March 2015 - Healthcare Financial Management Association

NEWSBRIEF
NEWSLETTER OF THE SOUTHERN CALIFORNIA CHAPTER OF H.F.M.A.
Southern
California
Chapter
2014 | 2015
VOLUME 24 / NUMBER 4
WWW.HFMA-SOCAL.ORG
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MARCH 2015
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OFFICERS
Kathy Hammack, FHFMA
President
Frank P. Matricardi, DrPH, MPH
President Elect
Lynn Otani
Vice President
Brian J. Mattson
Treasurer
Robert Heinemeier
Secretary
Please enjoy this March 2015 Newsbrief issue which includes
information on chapter events that have occurred since our
Holiday issue in December. I want to extend my appreciation
to the chapter leaders, committee chairs, and the many
volunteers who contributed their time to make the events
successful. We saw many of you while attending the educational
sessions and thank you for your support of the chapter!
James Moynihan, FHFMA, MBA,CTP
Immediate Past President
Steven R. Blake, FHFMA, CPA
Advisor
DIRECTORS
Kathi Athey
Paul Bouganim
Eric Delgado, FHFMA
Kiet Lam
Joe Perry
Erin Quillen
Lisa Wada
Shery Weaver
Gretchen Works
INSIDE
THIS ISSUE
Wicked
PAGE 3
A Sweet Ending
On February 16th, we celebrated President’s Day and this issue includes an article
about the February 5th event held at the Japanese American National Museum.
There your Southern California HFMA chapter celebrated with a tribute to chapter
past presidents. Please read more in the article included in this issue.
I know that many of you attended the Region 11 Symposium in San Diego in January.
There were over 530 members and sponsors in attendance from the 7 chapters who
participate and make up Region 11. If you missed it, mark your calendars for
January 24 -27, 2016 and meet us at the Manchester Grand Hyatt in San Diego.
The chapter received the results of the member satisfaction survey in January and
the Board is reviewing the results in detail. Your feedback gives us actionable ideas
and opportunities for improving the chapter. The idea is to once again take those
suggestions as input for next year’s strategic plan with programs, locations, et cetera,
and to address those issues where possible. The good news is that the results improved
over last year by 8%. Thank you to those who responded and don’t forget that you
may also send us an email or call me any time that you have an idea or feedback.
PAGE 6
Changes to
Certification Program
PAGE 7
“Immediate Jeopardy”
PAGE 8
2015 Revised
Payment Policies
Please remember to review the upcoming events and webinars for the March 19th
Spring Education Program that will be held in Monrovia. You also have 24/7 access
with your membership to the many recorded and live webinars at HFMA.org.
I hope you enjoyed Valentine’s Day with your loved ones, and now Spring is just
around the corner!
PAGE 11
Education Outreach
Updates
PAGE 14
Kathy Hammack, FHFMA
President, HFMA Southern California Chapter
NEWSBRIEF
Southern
California
Chapter
VOL.24/NO.4 • MARCH 2015 • PAGE 2
2014-2015 CORPO RATE SPONSORS
_________________
2O14
|2O15
_________________
GOLD LEVEL
COMMITTEES
Certification
Robert Rivas, CHFP
CFO Roundtable
Eric Delgado, FHFMA
DCMS Coordinator
SILVER LEVEL
Lisa H. Wada – CHAIR
Educational Outreach/Webinars
Joe Perry
Fall Conference
James Moynihan, FHFMA, MBA,CTP
ProgressiveManagement Systems
Employee Owned
Founders Points
Shery Weaver
Government Programs
Paul Bouganim
Legislative Committee
BRONZE LEVEL
Christopher Hapak
Link Committee
Steven R. Blake, FHFMA, CPA
Long Term Care
Stephen David, CPA
Member Contact
Lori M. Kuwahara
Membership Committee
Gretchen Works
Networking/Social Committee
Erin Quillen
Newsbrief
Genevieve Nelwan
Program Planning
Lynn Otani
Region 11 Symposium
Steven R. Blake / Frank Matricardi
Revenue Cycle
Kiet Lam
Sponsorship
James M. Cummings
Student Recruitment /Scholarship
Brian Mattson
Website
Kathi Athey
Yerger Coordinator
Kathy Hammack
NEWSBRIEF
COMMITTEE & EDITORS
Genevieve Nelwan – CHAIR
Alice Dunlap – CO-CHAIR | NEWSBRIEF
Tracy Donegan – CO-CHAIR | SOCIAL MEDIA
Lisa Wada – SENIOR EDITOR
Denise Cawley
Joe Perry
PHOTOGRAPHER
Richard A. Anzalone
HFMA SO-CAL
ADMINISTRATIVE ASSISTANT
Lori M. Kuwahara
714-279-8675
714-844-9354 FAX
lori@hfma-socal.org
Why Not Join HFMA SoCal on Facebook?
Our HFMA SoCal Chapter is a part of that social connector that everyday grows in scope
and members. Keep up to date on upcoming events and other important news, or just look
at our fun posts and pictures too. Get connected now! You can request to become
a member of the Facebook page at https://www.facebook.com/groups/hfmasocal/
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 3
INkindRECOGNITION
Recognition of Companies that provide non-cash support
There are many companies that support the Southern California chapter of HFMA
but are not participants in the corporate Sponsor Program. Additionally, there are
companies that are participants in the corporate sponsor program and also
support the chapter in other ways.
In recognition of their support and belief in the chapter’s goals, the Southern California
chapter of HFMA would like to recognize the following companies:
US Bank
Progressive Management Systems
CMRE
The following companies are our newest corporate sponsors:
Medical Data Systems
S U N D A Y ,
J A N U A R Y
Turning Point
2 5
HFMA SO. CALENDAR
2015
EVENTS_______________________
_____________
_
March 19 | HFMA So Cal Spring Educational Program
7:30am - 4:00pm / Doubletree by Hilton, Monrovia, CA 91016
On Sunday, January 25th, 2015 the Southern California Chapter of HFMA
met in the heart of Hollywood for a fun-filled evening complete with food,
cocktails, and L.A.’s most popular musical, WICKED.
First, guests trickled into Wood & Vine, a New American restaurant and
cocktail bar that offers a menu of market-driven seasonal shared plates,
craft cocktails, and local small batch wines and beers. Networking and social
interactions were encouraged and accompanied by a fantastic selection of
cheeses, charcuteries, and truffle chips. Guests enjoyed a self-serve wine bar,
and as the night waned, dishes of diver scallops, lamb merguez, and chicken
and waffles for the kiddos paraded around our private party space.
Soon the wine bottles emptied and plates were cleared and we made our
way across the street to the Pantages Theater. The highlight of our evening
was fast approaching. Winner of over 100 international awards, including
a Grammy and three Tony Awards, WICKED is acclaimed as “Broadway’s
biggest blockbuster” (The New York Times) and HFMA had some of the
best seats in the house, Orchestra Center. Quickly we were thrown into the
story of The Land of Oz, The Emerald City and The Yellow Brick Road long
before Dorothy and Toto. Chandralee Schwartz (as Glinda) and Emma
Hunton (as Elphaba), better known as The Good Witch and The Wicked
Witch of The West, led the pack in a groundbreaking performance, proving
to create another successful “Night at the Pantages” with HFMA.
May 14 | Annual Chapter Awards Banquet & Ceremony
6:30 -10:00pm / Aquarium of the Pacific,Long Beach, CA 90802
May 21 | Chapter Lunch & Learn Webinar Details TBA
June 5 | Chapter Kick Off Meeting
Embassy Suites Glendale, Glendale, CA 91203
September 13-15 | HFMA Southern California and
San Diego/Imperial Chapter Fall Conferenc
Hyatt Regency Long Beach, Long Beach, CA 90802
2016
EVENTS_______________________
_____________
_
January 24-26 | Region 11 Symposium
Manchester Grand Hyatt, San Diego, CA 92101
Details on all events can be found on the chapter’s website:
www.hfma-socal.org/, click on Events Listings.
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 4
Patient-Friendly Billing:
Creating a Positive Feedback Loop that
Benefits Patient and Provider
__________________ Randy Blue, M.Ed, CRCR __________________
Patient billing traditionally hasn’t been a
focal point for customer service efforts in
healthcare. But that’s changing today as
organizations pursue the benefits of a
more patient-friendly billing experience.
___________________________________________________
Improving the patient side of revenue cycle management can
strengthen customer satisfaction, contribute to performance
bonuses, increase loyalty and generate new referrals. It can also
reduce bad debt by improving the odds that self-pay balances
will be collected in a timely fashion.
Strategies for developing patient-focused billing involve improved
communications, simplified statements and providing a single
point of contact for billing issues. Even seemingly minor tweaks
like reducing customer hold time can have a dramatic impact
on customer perceptions, studies show.
Customer Satisfaction Takes Center Stage
Customer satisfaction has emerged as a key component in the
Patient Protection and Affordable Care Act’s (ACA) overall push
to improve healthcare quality. Today, customer satisfaction data
collected through the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey is used to help
calculate performance bonuses and penalties developed under
the Center for Medicare & Medicaid’s (CMS) Hospital Value-based
Purchasing Program.1
Patient satisfaction scores figure prominently in CMS’Accountable
Care Organization quality measurement efforts, as well as the
physician performance bonuses and penalties implemented
through the Physician Quality Reporting System (PQRS).2
Beyond supporting these reform-driven programs, positive
customer experience scores generate dividends in their own right.
The continued growth of high-deductible health plans means
that consumers increasingly are shopping for care based on both
cost and perceived value.
As a result, the ability to promote customer satisfaction represents
another way for providers to differentiate themselves in a competitive environment. A positive billing experience can generate
word-of-mouth referrals and positive customer feedback on
social media sites. Significantly, a 2013 survey conducted by
Connace found that 88% of patients with highly positive billing
experiences would recommend a hospital to friends.3
And as patient financial responsibilities increase due to highdeductible plans, strengthening effective patient communications
also can translate into accelerated cash flow. That means reduced
days in A/R, reduced collection expense and less bad debt.
According to a 2014 survey by TransUnion, 75% of responding
patients stated that pre-treatment estimates of out-of-pocket
costs would improve their ability to pay for healthcare.4
Communication: Key to Patient-friendly Billing
Effective communications about a patient’s financial obligations–
provided both before and after the episode of care–are at the
heart of a customer-friendly billing process.
Organizations should make every effort to develop a system
that can give patients an accurate estimate of their total out-ofpocket expense at the time of registration or procedure check-in.
Patients who may have difficulty immediately paying their entire
balance should be given the opportunity to make installment
payments over time.
Additionally, statements submitted after care should be clearly
written and concise. Whenever possible, the balances due from
all providers involved in a care event should be consolidated
into a single, easily understood statement.
While many organizations may not yet be sufficiently integrated
to offer this service, they should nonetheless work with their
care partners to determine how such a statement could be produced. A consolidated statement is critical, since multiple bills
for what the patient rightly views as a single episode of care can
confuse and frustrate customers and lead to slow or no pay.
Patient-friendly billing can be further enhanced by providing a
dedicated customer service contact for patient questions about
billing issues. The ability for patients to connect with a specific
individual conversant in all financial aspects of their care should
help reduce consumer frustration and ill-will. This level of service
can be taken a step further if the billing representative offers to
facilities or government agencies on the patient’s behalf.5
Continued on page 5
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 5
Patient-Friendly Billing that Benefits Patient and Provider
__________________ Continued from page 4 __________________
Best Practices from Remote Call Centers
Since telephone conversations are the primary method for
communicating with patients about financial matters, setting the
groundwork for a positive phone experience from the consumer’s
perspective is critical. In fact, a study by Frost & Sullivan Research
suggests that being on hold for an extended period of time is
one of the primary causes of customer dissatisfaction. Moreover,
it can take only two negative phone experiences for a consumer
to develop a diminished opinion of the service provider.6
To meet the challenge of prompt, personable and knowledgeable communications, organizations may wish to contract with
a dedicated outsourced call center. Call centers focused specifically
on revenue cycle issues can provide detailed information
regarding co-pays, dates of service and amounts due, and also
work with patients to develop workable plans for paying down
balances. Additionally, qualified centers offer a scalable solution
that can be ramped up as patient volume increases.
Finally, reasonable billing procedures and accessible, respectful
billing personnel can help strengthen cash flow, reduce collection costs and cut bad debt. All told, patient-friendly billing is
a positive feedback loop that–once in place–can continue to
generate key benefits for both consumers and healthcare
organizations for years to come.
–––––––––––––––––––––––––––––––––––––––
1
“HCAHPS: Patients’ Perspectives of Care Survey,”
Centers for Medicare & Medicaid Services, Sept. 25, 2014,
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-AssessmentInstruments/HospitalQualityInits/HospitalHCAHPS.html
2
“Quality Measures and Performance Standards,”
Centers for Medicare & Medicaid Services, Dec. 31, 2014,
http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/sharedsavingsprogram/Quality_Measures_Standards.html
3
Dustin Whisenhut,“Making the Revenue Cycle an Ambassador for
Your Organization,”hfma.org/rcs, November 2014, http://bit.ly/1yrWIYF
4
Fostering Loyalty and Goodwill to Boost Referrals
As a patient’s healthcare financial obligations increase, their
interactions with billing personnel carry an ever-greater weight.
For many, perceptions formed during these encounters can
have a major, if not decisive, impact on the way the overall
organization is viewed.
“TransUnion Survey Finds Patients Willing to Pay More of Their Bills
With Improve Billing Information at the Time of Service,” TransUnion,
April 7, 2014, http://transunion.mwnewsroom.com/press-releases/
transunion-survey-finds-patients-willing-to-pay-mo-1104086?feed=
abde9b49-8716-4c7b-b7a3-bff44ca35beb#.VLkjrSvF_h4
5
Whisenhut,“Making the Revenue Cycle an Ambassador for Your
Organization,” hfma.org/rcs, November 2014, http://bit.ly/1yrWIYF
6
For that reason, it is critical that providers work to develop truly
customer-friendly billing services. By reducing wait times,
empowering dedicated, knowledgeable personnel, offering
payment flexibility and creating easy-to-understand statements,
providers will foster loyalty and goodwill.
These positive feelings not only improve the likelihood of return
business, but also boost the prospect of referrals and beneficial
social media reviews. Affirmative patient feedback, in turn,
supports quality scores that can produce performance bonuses.
The San Diego Symposium
“This is Your Wake-Up Call: Ten Ways to Improve the Patient
Experience,” McKesson Business Performance Services, January 2015,
http://bit.ly/1wggkth
–––––––––––––––––––––––––––––––––––––––
Randy Blue M.Ed, CRCR, is an Executive Director with McKesson’s
Business Performance Services division. Randy is located in Seattle, WA
and has over 25 years experience in sales and marketing, specifically in
the healthcare space. Randy is committed to helping health systems and
physician organizations manage the rapidly evolving healthcare landscape to improve business performance. www.mckesson.com/BPS
J A N U A R Y 10-14 | 2 0 1 5
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 6
3
A Sweet Ending to
LONG CAREERS
Scott Ujita _________________________________
On February 6, 2015 the Southern California Chapter
celebrated the retirement of three outstanding members,
James Stewart, Ira Alexander and George Colman
at the Japanese American National Museum in downtown Los Angeles. Each of these members served at
both the Chapter and National level of HFMA, and were
instrumental in shaping and building our chapter to be
the best HFMA chapter in the Nation.
Over 100 people attended the event. The night started
off with great music from Bart and Lori Andrews, who
have played at many HFMA events in the past. A slideshow was presented which showed many pictures of
Ira, George, and James going back to the early 1990’s.
There was also wine and a delicious dessert buffet for
everyone to indulge.
Kathy Hammack, our current Chapter President, gave
an introduction and acknowledged the fifteen past
Chapter Presidents in attendance that evening. Susan
Labow, Past President and one of the planners of this
event, kicked off the introductions with a brief history
of each retiree. Also, Past Presidents Greg Labow and
Dave Canfield shared some great personal stories of
Ira, George, and James. One of the surprises of the
evening came when Kathy Hammack announced that
three student scholarships will be named after Ira
Alexander, George Colman, and James Stewart. These
scholarships will help our chapter gain additional
visibility in the local college campuses in Southern
California in order to attract potential HFMA members.
Special messages and sentiments were submitted to
Denise Ransdell and Susan Labow, who put together
beautiful memory books for each retiree. I was able to
look through each of the books and read how special
Ira, George, and James are, and how they had such a
positive influence on so many of our chapter members.
This was a great event to celebrate with three great
leaders of our chapter. I am glad that I had the opportunity to say thank you to Ira, James, and George for
all the time they gave and the hard work that they
put into our chapter.
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 7
Changes Coming to National Certification Program
__________________ Debby Chanen, MNBA, FHFMA __________________
Starting in June 2015, the healthcare industry's premier certification
in healthcare finance will adopt an integrated approach that extends
beyond its traditional focus on demonstrating competence in
finance and accounting. The changes in Healthcare Financial
Management Association’s (HFMA) signature certification program,
the Certified Healthcare Finance Professional (CHFP), are designed
to prepare leaders for a new era in health care. According to HFMA
President and CEO Joseph J. Fifer, FHFMA, CPA, healthcare leaders in
all sectors will require a deep understanding of the new financial realities
of health care that reflect an integrated delivery system with the complexities of the provider, payor, and physician perspectives intertwined.
The reconfigured CHFP consists of two online modules:
• The Business of Healthcare: A big-picture overview of
healthcare finance, risk and risk mitigation, new payment models,
financial accounting and cost analysis, strategic financial issues,
management of financial resources, and shifts in payment models.
• Operational Excellence: The application of business acumen
includes exercises that use a case study approach to understanding
the business of health care.
More information on the new Certification Program will be
distributed by National in the next few months prior to the new
start date of June 2015. In the meantime, the current program will
continue and the Southern California Certification Committee
suggests that you go forward with the National online study program
or studying the materials from the Region 11 Practicum. Another option
is to take the in person education which will next be offered at the
Chapter’s Educational Program on March 19th at the Hilton Doubletree
in Monrovia. Our instructor will be Christoph Stauder, CPA, FHFMA,
who wrote the 450 page practicum participant guide, and teaches
the practicum at our Fall Conference Sunday sessions.
Katie Glynn, one of our Chapter members recently took and
passed the exam. Katie, manager in the Advisory and Finance Risk
Transformation practice at Deloitte and Touche LLP, credits her
success in passing the exam to the HFMA Certification Candidate
Practicum. After completing the online study course offered through
the HFMA website, she still felt that there were some areas of weakness
in her knowledge where she hadn’t had requisite experience. She
also attended four certification practicums offered via webinars by
the Region 11 Chapters. Katie noted that “After completing the four
webinars presented by Christoph Stauder I felt much more confident
and prepared for the exam. The Practicum not only provided me with
an overview of all areas covered on the exam, but also helped
highlight those areas of focus by providing specific case studies. I
don’t think I would have been as prepared for the exam with the
online study course alone and recommend to all those planning to
sit for the exam to use both the online study course and Practicum
to help them best prepare for the exam.”
The Southern California chapter offers an incentive program to
encourage our members to obtain certification. At this time, any Chapter
member who obtains CHFP certification is eligible to get their
examination fees ($395) refunded in full by the chapter! Members
can also get access to the online training offered by HFMA National
for free ($249 value), subject to a $95 deposit that is refunded after
the exam is passed. The member can take the certification exam
either from the comfort of your home/office or at Castle Worldwide
testing centers. You can get full details from the chapter website
(http://hfma-socal.org/certified.html). Also, if you have any questions
regarding our incentives, your exam preparation or about taking the
exam, you can always contact any of the Certification Committee
members listed below:
Robert Rivas, CHFP
213-553-1972 / rrivas@deloitte.com
Debby Chanen, FHFMA
626-813-4927 / dchanen@mail.cvhp.org
Ananta Mukerji, CHFP
714-583-6246 / ananta@avianaglobal.com
After you pass the exam, don’t forget to contact the chapter
Certification Committee to get reimbursement for your paid
fees and your $95 deposit!
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 8
“Immediate Jeopardy” Penalties Soar in California
__________________ J. Stuart Showalter, JD, MFS __________________
Regulations that became effective last April subject California hospitals to
significant financial penalties for noncompliance with licensing requirements
and other healthcare-related laws. Hospital executives should prepare to
appeal these staggering penalties rather than pay them routinely.
Background
Between October of 2007 and July of last year, the California
Department of Public Health (CDPH) issued 297 administrative
penalties against California hospitals based on allegations that
noncompliance with licensure requirements “has caused, or is
likely to cause, serious injury or death.”The penalties have ranged
from $25,000 to $100,000, and they total nearly $14 million.
“The CDPH is on a mission,”says Mark Kadzielski, partner and
national chair of the health law practice of Pepper Hamilton, LLP
in Los Angeles,“and it is pursuing this mission vigorously. It has
become a significant aspect of the Department’s regulatory
activity and is, in effect, a new tax on California hospitals.”
CDPH’s authority to issue these so-called“immediate jeopardy”(IJ)
penalties began on January l, 2007, and the fines were first levied
at $25,000 for each violation. Over time, however, the maximum penalty has increased five-fold to $125,000 for a single
IJ violation and up to $25,000 for each“non-IJ” violation.
Although each penalty alone might seem immaterial, Kadzielski
says they can quickly become a huge financial burden on a
hospital’s bottom line.
The Process
An IJ investigation begins when the department receives a
self-report or complaint of an adverse event. The investigation
can take a single day or many months, and at some point long
after the investigation has been concluded CDPH makes a determination that an IJ violation has occurred. The facility is then
issued a “statement of deficiencies” and is given 10 days to
submit a corrective action plan. But Kadzielski says the hospital
cannot appeal the department’s decision until an administrative
penalty has been assessed,“and this often does not occur for
many months.”
Not all deficiencies investigated by CDPH are found to be IJ’s,
and not all IJ’s result in penalties. The CDPH has provided
“absolutely no guidance as to how it determines that an IJ has
occurred or which deficiencies warrant administrative penalties,”
Kadzielski says, and “there is no discernible pattern to the
department’s fining practices.”
For example, from FY 2007-08 to FY 2011-12, CDPH received
1,061 reports of post-surgical retention of a foreign object. Of
those incidents, only 57 resulted in an administrative penalty,
and a review of those cases reveals that no uniform criteria
were applied and no consistent decisions were made. The
department’s practice has been to wait many months to tell a
hospital that an IJ finding will be issued and to assess penalties
years after the incident.“So hospitals languish in constant limbo,
waiting to find out whether a penalty will be assessed for
long-past alleged deficiencies,” he says.
Regulatory Criteria are Vague and Confusing
In theory, some new regulations covering IJ penalties should
have provided much-needed clarification. But the regulations
— which dramatically expand the circumstances in which a
penalty may be issued and significantly increase the maximum
penalties that may be assessed — are complex and confusing
and provide no additional transparency regarding whether and
when a fine will be imposed.
“Hospitals might have expected a clear explanation of the
circumstances in which they will be fined and the size of the
penalties, but that has not occurred.” Instead, Kadzielski says,
figuring out the possible penalty involves a calculation worthy
of the Internal Revenue Code:
1. Determine there is a“deficiency,”that rises beyond a
“non-minor” violation.
2. Calculate the “Initial Penalty,” as follows:
a. Select one of six“Levels of Severity”;
b. Select one of three“Scopes of Noncompliance”;
c. Identify a percentage from the“Scope and Severity Matrix”;
d. Identify the maximum statutory penalty amount; and
e. Multiply the values from c. and d.
Continued on page 9
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 9
New
SoCal Chapter Members
JOINED FEBRUARY 2015
Murtaza Mogri
Raymond Chang
Mary Nguyen
Alon Asefovitz
Stanson Health
COPE Health Solutions
Moss Adams LLP
Cedar Financial
Raj Kadam
Cindy Malouin
Virginia L. Ripslinger
Medvantics
Malouin Marketing
St. Joseph Health
Join HFMA SoCal Chapter www.hfma-socal.org
YOUR
INDUSTRY
YOUR
FUTURE
YOUR
VOICE
“Immediate Jeopardy” Penalties Soar in California
Continued from page 8
__________________
3. Derive the “Base Penalty,” which may be higher than the
statutory maximum, by applying “adjustment factors” to the
Initial Penalty. Those factors are:
a. The patient’s physical and mental condition;
b. Any actual financial harm to the patient;
c. Factors beyond the hospital’s control; and
d. Whether the violation was “willful.”
4.“Final Penalty,” by applying additional“adjustment factors”
to the Base Penalty. Those factors are:
a. Whether there was an immediate correction; and
b. The facility’s history of compliance with related state
federal laws.
5. Assess the lesser of the Final Penalty or the statutory maximum.
It is beyond the scope of this article to explain these calculations,
but Kadzielski says each of these decision-points is vague,
ambiguous, and open to interpretation and dispute.“For example,
the legislature included as a required adjustment factor ‘the
demonstrated willfulness of the violation.’ But, the definitions
of willfully and willful violation are written so broadly that this
adjustment factor will probably be applied against a hospital
every time an employee or medical staff physician does anything
that results in an adverse outcome.”
What Hospitals Should Do
Kadzielski and his team of health lawyers have helped numerous
clients prepare for and successfully appeal these CDPH penalties.
Given that the fines are often assessed months or years after the
underlying incidents, he says some hospitals have chosen simply
to pay the fines.“This is because the event usually happened
long before, memories have faded and witnesses are impossible
to find. Hospitals sometimes think it would be easier to pay the
penalty than go to all that trouble.”
But he usually advises against this approach.“Paying now is often
a short-sighted decision, and it can be more expensive than
possibly paying something a few years down the road, given the
time value of money.” He recommends that whenever an
adverse event occurs an internal investigation be conducted
immediately to document the facts, take witness statements,
make copies of the medical records, and otherwise prepare to
defend against a fine. He and his team work closely with
hospitals to perform these tasks. Then hospitals are ready to
appeal any fines.
“And above all,” he adds,“alert the CFO, finance department, risk
management team, and any other appropriate departments of
the hospital not to pay any CDPH fines merely for the sake of
convenience without a thorough consideration of the situation.”
––––––––––––––––––––––––––––––––––––––––––––––––
Author: J. Stuart Showalter, JD, MFS, is a contributing editor to HFMA’s Legal & Regulatory Forum.
Interviewer for this article: Mark A. Kadzielski is a partner in the Los Angeles law firm of Pepper Hamilton, LLP and chair of the firm’s
national health law practice. He can be reached at 213.928.9820 or kadzielm@pepperlaw.com.
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 10
Win a trip to Paradise!
2014-2015
Member-Get-A-Member Contest
Vacation Destination Giveaway to
Puerto Vallarta, Mexico
The Southern California Chapter of HFMA, in association with Sponsors
Progressive Management Systems and CMRE, Inc.
Have given its members a chance at winning the following prizes:
1st Place: Trip to Puerto Vallarta, Mexico. Included in this trip give-away is 7 days, 6 nights beach-front
condo in Puerto Vallarta & $1,000.00 towards travel expenses
2nd Place: Apple iPad
3rd Place: One free admission, for the winner, to all three 2015-2016 So Cal Chapter Educational Programs
*HOW TO WIN*
Refer a new member to our Chapter ² Each new member who lists you as their sponsor gives you an additional chance for the drawing at the end of the
year. The more sponsored new members you have, the better the chance to win the grand prize drawing.
Each new member will be required to provide your name and your HFMA member number at the time of registration. ,I\RXGRQ·WNQRZ\RXUPHPEHU,
number, contact Lori Kuwahara at (714) 279-8675 or lori@hfma-socal.org. We encourage you to have them join via the National HFMA website at:
www.hfma.org/membership
The contest begins on June 1, 2014 and ends on April 19, 2015. We will announce the winners at WKHFKDSWHU·V$QQXDO$ZDUds Dinner in May of 2015.
If the member with the most sponsored new members does not win the grand prize, he/she will receive the second place prize.
Kathy Hammack, President
HFMA Southern California Chapter
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 11
S B
1 2 7 6
HOSPITALS AND EMERGENCY PHYSICIANS IN
California Will Ring in the New Year with
Revised Charity Care and Discount Payment Policies
__________________ Julie A.Simer, Esq. / Shareholder, Buchalter Nemer __________________
You changed the batteries in your flashlights and smoke detectors, but
did you revise your charity care and discount payment policies prior to the
stroke of midnight on December 31, 2014? A new law, SB 1276, took effect in
California on January 1,2015, and it means that many California hospitals 1
and emergency physicians 2 will need to revise their charity care and discount
payment policies (collectively “financial assistance policies”) 3 to comply.
The law imposes duties4 upon hospitals, physicians, and collection
agencies that bill or collect payment for medical services provided
to a“financially qualified patient.”A“financially qualified patient”5
is a patient who satisfies both of the following criteria:
1. a self pay patient or a patient with high medical costs; and
2. family income that does not exceed 350 percent of the
federal poverty level (“FPL”).6
The term“high medical costs”is defined in the statute as annual
out of pocket medical expenses that exceed 10 percent of the
patient’s family income (or a lower threshold amount pursuant
to the hospital or emergency physician’s financial assistance
policies).7 The law also requires that any affiliate, subsidiary, or
external collection agency that collects receivables on behalf of
a hospital or emergency physician must agree to adhere to the
standards and scope of practices and comply with the definition
and application of a reasonable payment plan established by
the hospital or emergency physician.8
The original“Hospital Fair Pricing Policies”legislation, AB 774,
was enacted in 2006 after several years of debate between
consumer advocates and hospitals. It requires hospitals to
establish financial assistance policies and provide patients with
notice of those policies. It also limits hospital charges to uninsured
patients with family incomes below 350 percent of the FPL to
no more than the hospital could expect to receive for the same
services from Medicare, Medi-Cal (California’s Medicaid program)
or other government-sponsored benefits. It requires hospitals
to screen patients for government subsidized programs for
which they may qualify and establish practices for medical bill
collection, including that a hospital or collection agent may not
take adverse action against a consumer for at least 150 days
after the initial bill.
In 2010, AB 1503 imposed similar, but not identical, fair pricing
obligations upon emergency physicians. It requires hospitals to
include a statement in its notice to patients that the emergency
physician is required by law to provide discounts to uninsured
patients or patients with high medical costs who are at or below
350 percent of the FPL. It also specifies billing and collection
procedures to be followed by the emergency physician and his
or her assignee, collection agency, or billing service.
With the enactment of the Patient Protection and Affordable
Care Act (“ACA”), many previously uninsured Californians
became eligible for Medi Cal or subsidized insurance purchased
through Covered California, California’s health benefit exchange.
Under the ACA, however, insurance plans with the lowest
premiums also have the highest out of pocket costs. Thus, the
Western Center on Law and Poverty (“WCLP”), the sponsor of
SB 1276, observed that even with third party coverage, a patient
may be unable to pay or negotiate a payment plan on the
balance due and still have enough money left over to survive.
The WCLP noted that the law existing at the time provided no
guidance on how to determine a reasonable payment plan for a
financially qualified patient. Apparently, the WCLP had received
reports of collection agencies demanding unaffordable
monthly payments.
Continued on page 12
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 12
Ringing in 2015 : Revised Charity Care and Discount Payment Policies
__________________ Continued from page 11 __________________
SB 1276 made the following changes:
1. Revised the definition of “high medical costs,” thereby allowing a
financially qualified patient to become eligible for a hospital’s financial
assistance program, regardless of whether the patient previously
received a discount from the hospital as a result of third party coverage.
2. Defined a “reasonable payment formula” for purposes of determining
the monthly payment obligation of a financially qualified patient under
the hospital’s or emergency physician’s financial assistance program,
as not more than 10 percent of a financially qualified patient’s family
income for a month, excluding deductions for essential living expenses.
3. Defined “essential living expenses” as expenses for any of the following:
rent or house payment and maintenance, food and household supplies,
utilities and telephone, clothing, medical and dental payments,
insurance, school or child care, child or spousal support, transportation
and auto expenses, including insurance, gas, and repairs, installment
payments, laundry and cleaning, and other extraordinary expenses.
4. Revised the notice that hospitals and emergency physicians are
required to provide patients to inform them that they may be eligible
for various public insurance programs and required that the notice
include references to the California Health Benefit Exchange (Covered
California), and other state or county funded health coverage programs.
5. Required hospitals and emergency physicians, in addition to the
existing notice requirements, to also provide patients with a referral
to a local consumer assistance center housed at legal services offices.
6. Specified that if a patient applies, or has a pending application, for
another health coverage program at the same time that he or she applies
for a hospital’s financial assistance program, neither application
precludes eligibility for the other program.
7. Required a hospital or emergency physician to negotiate the terms
of a payment plan with a financially qualified patient, taking into
consideration the patient’s family income and essential living expenses
and specified that this also applies when a patient wishes to renegotiate
the terms of a defaulted payment plan.
8. Permits, for purposes of determining the reasonable payment formula,
the emergency physician or his or her assignee to rely on the determination of family income and essential living expenses made by the
hospital at which emergency care was provided, and permitted the
emergency physician at his or her discretion, to accept self-attestation
of family income and essential living expenses by a patient or a
patient’s legal representative.
The law requires California hospitals to file updated charity care
program policies with the Office of Statewide Health Planning
and Development (“OSHPD”) biennially on January 1, or when
a significant change is made to the policies.9 OSHPD is required
to collect from each hospital a copy of its charity care policy,
discount payment policy, eligibility procedures for those policies,
review process, and application form.10 Copies of all filed hospital
policies are available on the OSHPD website.11 Submitted information is reviewed by OSHPD to ensure compliance with
reporting requirements. Beginning January 1, 2015, the OSHPD
audit staff will contact hospitals on issues of possible noncompliance to obtain clarification and/or revised information.
Compliance with the law is a condition of licensure for general
acute care hospitals in California, and noncompliance may be
the basis for the imposition of penalties by the California
Department of Public Health (“CDPH”).12 When deciding
whether to impose a penalty, the CDPH will consider the extent
of noncompliance, the amount of financial harm to the patient,
whether the violation was willful, and the willingness of the
hospital to take corrective action.13 Compliance with the law is not
a condition of licensure for physicians and surgeons, however.14
Nonetheless, if a hospital or emergency physician collects
payments in excess of the amount due under the law, the hospital
or emergency physician must repay the excess plus interest.15
Many open questions remain with respect to SB 1276. For
example, the law does not clearly specify whether hospitals
must provide financial assistance for nonemergency services,
such as elective surgeries or long term care. OSHPD directs each
hospital to make its own determination as to the scope of
covered services under its financial assistance policies. Therefore,
it is important for hospitals and emergency physicians to consult
with their legal counsel before revising financial assistance
policies, which will eventually be available to the public on the
OSHPD website.
SB 1276 is just one of the many new laws and regulations
affecting health care providers that became effective on January 1.
A New Year’s resolution that every health care provider should
make is a renewed focus on regulatory compliance.
–––––––––––––––––––––––––––––––––––––––
1
The term“hospital” means a facility that is required to be licensed
under Health & Safety Code § 1250 (a) [general acute care hospitals],
(b) [acute psychiatric hospitals], or (f) [special hospitals that provide
inpatient or outpatient care in dentistry or maternity] of Section 1250,
except a facility operated by the State Department of State Hospitals or
the Department of Corrections and Rehabilitation. Health & Safety
Code §§ 127400(d) and 127450(f).
2
”Emergency physician” means a physician and surgeon licensed
pursuant to Chapter 5 (commencing with Section 2000) of Division 2
of the Business and Professions Code who is credentialed by a hospital
and either employed or contracted by the hospital to provide emergency
medical services in the emergency department of the hospital, except
that an“emergency physician”shall not include a physician specialist
who is called into the emergency department of a hospital or who is on
staff or has privileges at the hospital outside of the emergency department.
Health & Safety Code § 127450(c).
Continued on page 13
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 13
The San Diego Symposium
Ringing in 2015
Continued from page 12
___________
3
The term “charity care” is used to describe the situation where the
patient is not expected to pay any amount for provided services, based
on the hospital’s determination that the patient is unable to pay for that
care. This may also be referred to as“full charity care” or “free hospital
care.” The term“discount payment plan” describes the situation where
the hospital has determined that the patient does not qualify for
completely free care but is eligible for a discount and is expected to pay
only a part of the bill. See, OSHPD Frequently Asked Question PQ3
available at: http://www.oshpd.ca.gov/HID/Products/Hospitals/
FairPricing/FAQPublic.html#PQ3
4
Health & Safety Code §§ 127405(a)(1) and 127454(b)(4).
5
Health & Safety Code §§127400 (c) and 127450(e).
6
Health & Safety Code §§ 127400(g) and 127450(i).
7
Health & Safety Code §§ 127400(g) and 127450(i).
8
Health & Safety Code §§ 127425(b) and 127455(b).
9
Health & Safety Code § 127435.
10
Id.
11
The SyFPHR website: https://syfphr.oshpd.ca.gov/Logon.aspx
12
Health & Safety Code § 127401, 22 C.C.R. § 70959.
13
22 C.C.R. § 70959.
14
Health & Safety Code § 127451.
15
Health & Safety Code § 127440 and 127458.
J A N U A R Y 10-14 | 2 0 1 5
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 14
E D U C A T I O N A L
O U T R E A C H
FEBRUARY CHAPTER HIGHLIGHTS
Customer Service and Revenue Cycle101
__________________ Joe Perry __________________
The chapter recently held two revenue cycle training opportunities for members in the San Fernando Valley and Inland
Empire areas on February 4th and 5th. Chapter past President,
Vickie Morgan, served as presenter for both days of education
that focused on a review of the revenue cycle process and
how to apply customer service best practices throughout the
revenue cycle process.
Both classes were interactive courses, with Vickie and others
attending the class sharing best practices from their experiences.
At the February 4th event, held at Valley Presbyterian Hospital,
Vickie stressed the impact that the little things can make a
difference when striving to deliver excellent customer care. Simple
things like maintaining good eye contact, describing what and
how you are going to help the customer, and being sensitive to
cultural differences were all part of the training in best practices.
At the February 5th event, held at the Kaiser Fontana Hospital,
Vickie gave an overview of the revenue cycle process by reviewing
the lifecycle of a claim from physician order, scheduling, and
authorization, to the management of payments and denials.
During the presentation, Vickie repeatedly pointed to the importance of communication between the multiple groups that
make up the revenue cycle process. Included in the main case
study, Vickie also pointed out the continually evolving role of
case management in assisting with the process of getting the
appropriate authorizations throughout the continuation of a
patient’s care.
Both sessions would not have been possible without the support
of our hosting facilities and our presenter. Thank you to both
Valley Presbyterian Hospital and the Kaiser Fontana Hospital
for graciously hosting the education events, and a tremendous
thank you to Vickie Morgan for presenting both days. We hope
that you will be able to join us for another education event in
the very near future. Be sure to check the chapter events page
on the website for details about all of our upcoming events.
Educational Outreach Upcoming Events Calendar
April 29-30, 2015 | Education Outreach (TBD)
May 21, 2015 | Chapter Webinar – “Lunch and Learn”
Be sure to check
the“Events”page on
the chapter website
for more details on
the full upcoming
calendar.
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 15
2 0 14 -2 0 1 5
C O R P O R A T E
S P O N S O R
P R O G R A M
WHY BECOME A CORPORATE SPONSOR?
southern california chapter
Visibility is a powerful advantage. As a sponsor of the Southern California Chapter of
the Healthcare Financial Management Association (HFMA SoCal), you gain exposure
to a select audience that is over 1,000 members strong. Our membership consists of
CEOs, CFOs, Revenue Cycle leaders, Patient Financial Services directors, and other
healthcare finance professionals.You emerge as a leader by demonstrating your
support of professional education and quality programs.
2014-2015
Southern California
Corporate Sponsorship
Program
As an HFMA SoCal sponsor, a wealth of recognition opportunities is yours. At a
minimum, you will see your organization’s name and logo on pertinent marketing
materials and gain on-site acknowledgement and signage at educational conferences.
Additional promotional opportunities are available, depending on the category of
sponsorship you select.
The Corporate sponsorship program is now in
its fifth year. We currently have thirteen corporate
sponsors at a variety of sponsorship levels. It is
my belief that corporate sponsors truly value
the unique position of being a corporate
sponsor. As a corporate sponsor they are
recognized at each of our three chapter
education sessions. That recognition takes
three forms: 1)All employees of the sponsoring
firm wear name tags that identify them as a
sponsor, 2)The names of all corporate sponsors
are posted prevalently in the registration lobby,
3) All sponsors are featured in a PowerPoint
presentation that highlights them and
upcoming chapter events.
With your support and technical expertise, HFMA SoCal will continue to thrive
and provide more valuable services to our members and potential members. The
Southern California Chapter is proud of its current affiliations with sponsors and
looks forward to hearing from you.
In addition to the increased visibility at chapter
events, Corporate Sponsors have links to their
corporate website posted on the SoCal chapter
website. Our chapter has approximately one
thousand members who routinely visit the
website, in addition to members of other HFMA
chapters who also visit our website. And
finally, in every edition of Newsbrief, there is a
list of corporate sponsors along with their
corporate logo.
Sponsorship registration forms are available on
the chapter website www.hfma-socal.org. The
contributions for corporate sponsorship are
prorated so it is always a good time to sign up
as a corporate sponsor. Should you have any
questions about becoming a corporate sponsor,
contact James Cummings, Sponsorship
Chairperson, at: cummingsllc@aol.com.
All sponsorships are received with great appreciation and in good faith; we are the
stewards of your investment.
CATEGORIES AND BENEFITS OF
CORPORATE SPONSORSHIP
BENEFITS
BRONZE
$1,000
SILVER
$2,500
GOLD
$3,500
PRESIDENT’S
CLUB $5,000
Posting at all chapter meetings
X
X
X
X
according to sponsorship category.
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Listing of sponsor according to
X
X
X
X
level in all Chapter program brochures.
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Listing of sponsor according to
X
X
X
X
category in each issue of the Chapter
newsletter and on Chapter website with
link to sponsor website or email addess.
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Option to sponsor an Information table
X
at all chapter education events.
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Free registration certificates at Chapter
1
2
3
5
educational program* (as indicated).
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Quarter (1/4) page ad in every newsletter.
X
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Option to host a hospitality suite at any
X
Chapter educational program,* with President’s
approval (i.e. sponsoring company will
pay fees of hospitality suite).
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Special ribbon and/or name tag
X
X
X
X
designating Chapter Sponsor.
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Opportunity to introduce speakers
X
at an educational program.*
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Opportunity to speak for one minute
X
at a general session on their company.
* Educational programs for the upcoming year are scheduled for Aug.14, 2014, Nov. 20, 2014 and Mar. 19, 2015.
NEWSBRIEF
VOL.24/NO.4 • MARCH 2015 • PAGE 16
2 0 14 - 2 0 1 5
C O R P O R A T E
S P O N S O R
P R O G R A M
CORPORATE SPONSOR INFORMATION SHEET
START DATE This Corporate Sponsorship Program began on June 1, 2014, and runs through May 31, 2015.
DETAILS OF THE PROGRAM Enrollment period will be throughout the chapter year. An email announcement will be sent to all chapter members and
vendors listed in the current membership directory. Selected vendors who have expressed an interest in sponsoring past HFMA events will also be contacted.
PAYMENTS Payments are due with the application/agreement and can be submitted at any time during the chapter year. Quoted rates assume a full year’s
sponsorship at the various levels. Payments received between June and August will pay 100% of stated donation; Payments received between September
and November will pay 75% of stated donation; and those paying between December and February will pay 50% of the stated donation.
A confirmation letter will be mailed after the potential sponsor commits to the agreement. The sponsor will be sent a “Thank You” note once the payment
is received. The website will be updated to reflect sponsorship agreement within two weeks of receiving payment.
Corporate Sponsor Registration
southern california chapter
PLEASE COMPLETE AND RETURN THIS FORM TO:
James M. Cummings, HFMA-SoCal Chapter Sponsorship Chair
20638 Merridy Street, Chatsworth, CA 91311
NOTE: Please make checks payable to“Southern California Chapter-HFMA”
To pay by credit card, please go to: http://www.cvent.com/d/scqpcj/1Q
SPONSOR’S COMPANY NAME _______________________________________________________________________
___
CONTACT NAME _________________________________________________________________________________
CONTACT PHONE NUMBER __________________________________________________________________________
BILLING ADDRESS ________________________________________________________________________________
CITY | STATE | ZIP ________________________________________________________________________________
E-MAIL _______________________________________________________________________________________
WEB SITE ADDRESS _______________________________________________________________________________
We would like to participate at the following sponsorship level:
PRESIDENT’S CLUB ($5,000) GOLD ($3,500) SILVER ($2,500) BRONZE ($1,000)
We would like to make two installment payments.
For More Information, Contact: James M. Cummings, Sponsorship Chair, HFMA-SoCal Chapter.
E-mail: cummingsllc@aol.com / Phone: 818-642-2990
Contributions to 501(c)(6) organizations are not deductible as charitable donations for federal income tax purposes. Donations may be deducted as
a business expense if they are “ordinary and necessary” in the conduct of the taxpayer’s business. Always consult your tax advisor for assistance.

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