nj physician magazine may 2013

JULY 2012

Also In This Issue:Hospital Charges Billed to Medicare Cover Wide Range

Group Seeks to End Recertification Mandate for DoctorsChristie: New Jersey Opts For Full Federal Health Exchange

Visit us now online atwww.NJPhysician.org

MAY 2013

Advanced Neurosurgery Associates, P.C. For Patients with Neurologic Disorders and their Families – Miracles Do Happen

A Glimpse Into the Security Breach Analysis Required of Physicians

Arno H. Fried, MD, FACS

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Montdor Medical Media, LLC

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Iris and Michael Goldberg

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Michael Goldberg

Andew Kitchenman

Mark Manigan

John D. Fanburg

Todd C. Brower

Kevin M. Lastorino

Carol Grelecki

Debra C. Lienhardt

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Publisher’s Letter

With warm regards,

Michael GoldbergCo-Publisher

Dear Readers,

Welcome to the May edition of New Jersey Physician, providing the information critical to the survival of medical practices during this most confusing time. Our mission is to offer you relevant editorial of value focused on the needs of physicians statewide.

Parameters for the enforcement of HIPAA and HITECH governing how providers handle, store, protect, and share health information have been developed and were published in January of this year. How providers evaluate whether an action involving the unauthorized acquisition, access, use or disclosure of information rises to the level of a breach under HITECH requiring notification is discussed by Rebecca Hobbs, Esq and Alexandra Garcia, Esq., Chair of the Health, Hospital and Technology group of their law firm.

Governor Christie has chosen that New Jersey’s health insurance exchange, the market where people will be able to buy insurance with federal subsidies starting next year, will be run by the federal government, not by the state, or by a partnership of the State and Federal governments.

How much should a knee replacement cost? It seems that there is a wide range, hospitals charge for the same procedure. In New Jersey, charges ranged from $202,777 in one hospital to $40,139 in another. Hospitals are rarely paid the full amount that they charge since rates are either limited by the federal government or negotiated by private insurance. Bayonne Hospital has been singled out as the highest overall billing facility in the country in regards to Medicare and Medicaid billing.

New Jersey hospitals are celebrating a major drop in hospital infections and other preventable problems last year due to a federally funded initiative that’s part of the Affordable Care Act. The effort, led by the New Jersey Hospital Association, is aimed at improving the quality of care offered at hospitals by reducing preventable illnesses that originate in healthcare facilities.

When I met Dr. Arno Fried for the first time, I asked him what motivated him to focus on the practice of neurosurgery for children. He quickly responded that he found it to be the most challenging, yet at the same time, the most gratifying specialty. There are many children in the world who are most fortunate this decision was reached. Dr. Fried is chairman of the Neuroscience Institute at Hackensack University Medical Center where he coordinates activities of the departments of Neurosurgery, Neurology, and Neuroradiology and serves as Director of Pediatric Neurosurgery and Director of the Level 4 Epilepsy Center. He is also Chief of Pediatric Neurosurgery at the Barnabas Health System, Chief of Neurosurgery at St. Peters University Hospital and Chief of Neurosurgery at the Liberty Health System. If that isn’t enough, he is among the very few neurosurgeons nationally board certified in both general and pediatric neurosurgery. The world is a much better place for having Dr. Fried in it.

Contents

2 New Jersey Physician

CONTENTS

49

18STATEHOUSE

GARCIA - HOBBS

22 NJ HITEC

21HEALTH LAW UPDATE

Advanced Neurosurgery Associates, P.C.

For Patients with Neurologic Disorders and their Families – Miracles Do Happen



Cover Story


photography by Michael Goldberg

Arno H. Fried, MD, FACSAdvanced Neurosurgery Associates, P.C.For Patients with Neurologic Disorders and their Families – Miracles Do HappenBy Iris Goldberg

Sitting in the waiting room of Advanced Neurosurgery Associates, P.C., one cannot help but notice the countless testimonials from patients whose lives were resurrected after undergoing neurosurgery performed by Arno H. Fried, MD, FACS. Dr. Fried is Chairman of the Neuroscience Institute at Hackensack University Medical Center (HUMC), where he coordinates activities of the Departments of Neurosurgery, Neurology and Neuroradiology and serves as Director of Pediatric Neurosurgery and Director of the Level 4 Epilepsy Center.

Additionally, Dr. Fried is Chief of Pediatric Neurosurgery at the Barnabas Health System; Chief of Neurosurgery at St. Peter’s University Hospital and Chief of Neurosurgery at the Liberty Health System. Dr. Fried is among only a small group of neurosurgeons in the country that are board-certified in both general and pediatric neurosurgery.

The stories of the children are especially moving and for pediatric and adult patients with epilepsy, the results achieved by the physicians of Advanced Neurosurgery Associates are no less than miraculous in many cases. “The driving principle of our practice and what distinguishes us is the pediatric neurosurgery and the epilepsy surgery in children and adults and also, the unparalleled quality of the care provided,” Dr. Fried shares.

Brought to HUMC seventeen years ago for the purpose of developing a pediatric neuroscience program, Dr. Fried established his practice and focused on the task at hand. “My goal was to bring groups of specialists to cover major disorders with a team approach,” he recounts. Dr. Fried recruited an epilepsy team, a pediatric neuro-oncologist and other renowned neuroscience experts from well-recognized academic medical facilities across the country. The team then put programs in place for treating a myriad of conditions including but not limited to:

• Pediatric brain tumors

• Epilepsy - with surgery for some patients

• Hydrocephalus (minimally invasive endoscopic surgery)

• Spina bifada

• Spasticity in children and adults with a variety of neurologic disorders including cerebral palsy, multiple sclerosis and head trauma• Congenital skull anomalies in children - with craniofacial reconstructive surgery

While this was the origin of the practice and the program, Dr. Fried explains that both have evolved over the years. Joining Advanced Neurosurgery

Associates in 2007, Mostafa El Khashab, MD, PhD specializes in the surgical treatment of pediatric brain tumors and the management of intractable epilepsy. Although, initially, the practice focused only on children, after time, adult patients with brain tumors and epilepsy were treated as well.

The addition of Arien J. Smith, MD, a neurosurgeon who specializes in treating complex spine disorders in adults and children further broadened the scope of patients. Also, Dr. Smith has advanced training in minimally invasive spine surgery techniques and is one of only a few surgeons performing fusions with small percutaneous incisions rather than an open procedure with one incision as long as 10 inches.

In terms of Advanced Neurosurgery Associates, Dr. Fried reiterates its impressive track record. “We have an extremely busy pediatric neurosurgical practice in New Jersey,” he states. “Pediatric brain tumors, craniofacial reconstructions, spasticity surgery, spina bifida, endoscopic surgery for shunts - we do the full gamut of very state-of-the art work and we collaborate with these other specialists,” Dr. Fried specifies.

“With the epilepsy surgery, we work with a team of 10 epileptologists, who are neurologists that are fellowship trained in epilepsy. They are Northeast Regional Epilepsy Group led by Dr. Marcelo Lancman. This group does the monitoring and the mapping and comes into the operating room with us to map out the seizure areas,” informs Dr. Fried.

At HUMC there are 18 monitored beds for video EEG monitoring and Advanced Neurosurgery Associates performs between 50 and 60 epilepsy surgeries a year, which, as Dr. Fried points out, is a large volume for something that is so specialized.

May 2013 5

photography by Michael Goldberg

Intracranial grids are implanted across the suspected areas of seizure origination.

The typical scenario for epilepsy surgery begins with the patient coming in for Phase I monitoring, which is video EEG recording with the patient remaining until between 5 and 10 seizures are recorded. If the seizures are found to be focal (coming from one part of the brain), the patient moves on to the next step. This involves a variety of tests including a special type of MRI, a pet scan, a neuropsychological evaluation and a test to distinguish dominance of one side versus the other.

As patients progress through this process, it is determined whether they are a good candidate for epilepsy surgery. “We have a meeting every Thursday afternoon that is teleconferenced so that all sites are online, with everyone on the multidisciplinary panel participating,” Dr. Fried relates. For those patients that could possibly benefit from surgery, the next phase of the program is initiated.

Potential candidates are brought into

“They can see which electrodes the seizures are coming from,” Dr. Fried explains. “If they are convincingly coming from under one region of the grid, then we know that is the one and only site of origin of eptileptogenesis of the seizure,” he continues.

Then the area in question is stimulated and the function of the brain is mapped. “The goal is to find a seizure focus and the functional areas of the brain that are separate so that we can resect the seizure focus without affecting the

the hospital where they undergo a craniotomy, under general anesthesia, during which intracranial grids that contain electrodes within, are implanted across the suspected areas of seizure origination. After this procedure is completed, the patient is brought to a specialized epilepsy unit within the hospital where the epilepsy team monitors and then maps out the seizures.

patient’s function,” describes Dr. Fried. “If we find that the seizure focus and the functional area overlap, then we cannot do a resection,” he adds.

Dr. Fried goes on to share that there are certain times when the two areas overlap just slightly. “In those cases we can talk to the family and explain that there might be some weakness after the resection,” he states. “But that is really a small price to pay for a lifetime of no more seizures or medication.”

In fact, Dr. Fried feels that of all of the procedures he performs, epilepsy surgery is the most gratifying. “If you look in the waiting room, there are some great testimonials, including a woman who was finally able to give birth and the little girl who came to us all the way from Georgia. Some of these people were having ten seizures a day,” he reports. “There are adults who couldn’t drive and who now have a driver’s license, Dr. Fried remarks. “They’re driving. They’re off


View of the brain post- hemispherectomy

“So if someone has multi-focal seizures and they are little seizures, they become big seizures once they cross the corpus callosum to the other side of the brain,”

Dr. Fried explains that while cancerous brain tumors in children, most commonly, medulloblastomas found in the cerebellum are highly malignant, they have a 70 percent cure rate. “So we’re very aggressive,” Dr. Fried informs. “We are participating with COG (Children’s Oncology Group), which is a national consortium,” he adds, explaining that the protocols are the same in all of the renowned pediatric oncology programs throughout the country. “The pooling of data has allowed so much of the tremendous advances in pediatric oncology. It is all because of that collaboration,” Dr. Fried points out.

The results of many other pediatric brain surgeries performed by Dr. Fried are equally dramatic. For example for infants or older children with hydrocephalus,

medication. We’ve been able to totally change their lives,” he exclaims.

For patients who do not have a single discreet seizure focus and are not a suitable candidate for resection, Dr. Fried relates that there are other promising methods of treatment offered at Advanced Neurosurgery Associates. “One of the things we can do is to implant a vagal nerve stimulator, which essentially is a pacemaker for the brain,” he offers.

Vagus nerve stimulation (VNS) is designed to control seizures by sending regular, mild pulses of electrical energy to the brain via the vagus nerve in the neck. The VNS device is placed underneath the skin on the chest wall and a wire runs from it to the vagus nerve. By programming the device to stimulate the brain, as Dr. Fried explains, the seizures are desynchronized.

“We can also do a procedure called corpus callosotomy, which is actually splitting the brain,” he continues. Dr. Fried goes on to describe that the corpus callosum is a white matter band that connects the two hemispheres of the brain. While it helps the hemispheres share information, the corpus callosum also contributes to the spread of seizure impulses from one side of the brain to the other.

Here the corpus callosum is visible separating the two hemispheres of the brain.

With the various options available to improve the quality of life for those who suffer from epilepsy, Dr. Fried re-emphasizes that the responsibility of deciding the appropriate course of treatment in each case does not rest upon his shoulders alone. “Every case is discussed with the team during the Thursday conference,” he makes a point of mentioning again.

“The principle is called ‘convergence of data.’ We look at the brain from an MRI perspective, an electrical perspective, a neuropsychological perspective, to see how the brain is actually functioning because we know that some functions are on the right and some are on the left and with a PET scan, which is a metabolic perspective,” Dr. Fried specifies.

He goes on to share that if all of these indicators point to the same spot in

Dr. Fried explains. Cutting the corpus callosum prevents a seizure from crossing over, so that although the patient will continue to experience seizures, they will be significantly smaller.

The procedure starts with a craniotomy to expose the brain in order to access the corpus callosum. “We separate the two halves of the brain to get down to the corpus callosum and then we cut the corpus callosum,” Dr. Fried states. “Once we do that, patients no longer have these tremendous, debilitating seizures,” he is pleased to share.

Dr. Fried discusses one last option for certain patients who cannot be helped by the other methods. “It is called a hemispherectomy and I believe I might be the only surgeon in the area doing it,” he suggests. “A hemispherectomy is literally removing half the brain. I know it sounds very gruesome but these individuals regain all of the function lost,” Dr. Fried assures.

He explains that in children under the age of twelve, (the only patients that would be eligible to undergo this procedure) once one side of the brain is removed the other side miraculously takes over providing all of the functions. “Within a few months they’re walking, they’re running, they’re using their arm and they’re seizure-free. It’s amazing!” Furthermore, Dr. Fried reports their IQ goes up because they’re not constantly having seizures. “It is a very dramatic operation,” he says.

the brain, the team can then conclude that the patient is an extremely good candidate for surgery. “If, however, one test points here and one points there and still another points somewhere else, that is a red flag that tells us surgery may not help that patient,” Dr. Fried shares. “Then we consider the other options.”

In terms of pediatric brain tumors, Dr. Fried has amassed a great amount of expertise, probably treating more cases each year than anyone within the state. Dr. Fried works with numerous prominent pediatric neuro-oncologists that have developed highly-rated pediatric cancer programs. Stephen Thompson, MD of the Tomorrow’s Children Institute at HUMC, leads the pediatric neuro-oncology program.

May 2013 7

Temporal Lobe Tumor

Dr. Fried can often employ advanced technology to treat the condition through a minimally invasive endoscopic approach.

Hydrocephalus occurs when there is a blockage in a ventricle (passageway) in the brain causing cerebrospinal fluid (CSF) to back up. Sometimes referred to as “water on the brain,” hydrocephalus can cause babies’ heads to swell to accommodate the excess fluid. Older children whose skull bones have matured and fused together can experience painful headaches due to increased pressure within the head. If left untreated, hydrocephalus can lead to brain damage, loss of mental and physical functions and even death.

The standard of care for decades has been to place a shunt which involves surgically implanting one end of a catheter into the ventricle of the brain and the other end in either the abdominal cavity, chambers of the heart, or space around the lungs, where CSF can be drained and absorbed

by the bloodstream. For appropriate patients, that procedure can now be performed less invasively.

Dr. Fried, who was the first neurosurgeon in New Jersey to use the endoscopic approach for hydrocephalus, prefers it whenever possible. “Instead of putting in a shunt, we go into the ventricles with a small scope and a camera and open up a fluid pathway so that fluid can circulate naturally and that avoids having to implant shunt hardware,” he explains. Dr. Fried is able to view the surgical site on a monitor while he uses small instruments to create the opening. “The results are excellent,” he happily reports.

Craniofacial reconstruction is another important area of expertise for Dr. Fried. This procedure involves correcting deformities of the skull, also affecting the face and the eyes. Dr. Fried works with a highly skilled plastic surgeon who has received specialty training in craniofacial surgery. “We take apart the entire skull,” Dr. Fried states. “My job is to protect the

brain. I take the skull off and he puts it back in the correct way,” he continues. Co-directing the craniofacial program at HUMC’s Joseph M. Sanzari Children’s Hospital, as well as at Saint Barnabas Medical Center, is Frank Ciminello, MD. At St. Peter’s University Hospital, Kevin Nini, MD is the craniofacial plastic surgeon.

Dr. Fried shares that the team does everything from the most involved major reconstructions to minimally invasive procedures, sometimes using endoscopes that are slipped under the scalp in order to remove bone through an incision that is only one inch long. “Depending on the situation at hand, we have a vast armamentarium to use,” Dr. Fried offers.

“Again, the driving principle of our practice is the pediatric neurosurgery and the epilepsy surgery for children and adults,” Dr. Fried comes back to, in order to summarize. “This year, our program here at Hackensack was ranked 25 out of 50 on the US News & World Report list for Pediatric Neuroscience,” he proudly


The endoscope is slipped under the skull to remove bone.

adds. This is extremely impressive and significant because HUMC was ranked higher than many facilities across the country renowned for their pediatric neuroscience programs.

When asked why he wanted to become a pediatric neurosurgeon, Dr. Fried confesses that his first choice was to play centerfield for The New York Yankees. Knowing that this was not even a remote possibility, he had to come up with something that would inspire as much passion.

Dr. Fried and Dr. Cimenello work together to perform craniofacial reconstruction.

On a more serious note, Dr. Fried shares, “The reason I went into pediatric neurosurgery is really threefold. One is that of all the aspects of neurosurgery, it is the most challenging. Every day, there is the possibility of a challenging case that can have a great outcome. Number two is the opportunity to deal with the kids and their families,” he says,” revealing how gratifying that is for him on a personal level. “The third reason is that I was exposed to some really great mentors during my residency, who were the pioneers in pediatric neurosurgery,”

Dr. Fried relates. “They were the ones who taught that children are not just small adults. They need their own specialty,” he emphasizes.

He may not have the opportunity to

perform his work before a stadium filled with screaming fans but for those countless patients whose lives have been dramatically changed for the better, Dr. Fried has hit a homerun every time.

For more information about the Neuroscience Institute or to schedule an appointment with Dr. Fried, please call (201) 457-0044

Asking price for most–common procedure -- replacement of hips and knees – can be more than $200K or as little as $40K

May 2013 9

NEW JERSEY STATEHOUSEHospital Charges Billed to Medicare Cover Wide Range

Statehouse

By Andrew Kitchenman,

Many New Jersey patients never see the amounts that hospitals charge for their services -- but if they did take a look at the numbers, they might feel another hospital trip was in order.

Hospitals charge Medicare widely different amounts for the same services, although the amount that they actually are paid is much lower, according to data released this week by the federal Centers for Medicare & Medicaid Services (CMS).

For example, the amount hospitals charged Medicare for hip replacements and knee replacements, the most common procedures for Medicare patients, averaged $66,639. This was nearly as much as the $71,180 median household income for the state. However, the average amount that Medicare actually paid for the procedures was $15,059.

The average amount charged for hip replacements and knee replacements ranged from $202,777 at Our Lady of Lourdes Medical Center in Camden to $40,139 at Southern Ocean Medical Center in Manahawkin.

While CMS requires that hospitals submit charges, the agency generally doesn’t use this information in determining how much it pays hospitals. Instead, CMS considers a variety of factors based on the estimated cost for each service.

The database was released as part of a federal effort to increase transparency and make the healthcare system more affordable and accountable, federal officials said.

Hospitals are rarely paid the full amount that they charge, since government insurance programs like Medicare and Medicaid determine how much to pay providers, while private insurance companies negotiate lower rates with providers.

However, some uninsured patients and patients who receive services from a hospital that is outside of their insurance network are affected by the charges, according to Wardell Sanders, president of the New Jersey Association of Health Plans, an insurance industry trade group.

“It’s not the case at all the charges don’t matter – they matter a lot,” Sanders said.

Patients who choose to go out-of-network will be billed based on the hospital charges, while insurers of patients who must receive emergency services at an out-of-network facility will also pay higher rates based on a “fee profile” that takes into account hospital charges.

Sanders noted that New Jersey hospitals’ charges are among the highest in the country. He said one reason for the high prices might be the state’s requirement that insurers pay for services at out-of-network providers.

“It does create this perverse economic incentive for folks to charge more and more and more because they can get paid for it,” Sanders said.

An example may be Bayonne Hospital Center, which charged the most of any of 65 hospitals in the state for eight of the 10 most common services for Medicare patients. Bayonne has many out-of-network patients, Sanders noted.

Sanders said expensive charges have little to do with how expensive it is for hospitals to provide the service. “It’s not really based in reality,” Sanders said of the figures.

At the other end of the scale from Bayonne is Cape Regional Medical Center in Cape May Court House. It had the lowest charges in the state for seven of the 10 most common services, although it still charged at least twice as much as Medicare paid for each service.

Cape Regional chief financial officer Mark Gill attributed the relatively low rates to a focus on providing care efficiently, noting that his hospital has some of the lowest costs in the state.

“We do try to keep an eye on our peers in Atlantic (County) and even Cumberland County, in case people do price-shopping,” said Gill, adding: “We’re a very low-cost, efficient hospital.”

Gill said he was pleased that CMS released the information for free. The agency previously charged a fee for the data.

“The more transparent it is, the more information that’s out there,” Gill said.

Handful of conglomerates could dominate NJ providers in coming years, panelists predict


He added that he believes there is a strong link between the efficiency of the care that’s provided and the quality of the care. As an example, a hospital that is able to treat patients quickly can release them and reduce the chances of hospital-generated infections.

New Jersey Hospital Association spokeswoman Kerry McKean Kelly said that much of the information about Medicare charges isn’t relevant to insured patients.

The payment system has “evolved over time and we do realize that there is not a lot of sense behind the data,” she said.

Even most uninsured patients do not pay the hospital charges, since a 2009 state law limits charges to 15 percent above what Medicare would pay for all patients whose household income is less than 500 percent of the poverty line, which currently amounts to $57,450 for a single person or $117,750 for a family of four.

Healthcare Leaders Envision a Shared FutureBy Andrew Kitchenman,

The large healthcare systems of today could become giants in a decade.

That vision was summoned up by healthcare leaders yesterday at an event focused on the state of health in New Jersey.

Robert Wood Johnson University Hospital Hamilton President and CEO Anthony “Skip” Cimino said he envisions “five or six” systems dominating healthcare in New Jersey by 2023.

“The model that we see today will be dramatically different,” with much greater coordination of care and focus on patient outcomes, Cimino predicted toward the end of an annual conference hosted by the nonprofit Council on State Public Affairs at the RWJ Hamilton Center for Health & Wellness in Hamilton.

Cimino also expects the merger of Rutgers University and the University of Medicine and Dentistry of New Jersey to strengthen the state’s status as a center for healthcare research.

Not only will there be fewer hospital systems, but more healthcare will be delivered outside of hospitals, said Dr. Kenneth N. Sable, executive vice president and chief operating officer of Saint Peter’s Healthcare System.

Sable added that as hospitals build up strength in specialized areas, different hospitals in the same region will offer different services.

“It’s not that every hospital will do everything for all people,” he said in response to questions from healthcare attorney James A. Robertson, a partner with McElroy, Deutsch, Mulvaney & Carpenter LLP in Morristown, who led the discussion.

Sable also predicted that the overall health of the state’s population will improve. He pointed to improvements in pediatric care, including a reduction in dangerous sepsis infections, as a sign of good things to come for the overall population. He added that he expects less need for hospital stays for patients with a wide range of conditions.

“I think this recipe changes the need for these huge, many-building hospitals all over the place, and that consolidation will be part of that,” Sable said.

Dr. Mary Campagnolo, president of the Medical Society of New Jersey, said consolidations will occur across traditional boundaries, creating “conglomerates” that are no longer recognizable as hospital-centered systems.

“We’re seeing pharmacies joining in with accountable care organizations and physician groups,” said Campagnolo, referring to arrangements in which an insurer attempts to compensate providers for how well they perform and keep costs down, rather than for each service they provide.

The new conglomerates “may not be the traditional health systems as we think of them,” said Campagnolo, chief of the family medicine department at Virtua-Memorial Hospital in Mount Holly.

Campagnolo added that doctors will increasingly become “leaders of teams,” which include other providers.

She added that while she hopes doctors continue to do in-person diagnoses of patients, they will also be basing more decisions on data that’s been collected on patients.

Campagnolo said having hospitals that are more specialized could also reduce the patchwork of healthcare services in the state.

“It should drive down costs, if it’s not doing that, then we’re probably not doing the right things so that New Jersey can become a much more efficient state for healthcare,” she said.

Campagnolo said after yesterday’s event that it’s essential for healthcare providers to continue to make decisions based on the needs of patients, regardless of how large healthcare conglomerates become.

May 2013 11

The discussion on the future of long-term future of healthcare followed panel discussions on the implementation of the health benefit exchange and Medicaid eligibility expansion, key features of the 2010 Affordable Care Act that are both scheduled to beginning covering more New Jersey residents on January 1, 2014.

Seton Hall health law professor John V. Jacobi noted the challenge involved in informing uninsured residents about the new options. The exchange will be an online marketplace in which uninsured people can buy coverage and learn whether they are eligible for federal subsidies.

The panelists said the ACA is primarily focused on expanding access to care, but further work is needed to control healthcare costs.

Former Gov. James Florio said the biggest issue with implementing the ACA will be “impatience – people wanting to have all these things resolved sooner rather than later and that’s somewhat unreasonable, in the sense that we’re talking about one-fifth, roughly, of the gross domestic product, represented in healthcare costs. So we have to have a little bit of patience as we try to reconcile costs, quality and access.”

Legislative Leaders Put Heat on For-Profit HospitalsSweeney attacks Salem hospital for stonewalling union, Weinberg demands financial transparencyBy Andrew Kitchenman,

As more hospitals switch to for-profit status, state lawmakers are demanding more financial openness and more open-mindedness in dealing with labor unions.

Senate President Stephen M. Sweeney (D-Cumberland, Gloucester, and Salem) joined nurses’ union leaders in Salem yesterday in calling on the for-profit owner of Memorial Hospital of Salem County to negotiate with the union.

“A big concern about what is going on in this state and this nation right now is the for-profit hospitals,” Sweeney said. “No one’s against for-profit (status), people making money and things working. We are against sacrificing healthcare and that care is being driven by the bottom line, rather than what’s best for the patient.”

Sweeney noted that he supported the hospital’s conversion to for-profit status in 2002, when it became the first for-profit hospital in the state.

Like officials in other communities since then, he had expressed concern that the local hospital could close. However, he said Tennessee-based hospital owner Community Health Systems hasn’t lived up to its commitments since 2002.

“I was here when they made the promises and they tried to get out of nearly every single promise they made,” said Sweeney, citing a proposal by CHS to close the Salem hospital’s maternity ward. “All they care about is taking money out of this state, and not really about the people who live here.”

Sweeney said the company’s refusal to negotiate with the Health Professionals and Allied Employees is “disgraceful,” adding, “Even with some of the worst employers, you can make some headway." He also said that CHS “is the worst of the worst, and it’s a disgraceful example of what’s wrong in this country today.”

The hospital has been challenging a September 2010 vote by the nurses to form a union. The appeal is on hold due to a legal dispute over National Labor Relations Board members.

Sweeney and HPAE officials alleged that nurses feel they can’t advocate for patient safety because they fear losing their jobs. Hospital officials denied the allegation. Hospital spokesman George Gennaoui said in a statement that the hospital is committed to “quality, safe care for our patients,” appreciates its employees and empowers them to “speak about any issues of concern.” In recent years, the number of proposed for-profit conversions has increased in New Jersey, including the recent Prime Healthcare Services of California announcement that it buying the three-hospital St. Clare’s Health System.

The HPAE has challenged Prime’s purchase of St. Mary’s Hospital in Passaic and Saint Michael’s Medical Center in Newark, but a separate union, JNESO, has been negotiating contracts with the company and has criticized the HPAE for interfering with the deals.

Sen. Loretta Weinberg (D-Bergen) introduced a bill on April 29 that would require for-profits to disclose several pieces of financial information.

Weinberg said she decided to introduce the measure after Gov. Chris Christie conditionally vetoed a bill that would have required for-profits to disclose the same information as nonprofits.

While Weinberg said she wouldn’t predict whether Christie would be more welcoming of the new bill, she added: “I’m hopeful that he will live up to what he claims about himself, that everything that he’s involved in is transparent and open.”

This bill would not require for-profits to disclose all of the information that nonprofits must disclose, but would require that hospitals put three years of audited financial statements on their websites.


She added that the state’s growing popularity among for-profit hospital companies might not reflect a long-term commitment to the facilities.

“We’ve become a mecca for that and we really need to require them to meet minimum standards of transparency so that we know that these for-profit companies want to be in the healthcare field not the real-estate field.”

Sweeney supports the bill. “If you’re going to be taking state dollars, then you should open your books, just like everyone else does,” he said.

HPAE President Ann Twomey said the union isn’t opposed to all for-profits, but believe they should be held to the same financial standards as nonprofits and make the same commitment to benefiting their communities. She said CHS hasn’t been doing that.

“They should do the right thing, sit down, recognize the results of the election which was won fair and square by secret ballot,” Twomey said.

Hospitals See Rapid Progress in Reducing Infections, Other Preventable ProblemsAssociation credits statewide improvement to federally backed initiative under Affordable Care ActBy Andrew Kitchenman,

New Jersey hospitals are celebrating a major drop in hospital infections and other preventable problems last year, due to a federally funded initiative that’s part of the Affordable Care Act.

The effort, led by the New Jersey Hospital Association, is aimed at improving the quality of care offered at hospitals by reducing preventable illnesses that originate in healthcare facilities. These problems are a major cause of concern at hospitals and reducing their occurrence is a goal of federal health reform.

The association has been holding face-to-face learning sessions in which doctors and nurses share their experiences in reducing the spread of infections, readmission rates, and other preventable problems.

“It’s really bringing together clinicians and focusing on what are the best practices,” said Aline Holmes, director of the NJHA Institute for Quality and Patient Safety and a registered nurse.

It took only one year for hospitals to achieve broad-based improvements, according to an association report released yesterday. The

May 2013 13

initiative, known as Partnership for Patients, was launched at the beginning of 2012 and is scheduled to continue through the end of this year.

The state saw improvements in 11 of the 12 quality categories being tracked by the federally funded initiative. The improvement in the readmission rate is particularly significant for the state. Hospitals with high levels of readmissions face financial penalties under a separate ACA program.

An NJHA affiliate is one of 26 “hospital engagement networks” across the country that is aiming to reduce the 12 preventable problems by 40 percent from 2011 to 2013.

“It was a full-court press,”. Holmes said.

Along with seeing drops in infections from colon surgeries, hysterectomies, and knee replacement surgeries, the hospitals improved in areas ranging from hospital readmissions, which fell by 6.4 percent, to pressure ulcers, which fell by 65.2 percent.

These dramatic reductions show hospitals can prevent problems like these from occurring if they focus on them and apply lessons learned from the success stories of other healthcare providers.

New Jersey hospitals have a poor track record in some of these problem areas, including readmissions, compared with hospitals in other states.

The only area where improvement didn’t occur was in early elective deliveries. However, most hospitals in the state have changed their policies to reduce these cases, which should also reduce the number of induced and caesarean births, Holmes said.

The report is a sign of progress in tackling an important issue, according to David Knowlton, president and CEO of the New Jersey Health Care Quality Institute, which has promoted efforts to reduce hospital-acquired infections.

He noted that when state officials increased public reporting of hospital-acquired infections, “the hospital association, instead of pushing back, actually embraced it.”

The one-year drop was the result of years of work focusing on these issues, according to Dr. Anthony G. Slonim, executive vice president and chief medical officer of Barnabas Health.

“What we’ve seen in a variety of other places and approaches is that teamwork really matters,” said Slonim, adding the success is a result of collaboration between hospitals, the association and the federal Centers for Medicare & Medicaid Services (CMS), which launched the initiative.

For example, the sessions drew on years of work by the association and hospitals in reducing urinary infections from catheters, by ensuring that catheters are only used when appropriate and removing them as soon as possible, Holmes said. In addition, changing the material that is applied to the skin before the line is inserted has reduced central line infections.

Holmes said it can be helpful for doctors and nurses to hear from professionals from other organizations.

“They can serve as resources so that if organizations get stuck or they’re not seeing the kind of improvement they want, it can be helpful to talk to somebody outside,” Holmes said.

Holmes expressed hope that the 62 hospitals that participated in the initiative will achieve 40 percent reductions by the end of the project.

“I do think we’ll be there,” Holmes said. “We’ve seen a lot of progress.”

She added that the rate of hospital readmissions is the most difficult to reduce.

CMS is scheduled to inform local networks like the NJHA in October whether the initiative will be extended for a third year.

Group Seeks to End Recertification Mandate for DoctorsFederal lawsuit aims to end expensive, time-consuming process required for hospital staff physiciansBy Andrew Kitchenman,

A lawsuit lawsuit filed in Trenton this week is seeking to end the requirement that doctors be recertified by professional specialty boards to serve on hospital staffs.

The lawsuit filed in U.S. District Court by the Association of American Physicians & Surgeons also asks that the American Board of Medical Specialties repay doctors for the cost of recertification.

Under recertification, doctors must complete a series of requirements, including a medical test, and pay fees to one of the 24 specialist boards that are members of the ABMS.

Recertification, also known as maintenance of certification, is usually done every 10 years. Recertification requirements have grown since the current system was established in 2000. Since then, recertification has become tied to whether doctors can maintain their licenses and serve at hospitals.


Opponents of the process have expressed concern that it is costly and time-consuming. The lawsuit alleges that the time spent by doctors seeking recertification cuts into the time they can spend with patients.

“There’s a lack of evidence for any benefit from this recertification,” said Andrew L. Schlafly, a Far Hills attorney and the counsel for the Association of American Physicians & Surgeons, which a national organization opposed to government intervention in healthcare. The lawsuit asks that the ABMS be ordered to stop seeking agreements with hospitals and state medical boards that require recertification and to declare existing agreements null and void.

Board officials rejected the claims in the lawsuit, citing a series of studies that have found benefits from recertification.

“We strongly dispute the claims made by AAPS,” board spokeswoman Karen Metropulos wrote in an email, adding that the organization stands by recertification “as an important voluntary program of lifelong learning, self-assessment and quality improvement that offers value to both physicians and their patients.”

The lawsuit cites the experience of an anonymous New Jersey doctor, identified only as “J.E.” The doctor was forced to leave the staff of Somerset Medical Center after 29 years because he wouldn’t comply with recertification, according to the lawsuit.

Schlafly said the doctor wasn’t identified due to concerns over potential retribution.

“Anytime anyone challenges hundreds of millions of dollars like this, they’re going to go negative,” Schlafly said.

While a major component of recertification is continuing education required of doctors, Schlafly said that was the target of the lawsuit. Instead, the lawsuit was prompted by other components, including a test of medical knowledge. Schlafly cited a question asked of a plastic surgeon about how a technician would conduct an x-ray as an example that had no practical value.

“Good physicians wouldn’t be able to get their licenses renewed by the state if they don’t get recertified,” Schlafly said. He added that the lawsuit isn’t challenging initial certifications, which he likened to college degrees.

The association isn’t alone in opposing recertification. In 2010, the New England Journal of Medicine asked doctors] whether they would recommend that another doctor seek recertification if given a choice – 63 percent recommended against it. Recertification fees range from $1,250 to $4,820 depending on the specialty, according to a 2012 New England Journal of Medicine article.

Board officials have said that recertification is vitally important and reflects doctors’ commitment to maintaining their standards.

“Certification Matters,” according to a statement on the board website. “And ultimately, the measure of physician specialists is not merely that they have been certified, but how well they keep current in their specialty.”

The board has 21 days to respond to the suit, which was filed Wednesday.

May 2013 15

Christie: New Jersey opts for full Federal Health ExchangeNew Jersey’s health insurance exchange, the marketplace where people will be able to buy insurance with federal subsidies starting next year, will be run by the federal government — not by the state or a partnership of the state and federal government.

The deadline for telling the federal Department of Health and Human Services whether the state would opt to partner with the federal government on the exchange, Governor Christie told Secretary Kathleen Sibelius that “federal operation of the exchange is the most responsible choice.”

This came as no surprise after he twice vetoed legislation last year to set up a state-run exchange. And it aligned with 22 other Republican governors who saw their passive resistance as a way to thwart implementation of President Obama’s health care law.

Still unclear is what the governor will decide on a second key component of federal health reform — expansion of Medicaid, the state-federal insurance program for the poor, to include childless adults with incomes below a certain level. The response of Republican governors has been less consistent, with some saying the economic benefits to their states from billions in federal subsidies outweigh ideological concerns.

The governor has not indicated a preference on Medicaid, but may do so in his budget address this month. There is no deadline for the Medicaid decision, other than the practical one of enabling people to enroll by Jan. 1 if it expands.

The new federal mandate requiring people to have health coverage takes effect Jan. 1.

An estimated 250,000 New Jersey residents are expected to buy coverage on the insurance exchange in its first year, with the number eventually growing to 400,000. The experience of shopping online for insurance is not expected to be too different regardless of whether the federal or state government runs it.

Determining whether shoppers on the exchange are eligible for subsidized insurance or Medicaid will require the transfer of data between state and federal computer systems, and the governor committed his administration to help make that work. He identified two officials — the state insurance commissioner and the state Medicaid director — who will coordinate with the federal government.

“As we move towards open-enrollment on the new, federally designed and operated exchange, my administration looks forward to working with your department,” his letter said.

Advocates for a full state embrace of Obama’s health care law said the governor’s decision came as no surprise, but was disappointing.

Over the last two years, the Christie administration received nearly $9 million to study the best form of an exchange for New Jersey.

The “hands-off policy” the governor has chosen “is a big change for a state that … has been in the forefront in protecting consumers and providing affordable health coverage to uninsured children, families and people with disabilities,” said Raymond Castro, an analyst with New Jersey Policy Perspective, a progressive think tank.

But “given the complexity of the challenge and the lateness of the hour, the governor’s decision to cede all authority for the exchange is probably the right one,” he said.

By waiting until the final day for a decision, the governor left New Jersey in a difficult position, said others.

“New Jersey is substantially behind in preparing to launch a program that must have the capacity to serve an estimated 1 million people” eventually, said Dena Mottola Jaborska, the spokeswoman for New Jersey for Health Care, a coalition that supports President Obama’s health care law. Christie’s choice was a “missed opportunity to shape a state exchange tailored to the specific needs of New Jersey,” she said.

Conservatives, however, said it was best to leave the creation of a bureaucracy — with all the problems they anticipate — to the federal government.

“We think it’s a wise move,” said Steve Lonegan, state director of Americans for Prosperity, a Tea Party affiliate. “Our taxpayers will benefit from leaving this to the federal government.”

Democratic lawmakers, who have pushed for both a state-based insurance exchange and expansion of Medicaid, said they still hoped to play a role in health reform in the state.

The law allows the state to take over operation of the exchange in the future.

With that in mind, said state Sen. Nia Gill, D-Montclair, “we must ensure adequate oversight and involvement by the legislative branch of government.” She plans to introduce a measure to create a legislative task force to do so, she said.

Gill and Assemblyman Herb Conaway, chairman of the Assembly Health Committee, also wrote to Sibelius on Friday, asking her to consider the two bills Christie vetoed as Sibelius sets up an exchange for New Jersey.


Health Law Update

HEALTH LAW UpdateAssembly bill A-3970 (introduced April 4, 2013), would, if passed into law, invalidate any covenant, contract or agreement not to compete, not to disclose or not to solicit entered into by an individual with his or her most recent employer, if the individual is found to be eligible for unemployment insurance benefits. As currently written, the bill would not apply to any such covenant or agreement in effect on or before the date of enactment into law.

Senate bill S-2678 (introduced April 15, 2013, with identical Assembly bill A-4026 introduced April 29, 2013) would amend the Physician Assistant Licensing Act to revise licensure requirements for physician assistants and create a physician-delegated scope of practice for physician assistants.

Assembly bill A-3878 (passed by the Assembly on April 29, 2013 and introduced in the Senate on April 15, 2013 as S-2673) would require the Commissioner of Banking and Insurance to establish a public awareness campaign about the new federally-required health insurance exchange.

Senate bill S-2669 (introduced April 15, 2013) would establish a three-year Medicaid demonstration project to cover room and board services for certain terminally ill patients in the home or other non-institutional setting.

Assembly bill A-2669 would revise the Health Care Quality Act to, among other things, require health insurance carriers that offer a managed care plan to continue to cover treatment for a patient suffering from a chronic condition, rather than discontinuing coverage because the carrier made changes in its policy concerning the medical necessity of the treatment.

For additional information, contact:

Mark Manigan / 973.403.3132 / [email protected]

John D. Fanburg / 973.403.3107 / [email protected]

Pending Bills May Impact NJ Health Care Providers

May 2013 19

The U.S. Department of Health & Human Services (HHS) recently issued proposed rules for Health Insurance Exchange Navigators. Beginning on October 1, 2013, in accordance with the federal health reform law, individuals and small businesses will be able to purchase private health insurance through either state-based exchanges, or through federally-facilitated exchanges for states that did not elect to establish a state-based exchange, such as New Jersey. Coverage is to be effective January 1, 2014.

Exchanges will be directed to award grants to Navigators that will provide fair and impartial information to consumers about health insurance, the exchange and insurance affordability programs. Navigators will not be authorized to make eligibility determinations, but will be able to help consumers through the eligibility and enrollment process, and will help qualified individuals make informed decisions during the health plan selection process.

Under the proposed rules, a Navigator may not be a health insurance issuer and should not receive compensation from health insurance issuers in connection with enrollment of qualified individuals or employees of a qualified employer. Each exchange must have at least two entities certified as Navigators, one of which must be a non-profit entity.

For additional information, contact:

Carol Grelecki / 973.403.3140 / [email protected]


HHS Issues Proposed Rules for Health Insurance Exchange Navigators

Section 501(r) of the Internal Revenue Code, enacted as part of the health reform law, requires non-profit hospitals to (i) conduct a community health needs assessment (CHNA) at least once every three years; (ii) establish financial assistance and emergency care policies; (iii) establish limitations on charges for emergency care; and (iv) set policies and procedures relating to billing and collection. A non-profit hospital (including a hospital that is part of a system) that fails to meet these requirements may face a $50,000 (per hospital if part of a system) excise tax and/or revocation of non-profit status (for willful or egregious violations).

Under recently-proposed Internal Revenue Service regulations, to conduct a CHNA, a hospital must (a) define the community it serves; (b) assess the health needs of that community by identifying and prioritizing significant health needs of its community and available resources to address those needs; (c) take into account input from people representing the broad interests of the community, including those with special knowledge or expertise in public health; (d) document the CHNA in a writing that is adopted by the hospital’s authorized body, which includes a description of the processes and methods used in the CHNA; and (e) make its last two CHNA report widely available to the public, both on its website and available for public inspection at the hospital. The report must also document how the hospital plans to address significant community needs or why it does not plan to address them. While hospitals may conduct joint CHNAs with other facilities servicing the same communities, each hospital must document its own specific CHNA report.

For more information, contact:

Todd C. Brower / 973.403.3103 / [email protected]

Kevin M. Lastorino / 973.403.3129 / [email protected]

IRS Proposes Rule on Community Health Needs Assessments

Last month, an unlicensed, New Jersey one-room outpatient surgery center filed suit against a Cigna subsidiary and other unnamed plans for wrongfully denying reimbursement for out-of-network services. The surgical center is registered with the New Jersey Department of Health and certified with Medicare, but is a non-participating or “out-of-network” provider in connection with the relevant health insurance plans. According to the amended complaint filed in the action, the services at issue were provided to patients who were covered by plans administered by Cigna affiliate, Connecticut General. The plaintiff alleges the surgical center and/or the patients were informed by insurance company agents that the plan would cover the procedures, and the patients need not obtain pre-authorization or pre-certification prior to receiving services, which included spine procedures and pain management injections. The plaintiff also alleges the patients provided executed assignments of benefits in connection with the reimbursements for the procedures.

The plaintiff seeks damages for, among other things, arbitrary and capricious breach of insurance plans subject to ERISA and breach of contract relating to non-ERISA plans. As of the writing of this article, the defendants had not yet filed an answer to the complaint.




NJ One-Room Surgical Center Sues Cigna for Denial of OON Benefits


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The Centers for Medicare & Medicaid Services and the U.S. Department of Health & Human Services (HHS) recently issued proposed rules revising the federal Stark law exception and the federal anti-kickback statute (AKS) safe harbor for the donation of electronic health record (EHR) items and services. Both the Stark exception and AKS safe harbor were published in 2006 to promote the use of EHR systems by allowing physicians to accept EHR donations from referral sources. To qualify for these protections, EHR systems had to be interoperable within the previous twelve month period, as determined by a certification body recognized by HHS. The exception and safe harbor are set to expire December 31, 2013.

The proposed rules amend the provisions for interoperability by removing the twelve-month time period within which the system must have been certified and clarifying that the Office of the National Coordinator for Health Information Technology is responsible for recognizing certifying agencies. Additionally, the proposed rules extend the sunset date for the exception and safe harbor to December 31, 2016, or later, and limit the exception and safe harbor to certain health providers, such as hospitals, group practices, prescription drug plan sponsors and Medicare Advantage organizations. Comments are due by June 9, 2013.



Debra C. Lienhardt / 973.364.5203 / [email protected]

CMS and HHS Release Proposed Rules Revising Stark Exception and Anti-Kickback Statute Safe Harbor for EHRs

May 2013 21

As you have heard, parameters for the enforcement of HIPAA and HITECH that govern how Providers handle, store, protect and share protected health information (“PHI”), have been developed in the Omnibus Regulatory Action, published in the January 25, 2013 edition of the Federal Register. A complete overview of the regulation is beyond the scope of this article. Instead, this article presents a succinct overview of the steps providers must use to evaluate whether an action involving the unauthorized acquisition, access, use or disclosure of PHI, rises to the level of a breach under HITECH that would trigger the notification requirements.

Two significant developments are that: (1) not every breach is reportable; and (2) the burden has shifted to Providers to demonstrate that the probability that PHI was compromised is low, and thus not reportable.

To clarify, the Omnibus Rule sets forth that any disclosure, access, use or acquisition of PHI which is not permitted by statute, is presumed to be a breach. Also, a provider must comply with the notification requirements of HITECH, unless the Provider can show that there is a low probability that PHI has been compromised. Significantly, the Provider must now document the analysis applied to evaluate whether a reportable breach has occurred. Remember, the burden of proof is on the provider, so it is important to have a policy and process in place.

The essential analysis can be broken down into the following three (3) steps:

STEP 1: DOES THE ACTION FALL UNDER ONE OF THE EXCEPTIONS TO THE DEFINITION OF A BREACH?

The Final Omnibus Rule (hereinafter “Rule”) defines a breach as “the unauthorized acquisition, access, use, or disclosure of [PHI] in a manner not permitted under subpart E of this Part, which compromises the security or privacy of the [PHI].”

Also similar to the statutory language of HITECH, the Rule includes three (3) exceptions to the definition of a breach. The exceptions are meant to cover situations that were never intended to be subject to the Notification Requirements or Penalty Provisions of HITECH. The following are the exceptions with examples:

Exception 1: An accidental and good-faith acquisition/access/use of PHI by a workforce member in the course of their relationship with the Provider that is not further disclosed.

Example: Provider’s biller accessed Jane Doe’s chart to enter a recent visit. She accidentally typed “John Doe” instead of “Jane Doe”, and John Doe’s electronic medical record popped up on her computer screen giving her access to John’s PHI. She immediately realized her mistake and closed John Doe’s electronic record. The information she viewed was not further disclosed.

Exception 2: An accidental disclosure and/or receipt of PHI between two persons authorized to access PHI at the same Covered Entity.

Example: Two doctors at the same hospital are discussed treatment options for a patient. The treating doctor inadvertently disclosed some portion of the patient’s PHI, that was not necessary for treatment. That PHI was not further disclosed by the receiving doctor, unless or until he had specific authorization to disclose.

Exception 3: A disclosure of PHI where the Provider has a good faith belief that the unauthorized person to whom the information was disclosed could not have retained the information.

Example: A Provider’s receptionist accidentally handed Patient A discharge papers for Patient B. As the receptionist made the hand-off, she realized her error and immediately takes the papers back from Patient A.

If one of the three exceptions apply, skip STEP 2, and go straight to STEP 3.

If the action does not fall under one of the three exceptions, go to STEP 2.

STEP 2: DID THE ACTION COMPROMISE THE SECURITY OR PRIVACY OF THE PHI?

You, the Provider, have determined that the unauthorized access, acquisition, use or disclosure does not fall under one of the three exceptions. There is still hope. The action may not rise to the level of a breach triggering the notice requirements.

To be a reportable breach, the privacy and security of the PHI must have been compromised:

Scenario A: A Provider placed medical billing papers in a sealed envelope to deliver to their Business Associate. Provider took the train over to the Business Associate’s office and accidentally left the sealed envelope on the train. After twenty minutes passed, the Provider realized his mistake, returned to the train station and found the envelope, still sealed, sitting in the lost and found.

Scenario B: A Provider leaves an unencrypted laptop containing the PHI of patients on a plane. The laptop is never recovered..

Under the Final Omnibus Rule, the Department of Health and Human Services (HHS) has replaced the subjective analysis of the risk of harm to the individual, with a 4-part analysis intended to be more objective. This analysis is applied on a spectrum.

If you reasonably believe the PHI has been compromised in any given scenario, you must notify, and do not need engage in further analysis.

However, if it is arguable that there is a low probability that the security and privacy of the PHI has been compromised, you must apply the four factor test in STEP 3.

A Glimpse into the Security Breach Analysis Required of Physicians


Background

In 2009, the Health Information Technology for Economic and Clinical Health (HITECH) Act, a part of the Recovery Act, created the Medicare and Medicaid Electronic Health Records (EHR) Incentive Programs to promote the adoption of EHRs in support of the ultimate goals of improving the quality of patient care and reducing health costs. Through this program, eligible hospitals and doctors earn incentives by demonstrating “meaningful use” of certified technology, which means that health care providers use EHRs in ways that improve care and lower costs. Examples of “meaningful use” include electronic prescribing of medications and ensuring patients have access to their digital records.

In addition to providing incentive payments, the HITECH Act calls for assistance and technical support to help providers implement EHRs, enables coordination within and among states to support the implementation of EHRs, and develops a properly trained health IT workforce to support providers in becoming meaningful users of certified EHRs.

These programs, administered by the Centers for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator of Health Information Technology (ONC), are building the foundation for every American to benefit from an EHR as part of a modernized, interconnected, and improved system of care delivery. By putting in place EHR systems that meet rigorous functionality and ease-of-use standards, providers and patients will reap tangible benefits in quality and affordability. These include easy access to health records and data, reminders and alerts for providers and patients, and reductions in medical errors.

The Affordable Care Act includes numerous reforms to improve the quality of health care and lowers costs for taxpayers and patients. Health IT is critical to implementing and making these new payment and delivery models work. Health IT provides the kind of smart data and analytics that is already helping programs such as Accountable Care Organizations, bundled payments, patient-centered medical homes, and value-based purchasing. For example, CMS has reported a significant decrease in the hospital readmission rate of Medicare patients returning to the hospital after being discharged (CMS Lower Costs, Better Care Fact Sheet). After fluctuating between 18.5 percent and 19.5 percent for the past five years, the 30-day all-cause readmission rate dropped to 17.8 percent in the final quarter of 2012, preventing 70,000 readmissions last year. Health IT enabled hospitals to measure and achieve these results.

Progress to Date

Robust Participation in the EHR Incentive Programs:

• Hospital Participation:More than 85 percent of eligible hospitals are participating in theMedicare andMedicaid EHRIncentive Programs, and more than 75 percent have received incentive payments for meaningfully using EHR technology as of March 2013.

CMS Fact Sheet: A Record of Progress on Health Information Technology

STEP 3: ANALYSIS UNDER THE 4-FACTOR TEST

If a Step 1 exception applies; and/or it is reasonably possible that the disclosure poses only a low probability that the security and privacy of the PHI has been compromised, you must apply Step 3, and document your analysis of the following factors:

(1) The nature and extent of the PHI involved, including the types of identifiers and the likelihood of re-identification;

(2) The unauthorized person who used the PHI or to whom the disclosure was made;

(3) Whether the PHI was actually acquired or viewed; and

(4) The extent to which the risk to the PHI has been mitigated.

Only future enforcement actions and ensuing litigation will unearth HHS’s intended application of this four factor test. For now, it is clear that the Final Omnibus Rule shifts the burden to the Provider to prove that the risk is low that PHI was compromised during the purported breach, so as to avoid triggering the breach notification requirements. Providers must proactively institute safeguards and best practices to both prevent and properly handle security breaches of PHI.

Failing to do the proper analysis or to comply with the appropriate notification requirements can be costly. Therefore, it is essential for providers to seek good counsel in navigating this very complex, confusing and uncharted territory. Look out for future articles discussing trends in enforcement, and for tips on how to mitigate the risk at issue.

___________________________________________

Written by the partners of Garcia Hobbs Law, LLC, Rebecca Hobbs, Esq. and Alexandra Garcia, BSN, Esq., Chair of the Health, Hospital & Technology Group of the Firm. Please reach out to us regarding the information in this article, any other legal issues, and to learn about our Security Breach Risk Assessment & Response Plan, and our Comprehensive Legal Service Plan for medical practices.

NJ Hi-Tech

• Physicians and otherHealth Care Provider Participation:More than 388,000 of the nation’s eligible professionals haveregistered to participate in the Medicare and Medicaid EHR Incentive Programs, representing 73 percent of all providers eligible to participate. More than 230,000, or 44 percent of all eligible professionals, have received an EHR incentive payment for meaningfully using EHR technology as of March 2013.

• AssistancefromRegionalExtensionCenters:HITECHfundsestablished62HealthInformationTechnologyRegionalExtensionCenters (RECs) to offer technical assistance and guidance that is critical to accelerating the provider adoption and meaningful use of EHRs, particularly in rural areas and other underserved settings.

• RECsareprovidingassistanceandsupporttomorethan44percent(130,000)ofprimarycareprovidersand48percent(20,000) of Nurse Practitioners nationwide.

• Morethan80percentofallFederallyQualifiedHealthCentersareenrolledwithaREC.

• EffectontheHealthITMarketplace:FederalinvestmentandstandardsettinghavehelpedtocreatearobustmarketforeHealth IT products. As of March 2013, there are 941 vendors providing more than 1,700 unique certified EHR products.

• RapidAdoptionofAdvancedTechnology:SurveydatashowsthattheHITECHActhasdramaticallyacceleratedproviders’use of key health IT capabilities nationwide:

• E-Prescribing:Office-basedphysicians’useofe-prescribinghasincreasedfrom0.8percentinDecember2006to53percentthrough January 2013, and more than 94 percent of all pharmacies are now actively e-prescribing.

• Hospitals:Between2008and2012,thenumberofhospitalsusingEHRsystemswithcertainadvancedfunctionalitiesthatgo even beyond the requirements of Meaningful Use Stage 1 (including physician clinical notes and electronic imaging results) more than quadrupled from 9.4 percent to 44 percent.

• Doctors:PhysicianadoptionofEHRsystemswiththesameadvancedfunctionalitiesmorethandoubledbetween2008and2012, from 17 percent to 40 percent.

Economic Impact

• AccordingtotheBureauofLaborStatistics,morethan50,000healthIT-relatedjobshavebeencreatedsinceHITECHwasenacted.

• AsofJanuary2013,communitycollegeshavetrained17,049professionalsinhealthIT,andasofSeptember2012,universitieshad graduated over 820 post-graduate and masters-level Health IT professionals. This is the result of four ONC-supported workforce development programs that are helping to train the new health IT workforce to meet the increased demand for these workers.

• AsofFebruary2013,theMedicareandMedicaidEHRIncentiveProgramshavepaid$12.6billioninincentivestohospitals,doctors, and other health care professionals.

Other Key HITECH Programs & Initiatives

• BeaconCommunity Program:This grantprogram funds 17pioneering communities across the country that are usinghealth IT as a foundation for bringing together doctors, hospitals, local health program administrators, and patients to achieve measurable improvements in health care quality, safety, efficiency, and population health. For example, the Beacon Communities in the Mississippi Delta and Southeast Michigan are working to improve diabetes care through the use of IT-enabled care management and coordination strategies. The Keystone Beacon in Pennsylvania and the San Diego and Maine Beacon Communities are using health IT to reduce emergency department visits and hospital admissions and readmissions.

• StateHealthInformationExchangeProgram:Thisgrantprogramsupportseffortsin56statesandterritoriestosetuphealthinformation exchange (HIE) capability among clinicians and hospitals within and across state lines. The 56 HIE entities are increasing the connectivity of health information between providers to help improve the quality and efficiency of care.

• MedicaidFundingforHealthInformationExchanges:ThisprogramprovidesadministrativefundingtohelpstatesbuildHITinfrastructure and support enrollment of providers in the Medicaid program. States must demonstrate a sustainable HIE business model to qualify for funding. This program facilitates the adoption and use of HIE and helps Medicaid providers meet meaningful use criteria.

• StrategicHealth ITAdvancedResearchProjects (SHARP)Program:Thisgrantprogramfunds innovations inhealth IT toaddress well-documented problems that have impeded HIT adoption in areas such as health IT security and the secondary use of EHR data.

Moving Forward

HHS recently announced its 2013 Health IT Agenda, a plan to accelerate health information exchange (HIE) development and build a seamless and secure flow of information essential to transforming the health care system in 2013. Steps include:

• SettingAggressiveGoalsfor2013:HHSissettingthegoalof50percentofphysicianofficesusingEHRsand80percentofeligible hospitals receiving meaningful use incentive payments for using EHR technology by the end of 2013.

May 2013 23

• Increasing theEmphasison Interoperability:HHSwill increase its emphasisonensuringelectronic exchangebetweenproviders and across settings of care. We will leverage HHS programs and resources to promote interoperability through multiple channels. Recently, we issued a request for information (RFI) seeking public input on policies that will strengthen the business case for electronic exchange between providers to ensure that patients’ health information will follow them seamlessly and securely where ever they access care.

• EnhancingtheEffectiveUseofEHRsthroughInitiativessimilartotheBlueButtonInitiative:Today,Medicarebeneficiariescan access their full Medicare records online. HHS is also encouraging Medicare Advantage plans to expand the use of Blue Button to provide beneficiaries with one-click secure access to their health information. An HHS challenge facilitated the creation of an app that makes information downloaded from Blue Button easy for a patient to understand and use. HHS is also working with the Veterans Administration and more than 450 different organizations to adopt initiatives similar to Blue Button to make health information available to patients and health plan members.

• ImplementingStage2ofMeaningfulUse:HHSisimplementingthenextstageoftheMedicareandMedicaidEHRIncentivePrograms, which focuses on increasing health information exchange between providers and promoting patient engagement by giving patients secure online access to their health information.

• Highlighting Program Integrity: HHS is taking new steps to ensure the integrity of EHR Incentive Programs and thattechnology is not being used to promote fraudulent activity. For example, CMS has implemented audits of providers and hospitals that have adopted health IT. CMS is also working with state program integrity directors to establish new strategies focused on claims and clinical data from these providers. In addition, EHR technology is creating spillover benefits for program integrity in other federal programs: the Social Security Administration reports that Disability Insurance initial decisions are 21 percent faster for cases based on electronic medical evidence, with greater accuracy than paper records.

CMS has also launched its eHealth Initiative to align existing Medicare and Medicaid quality measurement programs (e.g., Physician Quality Reporting System, Hospital Inpatient Quality Reporting), EHR standards and usage requirements through the EHR Incentive Programs, ICD-10 implementation, and other Health IT-focused efforts to better support the ultimate goals of improving the quality of patient care and reducing health costs. With the increased use of EHRs, providers now have the ability to use standardized processes to send quality clinical data to Health Information Exchanges, state Medicaid agencies, and CMS.


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