and delivery services in the Medicare IME payment adjustment calculation. CMS will extend this policy to beds effective for cost reporting periods beginning on or after October 1, 2012.

The formula is traditionally described in terms of a certain percentage increase in payment for every 10% increase in the resident-to-bed ratio. Currently, observation bed days are included in the number of available inpatient beds used for purposes of calcu-lating a hospital’s IME adjustment.

For both GME and IME, CMS is adopting its proposal to exclude teaching hospitals from claiming the time residents are training at a Critical Access Hospital (CAH). A CAH will still be able to incur the costs of training residents and will receive payments based on 101% of its Medicare reasonable costs for the time those residents rotate to the CAH.

Rural Referral CentersRural hospitals that meet certain criteria can be clas-sified as a Rural Referral Center under IPPS. This status allows:

• exemption from the 12% cap on Dispropor-tionate Share Hospital (DSH) payments that is applicable to other rural hospitals; and

• Special treatment under the geographic reclas-sification rules including:

Exemption from the proximity criteria; and

Exemption from the requirement that a hospital’s AHW must exceed 106% or 108% of the AHW of the labor market area where the hospital is located.

A hospital may voluntarily cancel its rural status, in which case it will lose its RRC designation and will lose the above-mentioned exemptions. However, it will continue to be exempt from the requirement that its average hourly wage exceed 106% or 108% of that of its labor market area for the purpose of geographic reclassification.

To obtain RRC status, a rural hospital must maintain a minimum of 275 beds available for use. As an alter-native, one can obtain RRC status if it meets certain minimum case-mix index (CMI) and discharge crite-ria and at least one of three optional criteria, consist-ing of relating to specialty composition of medical staff, source of inpatients or referral volume. CMS has updated the FY 2013 minimum values by region and is available online, Federal Register.

Expiration of Medicare Dependent Hospital StatusHospitals that meet defined criteria could achieve special rural status as a Medicare Dependent Hospi-tal (MDH). Hospitals that achieved this status bene-fited from special payment rules that allowed for




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payment under the IPPS at a blend of the federal rate and a hospital-specific rate. The status also allowed for higher levels of DSH payments if the hospital exceeded certain thresholds. Absent legislation to extend the program, FY 2014 will not have the MDH benefit.

Medicare DSH CalculationMedicare makes an additional payment to hospitals that serve a disproportionate number of low-income patients. To qualify for the Medicare DSH adjust-ment the hospital must:

1. be located in an urban area, have 100 beds or more, and more than 30% of its net inpatient care revenue is derived from state and local government payments for care furnished to low-income patients; or

2. calculate its DSH patient percentage (DPP) using the complex statutory formula as follows:

Medicare SSI Days + Medicaid (Non-Medicare Days Total Medicare Days Total Patient Days

The second method is the most common method used by hospitals to qualify for DSH payments. The first part of the computation includes patient days for patients who were entitled to Medicare Part A and Supplemental Security Income (SSI). This number is divided by the total number of Medicare Part A days. The second part of the computation includes patient days for patients who were eligible for Medic-aid, not including any days in the first computation, divided by total patient days. Hospitals whose DPP


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exceeds 15% are eligible for a DSH payment adjust-ment. CMS will continue to determine the final DSH-eligibility at cost report settlement.

CMS implemented significant changes to the current Medicare DSH payment policies due to ACA requirements. These changes will reduce and redis-tribute DSH funding beginning in FY 2014. The new law will make it so 25% of estimated DSH funding under the traditional formula be continued to be paid to DSH hospitals. The remaining 75% will be reduced to reflect the impact of insurance expansion and then redistribute those funds to the new and separate uncompensated care payment system. This payment will determined based on each individual hospital’s ratio of uncompensated care relative to its total compared to all DSH-eligible hospitals. CMS has adopted the following rules in order to define this new program:

• Funding dedicated to the New Uncompen-sated Care Factor: this was the 25% of esti-mated DSH payments to all hospitals under the previously methodology. The estimate of funds to be paid is based on the most recently reviewed and filed cost report data (FY 2010). The estimate includes projections for infla-tion, utilization, and case mix changes. Hospital-specific factors related to the projec-tions have not been yet made available. This amount will allow $3.193 billion dollars to be distributed from this fund.

• ACA-mandated DSH Funding Reductions: The ACA required DSH funding dedicated to uncompensated care payments to be reduced by a factor that reflects the impact of insur-ance expansion before it will be distributed to a hospital. Based on studies performed by CMS, the rate of uninsured is expected to decrease from 18% to 17%. This is the other 75% portion taken away from the former DSH payment system. This will provide about $9.579 billion worth of funds to be allocated to uncompensated care.

• Determination of Hospital Specific Uncom-pensated care Payments: For FFY 2014, CMS

is adopting its proposal to use Medicaid days and Medicare SSI days as a proxy for uncom-pensated care. These days currently make up the numerator of the traditional DSH formula. CMS believes the use of low-income patient days will provide insight into the treatment costs associated with uninsured patients.

CMS is currently stating 2,437 hospitals will be eligible for DSH payments in FY 2014. CMS’ list is based on the Medicaid fraction listed in the March 2013 update of Provider Specific File. In response to the concern from DSH hospitals regarding the new payment methodology and cash flow issues, CMS will change its initial ruling in regard to payment from the uncompensated care bucket. Originally, CMS proposed a lump-sum payment for hospitals. Instead, CMS will make these payments on a discharge basis through the claims process based on a 3-year average (FY 2010 – 2012).

Low-Volume Hospital AdjustmentBeginning in FY 2005, CMS established a low volume hospital adjustment to account for the higher costs for discharge for low volume hospitals. The FY 2011 final rule modified the provisions for the eligibility criteria. For FY 2011 through FY 2013, a hospital qualified as a low volume hospital if it had more than 15 road miles from another hospital and had less than 1,600 Medicare discharges. In addition, CMS will scale the low volume hospital adjustment for those hospitals with discharges between 200 - 1,600 discharges. Accordingly, for qualifying hospitals with fewer than 1,600 Medicare discharges but more than 200 Medicare discharges, the low volume add-on payment is calculated by subtracting from 25%, the proportion of payments associated with the Medicare discharges in excess of 200.

For FY 2014, CMS will adjust the 25% criteria back to the more restrictive requirements previously in effect pre-FY 2011, which were 25 road miles and 800 discharges. A hospital must have made its request for low-volume hospital status in writing to its fiscal intermediary or Medicare Administrative Contractor by September 1, 2013. ❏



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This spring the American Hospital Association (“AHA”) with the assistance of the public account-ing firm Ernst & Young (“EY”) released a report enti-tled “Ernst & Young Schedule H Benchmark Report (“Benchmark Report”) for the American Hospital Association Tax Years 2009 & 2010”. This is the second consecutive year AHA collected community benefit information from tax-exempt hospitals and asked EY to analyze and report on the information collected. The Benchmark Report was based upon information reported by tax-exempt hospitals on their annual Federal Form 990, Supplemental Schedule H, Hospitals, for the 2009 and 2010 tax years; respec-tively.

In 2012, AHA released the results of its first annual Schedule H project which included an analysis of community benefit information reported by tax-exempt hospitals with respect to their 2009 Federal Form 990, Schedule H. Beginning with the 2009 Federal Form 990 tax returns, all licensed tax-exempt hospitals were required to complete all six parts of Schedule H, including Part I; which outlines the hospital’s community benefit information based upon primary guidance and principles of the Catholic Health Association.

The 2013 Benchmark Report provides comparative data for Federal Form 990, Schedule H filers for both the 2010 and 2009 years.

BackgroundThe process for compiling the information was similar to last year; AHA requested that its members provide EY with a copy of their filed 2010 Schedule H. In

addition, EY also invited its clients to participate. Similarly, the data was collected and tabulated in the same manner as the prior year’s report. Each respond-ing single licensed hospital was categorized as follows:

1. Size – based on total hospital expense:

• a small hospital had less than $100 million of total hospital expense;


A Summary of the Schedule H Benchmark Report

for Tax Years 2009 and 2010By:

Scott J. Mariani, JD and Allison S. Kimowitz, CPA


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• a medium hospital had $100 million to $299 million of total hospital expense; and

• a large hospital had $300 million or more of total hospital expense.

2. Location – based on hospital zip code:

• Urban and Suburban

• Rural

3. Hospital Type – based on facility response:

• General Medical and Surgical

• Children’s

• Teaching

• Critical Access

A hospital which responded and reflected a Schedule H with more than one licensed hospital (in Schedule H, Part V Section A, Hospital Facilities) was classi-fied as a system for purposes of the Benchmark Report.

Hospital RespondentsThe number of participating Schedule H filers actu-ally decreased in this year’s Benchmark Report from 571 to 524. However, system participants increased from 94 to 118. In addition, the total amount of hospital participants actually increased from 877 to 972; respectively, due to a rise in the number of system participants this year. Interestingly, there was a significant reduction in medium sized hospital participants this year from 185 to 121. The decline in single licensed participants and increase in system and total participating hospital facilities may be a result of the hospital mergers, closures, consolidations and creation of large integrated hospitals and healthcare


(Schedule H Benchmark Report - continued from page 17)

© 2013 PwC. All rights reserved. “PwC” refers to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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Issue 3 19

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systems occurring in the United States.

The total hospital participants in the Benchmark Report represent approximately 33% and 30% of total tax-exempt hospitals in the United States for the 2010 and 2009 years; respectively. Based upon the size category criteria outlined above, the participating Schedule H filers were categorized as follows for the two years: (see chart above).

The ResultsOn average, overall, for 2010 the participating hospitals and systems reported 11.6 percent of their total annual expense as a benefit to the community compared to 11.3 percent reported for 2009. This means that a hospital with $100 million of reported expense incurred over $11 million of benefits to the community in both 2010 and 2009. For purposes of the Benchmark Report, “benefits to the commu-nity” include charity care, Medicaid underpay-ments, community health improvement programs, health research and education, subsidized services, bad debt expense (at cost) attributable to patients eligible under the organization’s financial assistance policy, Medicare shortfall, and community building activities.

The information relating to Schedule H, Part I, Financial Assistance and Certain Other Community Benefits at Cost shows that the overall average of

expenses attributable to “community benefit” under the definition adopted by the IRS and reported on each hospital’s and system’s respective Schedule H, Part I decreased slightly from 8.4 percent in 2009 to 8.2 percent in 2010. These numbers do not include




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Medicare shortfall or bad debt expense (at cost) attributable to patients eligible under the organiza-tion’s financial assistance policy.

The chart above includes a comparison of the infor-mation for both years.

Charity Care, Means-Tested Programs, and Other BenefitsThe average of expenses attributable to “community benefit” under the definition adopted by the IRS and reported on each hospital’s respective Schedule H, Part I was further reported by hospital size. The 2010 report shows that small hospitals reported an aver-age community benefit percentage of 7.3 percent, medium hospitals reported 7.5 percent, large hospitals reported 9.2 percent and systems reported 8.1 percent. The hospital size categories and respective commu-nity benefit categories which total to these percent-ages are as follows:

Small HospitalsThe 7.3 percent is comprised of the following: 5.9 percent represents charity care, unreimbursed Medic-aid, and other unreimbursed costs from means-tested government programs; 0.1 percent represents health professions education; 0.2 percent represents cash and in-kind contributions to community groups; and 1.1 percent other benefits. The total 2009 percentage also totaled 7.3 percent.

Medium HospitalsThe 7.5 percent is comprised of the following: 5.5 percent represents charity care, unreimbursed Medic-aid, and other unreimbursed costs from means-tested government programs; 0.4 percent represents health professions education; 0.3 percent represents cash and in-kind contributions to community groups; and 1.3 percent represents other benefits. The total 2009 percentage was slightly higher at 8.0 percent.


Total charity care, means tested government programs and other benefits: 8.4%Community building activities: 0.1%Bad debt expense attributable to charity care: 0.4%Medicare shortfall: 2.4%

Total charity care, means tested government programs and other ben-efits: 8.2%Community building activities: 0.1%Bad debt expense attributable to charity care: 0.5%Medicare shortfall: 2.8%

“Total benefits to the community” of 11.3% for 2009.

“Total benefits to the community” of 11.6% for 2010.

Charity care and unreimbursed Medicaid, etc. was 5.7% of the 2009 and 2010 totals; respectively.



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Large HospitalsThe 9.2 percent is comprised of the following: 5.5 percent represents charity care, unreimbursed Medic-aid, and other unreimbursed costs from means-tested government programs; 1.6 percent represents health professions education; 1.1 percent represents medi-cal research; 0.2 percent represents cash and in-kind contributions to community groups; and 0.8 percent represents other benefits. The total 2009 percentage was slightly higher at 9.8 percent.

SystemsThe 8.1 percent is comprised of the following: 5.2 percent represents charity care, unreimbursed Medic-aid, and other unreimbursed costs from means-tested government programs; 1.1 percent represents health professions education; 0.2 percent represents medi-cal research; 0.5 percent represents cash and in-kind

contributions to community groups; and 1.1 percent represents other benefits. The total 2009 percentage was higher, totaling 9.3 percent.

Community Building ActivitiesThe participating hospitals and systems indicated that, on average, each incurred only 0.1 percent of their total expenses on community building activities in both 2010 and 2009. These activities typically are not directly related to the provision of patient care services but other services which generally improve the surrounding community of the hospital.

These activities often promote regional health by offering direct and indirect support to communities with unmet health needs, including patients who are indigent, uninsured, underprovided for, or geographi-cally isolated from healthcare facilities. Examples




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of community building activities include physical improvements and housing, economic development, community support, environmental improvements and community health improvement advocacy.

Community building activities are reported in Federal Form 990, Schedule H, Part II, Community Building Activities.

Bad Debt ExpenseThe average reported bad debt expense (at cost) attributable to patients eligible under the organiza-tion’s financial assistance policy increased slightly from 0.4 percent of total expenses or approximately $1.6 million per participant in 2009 to 0.5 percent of total expenses or approximately $1.8 million per participant in 2010.

Estimates of bad debt expense (at cost) attributable to patients eligible under the organization’s financial assistance policy were completed by greater than 80 percent of the participants, a 10 percent increase from last year’s participants. In both years, a major-ity of hospitals and systems reported that a portion of their bad debt expense would qualify as a benefit to the community as charity care due to the low income of the patients.

This information is reported in Federal Form 990, Schedule H, Part III, Bad Debt, Medicare, & Collec-tion Practices.

Medicare Surplus and ShortfallA Medicare reimbursement shortfall was reported by




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Footnotes:

1) IRS Schedule H filings for tax exempt hospitals for 2009 and 2010

See links:

http://www.irs.gov/pub/irs-prior/f990sh--2009.pdf

http://www.irs.gov/pub/irs-prior/f990sh--2010.pdf

2) Ernst and Young Schedule H Benchmark Report prepared for the American Hospital Association Tax Years 2009 and 2010; results from the Tax exempt hospital’s annual Community Benefit Reporting. See link provided for more informa-tion.

http://www.aha.org/content/12/09-sche-h-benchmark.pdf

more than 74 percent of the respondents in 2010, similar to the 75 percent reported in 2009. Shortfall is when the Federal government reimburses hospitals less than their costs for treating Medicare-qualifying patients. This information is reported in Federal Form 990, Schedule H, Part III, Bad Debt, Medicare, & Collection Practices.

SummaryThe tax-exempt status of hospitals and what they are doing to further their charitable purposes has drawn the attention of the IRS and Congress for a number of years. The identification, quantification and accu-rate reporting of community benefit activities and programs for hospital facilities have never been more important.

The Benchmark Report is important because it provides industry data and comparative information on the first two years of complete Schedule H’s filed by tax-exempt hospital facilities. Prospectively, tax-exempt hospitals and systems can continue to use this report for benchmarking themselves to similarly sized peers. Moreover, this report may be even more bene-ficial if future reports also provide participant aver-ages based upon certain geographic category location groupings in the United States (e.g. northeast, south-east, mid-west and west). State by state information would also be extremely useful.

Under the Patient Protection and Affordable Care Act enacted on March 23, 2010, the IRS must review the Form 990, Schedule H for every filing tax-exempt hospital at least once every three years. These reviews have begun and the Benchmark Report can be a useful source of benchmarking information for tax-exempt hospital facilities annually as a tax compliance check to ensure they stay within community benefit industry averages. ❏

Scott J. Mariani, JD, is a Partner at WithumSmith+Brown, Certified Public Accountants and Consultants, and is also a Practice Leader of the firm’s Healthcare Services Group. Scott can be reached at [email protected]. Allison S. Kimowitz, CPA, is a Supervi-sor at WithumSmith+Brown, Certified Public Accountants and Consultants, and is a member of the firm’s Health-care Services Group. Allison can be reached at [email protected].

About the Authors

(Schedule H Benchmark Report -continued from page 22)


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Heightened regulations have raised the visibility of the Chief Compliance Officer (CCO). All members of the c-suite especially the Chief Financial Officer (CFO) should have knowledge of how the CCO has built the compliance program. The CCO has account-ability to ensure compliance with regulations and policies. It is important to get compliance right and to be able to prove to the regulators, the board, and c-suite management that the compliance program is effective. These 10 questions will help and are not in order of importance.

1. What new regulations have you reviewed this year and what did you do?

The CCO should create procedures for best prac-tice surrounding regulatory exposures. New regu-lations can be a significant regulatory exposure. All one needs to do is read Mass Media or HFM to get insight into new regulations. The key to this question is an answer that the CCO has assessed the exposure and has worked with other members of management to minimize the exposure. If the CCO is not working with members of manage-ment to reduce regulatory risk, the organization may not be adequately addressing compliance with new regulations.

2. What were the results of our periodic exclusion checks?

The OIG is clear that the effect of exclusion is that no Federal payment may be made for services furnished by an excluded individual. For example, services performed by an excluded nurse, even where such services are related to administrative duties will subject their employer to possible Civil Monetary Penalty (CMP) liability. The OIG indi-cates that CMP may result from employment of

any excluded administrator, biller, or accountant. The OIG stresses that providers should always check the OIG’s List of Excluded Individuals and Entities.

3. How many offenses did you detect, what disci-plinary action was taken and what are the outstanding corrective action plans?

The CCO should develop and impose a Correc-tive Action Plan (CAP) upon noncompliant staff as a means of facilitating the overall goal of full compliance with policies and regulations. When-ever an incident of non-compliance is identified, the CCO should take prompt action to investi-gate the matter, determine root cause and outline effective corrective action. Corrective Action Plans reduce the likelihood of future noncompli-ance. The CCO can age the CAP based on the completion date. A CAP well aged may need CFO support for implementation.

4. What is your inventory of monitoring routines?

Monitoring is the heart of a compliance program. The CCO should have a healthy inventory of routines to address compliance with laws. The OIG specifically is interested in routines to check compliance with laws governing coding, claims and cost reporting.

5. What is the breakdown of calls to the hotline by matter and investigator?

The CCO should have hotline analysis of the number of calls received and investigated. The analysis should show a bottom line reduction in


Top 10 Questions To Ask Your Chief Compliance Officer

By:Christopher C. Boutin FHFMA, CPA.CITP, CGRCP


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Welcome New Members! The following members recently joined the Massachusetts-Rhode Island Chapter of HFMA. We welcome you to the Chapter and encourage you to take advantage of the many professional development, networking and information resources available to you at HFMA. Other HFMA members are a terrific resource for your everyday professional challenges – we encourage all members, current and new, to get involved with HFMA committees and social activities. And… use the Membership Directory – it’s a great resource! We value your membership, so please send us feedback or questions on your HFMA experiences to [email protected].

December 1, 2013 – January 31, 2014

Daniel AbbottTD Bank N.A.

Sarah E BaileyDeloitte

Anthony CavalieriAssociated Credit Services, Inc.

Christopher P D’ArcangeloSouthcoast Physicians Network

Stephen DionWellmatch Health

Susan DugganBank of America

Scott G DykemanBrigham and Women’s Hospital

Civita FaheyHarvard Vanguard Medical Associates

Irina FromentBank of America Merrill Lynch

Samuel Girgis

Ryann HollowayPWC

Long HongCape Cod Healthcare

Jeffrey Horine

Jason M HullNantucket Cottage Hospital

Sidharth Jainnavinet

Michael KanarellisWolf and Co

Dan KlineSports & Physical Therapy Assoc

Michael E KnollKlr

Stacey LeePricewaterhousecoopers LLP

Kristen Janiak LynchGreater Boston Urology

Eric J McCarthyBlue Cirrus Consulting

Amanda McEneaneyBaker Newman Noyes LLC

Glenn F. MorrisseyBank of America Merrill Lynch

Sandra A NowokunskiLahey Hospital and Medical Center

Kiran Pandey

Dhara SatijaDeloitte

Patricia SheehyNantucket Cottage Hospital

Diane L SorianoBaystate Reference Labs

Ginger StolzenthalerFirst Niagara Bank

Tom SullivanOptum

Jonathan TepeSteward Health Care

Brenda J ThorbahnNorwell VNA & Hospice

Andrew WebsterTD Bank N.A.

Kathleen WestMcKesson


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misconduct. The analysis should be in sufficient detail to spot trends before they result in larger compliance issues.

6. Were the matters reported to the CCO greater or less than those received in the prior year and what action will you take as a result of the volume?

Former Assistant Attorney General Lanny Breuer said a compliance program should be “dynamic, not static.” The dynamic compliance program is one that every individual in the organization has the opportunity to report a matter.

7. What is your plan to communicate the compli-ance program and its effectiveness?

Potter Stewart, Associate Justice of the United States Supreme Court wrote in 1964 that “hard-

core pornography” was hard to define, indicating “I know it when I see it.” Such is the dilemma with defining compliance program effectiveness. The CCO has to communicate the evidence in support of an effective compliance program knowing that a regulator may disagree. A disagreement may result in a Corporate Integrity Agreement. Thus there is the need to keep moving compliance program effectiveness forward.

8. What specific training do we give annually to our billers and coders?

The CCO should consistently revise, update and evaluate compliance related education and train-ing materials in all department specific training. Compliance with federally mandated regulations and Joint Commission guidelines are a few of the competing priorities for most healthcare providers.


(TOP TEN QUESTIONS TO ASK- continued from page 24)


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The Medicare Learning Network offers free, accu-rate and official training to assist billers and coders in streamlining the claims submission process, as well as enriching employee understanding. On the training horizon, ICD-10 implementation and the sheer number of codes will require specific training for billers and coders. Billing personnel will require additional training and familiarity with clinical diagnoses and anatomical terminology in order to maintain productivity.

9. How many regulators communicated with management last year, on what topics, and what was the outcome?

The number of regulations that govern health care is overwhelming. Almost every aspect is overseen by a regulatory body and sometimes by several. Sometimes we may feel that we spend more time complying with rules that direct our work than actually doing the work itself. The CCO should

have a handle on the inquiries from these regula-tors. As part of assessing risk, knowing what regu-lators made inquiry into your operations and the outcome is necessary to determine risk levels.

10. What is the process to assess compliance risk and what is our exposure regarding the OIG workplan?

Everything dealing with compliance is risk. Assess-ing that risk is an informal daily task. A formal risk assessment should be performed annually. The OIG annual workplan provides insight into regu-latory concerns. The process to assess risk should consider the OIG workplan yet be responsive to the organization.

While there are many more questions to ask regarding your compliance program, these top 10 should gener-ate interesting answers and insight. ❏

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(TOP TEN QUESTIONS TO ASK- continued from page 26)


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Your chance to win a $100 gift card AND earn educational credits for the Chapter!

1. Reimbursement Update: Part II2. Top 10 Questions to Ask Your Chief Compliance Officer3. A Summary of the Schedule H Benchmark Report for Tax Years 2009 and 2010

Next, follow this link to a survey with the article questions: http://survey.constantcontact.com/survey/a07e8xo6t3ehrmiaw0v/start

Finally, answer the questions and provide your name and HFMA ID number (you must be an HFMA member to qualify for the drawing). We will close the survey 60 days after the newsletter is released. The winner will be notified soon after and the $100 gift card will be delivered.

How do you win?

How do you enter?

First, read the three articles in this issue of Mass Media and answer five questions for each article to be entered into a random drawing for the $100.00 gift card.

First, read the three articles in this issue:

Good Luck!

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Thank you to the speakers at the November 21st CFO Forum from left to right Matthew Comerford from Alvarez & Marsal, Chris Jedrey from McDermott Will & Emery, Charlie Ditkoff from Cumberland Consulting Group, Julie Rosen from the Schwartz Center for Compassionate Care, John Harris from Marwood Group, and Roger Boucher from Bank of America Merrill Lynch.

Program coordinators Jeffrey Dykens, CPA from Falmouth Hospital and Karen Kinsella from Bank of America Merrill Lynch

November 21, 2013The HFMA Massachusetts-Rhode Island Chapter sponsored its third annual CFO Forum titled “Trends in Healthcare Finance, M & A and Investment Management” on November 21, 2013. Organized by Chapter Past President Jeffrey Dykens, COO, Falmouth Hospital and Chapter member Karen Kinsella, SVP Bank of America Merrill Lynch, the session targeted regional CFO’s and Senior Healthcare Finance executives. The session offered information on current healthcare finance trends, investment management evaluation plus M&A activities from both the Not-for-Profit and For-Profit provider perspectives.

The nearly fifty attendees represented a good cross-section of senior healthcare finance executives from Massachusetts and Rhode Island. An early afternoon reception at the scenic Boston Convention and Exhibit Center (BCEC) offered attendees the opportunity to network before the formal program began.

Andy Bressler Managing Director Healthcare Research from Bank of America Merrill Lynch began the afternoon with an up-date on the early technical struggles and enrollment results for the Federal and State Healthcare Exchanges. At that time, he previewed the likely need to extend enrollment deadlines. Steve Campisi, Head of Philanthropic Thought Leadership at US Trust followed with a discussion on the CFO’s View of the Endowment Portfolio. Steve focused on evaluating the effectiveness of endowment management by the ability to generate

CFO Forum

returns sufficient to support operational needs and not just by “beating the benchmark”. Charlie Ditkoff of Cumberland Consulting Group led an engaging panel discussion titled Trends in Healthcare – Acquire, Merge, Affiliate. Legal, financial and regulatory experts from McDermott Will & Emery, Alverez & Marsal plus Marwood Group provided perspectives on what issues to consider before a merger or affiliation and operationally what to anticipate once the event has occurred. The Chapter extends its thanks to all of the speakers and looks forward to repeating a similar program next year.

To wrap up the day, the attendees were once again invited to a cocktail reception sponsored by the Schwartz Center for Compassionate Care, which was hosting its annual dinner at the Convention Center that evening. The Chapter extends heartfelt thanks to Executive Director Julie Rosen and the Schwartz Center for sharing the evening with attendees and to Jeff Dykens and Karen Kinsella for their efforts in coordinating another great program.

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o Extended Business Office/Early-Out Services Self Pay Recovery & Call Center Insurance Recovery and Claims Resolution

o Self Pay Collections & Bad Debt Recovery Services o System Conversions Assistance & A/R Clean-Up Projects

MDS is a dedicated partner that cares about the success of our clients. We proactively monitor the performance level, and services that we provide each of our clients. Our personal, counseling approach, proprietary software, and superior technology allow us to collect more dollars on our client’s behalf, without system limitations, for accounts that would have otherwise not been accrued through the standard hospital based revenue cycle. SERVICE Our Company offers our expertise of over 384 employees in six offices nationwide who currently service our 460+ clients. MDS is privately held and is exclusively healthcare focused, working with both non- profit and for-profit healthcare systems. We have always understood the needs of our partners, the need to accommodate your patients, respect your communities, and efficiently enhance the financial well being of providing healthcare in today’s dynamically changing market. For more information, contact: Estelle Welte Senior Vice President MDS (772) 559-8782 [email protected]


“ Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed. ©2014 Bank of America Corporation 01-14-8554

Improving your financial health with customized solutionsWhether you seek an infusion of funds, improved

revenue cycle metrics, streamlined payments processes

or strategic advice, Bank of America Merrill Lynch

provides customized solutions and services backed by

more than $22 billion in commitments to the healthcare

industry. All delivered by a client manager and team of

specialists focused on improving your financial health.

AD-01-14-8554.indd 1 1/13/14 8:19 AM


Date Event Location Coordinator(s)

03-28-2014 Enterprise Performance Management Four Points Sheraton Roger Price, Stephen Saudek, & Practice Management Joint Meeting Norwood, MA Caryl Beison & Annamarie Monks

05-14-2014 thru Region 1 Conference Mohegan Sun Region 1 05-15-2014 Uncasville, CT

05-22-2014 HFMA Massachusetts-Rhode Island Downtown Harvard Club Roger Boucher and Chapter Annual Awards Banquet Boston, MA Garrett Gillespie

06-06-2014 Managed Care Program Doubletree Hotel James Donohue, MBA Westborough, MA & Jan Costa

HFMA Massachusetts- Rhode Island Chapter 411 Waverley Oaks Road, Suite 331B Waltham, MA 02452

E d u c a t i o n / P r og r a m A d m i n i s t r a t i o n C o m m i t t e e , C o - C h a i rs : D e b o r a h Wi l s o n , C PA & C a t h e r i n e Ro b i n s o n - S k e e n dw i l s o n @ l a w r e n c ege n e r a l . o r g C a t hy. S k e e n @ s t e w a r d . o r g

NOTE: Please keep in mind that the themes listed for the programs are general. The programs themselves address current issues pertaining to these themes.

P r o g r a m & S p e c i a l E v e n t S c h e d u l e

2013

- 20

14Holliston, MAPermit NO . 20

Holliston, MA

Holliston, MA Holliston, MA

Permit NO . 20

Permit NO . 20 Permit NO . 20

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