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www.hfmametrony.org Page 1 Volume 46 Issue 15 Winter 2016 JOSEPH A. LEVI 57 TH ANNUAL INSTITUTE The Long Island Marriott Grand Ballroom 101 James Doolittle Boulevard, Uniondale

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Page 1: JOSEPH A. LEVI 57TH ANNUAL INSTITUTE - HFMA Metro NY › wp-content › uploads › 2019 › 05 › Winter_20… · Salucro American Express AVZ & CO., P.C. Deloitte & Touche LLP

www.hfmametrony.org Page 1

Volume 46 Issue 15 Winter 2016

JOSEPH A. LEVI57TH ANNUAL INSTITUTE

The Long Island Marriott Grand Ballroom 101 James Doolittle Boulevard, Uniondale

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2015-2016 CORPORATE SPONSORS

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PAST PRESIDENT2013-2014 David Evangelista2012-2013 Palmira M. Cataliotti, FHFMA, CPA2011-2012 John I. Costa2010-2011 Edmund P. Schmidt, III, FHFMA2009-2010 Cynthia A. Strain, FHFMA2008-2009 Mary Kinsella, FHFMA2007-2008 Gordon Sanit, CPA, FHFMA2006-2007 Elizabeth Carnevale 2005-2006 Jane C. Florek, CPA

EX-OFFICIOAll Past Presidents of the

Metropolitan New York Chapter, HFMADennis Whalen,

President, Healthcare Association of New York StateKenneth E. Raske,

President, Greater New York Hospital AssociationKevin W. Dahill,

President & CEO, Nassau-Suffolk Hospital Council

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Chapter Officers and Board of Directors

Metro NY HFMA Newscast Schedule

Electronic Publication Date ....................................................... 4/23/16

Article Deadline for Receipt by Editor........................................ 3/19/16

OFFICERS 2014-2015President Meredith Simonetti, FHFMAPresident-Elect David WoodsVice President Maryann J. ReganTreasurer Mario Di FigliaSecretary Diane McCarthy, CPA, FHFMAImmediate Past President Wendy E. Leo, FHFMA

BOARD OF DIRECTORSClass of 2016

Martin Abschutz, CPA, CGMA Donna M. SkuraChristina Milone, Esq. Sean Smith, CPA, MBAJames W. Petty, FHFMA

Class of 2017Ann M. Amato, CPA, MBA Diane Masi, MBAAlex Balko Patrick S. Semenza, CPA, CHFPJason Gottleib

Newscast Committee

EDITORS:Marty Abschutz, CPA, CGMA, Editor

James G. Fouassier, JD, Esq., Assistant Editor

COMMITTEE MEMBERS:Kiran Batheja, FHFMAJoel DziengielewskiPaulette DiNapoliPhil HoltzmanTina Jaggi

Mary Kinsella, FHFMAGinette Laliberte

Wendy Leo, FHFMAAndrew Natkin

Edmund P. Schmidt, III, FHFMAKen Sheridan

John Scanlan, FHFMACynthia Strain, FHFMAStephanie Welsher

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President’s MessageMeredith Simonetti, FHFMA....................................................................................................Page 5

Editor’s MessageMarty Abschutz, CPA, CGMA...................................................................................................Page 6

Calendar of Events ...............................................................................................................Page 7

New MembersRobin Ziegler ..........................................................................................................................Page 8

Committee Listings 2015-2016 ..........................................................................................Page 9

What Good is a Managed Care Organization (MCO) Network Agreement Anyhow?Metro NY HFMA Chapter Experts..........................................................................................Page 12

Annual Accounting and Auditing Update Seminar Recap Sean P. Smith, CPA ...............................................................................................................Page 16

Latest Available Trends Show Slightly Increasing Community Benefit ReportingScott J. Mariani, JD and Allison S. Kimowitz, CPA........................................................Page 17

Transforming Patient Access from a Cost Center to a Revenue CenterChristian Borchert ................................................................................................................Page 21

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I hope everyone enjoyed their holiday season. I wish all of you a healthy and prosperous New Year.It is hard to believe I am halfway through my year as President of this wonderful chapter. To date,we have made great progress. Even so, we have much to look forward to in the upcoming months.

Our premier educational event, The 57th Joseph A. Levi Annual Institute will be held March 3-4, 2016, at a NEWlocation, the Long Island Marriott in Uniondale. Chairpersons Christina Milone, Sean Smith and Donna Skura, alongwith the entire Annual Institute Committee have planned an extraordinary program. This year’s Institute also will bememorable as we celebrate our Chapter’s 60th Anniversary.

The program will feature panel discussions with industry leaders addressing relevant issues which challenge all of us to GoBeyond our traditional approach to healthcare finance; in addition to hearing from our prestigious CFO panelists who willshare their challenges to support the business model change from FFS to value based reimbursement, we will hear fromthe payor community on how they are developing benefit design and quality measures. We, also, will hear from our CIOpanelists, who will discuss their vision of technology required to support their organizations’ needs. Lastly, we will hearabout different Ambulatory Care ownership models.

Steven M. Safyer, MD, President and CEO of Montefiore Health System, once again will share his insight and vision for thefuture of healthcare, including how Montefiore has expanded their ambulatory network to provide healthcare populationmanagement.

In addition to our Annual Institute, our education committees have several seminars planned to educate our Chaptermembers. Here are some upcoming programs:

February 3rd – As part of our Knowledge is Power series, we will be holding a Heart Health Dinner at Carlyle on theGreen

February 4th - Annual Reimbursement Seminar at the LaGuardia MarriottFebruary 11th - we will have our first Revenue Integrity Day at the LaGuardia MarriottApril 6th - Medicare Fundamentals 101 at Nassau Suffolk Hospital Council in Hauppauge April 12th - another new program, our first Patient Experience Day at the Viana Hotel in Westbury

Our Social Events committee has planned our annual cultural event. This year we will be celebrating Portuguese night atthe Mineola Portuguese center. The evening will be celebrated with great friends, family and colleagues, along with greatfood, drink and entertainment. Unfortunately, due to a record breaking snow storm we had to reschedule the event fromJanuary 23rd to March 12th. I hope you will join us.

Lastly, I want to remind all of you the Metropolitan NY Chapter offers its members in good standing full reimbursement forthose willing to take the “Certification Challenge.” The study materials can be purchased online at www.hfma.org . TheChapter will reimburse members pass or fail once you sit for the exam. I strongly encourage each of you to pursue becomingcertified and to enjoy the ensuing sense of accomplishment it brings.

I look forward to seeing you all at one of our many upcoming events.

Meredith Simonetti, FHFMAPresident

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By Marty Abschutz

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We start off this issue of Newscast with our first Advisory Panel’s premiere extended discussion, “What Good is a ManagedCare Organization Network Agreement Anyhow?” Among the issues touched on in their discussion are Pursuing Out ofNetwork Payment, The Assignment of Benefits Headache, and the “Surprise Bill” Law. The experts participating in thisdiscussion are Liz Carnevale, AVP, Patient Financial Services at NY Methodist Hospital (also former Chapter President),Roy Breitenbach, Esq., Legal Partner/Director at Garfunkel Wild, P.C., and Jim Fouassier, Esq., Associate Director ofManaged Care at Stony Brook Medicine (also our assistant Editor). Putting it all together is Ellen Scott, R.N., PARR Director,Health/ROI.

They represent four important disciplines in our industry: financial operations, legal, managed care and clinical. I’mconvinced you’ll find this a useful, engaging, and informative read. (Yes, there’s some practical guidance.) Please write tome with any comments or questions you would like to put to our panel. This can be in the form of questions left unanswered,comments with your view on this issue or questions and suggestions for the next topic they publish.

Sean Smith, CPA, who Chairs our Finance/Reimbursement/Audit Education Committee, summarizes the Accounting andAuditing Update seminar, held in the Times Square Hilton for the first time. The new location was a success, eliciting manyfavorable comments. Please take a read to see what you missed (perhaps you’ll make a note on your calendar to attend thenext edition of this education stalwart) or remind you of the excellent content.

Our other in-depth article is, “Latest Available Trends Show Slightly Increasing Community Benefit Reporting” by Scott J.Mariani, JD, Partner, and Allison S. Kimowitz, CPA, Supervisor, WithumSmith + Brown, CPAs. Scott and Allison, report,analyze and summarize, Ernst & Young’sl Form 990 Schedule H Benchmark Report (“Report”) for the American HospitalAssociation (“AHA”). How does your hospital compare with what’s reported?

The weather outside IS frightful. We are in the time of year when budgets, new reimbursement and payment rates and,perhaps, new systems are being implemented. It’s also the time of year when plans are being finalized for the Joseph A.Levi Annual Institute (see our cover). While the Annual Institute is our signature professional development event, we havemany other opportunities to grasp the latest industry developments. Regardless of, virtually, any interest that you mayhave, the Chapter Education Committee will have something for you. See the short representative program listing on thenext page; also, visit www.hfmametrony.org and www.hfma.org for more opportunities.

Stay warm!

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2016 IMPORTANT DATES

February 4, 2016 Annual Reimbursement Seminar LaGuardia Marriott

February 10, 2015 ICD-10 Post-implementation Free Region 2 WebinarBilling and Payer Response Issues

February 11, 2016 Revenue Integrity Day La Guardia Marriott

March 3-4, 2016 57th Annual Institute Uniondale Marriott

April 6, 2016 Medicare Fundamentals Nassau Suffolk HospitalCouncil

April date TBD Annual ICR Seminar La Guardia Marriott

April 12, 2016 Patient Experience Day Viana Hotel

April 15, 2016 Effects of High Co-Insurance and Hofstra ClubDeductibles on Medical Practices

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HFMA Seminars provide timely, in-depth strategies and metrics to help you keep

pace with the healthcare finance topics you care about the most. View all upcoming

HFMA Seminars and register at www.hfma.org/seminars.

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The Metropolitan New York Chapter of HFMA Proudly Welcomes the Following New Members!

By Robin Ziegler, Membership Committee Chair

MetroNY HFMA is pleased to welcome the following new members to our Chapter. We ask our current membership to rollout the red carpet to these new members and help them see for themselves the benefits of HFMA membership. Encouragethem to attend seminars and other Chapter events. We ask these new members to consider joining a Committee to not onlyhelp the Chapter accomplish its work, but to expand their networks of top notch personal and professional relationships.See the list of MetroNY HFMA Committee Chairs, along with their contact information, listed in this eNewsletter.

SEPTEMBER 2015

Virginia LorenziColumbia University

Vincent JamesDHHS/CMS

Lauren Christian

Nicole HarewoodNY Eye & Ear Infirmary

Allison LombardoBank of America

Sadiaka JoarderQueens Medical Associates

Joel Attard

Josephine PascaleNYU Langone Medical Center

Ryan GallagherBank of America Merrill Lynch

Aidan BoswickHuron Consulting Group

Jeffrey CastilloBank of America

Bertrand BatistaSt. John’s Episcopal Hospital

Michelle A FreedNorth Shore LIJ

Jacqueline R ColemanNorth Shore-LIJ Health Systems

OCTOBER 2015

Konstantin TeslerMaimonides Medical Center

Vincent S PerniceLong Island FQHC, Inc.

Elizabeth GriffithWoodhull Medical & Health Center

Matthew D FeltonGreater New York Hospital Association

Anthony J Sarro Jr.Medical Practice Innovations, Inc.

Madeline J HigginsNorth American Partners in Anesthesia

Jordan M. BrownMedPilot, Inc.

Kevin T. BurkeFust Charles Chambers LLP

Linda BrynCHS of Long Island

Maria PanagiotakisJamaica Hospital Medical Center

Benjamin NodarCHS of Long Island

Avalon Lance, MHAMontefiore/Albert Einstein College of Medicine

NOVEMBER 2015

Faith Ozbay

Bridget StasenkoPNC Financial Services

Glenn R MondryCommerce Bank

Caralyn FriedmanNew York Methodist Hospital

Matthew KamaraErnst & Young

Manu KaurNorth Shore LIJ

Darryl Gibbing-IsaacStrategy Consultant

Khaled KadryKPMG

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CommitteeName Chair Co-Chair ViCe Chair 1 ViCe Chair 2 ViCe Chair 3 ViCe Chair 4

adVisory CouNCil Wendy leo david evangelista John Coster  Palmira Cataliotti 

[email protected]  [email protected]  [email protected] [email protected]

(516) 454-0700 (718) 206-6930 (516) 240-8147 (516) 663-2311

57th aNNual Christina milone sean smith donna skura Bob Jacobs Jim argutto

iNstitute [email protected] [email protected] [email protected] [email protected] [email protected]

(516) 296-1000 (516) 562-6013 (516) 572-4498 (516) 616-0200 ext. 201 (631) 761-1028

auditiNg John scanlan  gordon sanit  edmund schmidt Joe guaraccino

[email protected] [email protected] [email protected] [email protected]

(718) 283-3911 (516) 918-7065 (516) 255-1666 (718) 250-6755

BylaWs diane mcCarthy meredith simonetti david Woods

[email protected] [email protected] [email protected]

(516) 349-4643 (631) 465-6877 (212) 979-4566

CeNtral robin Ziegler  diane masi  annie lemoine Chrissy Kern

registratioN [email protected] [email protected] [email protected] [email protected]

(516) 338-1100 x314 (516) 551-5839 (516) 326-0808 ext 3312 516-296-1000

CertifiCatioN Jim Petty  Kiran Batheja art Cusack  John scanlan 

CoaChiNg [email protected]  [email protected] [email protected]  [email protected]

(516) 876-6022 (917) 603-7670   (718) 283-3911 

Certified memBers Kiran Batheja

[email protected]

CommuNity Josephine Vaglio david evangelista 

outreaCh [email protected]  [email protected] 

(516) 248-2422 (718) 206-6930

CoNtiNuiNg Care meredith simonetti

[email protected]

(631) 465-6877

CorP ComPliaNCe/ ann amato laurie radler mathew schwartz

iNterNal audit [email protected] [email protected] [email protected]

(516) 632-3405 (646) 471-7409 (646) 453-1252

CPe’s ed schmidt John scanlan 

[email protected] [email protected]

(516) 255-1666 (718) 283-3911 

dCms/ diane masi  robin Ziegler  diane mcCarthy meredith simonetti

BalaNCed [email protected] [email protected] [email protected] [email protected]

sCoreCard (516) 551-5839 (516) 338-1100 x314 (516) 349-4643 (631) 465-6877

exeC. Comm. david Woods meredith simonetti maryann regan

& PlaNNiNg [email protected] [email protected] [email protected]

(212) 979-4566 (631) 465-6877 (516) 576-5601

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CommitteeName Chair Co-Chair ViCe Chair 1 ViCe Chair 2 ViCe Chair 3 ViCe Chair 4

fiNaNCe/ sean smith alex Balko  Pat semenza tracy roland Kwok Chang 

reimBursemeNt/ [email protected] [email protected]  [email protected] [email protected] [email protected] 

audit (516) 562-6013 (516) 632-3965 (718) 488-3715 (908) 377-5122 (212) 979-4324

fouNders aWards Paulette diNapoli 

[email protected]

(516) 576-5638

geNeral eduCatioN Catherine ekbom donna skura diane masi  rachele hashinsky Jason gottlieb Christina milone

[email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

(516) 745-0161 (516) 572-4498 (516) 551-5839 (516) 296-1000 (646) 227-3156 (516) 296-1000

him/ur stacey levitt  annie lemoine

[email protected] [email protected]

(646) 732-5052 (516) 326-0808 x 3312

historiaN

iNVestmeNt mario di figlia diane mcCarthy

[email protected] [email protected]

(516) 876-1386 (516) 349-4643

legal affairs Christina milone fred miller

[email protected] [email protected]

(516) 296-1000 (516) 393-2250

maNaged Care James fouassier donna skura david evangelista  Pat Nolan

[email protected] [email protected] [email protected]  [email protected]

(631) 638-4012 (516) 572-4498 (718) 206-6930 (212) 430-6620

msP Kiran Batheja robin Ziegler

[email protected]  [email protected] 

(516) 338-1100 x314

memBershiP robin Ziegler 

marKetiNg [email protected]

(516) 507-5314

mediCal grP mgmt. Josephine Vaglio  andrie Kazamias art Cusack

[email protected]  [email protected] [email protected]

(516) 766-0521  (516) 918-7097 (917) 603-7670  

mis rivka gross Ken reda

[healthcare [email protected] [email protected]

technology] (732) 551-3338

NeWsCast marty abschutz James fouassier

[email protected] [email protected]

732-906-8700 x 109 631-638-4012

NomiNatiNg Wendy leo

[email protected]

(516) 454-0700

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CommitteeName Chair Co-Chair ViCe Chair 1 ViCe Chair 2 ViCe Chair 3 ViCe Chair 4

PatieNt fiNaNCial anne mcdonald Christian Borchert ron Camejo Jill Prisco hayes Vanessa mackay

serViCes [email protected] [email protected] [email protected] [email protected] [email protected]

(631) 754-0113 (315) 530-8079 (484) 832-9940 (631) 391-7800 (718) 226-4553

PPdd Wendy leo

[email protected]

(516) 454-0700

WeBmaster aNd Cindy strain  shivam sohan andrew Weingartner

PersoNNel [email protected]  [email protected] [email protected]

PlaCemeNt (516) 796-3700 (516) 576-1801 516-240-8147

PuBliC relatioNs emily Casto donna skura

& CommuNiCatioNs [email protected]  [email protected]

(614) 263-1043 (516) 572-4498

regioN 2 John Coster Kiran Batheja  

[email protected]   [email protected]

(516) 240-8147

regioN 2 maryann regan diane masi  diane mcCarthy

CollaBoratioN [email protected] [email protected] [email protected]

(516) 576-5601 (516) 551-5839 (516) 349-4643

ryaN aWard Wendy leo

[email protected]

(516) 454-0700

soCial eVeNts Kiran Batheja John Coster gordon sanit John mertz

[email protected] [email protected]  [email protected] [email protected] 

(516) 240-8147 (631) 495-6596 (516) 632-3170

sPoNsorshiP david Woods  robin Ziegler  art Cusack

[email protected]  [email protected] [email protected]

(212) 979-4566 (516) 338-1100 x314 (917) 603-7670

yerger aWard dana Keefer michele manuel Jonathan segal

[email protected] [email protected] [email protected]

(212) 857-5269 (212) 274-7230

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What Good is a Managed Care Organization (MCO)Network Agreement Anyhow?Metro NY HFMA Chapter Experts Discuss the issue

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Perhaps it should be a simple transaction: a healthcareprovider renders a service to a healthcare member in aparticipating plan and submits a claim to the subscriber’shealthcare insurer. In a perfect world, or maybe in theworld the way it used to be, payment would be swift,covering the cost of the service with an acceptable profitmargin for the provider. However, as most folks in thehealthcare industry know all too well, it does not always goso smoothly. There are denials, underpayments,administrative roadblocks, submission timeframes andother hurdles that make the simple action of getting paideven from a contracted payer, an adventure. This has ledsome in the industry to ask the question, “What good is aMCO network agreement anyhow”?

Newscast has asked some experts, fellow HFMA Metro NYChapter members, who are leaders in their fields ofhealthcare law, managed care contracting and billing andpayment to discuss this subject in practical detail.

First, why would providers choose to be out of networkwith one or more insurance carriers and why wouldconsumers utilize out of network physicians or facilities?For individual physicians or physician groups, the reasonsfor being out of network may be monetary: too littlereimbursement from contracted networks. It might noteven be an active provider decision, as individual andgroup providers may be dropped by carriers due to markettrends, including narrowing networks.

Since consumers are another factor in the healthcaremarketplace, why would they opt for care with an out ofnetwork provider? FAIRHEALTH, a consumer informationand advocacy group that helps the industry to set rates forout of network care, offers the following possible reasons:

Consumers have a serious illness and the innetwork treatment options may be limited;

Consumers go out of network without realizing it,referred by an in network provider to a non-participating one, or there may be separate out ofnetwork charges for an in network service, whichwe in the industry sometimes refer to as a “carveout” (e.g., anesthesiology or radiology); and

Emergency care.

Given the reality of out of network care, how do providersget paid, who pays and how much reimbursement will berealized? While participating provider organizations(PPOs) generally will pay for appropriate out of networkcare, the amount may be a percent of “usual, customary,and reasonable” (UCR) charges. Other carriers may paynothing.

Jim Fouassier, Esq., the Associate Director of ManagedCare at Stony Brook Medicine and an expert on managedcare contracting, explained several of the more commonprovider barriers to getting paid.

Pursuing Out of Network Payment

He explains that, generally, out of network reimbursementis based on the UCR, which may be determined solely bythe plan or payor in an arbitrary, self-serving manner. Inrecent years, more and more providers (and even planmembers, when they receive large balance bills) havestarted to push back, demanding more “reasonable”payments; litigation frequently is the result whenagreement can’t be reached. In an effort to frustrate thisactivity, some plans have altered their definition of UCR tominimize the ambiguity by actually pegging the out ofnetwork payments to a fixed number, such as 80% of theMedicare fee for service rate. Since the plan can only paywhat the benefit design established, this strategyprecludes arguments.

Added to the provider’s quandary related to out of networkclaims is often whether to balance bill the patient at all;not a popular concept. [If you could balance bill, wouldyou? - especially when, as a practical matter, most of thepatients covered by some of these narrow network andExchange plans (and, effective January 1, 2016, New York’snew basic health “Essential Plans”) are unable to pay.] Ofcourse, for plans regulated by New York Law, physiciansand other providers may have a remedy for “shortpayments” in an appeal under the new “Surprise” billinglaw. However, all too often, the size of the bill and the redtape and administrative costs related to such appeals,effectively, preclude this action as a meaningful remedy.

The Assignment of Benefits Headache

Then, there’s the issue of plan and payor violations ofassignment of benefits/ payment statements, which

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providers routinely obtain when a patient registers orpresents for services. As we know, all plans must providecoverage for “emergency” services. The provider (the“assignee”) takes the assignment of payment from thepatient (the “assignor”) and submits the claim to the planrather than to the patient. The plan then tenders paymentdirectly to the patient, in violation of the assignment. Suchpayment in violation of a valid assignment does not satisfythe underlying debt and renders the payer liable to have topay it again. So, in an appropriate case, some providershave been suing plans that pay in violation of assignmentof payments, and have been winning.

Some plans, however, recognizing that this is a growingtrend, have now started to incorporate “anti-assignment”clauses into the member contract benefit designs that arebinding on their members. Simply put, the provision saysthat a member may not assign any benefits of the healthplan to any out of network provider. Consequently, theassignment the member routinely gives his or her provideris meaningless, as the member had no authority to makean assignment in the first place. When the plan then paysthe member directly, the provider has no remedy for theassignment violation, i.e., there is no violation.

Roy Breitenbach, Esq., and Legal Partner/Director atGarfunkel Wild, P.C., an expert in Healthcare Law and Co-chair of the firm’s Litigation and Arbitration group, addedthat when benefits are sent directly to the member/insured,the patient may see this as a windfall; it’s no surprise whenthey turn around and buy a new refrigerator, making italmost impossible to ever collect. Roy raises another issuerelated to the assignment of benefits, adding furthercomplexity to the question of payment.

When ERISA plans (Employee Retirement Income SecurityAct, governing certain employee benefit plans) containanti-assignment provisions (making any assignmentinvalid), providing care to beneficiaries covered under sucha plan could be uncompensated, based on the language ofthe anti-assignment clause and the history of dealingsbetween the plan and the provider. This is a complicated,and fast developing area of the law. Healthcare providersshould be concerned and perform due diligence on vettingsuch plans.

Jim identified further provider reimbursement exposuretreating out-of-network patients. Quite often, out ofnetwork providers have no information about the planscovering particular patients, especially when they aredealing with third party administrators. Trying to get paidin this void is like shooting in the dark.

As mentioned above, recent legislation in New York State,the “Emergency Medical Services and Surprise Bills” law(“Surprise” billing law) took effect on April 1, 2015. Thislaw was enacted as consumer legislation, prompted byconcern from the New York State Department of FinancialServices that New York State healthcare consumers werebeing “surprised” with unexpected medical bills from out ofnetwork physicians and ancillary providers. The legislationrequires more transparency for consumers related to:

Carrier coverage/reimbursement of out of networkservices; and

Provider disclosure of network and hospitalaffiliations and anticipated patient costs for out ofnetwork services.

Although, at first blush, the law may seem to givephysicians a leg up in their fight to obtain better out ofnetwork payments, Jim concludes that the law favors thehealth plans. Almost all of these disputes arise in thecontext of emergency care. In New York, the law requiresall plans, in and out of network, to cover emergency careand to hold the member-patient harmless from anybalance billing.

Here’s the scenario: prior to the new law, the doctor bills$1000 for emergency services, the plan pays $450 (theamount that the plan deems to be the UCR); the doctorthen balance bills the member for $550. The member thencomplains to their health plan, the Insurance Division andthe Department of Health, the New York Attorney General,the Better Business Bureau, and anyone else who willlisten, and the plan is forced to remit the remainingbalance to the provider.

Enter the new law. Now, in addition to the providerappealing the payment amount, the patient or the plan canappeal the balance billing amount to the independent thirdparty agent (“ITPA”) that the law has created. In thecontext of emergency bills, the law establishes an “all ornothing” resolution; the agent has to decide what the fairand reasonable value of the emergency services actually is(using an assortment of criteria established in the law)and the amount that is closer – either the physician’s billor the plan’s payment – is what becomes final!!

Back to the example: this means that if the ITPAdetermines that the fair and reasonable value is $600,then all the physician gets is the $450 the plan originallypaid!! The rationale, we are told, is that (over a period oftime) providers will start billing less and plans will startpaying more, asserting that this should all even itself out.

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Roy commented further on the dispute resolutionopportunities set by the law. Disputes between consumersand health plans can be adjudicated by the NYS ExternalReview process and (short pay) disputes between providersand health plans can be “arbitrated” by an IndependentDispute Resolution Entity (IDRE). Of note, if the plan re-codes a case or denies based on medical necessity leadingto reduced reimbursement, the issue is not eligible forIDRE review. Medical necessity disputes may be handled asa part of the NYS External Appeal program through the NYState Department of Financial Services since the programeligibility requirements are silent related to out of networkdisputes (as long as the plan is under the purview of theNY State agency).

However, an out of network plan’s “internal” grievanceprocess has many twists and turns prior to obtaining afinal (internal) adverse determination. This must beaccomplished before the regular NYS external process canbe accessed. Some plans only allow the patient to appeal,claiming that the provider has no standing. This makes itsomewhere between difficult and impossible to exhaustinternal levels of appeal in order to further challenge non-payment. It’s a “Catch 22.” Both Roy and Jim protest thatplans cannot have it both ways.

Further legal modifications to the problems of collectingfor providing out of network care may be just around thecorner. The “Surprise” billing law also sets up an “out ofnetwork rate workgroup,” appointed by the governor toreport on the issues (this was slated to be completed byJanuary 1, 2016). It is comprised of membership fromplans, consumers and providers. With all of the above said,how does the new law apply on a practical basis forproviders?

Liz Carnevale, AVP, Patient Financial Services at NYMethodist Hospital, deals with out of network providerissues daily. Liz reports that out of network claims foremergency care are problematic. The hospital bills chargesand often receives push back from the out of networkcarriers that the services were not an emergency. “Weappeal these denials relying on the patient’s stated reasonfor the visit documented in the medical record (and not thefinal diagnosis after testing results). It is also important tolook at the time of the visit. This is especially important,for example, when the patient is a child running a 103-degree temperature, while access to care at one a.m. islimited.”

Jim adds that the legislation does not clarify what an“emergency” is and how long it lasts. (Eventually the

patient is stable and the course of an acute admission oractive treatment no longer qualifies as an actualemergency.) Definitions such as the one from the NY StateDepartment of Financial Services leaves plenty of “wiggleroom” for interpretation.

An “Emergency condition means a medical orbehavioral condition that manifests itself by acutesymptoms of sufficient severity, including severepain, such as a prudent layperson, possessingaverage knowledge of medicine and health, couldreasonably expect the absence of immediatemedical attention to result in:

placing the health of the person afflicted with suchcondition in serious jeopardy, or in the case of abehavioral condition placing the health of suchperson or others in serious jeopardy;

serious impairment to such person’s bodilyfunctions;

serious dysfunction of any bodily organ or part ofsuch person;

serious disfigurement of such person; or

a condition described in 42 U.S.C.; 1395dd…”.

The industry guidance, related to emergency departmentcare, is that the patient is generally held harmless. It’s upto the provider and the plan to come to terms. And if thepatient is held harmless, we all know how that will turnout.

When it comes to out of network ERISA unpaid/underpaidclaims, Liz tells providers to fight. The Memorandum ofUnderstanding between the US Department of Labor,Employee Benefits Security Administration (EBSA) and theHealth Care Bureau of the Office of the Attorney General(OAG) allows the parties to share information and conductjoint investigations involving potential violations withinNew York State. This gives hospitals teeth to vigorouslyfight for appropriate reimbursement. Her hospital decidedto outsource this work to a legal vendor, who has beensuccessful in obtaining reasonable reimbursement.

Jim and Roy do not see any difference in the issues orscenarios discussed based on plan types or patientdemographics, such as geography or patient mix, as longas commercial entities administer the plan benefit designs.Regardless of whether state or federal law controls theiroperations, (at the end of the day) plans offering MedicareAdvantage, Medicaid HMOs (Health Maintenance

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Organizations), FIDAs (Fully-Integrated Dual Advantageplans), or any other plan have to maximize profits. To dothis, they appear to take advantage of every ambiguity andloophole that an out of network relationship affords them.Jim cynically recites his corollary to the Golden Rule: “Theone with the gold makes the rules.”

So after this discussion, Jim, Roy and Liz were asked thequestion, “what good is a MCO network agreementanyhow,” especially agreements where providers gripeabout “boiler plate” contract language, regular andunilateral changes to payers’ provider manuals, or ongoinggrievances related to payers’ denials or claims processingissues? However, not surprisingly, Jim, Roy and Liz see thepositives in being in network.

Roy likes to have a written agreement, so everyone knowsthe rules of the road. He notes that if grievances cannot besettled informally, providers must pursue their legalremedies. Providers should act quickly, however, becausevery often managed care agreements have short periods inwhich you can bring disputes. Providers, should also bewary about informal resolutions, as they tend to lack theteeth of a legally binding settlement agreement.

Liz adds that it is always preferable to have contracts withlanguage that is clear, concise and lays out the rules soeveryone knows how to play the game. Whenever languageis vague, it leaves open the opportunity for

payors/employers to use their own interpretation, whichleads to denials/underpayment and long drawn outnegotiation, arbitration and other challenges.

The pursuit of legal remedies begs the question as to thesalvage-ability of provider/network relationships, shouldthere be litigation or arbitration actions. Both Roy and Jimfeel strongly that once providers stand up for their rightsas afforded by network agreements, payers have morerespect for them going forward.

Jim also acknowledges that with so many payment andadministrative headaches with out of network claims,unless the network has a very small penetration in theprovider’s area or the rates offered are below the provider’sactual costs, then being in network is not a choice, it’s anecessity. The way to optimize this is two-fold. First, aprovider must devote sufficient resources, including humanresources, in systems that track payments in as-close-to-real-time as possible; this can enable providers, to quicklyidentify “short” payments, ascertain reasons for theshortage and, most importantly, refute those reasons asearly as possible in the appeal timeframe. Second, if andwhen the reason implicates a contract provision, theprovider must be prepared to take whatever action isnecessary, including legal action, to enforce the contractprovision. After all, having that contract enables you toprotect and enforce your rights.

Citations

FAIRHEALTH, In-Network and Out-of-Network Care. Web. 30 November 2015. http://fairhealthconsumer.org

“HealthCare Provider Due Diligence: Anti-Assignment Clause Defeats Claim for Payment.” Health Plan Law, ERISAGroup Health Plan Administration. 23 October 2007. Web. 30 November 2015. http://www.healthplanlaw.com

“How New Yorkers are Getting Stuck with Unexpected Medical Bills from Out-of-Network Providers.” New York StateDepartment of Financial Services. 7 March 2012. Web. 30 November 2015.

Page, Leigh. “‘Out of Network’: More Money but Some Problems.” Medpage Today. 28 December 2013. Web. 30November 2015. http://www.medpagetoday.com/PracticeManagement/Reimbursement/43600

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Annual Accounting and Auditing Update SeminarRecapBy: Sean P. Smith, CPA

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For the first time in over three years the Annual Accounting and Auditing Update was held at a different location other thanthe Hofstra Club on Long Island. In an effort to have more seminars geographically convenient for all our members, theFinance and Reimbursement committee decided to hold the Annual Accounting and Auditing Update at the Hilton Hotel inTimes Square, New York City. Not knowing what to expect in attendance at this new venue, there was some apprehensionby our committee members. This was the first time we were holding a seminar at the Hilton Times Square; it was also thefirst time that we combined a “back to basic 101” session with a technical session.

The seminar was designed to be a comprehensive approach to appeal to all members from the staff level to the CFO. Theseminar began with “Financial Statements 101 ”presented by Scott Edelman, Controller at Burke Rehabilitation Hospital.Scott was, both, engaging and entertaining as he explained the basic concepts of the Balance Sheet, Statement of Operations(Income Statement) and Statement of Cash flows, including specific examples of each category. At the end of Scott’spresentation, all the attendees participated in an exam to reaffirm/test their understanding. This was the first seminar, inmy 15 years with HFMA, where the presenter had the attendees take an exam on the subject he/she just spoke about. Ithought this was a great way to reinforce what I just learned. As a Certified Public Accountant myself, the session was agreat refresher.

The second half of the seminar consisted of the technical session covering the latest accounting and auditing standardsimpacting not for profit entities, such as elimination of healthcare performance indicator, two net asset classifications(instead of three), as well as a new cash flow reporting model and required use of direct method. Kudos to Lisa Preddice,Partner, and Kate Corgel, Senior Manager at PWC, for tackling such tough subject matters and explaining them in a waythat the audience could understand.

The last part of the seminar consisted of a tax update presented by Eric McNeil, Director, also from PWC. Eric discussedthe latest updates to Section 501 R, the Affordable Care Act and the employer responsibility, concerns regarding executivecompensation and other issues impacting not for profits. As it turns out, we had over 50 attendees. This was more thandouble our attendance, compared to the prior year Accounting and Auditing seminar. Based upon feedback from ourattendees the venue was a huge success; they enjoyed the format of the seminar and subject matter and particularly praisedthe new location. I personally want to thank all our presenters, for a job well done, and our members, for making this afun and educational experience.

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Latest Available Trends ShowSlightly IncreasingCommunity Benefit ReportingBy: Scott J. Mariani, JD and Allison S. Kimowitz, CPA

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In 2014, the public accounting firm of Ernst & Young (“EY”) released itsthird annual Form 990 Schedule H Benchmark Report (“Report”) for the American Hospital Association (“AHA”). ThisReport, which is an accumulation of community benefit data from almost 1,000 participating tax-exempt hospitals, analyzesthe 2011 Schedule H, Hospitals, of the Federal Form 990, Return of Organization Exempt from Income Tax, of theseparticipating organizations. The Report also includes comparative data for 2009 and 2010 from their past reports to showcommunity benefit trends.

The Report analyzes the first three parts of Schedule H which provide quantitative information as opposed to other partsof Schedule H which contain qualitative information in the form of questions, responses and narratives. Schedule H, PartI reports information on charity care and other community benefits; Part II reports community building activity costs andPart III reflects bad debt and Medicare revenue and expense information.

Background

The process for compiling the information was similar to the past two reports. AHA requested that its members provide EYwith a copy of their filed 2011 Form 990 Schedule H. In addition, EY also invited its tax-exempt hospital clients toparticipate. The community benefit data was collected and tabulated in the same manner as the prior years’ reports.

Each responding single licensed hospital was categorized based upon the following:

1. Size – based on total hospital expensea. Small – less than $100M total hospital expenseb. Medium - $100M to $299M total hospital expensec. Large - $300M or more total hospital expense

2. Location – based on hospital zip codea. Urban and Suburbanb. Rural

3. Hospital Type – based on facility responsea. General Medical and Surgicalb. Children’sc. Teachingd. Critical Access

Any hospital that reported more than one licensed hospital facility in Schedule H, Part V, Section A, Hospital Facilities wascategorized as a system for purposes of the Report rather than as a hospital as outlined above.

Average responses, using simple averages of the Schedule H’s received, were calculated for all hospital systems andindividual hospitals in accordance with the above categories. Overall averages in the Report represent the average of resultsfrom both hospital systems and individual hospitals. No weighting was applied for the size of the hospitals.

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Hospital Respondents

The total number of Schedule H filers participating in the 2011 Report increased from 524 to 587 when compared to the2010 report. Overall, participating hospital facilities totaled 983 hospitals; a slight increase from the 2010 report.

Based upon the categories outlined above, the participating Schedule H filers for the three years reported are as follows:

2011 2010 2009Small 205 188 172Medium 152 121 185Large 133 97 120System 97 118 94Total Schedule H’s 587 524 571Participating Hospital Facilities 983 972 877

Source: Table 2 of the Report.

Quantifying The Results

The participating hospitals and systems, overall, reported 12.3 percent of their total expense as benefit to the communityin 2011 compared to 11.6 percent and 11.3 percent in 2010 and 2009; respectively. This means that a hospital with $100million of reported expense incurred over $12 million of benefits to the community in 2011. For purposes of the Report,“benefits to the community” include charity care, Medicaid underpayments, community health improvement programs,health research and education, subsidized services, bad debt expense attributable to charity care, Medicare shortfall andother community benefits, and community building activities.

The information relating to Schedule H, Part I, Financial Assistance and Certain Other Community Benefits at Cost, showsthat the overall average of expenses attributable to “community benefit” under the definition adopted by the IRS and reportedon each hospital’s and system’s respective Schedule H, Part I increased from 8.2 percent in 2010 to 8.9 percent in 2011.Please note that these numbers do not include Medicare shortfall or bad debt expense attributable to patients eligibleunder the organization’s financial assistance policy. Below is a comparison of this information for the three reporting years:

“Total benefits to the community” of 12.3% for 2011• Total charity care, means-tested government programs and other benefits: 8.9%• Community building activities: 0.2%• Medicare shortfall: 2.7%• Bad debt expense attributable to charity care: 1.0%

Note the total of the individual categories above actually totals 12.8%

“Total benefits to the community” of 11.6% for 2010• Total charity care, means-tested government programs and other benefits: 8.2%• Community building activities: 0.1%• Medicare shortfall: 2.8%• Bad debt expense attributable to charity care: 0.5%

“Total benefits to the community” of 11.3% for 2009• Total charity care, means-tested government programs and other benefits: 8.4%• Community building activities: 0.1% • Medicare shortfall: 2.4%• Bad debt expense attributable to charity care: 0.4%

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Charity Care, Means-Tested Programs and Other Benefits

The average of expenses attributable to “community benefit” under the definition adopted by the IRS and reported on eachhospital’s respective Schedule H, Part I was further reported by hospital size. The 2011 report shows that small and mediumhospitals both reported an average community benefit percentage of 8.5 percent, large hospitals reported 9.8 percent andsystems reported 9.0 percent.

The hospital size categories and respective community benefit categories which total to these percentages are as follows:

Small Medium Large SystemCharity care, unreimbursed Medicaid, 6.3 6.1 5.5 6.5and other unreimbursed costs from means-tested government programs

Health professions education 0.2 0.4 1.6 0.9

Medical Research 0.0 0.0 0.9 0.3

Cash and in-kind contributions 0.2 0.2 0.5 0.2to community groups

Other Benefits 1.7 1.7 1.3 1.2

Rounding 0.1 0.1 0.0 (0.1)

Total “community benefit” 8.5 8.5 9.8 9.0

Community Building Activities

The participating hospitals and systems indicated that, on average, each incurred approximately 0.15 percent of their totalexpenses on community building activities in 2011. This is a slight increase from 0.1 percent in the prior two years.Community building activities are reported on Schedule H, Part II.

Community building activities often promote regional health by offering direct and indirect support to communities withunmet health needs, including patients who are indigent, uninsured, underprovided for, or geographically isolated fromhealthcare facilities. Community building activities may also include hospital employees participating on the state Boardof Health, in regional health departments and neighborhood community relations committees, and with university and otherschool partnerships. In addition, community building activities may also include hospital’s donating cash or in-kind toprograms that address health problems in their surrounding communities.

Bad Debt Expense

Hospital’s report bad debt expense and an estimated amount of the bad debt attributable to charity care annually in ScheduleH, Part III, Bad Debt, Medicare, & Collection Practices.

In 2011, 70 percent of the 587 participating respondents reported bad debt attributable to charity care. The averagereported bad debt expense attributable to charity care was 1.0 percent of total expenses or approximately $3.0 million perparticipant in 2011. This compares with 0.5 and 0.4 percent of total expenses or approximately $1.8 million and $1.6million per participant in 2010 and 2009; respectively.

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Medicare Surplus and Shortfall

Hospital’s report total Medicare revenue and Medicare allowable costs of care relating to Medicare payments annually inSchedule H, Part III, Bad Debt, Medicare, & Collection Practices. A shortfall occurs when the Federal governmentreimburses hospitals less than their costs for treating Medicare patients.

In 2011, 72 percent of participants reported having a Medicare shortfall. This was a slight decrease from prior years of 74and 75 percent, respectively; in 2010 and 2009. In addition, most respondents also included in Schedule H, Part VI, anarrative description to explain why the organization felt that their Medicare shortfall should be treated as communitybenefit and included in Schedule H, Part I.

Conclusion

The 2011 Report, as with the 2010 and 2009 reports, provides community benefit information which tax-exempt hospitalsand systems should utilize in benchmarking their organization to national Schedule H averages. One should also rememberthis information is based upon approximately 1,000 reporting organizations, or approximately one-third of all potentialparticipants. Thus, the information, while useful, may not be a truly accurate reflection of all tax-exempt hospital facilitiesSchedule H activity and averages nationwide. In addition it should be pointed out that this information is based upon 2011filed Forms 990, Schedule H. For more recent national and local benchmarking comparisons, a tax-exempt hospital facilitymay want to access more recent Forms 990 via websites, such as GuideStar or Charity Navigator.

Prospectively, certain aspects of the Affordable Care Act may cause significant changes to a tax-exempt hospital’s ScheduleH. For example, tax-exempt hospitals should anticipate less charity care costs with the expansion of Medicaid and theindividual mandate (shared responsibility) and a corresponding increase in bad debt.

All tax-exempt hospital organizations should implement procedures designed to continue to accurately identify and quantifycommunity benefit activity and the subsequent reporting of this information on Schedule H.

About the authorsScott J. Mariani, JD, is a Partner at WithumSmith+Brown, Certified Public Accountants and Consultants, and is also aPractice Leader of the firm’s Healthcare Services Group. Scott can be reached at [email protected].

Allison S. Kimowitz, CPA, is a Supervisor at WithumSmith+Brown, Certified Public Accountants and Consultants, and is amember of the firm’s Healthcare Services Group. Allison can be reached at [email protected].

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Transforming Patient Access from a Cost Center toa Revenue CenterBy: Christian Borchert

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For far too long the front-end revenue cycle has been treated as a cost center. Trends are bucking that axiom asimprovements in technology, trade industry support and interdepartmental collaboration are allowing Patient Access leadersto stake their rightful claim in Revenue Cycle Management (RCM). A major driving force for change is a focus on thepatient’s experience- an organizational motivation to treat the patient’s clinical and financial need. In fact, sixteenpresentations at the 2015 HFMA ANI had some element of the patient experience included.

In April of this year, the HIMSS Revenue Cycle Improvement Task Force published a white paper stating that “RCM, as itexists today, is ill-equipped to handle the market forces impacting healthcare.” The paper cites that “Rapid growth inconsumer payments, reduced payer reimbursement rates, an ever changing regulatory environment, and shifting consumerexpectations have all contributed to the challenges facing RCM.” The Task Force, comprised of over 60 individuals fromproviders, payers, consultants, vendors and healthcare associations has envisioned a future of unprecedentedinteroperability by which a central healthcare data hub will help facilitate a consumer-friendly experience.

While this future business model is being worked out,healthcare is adopting internal changes through a wide varietyof disparate technology options (see sidebar) which has forcedmany Access and Revenue Cycle leaders into the role of projectmanager and QA analyst. These leaders are subjected to havingto manage implementation and maintenance, mentor staff whotoggle through multiple applications collecting as much dataand money as possible from the patients all while “focused” onensuring the patient has a positive experience.

Industry groups such as HFMA and NAHAM (NationalAssociation of Healthcare Access Management) have publishedmetrics with the MAP Keys SM and AccessKeys ® 2.0 designedto help organizations track performance using objective,consistent calculations. There are five Map Keys SM dedicatedto Access measuring Pre-Registration Rate, InsuranceVerification Rate, Service Authorization Rate, POS CashCollection Rate and Conversion Rate of Uninsured Patient toPayer Source.

NAHAM’s 22 AccessKeys® measure the effectiveness of front-end revenue cycle across six Patient Access domains:Collections, Conversions, Patient Experience, Process Failures,Productivity and Quality.

These same organizations, along with AAHAM (AmericanAssociation of Healthcare Administrative Management)additionally offer a variety of certifications aimed at ensuringstaff at the supervisor through executive levels areexceptionally knowledgeable in areas of Revenue CycleManagement.

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The utilization of proper procedures, the application of appropriate technologies in a well-educated organization thatmeasures their successes appears to be the recipe for success in the current RCM environment. From this cauldron ofchange management Access leaders are able to reposition their departments into revenue centers.

The PFS Committee will be hosting two sessions that tie into the theme of this article. Revenue Integrity Day will be heldon February 11th 2016 at the LaGuardia Marriott and Patient Experience Day will be held on April 12th 2016 at the VianaHotel and Spa with a cocktail hour afterward. Expert speakers and experienced panelists will provide their insight into thesetimely topics.

Lastly, and on a lighter note, one of our chapter hospitals, Montefiore, was highlighted in the Delta Sky magazine thismonth. The tag line of the article caught my eye, Making Hospitals Fun, by Kevin Featherly- “A comfortable, creativehospital environment isn’t just nice to have- for the youngest patients, it can be key to healing, inside and out.” Focus onthe child’s experience is showing positive clinical outcomes and it is hard to disagree with Meghan D. Kelly, Director of thePhoebe H. Stein Child Life Program and the CDM Group Creative Arts Therapy Program at Children’s Hospital at MontefioreMedical Center- “[T]his approach makes all the difference in the world. [W]e are going to see a trend toward more of it inthe future.”

Christian BorchertMetro NY HFMA PFS Committee Co-ChairMid-York AAHAM Chapter PresidentSalucro Regional Vice [email protected](315) 530-8079

Source material and further reading

HIMSS Revenue Cycle Improvement Task Force: http://www.himss.org/library/health-business-solutions/rethinking-revenue-cycle-management

HFMA MAP Keys SM: https://www.hfma.org/MAP/MapKeys/

HFMA Certifications: http://www.hfma.org/Content.aspx?id=508

NAHAM AccessKeys®: http://www.naham.org/?page=AccessKeys

NAHAM Certifications: http://www.naham.org/?page=Certification

AAHAM Certifications: http://www.aaham.org/Certification.aspx