President Corner: Mike Robbins

Inside this issue:

BOOM Project 2

Chance to Win

3

Upcoming Meetings 4

Medicare Bad Debts 5

New Members

8

Meeting in Morgantown 9

Board Members and Committees 11

Special points of interest: Upcoming meetings

Medicare

Where are they now

October 2008

Your Program Committee got this year’s educational calendar off to a great start with the sessions held last month at the Waterfront Place Hotel in Morgantown. I was particularly pleased with our attracting nationally-known Steven Berger to be our keynote speaker and provide attendees with a number of great take-home tools on improving their organizational performance. One of Steve’s most important messages was the importance of organizations making sure that they continue to invest all the resources necessary to train their employees, to ensure that they are up to speed on all of the latest requirements for their jobs. It would be an understatement to say that the Program Committee of the WV Chapter of HFMA considers it to be Job#1 to make sure that the program content we offer at each of our sessions throughout the year is as timely and relevant as we can possible make it. I would encourage each of you to contact me or members of the Program Committee with any topics that you believe should be covered in upcoming meetings; we are in the process of putting together the plans for our January meeting at the Marriott in Charleston as this issue of Mountain Talk goes to press. As part of our commitment to members’ continuing education, I also wanted to make you aware of recent action taken by your Chapter’s Board of Directors at its September meeting, to assist those of you who are interested in becoming certified members of HFMA. The Board has voted to reimburse any individual that passes a certification exam for the cost of taking any of the HFMA certification exams. In addition, we have agreed to purchase a set of self-study guides for use by Chapter members. These guides, which can run as much as $325 per set, will provide members with many of the tools necessary to prepare for these exams. We will purchase more than one set if there is enough interest expressed by members in participating in the certification process…so please e-mail me as soon as possible if you are interested in pursuing your certification. For more on the value of HFMA certification, I would encourage you to visit HFMA National’s website at www.hfma.org/certification/. As this will also be our last newsletter prior to the end of the year, please let me use this opportunity to wish you and your family an early best wishes for a Happy and Healthy New Year!

Healthcare is one of the many industries today that is faced with both financial challenges and the need to manage rapid change. A popular strategy for confronting these issues has been to focus on “core businesses” where an organization can capitalize on its strengths (i.e. add value) and “outsource” to the extent practical, those items which are outside of that core competency to an organization that has a core focus on the segment to be outsourced. Outsourcing is being utilized in wide variety of business sectors as a means to save money and focus on where your organization can generate revenues and profit. Energy costs are continuing to rise, causing unpredictable spikes in operating budgets. Capital is limited for plant overhauls or expansions. Yet your patients still need comfort and you need a predictable budget. BOOM stands for build-own-operate-maintain. Essentially, it is outsourcing the construction, ownership, op-eration, and maintenance of a central heating and cooling system to an organization that has that as its “core business”. Advantages of this approach include: Predictable long-term budgets Reduce the risk associated with a rise in energy costs Eliminate the need for capital outlay for central facility upgrades Offload the financial risk associated with unexpected downtime Guaranteed performance While engaging in a BOOM project is not a good fit for all hospitals, it should be considered when any of the following conditions arise: Your systems are in need of optimization to reduce operating costs The central systems are nearing the end of their expected life The hospital is considering major expansion or new construction Redundancy in the system has eroded due to increases in cooling requirements, causing financial risk of unexpected downtime Your energy costs are over budget and need to be made predictable

Tim Foley is with the Strategic Partnerships Group of Carrier Corporation, a division of United Technologies Corporation. He works with executives at hospitals and other large facilities with reducing operating costs and with major facility upgrades. He is newsletter editor and an active member of the Healthcare Financial Manag-ers Association of Northeastern New York. He can be reached at tim.foley@carrier.utc.com.

What in the world is the “BOOM” project? By Tim Foley

WIN FREE REGISTRATION TO 2010 ANI – NASHVILLE

HOW? WV Chapter members attending three of five of the 2008 – 2009 educational programs: September, 2008 Morgantown Fall Revenue Cycle Flatwoods January, 2009 Charleston Spring Revenue Cycle Flatwoods May, 2009 Stonewall Resort They will have their name placed in a drawing for one free ANI registration to be

awarded at the September, 2009 meeting.

WHY WOULD YOU WANT TO ATTEND HFMA’S ANNUAL NATIONAL INSTITUTE (ANI) ?

Here are some comments from recent attendees in Las Vegas: Greg Gibbs from Arnett and Foster: "Attending this year's ANI was great. The keynote speakers were motivational and educational. The general sessions provided me with some very valuable tools that I will be able to use on a day to day basis. And the chance to network with old friends and new acquaintances can not be matched. Vegas was great also. " Mike Robbins from The WV Hospital Association:

ANI brings value by providing me with access to speakers and topics that may not be provided during our Chapter meetings. This year, in particular, I was able to preview a speaker who will be presenting at our September meeting;

ANI provides me with the opportunity to network with my peers, in the world of healthcare finance gener-ally, and more specifically, with other Chapter leaders, as well as my peers from the Hospital Associa-tion world;

ANI helps provide me with better ideas of what works and what doesn’t work from a meeting planning standpoint, which I can bring back to WV to better plan our future meetings.

Dianna Cesa from West Virginia University Hospitals: Three things, the sessions are 1st class, meeting the vendors and networking with other HFMA members. This year I was able to get information that will help us with setting up online access for our patients. I also made contacts with vendors for services that we are needing.

HFMA Upcoming Meetings

Revenue Cycle Meeting

Octob er 2008

Please set the following dates aside on your calendar for the General Education Conferences and Revenue Cycle Work-shops for the West Virginia Chapter of HFMA for the year: FALL EDUCATION CONFERENCE Sept. 17-19, 2008 Waterfront Place Hotel, Morgantown FALL REVENUE CYCLE WORKSHOP Nov. 6, 2008 Days Hotel, Flatwoods WINTER EDUCATION CONFERENCE Jan. 14-16, 2009 Marriott Hotel, Charleston SPRING REVENUE CYCLE WORKSHOP April 9, 2009 Days Hotel, Flatwoods SPRING EDUCATIONAL CONFERENCE May 20-22, 2009 Stonewall Resort, Roanoke If you have any topics or speakers that you would like the Program and Revenue Cycle Committees to consider for any of these programs, please don’t hesitate to contact me. Mike Robbins, VP/Financial Policy West Virginia Hospital Association mrobbins@wvha.org

Come and network with us. November 6, 2008 at Flatwoods we are holding our Fall Revenue Cycle Meeting. There will be Emdeon, Valorie Raines from SelectNet, Tim Allman from Medicare Part B, Carelink and Kathy DeVault to discuss the great topic of self pay and the Uninsured.

Registration starts at 8:30 and the program begins at 9:00 for more information please contact Marcie Blankenship or Mike Robbins.

HOPE TO SEE YOU THERE!!

On May 2, 2008, the CMS issued a Joint Signature Memorandum (JSM) to all of its Fiscal Intermediaries (FI) titled “Clarification of Medicare Bad Debt Policy/Bad Debt Policy Related to Accounts at a Collec-tion Agency.” CMS states that the purpose of the memo is to “clarify longstanding policy concerning reimbursement for a Medicare Bad Debt while the account is at a collection agency.” This memo has created both controversy and confu-sion for providers and now leaves them with questions of how to respond to bad debt audits as well as set their collection and bad debt policies for the future. History of Medicare Bad Debt Reimbursement Chapter 3 of the Provider Reimbursement Manual (PRM), as well as 42 CFR §413.89, defines the criteria for an allow-able bad debt: The debt must be related to covered services and derived from deductible and coinsurance amounts. The provider must be able to establish that reasonable collection efforts were made. The debt must be uncollectible when claimed as worthless. If after the provider applied reasonable and customary attempts to collect a bill, the debt remains unpaid more than 120 days from the date the first bill is mailed to the benefici-ary, the debt may be deemed uncollectible unless there is reason to believe that the debt is collectible. This is what the PRM calls the Presumption of Uncollectibility. Sound business judgment established that there was no likelihood of recovery at any time in the future.

Based on interpretation of language contained in the Omnibus Budget Reconciliation Act of 1987 (OBRA of 1987), many Medicare contractors allowed providers’ bad debts for accounts sent to a collection agency. The OBRA of 1987 imposed a “bad debt moratorium” which says that if an intermediary was allowing hospitals to write off bad debts at the time they were sent to a collection agency prior to August 1, 1987, then the intermediary must continue applying that same principle when allowing write-offs in subsequent years so long as the provider had not changed its policy or changed its FI. All other bad debt criteria in PRM Section 310 still had to be met, including maintaining collection ef-forts for at least 120 days from the date of first bill. It is the provider’s responsibility to document that, prior to August 1, 1987, it was allowed to claim bad debts at the time they were sent to a collection agency. CMS acknowledged the “moratorium” throughout the 1990s in directions provided to FIs on auditing bad debts. In addi-tion, many FIs published specific memos outlining how providers should handle bad debts and gave specific instructions on how a provider could remain eligible for the “moratorium.” Many FIs continued to allow providers to claim bad debts when the related patient account had been turned over to a collection agency at least for cost reports filed through FY 2007. All of these instances illustrate that CMS, in many ways, had acknowledged the existence of the “moratorium” for the past twenty years. However, in one fell swoop with the issuance of the May 2 memo, CMS has reversed its policy and taken a more narrow interpretation. CMS Position on May 2, 2008 In its memo CMS instructed FIs that they are “required to disallow Medicare bad debts for accounts at a collection agency where the contractors may heretofore have allowed those bad debts in the past based, at least in part, on inter-pretation of language contained in the OBRA of 1987.”

Recent Developments in Medicare Bad Debts-Will we ever be able to claim our Medicare Bad Debts? By Trent Messick, CPA, Member & Delane Buck, CPA Senior Associate Dixon Hughes PLLC-Healthcare Consulting Practice

CMS highlights in the memo that the bad debt policies have been in existence since the late 1960s and it has been its pol-icy that when an account is in collection, a provider cannot have determined the debt to be uncollectible and cannot have established that there is no likelihood of recovery under the regulations. In other words, until a provider’s reasonable collection effort has been exhausted, including both in-house efforts and the use of a collection agency, a provider may not deem a bad debt as uncollectible under the provisions of PRM Chapter 3. CMS is claiming that even if there was a “moratorium” in 1987 providers should have never been able to claim bad debts that were still placed at a collection agency. (Writer’s commentary: If this is only a policy clarification and not new policy, then why has it created such confusion in the provider community? Also, if the regulations and longstanding policy have been in existence since the late 1960s, then why did it take CMS over forty years to come out with such a concise stance?) CMS has determined that any instructions previously issued which allowed hospitals to claim bad debt for accounts at a collection agency based on a Medicare contractor’s interpretation of the policy as of August 1, 1987, are incorrect. In no case is an unpaid Medicare account which is in collection, including at a collection agency, an allowable bad debt under the regulations. If a Medicare contractor’s practice has been to allow bad debts for some hospitals while the accounts are at a collection agency, based on its practices as of August 1, 1987, the Medicare contractor shall disallow these bad debts effective May 2, 2008. CMS states that contractors should not reopen cost reports to apply these guidelines. Cost report years that have not been final settled (NPR) are subject to the guidelines. This is typically FY 2006 and FY 2007 although some providers have unsettled reports back to FY 2000. FIs have verbally indicated that if a provider reopens a previously settled cost report for an issue other than Medicare bad debts, it is not the intention of the contractor to subject the bad debts for that year to the new guidelines. What Should a Provider Do? Regardless of opinions on the May 2 memo, hospitals will have to decide how they will respond to the new CMS guide-lines. Most providers’ primary concerns will relate to cash flow and financial implications. Providers will either choose to stand firm with their current policy and procedures and fight any Medicare audit adjustments through the appeal proc-ess or they will adapt and change their policies to conform to the recent CMS clarifications. Each has implications that providers must consider. Listed below are the two options with potential advantages and disadvantages. Stand firm with current policy and procedures.

Could result in cash flow decreases as appeals move slowly through the system. Puts provider in better position if favorable court cases compel CMS to retract current position. (Remember

one of the criteria to be eligible for the moratorium is that the provider could not have changed its policy since 1987.)

Only recommended for providers that could sustain the legal battle and reduced reimbursement in the short run.

Recent Developments in Medicare Bad Debts-Will we ever be able to claim our Medicare Bad Debts? By Trent Messick

Adapt and change policy to conform to recent CMS clarifications.

Results in less cash flow interruptions. Less favorable position if court cases compel CMS to retract current position, because now provider has

changed policy. With introduction of Medicare Administrative Contractors (MAC), providers may lose eligibility under the

moratorium anyway. Potential loss of collection revenue on non-Medicare accounts because hospital will be forced to pull back

all accounts from collection agency. There may be methods to mitigate these losses. Potential to claim additional bad debt that provider had not previously claimed because they may have trans-

ferred to collection agency prior to 120 days. Most providers will not be able to sustain the cash flow issues or the lengthy legal battles resulting from standing firm. In addition, providers should be aware of when their FI converts to a Medicare Administrative Contractor (MAC) the pro-vider will probably no longer be eligible for the moratorium. Regardless of a provider’s choice to stand firm or adapt and change policy, there are steps that should be taken. Stand firm with current policy and procedures.

Engage a healthcare attorney that is familiar with the Medicare bad debt regulations and rules. File timely appeals when NPRs are issued excluding the regular bad debts. Consider alternatives for joining class action filings Be prepared for lengthy appeal process. Be prepared for NO reimbursement on regular Medicare bad debts until providers have a favorable court

ruling that forces CMS to change. (All providers should continue to identify and claim crossover and indi-gent care bad debts separately.)

Adapt and change policy to conform to recent CMS clarifications.

Form a team at the hospital to rework collection and charity care policies. The team should include indi-viduals from finance, business office, reimbursement, collection agency and compliance.

Policy should be drafted to comply with new guidelines and clarifications issued by CMS. Consult regulations, memos issued and question/answer issued through FIs. Consider using account balance thresholds in shaping the collection procedures Evaluate the appropriate days to leave at collection agency to make sure that money is not left on the

table for non-Medicare accounts. Make sure that collection agency is aware of Medicare bad debt regulations. Work with collection agency to assist in the preparation of Medicare bad debt logs. If an FI disallows regular bad debts on prior year cost reports, consider filing an appeal for that year to

reserve appeal rights. Then work with collection agency to have the prior year accounts returned (pull back all payor accounts) so they can be claimed in a subsequent year.

Recent Developments in Medicare Bad Debts-Will we ever be able to claim our Medicare Bad Debts? By Trent Messick Continued

Evaluate potential of claiming additional Medicare bad debts that may have been previously excluded due to

the 120 day rule. Utilize/Implement charity/indigent care policy to identify appropriate charity care Medicare bad debts that

are not subject to the collection agency rules. (See §312 of PRM) Summary Providers should understand that this issue is far from over. Litigation and appeals will continue for years. The courts will eventually decide for us. However, there are things that are known to providers. CMS has made a clear stance re-garding bad debts at collection agencies. Providers cannot stand on the sideline waiting to decide how to respond to this issue. They need to make prompt, informed choices and understand the resulting implications. Stay tuned! About the Author Trent Messick, CPA is a member with Dixon Hughes PLLC. Trent is based in Winston Salem, NC, and can be reached by calling 336.714.8100, or by email, tmessick@dixon-hughes.com.

Recent Developments in Medicare Bad Debts-Will we ever be able to claim our Medicare Bad Debts? By Trent Messick Continued

Joyce Landers Jeff McCoy Director an Network Development Accountant Mountain State BC/BS Jackson General Hospital 900 Pennsylvania Ave 122 Pinnell St Charleston, WV 25302 Ripley, WV 25271 304-347-7730 304-373-1482 Joyce.landers@msbcbs.com jmccoy@jacksongeneral.com

Tracey Stalnaker Sherri Dean Accountant Manager External Provider Jackson General Hospital Mountain State BC/BS PO Box 720 700 Market St Ripley, WV 25271 Parkersburg, WV 26101 304-343-1483 304-424-7719 tstalnaker@jacksongeneral.com sherri.dean@msbcbs.com

WV Chapter Awards Lucille Craft Award

Sister M. Madeleine Lopez Walter R. Mitchell

Penman and Speaker of the Year

Each Newsletter we would like to highlight the awards that our chapter gives out each year. Second award SISTER M. MADELEINE LOPEZ AWARD Sister M. Madeleine Lopez has been an instrumental member of the West Virginia Chapter of HFMA since 1954. Ms. Lopez has served the Chapter in various ca-pacities including the position of President twice in 1959-1960 and 1966-1967. She is also the recipient of the Follmer Bronze, Reeves Silver, and Muncie Gold and was awarded the Founders Medal of Honor in 1987. To honor Sister M. Madeleine Lopez for her many years of faithful and dedicated service to the West Virginia Chapter of HFMA the Sister M. Madeleine Lopez award was devel-oped in 1999. The award is presented to a new chapter member for their outstanding support and participation in the activities, goals and achievements of the Chapter. Only West Virginia Chapter members who have joined the chapter in the previous 18 months are eligible.

See the WV Chapter website for informa-tion on the upcoming education events, the latest edition of the Mountain Talk, chapter wards and other details. The site is located at www.wvhfma.org and is maintained by Chris Clark and/or Steve Meadows. Current career opportunities and vendor information are also posted on the website. If you have any ideas or suggestions, or interested in posting information, please contact Chris or Steve.

“What is important for me to pro-mote is for people to get involved in HFMA, because it creates a stronger connection to health care as a profession” James Heffman

“Meeting at Morgantown” Members of the WV Chapter of HFMA enjoyed great education ses-sions, catching up with old friends and a West Virginia University Tailgating experience at the Fall Education Meeting at Waterfront Place in Morgantown, WV September 17-19, 2008. Chapter President Mike Robbins welcomed seventy participants to the conference as he introduced Keynote Speaker Steven Berger from Healthcare Insights. Attendees also enjoyed sessions on West Vir-ginia’s privatized Workers Compensation Market and Recovery Au-dit Contractors. The ever popular Yetta Bretzman presented a session on Microsoft Publisher to wrap up the second day of education. While the West Virginia Mountaineers suffered a disappointing over-time loss to Colorado, the tailgating party offered chapter Mountain-eer fans an evening of excitement and prizes.

Special thanks to all of the sponsors that made this meeting a success.

Page 11

President Mike Robbins (304) 353-9721 President Elect Jan Strope (304) 347-1550 Vice President Danielle Heston-Raddish (304) 624-2960 Secretary/Treasure Keith Morgan (304) 346-0441 Board Members Belinda Bennett (304) 469-8620 Dianna Cesa (304) 598-6376 Sandy Michaels (304) 257-1026 Susan Cunningham Lisa Simmons (304) 598-6247

Bring a friend to the next HFMA meeting!!

Join today at hfma.org/join.

Committee Name: Chairs Members Advisory and Nominating Susan Cunningham Board Officer and Directors Awards Dianna Cesa Stu Barnes Finance and Fundraising Linda Dugan Co Chair Keith Morgan Financial Review Angela Coburn Co Chair Jan Strope Mike Robbins Internet Chris Clark Steve Meadows Member Services Jan Strope Co Chair Jill Epstein Joe Hrutkay Barbara Knight Dianna Cesa Mid Atlantic Julie Shaw Susan Cunningham Newsletter Belinda Bennett Program and Entertainment Becky Hammer John May Sandy Michaels Doug Coffman Linda Dugan Lisa Simmons Barbara Knight Norman Mosrie Revenue Cycle Marcie Blankenship Co Chair Barbara Tackett Belinda Bennett Donna Urshel Donna St Clair Jane Antulov Jennifer Dierwechter Special Projects Mike Robbins If you have an interest in participating in the chapter committee activities or if you have an idea or suggestion, please contact the committee chair or President Mike Robbins

West Virginia Chapter – HFMA 2008-2009 Corporate Sponsors

EMERALD LEVEL HealthCare Financial Services

RUBY LEVEL Arnett & Foster PLLC Parente Randolph LLC

West Virginia University Hospitals

SAPPHIRE LEVEL Advanced Patient Advocacy

Helvey & Associates Medical Advocacy Services

Mountain State Blue Cross & Blue Shield ParrishShaw + Co

Quadax, Inc United Collection Bureau

Vanguard Financial Services Wells Fargo Insurance Services West Virginia Health Services

PEARL LEVEL Booth & McCarthy

NCO Financial Systems

Leadership Job Opening

Title: Head of Reimbursement Company: Providence Health & Services Location: Portland, OR Providence Health & Services in Oregon is recruiting for a leadership position responsible for reimbursement activities for the entire network of 7 hospitals within the Oregon region, with revenues totaling $2.8B. Suc-cessful candidates will hold a Bachelors degree and at least 10 years of experience preparing Medicare, Medi-caid, and Champus cost reports for mid to large-size hospitals and/or health system Providence Health & Services is rated, not only as one of the best employers in Oregon, but is a national award winning health system that extends across a five-state area - from Alaska through Washington, Montana, Ore-gon, and into Southern California. The system employs more than 47,000 employees, operating 27 acute care hospitals, and more than 35 non-acute health care facilities, as well as physician clinics, health plans, and nu-merous other health and education services. Interested parties can apply online at www.providence.org/careers #43249 or contact our recruiter at: Fiona Gladden Executive Recruiter-Oregon

Each newsletter we would like to highlight a past member of the West Virginia Chapter of HFMA. If you know of a former mem-ber and where they are please let us know and we would like to spotlight them so old friends can see where they are in their life.

Bert Barnette, CFO

Bert has been a member of HFMA for over 20 years. He is a past president of the West Virginia Chapter and now resides in North Carolina. Bert is currently the CFO at Chatham Hospital in Siler City NC. He and his wife reside in Siler City along with their children. He has recently become a very proud grandfather. Bert stays in close contact with his West Virginia Family and would love to hear from you If you would like to contact Bert he can be reached By email at bbarnette@chathamhospital.org

Where are they now?