Volume 46 Issue 3 Winter 2013 - HFMA Metro NY · PDF fileCybersettle, Inc.-PayMD E-Management Associates, LLC Emdeon Group J HANYS Solutions, Inc. Health/ROI Jzanus Consulting, Inc

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Volume 46 Issue 3 Winter 2013

2012-2013 CORPORATE SPONSORS

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BDO USA, LLP Bluemark, LLC CAB-Charles A. Barragato & CO., LLPCleverley + AssociatesCranewareDeloitte & Touche LLP Ernst & Young LLP Grant Thornton LLP Information Builders, Inc. Jzanus Consulting, Inc. KPMG, LLP Liberty Billing and Consulting Services, Inc.

McGladrey LLPMCRC GroupMiller & Milone, P.C. POM Recoveries, Inc. PricewaterhouseCoopers LLP RTR Financial Services, Inc. Siemens Medical Solutions Sunbelt Medical InternationalTRITECHHealthcare Management, LLCVALIC WeiserMazars LLP

AdreimaBetz-Mitchell Associates, Inc. Cirius Group, Inc.Cybersettle, Inc.-PayMDE-Management Associates, LLC EmdeonGroup J HANYS Solutions, Inc. Health/ROI Jzanus Consulting, Inc.M & T BankMBI Associates, Inc. McBee Associates, Inc. / HCE LLP

Mullooly, Jeffrey, Rooney & Flynn LLPMultiPlan, Inc. NTT Data Healthcare TechnologiesThe Outsource Group Physicians’ Reciprocal Insurers Pinnacle Strategies, Inc. Professional Claims Bureau, Inc. Proven Healthcare SolutionsReimbursement Services GroupSourceHOV/Managed Care ProfessionalsWashington & West, LLC WithumSmith+Brown, CPAs

Avadyne HealthCBIZ KA Consulting Services, LLC Collection Bureau of Hudson Valley - CBHV Convergent Revenue Cycle Management, Inc.DGA Partners, Inc.Garfunkel Wild, P.C. Grassi & Co.HCCS - Health Care Compliance Strategies Integrity Regulatory & Reimbursement Services, LLCM. Leco & Associates

MCS Claim Services, Inc. Medical Data Systems (MDS) Nassau Suffolk Hospital Council, Inc.NCO Healthcare ServicesOptumThe SSI Group, Inc. TD Bank - Healthcare Lending Division Triage Consulting GroupVecna Technologies


PAST PRESIDENT2010-2011 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 2004-2005 John M. Scanlan, FHFMA

EX-OFFICIOAll Past Presidents of the

Metropolitan New York Chapter, HFMADaniel Sisto,

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

President, Greater New York Hospital AssociationKevin W. Dahill,

President & CEO, Nassau-Suffolk Hospital Council


Chapter Officers and Board of Directors

Metro NY HFMA Newscast Schedule

Electronic Publication Date 4/23/13

Article Deadline for Receipt by Editor 3/19/13

OFFICERS 2012-2013President Palmira M. Cataliotti, FHFMA, CPAPresident-Elect David EvangelistaVice President Wendy Leo, FHFMATreasurer Meredith Simonetti, FHFMASecretary David WoodsImmediate Past President John I. Coster

BOARD OF DIRECTORSClass of 2013

Mario DiFiglia Richard T. Nagy, FHFMAJason Gottlieb Maryann J. ReganAnnie Lemoine

Class of 2014Martin Abschutz, CPA, CGMA Donna M. SkuraPaulette DiNapoli Robin ZieglerJames Petty, FHFMA

Newscast Committee

EDITORS:Marty Abschutz, CPA, CGMA, Editor

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

COMMITTEE MEMBERS:Christine Appicella

Kiran Batheja, FHFMAPaulette DiNapoli

James G. Fouassier, EsquireMary Kinsella, FHFMAMichael LamotheWendy Leo, FHFMA Don MacDonald

Mike McGrath, FHFMA

Susan MontanaAndrew NatkinJustin RoobergJosephine Ross

Edmund P. Schmidt, III, FHFMAKen Sheridan

John Scanlan, FHFMACynthia Strain, FHFMAStephanie Welsher

President’s MessagePalmira Cataliotti, CPA, FHFMA .............................................................................................Page 5

Editor’s MessageMarty Abschutz, CPA ..............................................................................................................Page 7

Calendar of Events ...............................................................................................................Page 8

New MembersRobin Ziegler ..........................................................................................................................Page 9

Committee Listings 2012-2013 ........................................................................................Page 10

Using Outlook to Priorize ..................................................................................................Page 12

HFMA Winter Academy Photos ..............................................................................Page 15, 17, 21

The Five Benefits of Customer LoyaltyTim Larkins...........................................................................................................................Page 16

Disaster Prevention Includes Your Managed Care AgreementsJames G. Fouassier, Esq.......................................................................................................Page 18

Dedicated Observation Units: The Clinical and Financial ImplicationsCyndy Kowalski, RN, MPA, C-CDIS ........................................................................................Page 22

“Best Efforts” In Commercial Contract TermsJames G. Fouassier, Esq.......................................................................................................Page 24

What’s “New” in the OIG Work PlanKathy Ruggieri ......................................................................................................................Page 26


I hope the comforts of home and family brought you much joy this holiday season. It is hard to believethat we are starting the 2013 year and that my year as President of this great chapter is coming to anend. We have made considerable progress to date, and still we have so much to look forward to in thenext few months.

Our premier educational event, the 54th Joseph A. Levi Annual Institute will be held on March 7-8, 2013at the LaGuardia Marriott Hotel. Chairman David Woods and the entire Annual Institute Committee haveorganized an extraordinary program complete with pertinent and tailor made content for our members.Along with the highly recognized CFO panel, we will bring to our members for the first time, a ChiefMedical Officer panel of distinguished physicians that will discuss clinical leadership’s footprint on thefinancial performance of a healthcare institution. The Annual Institute will include a welcome fromNational HFMA Chairman, Ralph Lawson, a keynote address from Honorable Alfonse D’Amato, and aNational HFMA update from Joseph Fifer, President and CEO, HFMA. We will present a Managed CarePanel made up of industry leaders that will consider the impact of the healthcare reform and New YorkState advocacy groups will provide a response to healthcare industry challenges. This year’s institutewill prove to be momentous as we honor and celebrate Joseph A. Quagliata, former President and CEOof South Nassau Communities Hospital and Past President of HFMA, Metropolitan New York Chapter1983-1984 with the Lifetime Leadership Award. We will also present the Steven A. Ryan Memorial Awardto Chapter Past President Kiran N. Batheja. This prestigious award is presented at the discretion of theBoard of Directors of the Metropolitan New York Chapter to an individual who has excelled in their workfor the Chapter and or has made a significant contribution in the financial field of healthcaremanagement. Finally, we will recognize Daniel Sisto, President of the Healthcare Association of New YorkState with an Outstanding Industry Service Award. Please register for the Annual Institute on our websiteor by mail.

I hope you will join us for the Annual Chinese New Year Celebration on January 26, 2013. The eveningwill be filled with great friends, family and colleagues along with good food, drink and entertainment.Also please mark your calendars, the next Long Island Ducks game outing will be on June 9, 2013.


I would like to take this opportunity to express my sincere gratitude to ourCorporate Sponsors and volunteers. It is with their support that we put forthexceptional educational programs to our members. We strive to continuouslyimprove our Chapter’s educational programs and encourage you to provide us withfeedback on how we can do better. Please don’t hesitate to reach out to me todiscuss any concerns or ideas you may have.

Warm regards and best wishes for a happy and healthy new year,Palmira M. CataliottiChapter President 2012-2013


By Marty Abschutz


Hopefully, you have all been able to keep warm in the face of the late January dip in temperatures. With thewinter 2013 issue of Newscast, we are moving into the home stretch of the HFMA year. We are all looking forwardto the premier education event of the year, the Joseph A. Levi 54th Annual Institute on March 7 and 8, 2013 atthe LaGuardia Marriott. Palmira Cataliotti, Chapter President, has highlighted several of the sessions, includingthe Chief Medical Officer (CMO) panel. The panel includes the CMO from four of our largest healthcare providers.The Institute committee also is presenting a managed care panel which includes executives from five managedcare insurers. They represent local and national companies.

The final session will highlight some of the responses being used for current recovery audit contractors’ (RAC)initiatives. Also, take a close look at the Calendar of Events elsewhere in this issue for several other educationopportunities. Be sure not to overlook the several webinars that are presented free to members presented by ourHFMA Region or National.

Jim Fouassier writes an article that many of us can relate to, given events in our recent past, “DisasterPreparation Includes Your Managed Care Agreements.” Jim’s second article, “Best Efforts in CommercialContracts” explores just what “Best Efforts” might (or might not) mean. Cyndy Kowalski brings us an article ondedicated observation units; this is an area that many providers are coming to grips with. Kathy Ruggieri bringsher take to us regarding the OIG workplan. This has been the subject of a Metro NY Compliance and Auditcommittee session. Whether or not you attended that program, we publish Kathy’s view here. Tim Larkins, fromthe South Carolina HFMA chapter, brings us his views on, “The Benefits of Customer Loyalty.” This is a topic thataffects every one of us in our professional lives. To round out this issue of Newscast, we continue the series onorganizing yourself by Gerard Walsh; this issue’s focus is on using Outlook to organize.

Our official Metro NY HFMA Linked In group continues to grow. We passed the milestone of 300 members, ashort time ago. Consider joining the discussion at http://www.linkedin.com/groups?gid=3960793&trk=hb_side_g.Also, “Like” us on Facebook to learn when the new photos are posted and for other information:https://www.facebook.com/HfmaMetroNewYork. (Remember, we are migrating event photos to the chapter’sFacebook page.)

I hope to see you at the Annual Institute in March and/or at the chapter’s Annual Business Meeting on Wednesday,May 1, 2013. Until then, all the best.

2012-2013 IMPORTANT DATES

March 7-8, 2013 Joseph A. Levi 54th Annual Institute LaGuardia Marriott

April 3, 2013 Medicaid Seminar LaGuardia Marriott

April 12, 2013 Annual ICR Seminar Uniondale Marriott

April 12, 2013 EMR - The Risk and The Reward Info Builders

May 1, 2013 Annual Business Meeting Leonard’s of Great Neck

A selection of FREE Webinars (Check www.hfma.org for more):

February 5, 2013 FREE Webinar – Observation Services

February 6, 2013 HFMA’s Virtual Conference #1

March 11, 2013 Medicare NPP Billing

March 20, 2013 The ABC’s of Transitioning to a New Revenue Model

April 11, 2013 HFMA’s Virtual Conference #2


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 2012

Iris RodriguezSouth Nassau Communities Hospital

Jim RoseRSG, Inc.

Jerilyn LoriaNew York Presbyterian Hospital

Maralyn MinerEmblemHealth

Neva A. HaroldNSLIJ Health System

Karen ProbeckWinthrop University Hospital

Samer E. OweisWinthrop University Hospital

Robbie S. Pruthi

Joseph DiGiovannaSaint Joseph’s Medical Center

John OwensGroup J

Jessica A Wilson

Francisco Alba AndresTruven Health Analytics

Lorraine BairdEmblemHealth

Shannon StachurskiNSLIJ Health System

Kathryn Seifert

Wally PatawaranThe John A. Hartford Foundation

Michael J GiannisisNSLIJ Health System

Stephan C AlcuinoBDO USA, LLP

Tomlee Lahayil AbrahamMount Sinai School of Medicine

OCTOBER 2012

Kate KesslerNYU Langone Medical Center

Ruby ThomasNew York Presbyterian Hospital

Trent L HainesNovia Stategies

Dolores FinneranCardiovascular Medical Associates

Kevin J DeluiseCohnReznick

Wendy RogersNYARC Inc.

Amy WestAHRC New York City

Marco RabieNYU Langone Medical Center

NOVEMBER 2012

Michelle KeilbasaJanssen Boitech

Alex Chang

Ginette M LaliberteBetz-Mitchell Associates

Nunzio SignorellaHELP/PSI, Inc.

Matthew Carballal

DECEMBER 2012

Daniel C LoenNSLIJ Health System

Kathryn BelloPricewaterhouse Coopers

Andrew Recchione

Sean BarrettDeloitte

Steve P HulversonAllscripts

Amy WolinWinthrop University Hospital



Advisory CouncilJohn Coster

[email protected] (516) 240-8147

Ed Schmidt [email protected]

(516) 572-4834

Cindy Strain [email protected] (516) 796-3700

Mary Long Kinsella [email protected]

(212) 297-5445

54th AnnualInstitute

David [email protected](212) 979-4566

Donna [email protected]/Christina Milone

[email protected](516) 509-0277

Bob [email protected](516) 616-0200 x201

Jim Argutto [email protected](631) 761-1028

AuditingJohn Scanlan


Gordon Sanit [email protected](516) 918-7065

Al [email protected](914) 365-3508

BylawsDavid Woods


Fred [email protected](516) 393-2250

Palmira Cataliotti [email protected]

(516) 663-2311

CentralRegistration

Robin Ziegler [email protected](516) 338-1100 x314

Diane Masi [email protected]

(516) 551-5839

John [email protected] (516) 240-8147

CertificationCoaching

Jim Petty [email protected] (516) 876-6022

John Scanlan [email protected]

(718) 283-3911

Kiran Batheja [email protected]

(718) 604-5578

Art Cusack [email protected] (516) 546-4198

Certified MembersKiran Batheja


Michael McGrath [email protected]

(516) 656-5374

CommunityOutreach

Josephine Vaglio [email protected]

(516) 248-2422

Continuing CareSteven Stella


Ann [email protected] (516) 663-8077

Corp. Compliance/Internal Audit

Ann Amato [email protected] (516) 632-3405

Regina [email protected](973) 972-3113

Terry [email protected](516) 663-2003

CPE’sJohn Scanlan


DCMS/BalancedScorecard


(516) 551-5839



(516) 663-2311

David Evangelista [email protected] (718) 206-6930

Exec. Comm.& Planning


(516) 663-2311

David Evangelista [email protected] (718) 206-6930

Finance/Reimbursement

/Audit

Mario [email protected]

(516) 705-1936

Kwok Chang [email protected] (212) 979-4324

Rachele [email protected](646) 227-3156

Rich [email protected](516) 298-8942/Joe [email protected](718) 250-6755

Founders AwardsPaulette DiNapoli


General Education

Maryann Regan [email protected]

(516-576-5601

Rich [email protected](212) 420-2516

Diane [email protected](516) 630-3911


(516) 551-5839

Committee Name Chair Co-Chair Vice Chair 1 Vice Chair 2


HIM/URAnnie Lemoine

[email protected] (516) 326-0808 x3312

Stacey Levitt [email protected](646) 732-5052

HistorianMichael McGrath

[email protected](516) 759-2200 ext. 5374

Paul Cheng, [email protected](347) 581-7573

Legal AffairsFred Miller


Managed CareDonna Skura


James [email protected]

(631) 638-4012

Rich [email protected](631) 444-4175

Patrick [email protected]

(212) 430-6620

MSPMichael McGrath


Kiran Batheja [email protected]

(718) 604-5578

MembershipMarketing



(516) 551-5839

Medical Grp Mgmt.

Josephine Vaglio [email protected]

(516) 766-0521

Jackie Namwila [email protected](347) 446-0159


Art Cusack [email protected] (516) 546-4198

MISJohn Mertz


Nicole [email protected]

(646) 471-7217

NewscastMarty Abschutz

[email protected](732) 906-8700 ext 109

James [email protected]

(631) 638-4012

Sue [email protected]

(631) 244-5661

NominatingJohn Coster


Patient FinancialServices

Jason [email protected](212) 297-4549

Paulette DiNapoli [email protected]

(516) 576-5638

Ned Rina [email protected](631) 465-6876

PPDDJohn Coster


Webmaster andPersonnelPlacement

Mary Long Kinsella [email protected] (212) 297-5445


Public Relations &Communications

Region 2

Emily [email protected]

(614) 263-1043

Michael [email protected]

(646) 227-2396

Zach [email protected](212) 213-0877 ext 441

Region 2CollaboratonCommittee


Wendy [email protected]

(516) 454-0700

Wendy [email protected]

(516) 454-0700


Ed [email protected]

(516) 572-4834


Gordon Sanit [email protected](516) 918-7065

Don [email protected]

(973) 872-1596

Ryan AwardMary Long Kinsella [email protected] (212) 297-5445



Meredith Simonetti [email protected]

(631) 465-6877Jonthan Segal


Committee Name Chair Co-Chair Vice Chair 1 Vice Chair 2

Social EventsKiran Batheja



SponsorshipMichael McGrath



(516) 663-2311

Yerger AwardDana Keefer


Julia Tsien [email protected]

(718) 589-2232

Using Outlook to PriorizeOUTLOOK TOOLS - HANDLING EMAIL MESSAGES1


Do you sometimes feel like you didn’t get anything important done at the end of the day, because all the urgent, small stuffkept you so busy you didn’t even start the things that really matter in the long run? People are paralyzed by the volume ofmessages or don’t have a systematic way of taking action on email. So most people leave messages in their In Boxes tolanguish and get buried by the onslaught of new incoming emails.

For example, You have to be done with a monthly report in the next hour, but... the alert window keeps popping up toannounce a new message you think, “This might be important!” . You want to respond right away, maybe out of curiosity,or because it represents a welcome distraction from boring tasks. You think, “I might as well answer really quick”.Compulsion to immediately answer every email as it arrives causes you to postpone important tasks. Even if you only taketwo to four minutes to answer a message it will enormously slow down tasks that require your full concentration. Fifteenminutes later, you find yourself back in front of the report trying to get the hang of those numbers again and you will haveto invest additional minutes to get back to working at the same speed as before.

Therefore, if you have your email set to notify you each time a new message is received, the first step is to turn it off! Unlessthere is a firm company policy to answer emails immediately, it is absurd to expect immediate answers to email messages.If you are expecting an urgent and important message, ask the sender to follow up with a phone call after the message hasbeen sent. If there are emails from “important people” that you routinely must respond to in a timely matter, thenautomatically divert the email upon receipt to a folder.

Most information managers have ways to accomplish the suggestions just presented. Here is how to effect these changesin Microsoft Outlook:2

1. Turn off new message notification01. On the Tools menu, Click Options02. Click the Preferences tab, and the click E-Mail Options03. Under Message Handling, deselect Display a notification message when new mail arrives check box.

2. Create a folder for “important people” emails.I recommend creating a folder called “Bosses”. We use the plural term Bosses to indicate there could be manypeople you must respond to. It could be superiors or subordinates.01. On the File menu, point to New, and then click Folder. 02. In the Name box, enter a name (e.g., Bosses) for the folder. 03. In the Folder contains dropdown box, click on Mail and Post Items04. In the Select where to place the folder, Expand the Personal Folders list05. Click on In Box06. Click OK

3. Create a Rule that diverts email into the Bosses folder.01. Click Inbox02. On the Tools menu, click Rules Wizard. 03. In the Apply changes to this folder list, confirm Inbox selection04. Click New.

At this point there a number of choices, we will create a template to move a new email from yourimmediate supervisor into the Bosses folder.

05. Click Start creating a rule from a template06. Select-Move messages from someone07. In the Rule Description, click on people or distribution list08. In the Show names from the: dropdown box, Select Contacts

1 Effective Time Management: Using Microsoft® Outlook® to Organize Your Work and Personal Life, Seiwert, Lothar2 Instructions from Microsoft Outlook XP


09. Select your immediate supervisor in the Name listing. (i.e., this list is generated from your Contacts listing)10. Click on the From� box. (i.e., this moves the name over and indicates the email address)11. Click OK.12. In the Rule Description, click on move it to the specified folder13. Expand the Personal Folders list and then expand the In Box list and then choose the Bosses folder14. Click OK.15. Click Next> 16. Confirm √ from people or distribution list, then Click Next> 17. Confirm √ move it to the specified folder , then Click Next>18. Click Next>19. Confirm √ Turn on this rule, then Click Finish>20. Click OK.

For emails you do not respond immediately to, you can manually assign them to a folder (i.e., see item 2. above). In the2012 Fall issue of Newscast3, we developed an Action/Status Ranking Table and is the key to a folder system structurethat prioritizes your email messages. The steps are:

1. Create five folders by the Levels of Importance (LOI). Name the folder by entering the LOI order first, then theName (e.g., 1. Urgent).

2. Create sub folders under the LOI for each Action or Status email outcome that you have identified and mappedto each LOI. Name the folder by entering the Rank first, then the Name (e.g., Under Urgent, 1.1 Appointment)

Here is a sample folder structure:

LOI order LOI Folder Action/Status Rank Qualifying DescriptionName Sub Folder

1 Urgent Appointment 1.1 Scheduled event that cannotDeadline or be moved or cancelledimmediate attention Instant 1.2 Event/Task that is specific and immediate

2 Pressing Telephone 2.1 A needed telephone callConsequential but not Follow Up 2.2 Requires a dated follow updriven by deadline

3 Routine Research 3.1 Reviewing correspondence orCompelled by researching for informationjob necessities Meeting 3.2 A scheduled event that can be

moved or cancelled

4 Assign Delegate 4.1 Can be assigned to aTo be done by subordinatesubordinates or Outsource 4.2 Can be assigned tothird parties a third party

5 Holding Queue 5.1 Due greater than the currentCan be delayed or week but less than a month

waiting for trigger event Later 5.2 Items not immediately due or triggered by an event

3 Follow the link (http://library.constantcontact.com/download/get/file/1102372063475-217/hfmafallnews.pdf ) then go to Page 20 – The Org Smorg


If the naming convention is used, it establishes the order in which the folders are reviewed. The Folder Tree for the firsttwo LOI’s will look like this:

1. Urgent1.1 Appoinments1.2 Instant

2. Pressing2.1 Telephone2.2 Follow Up

Recently, I came across a commentary succinctly summarizing the productivity advantages just outlined. Following is anamended and abbreviated version.

According to David Allen, the best-selling author of Getting Things Done, the first step is to ask, what is it? Is itactionable? Many of us use Outlook’s function, but for some the list has degenerated into an “amorphous blob ofundoability”. He suggests organizing Outlook using categories. If the item is actionable, you will have to decide on thenext step. This step will either be to do it, delegate it, or defer it. If a task can be handled in 2 minutes or less, simply doit. It will take longer to file and retrieve it later. If you can delegate it, do so. If you can’t handle it immediately, defer it toa category where it can be done. Of course you will have projects that can’t be handled as simply. Anything that involvesmore than one step should be filed under projects. On a weekly basis, you should review all listing under projects andask yourself, “What is the next action?” This will ensure that you continue to make forward progress.

SUMMARY• Turn off new email notification• TRASH those emails that do not require your attention or input!• If a task can be handled in 2 minute or less, Do It!• Create an “important people” (i.e., Bosses) folder for top priority review. These emails are done first regardlessof action needed or current status.

• Establish a folder system according to ranking by Level of Importance, then Action or Status.• Quickly review all emails on a weekly basis for action or re assignment.

Please direct your comments to http://www.sixwconsulting.com/


Photos selected by Marty Abschutz Photos by Bill Cohen

The Five Benefits of Customer Loyalty

By Tim Larkins

CEO, E5Xcellence


Loyalty is an important yet rare quality in our culture. It isdemanding and volatile. Without an environment containingconsistency of trust and attentive care, it will not survive.

Customer loyalty is no different. Your customers want andhope they can trust you. They demand the care thatanticipates their unspoken needs and quickly responds totheir spoken requests. The organizations recognizing thisare able to create and sustain customer loyalty not becausethey are lucky or just happen to hire the right people. Theydo it deliberately. And they are deliberate because theyunderstand that customer loyalty is a vital key to sustainedgrowth and profitability.

The first benefit from creating loyal customers is obvious yetsignificant – fewer of your customers choose others toprovide the service they originally entrusted to you.Most companies spend too much time and money on themarketing efforts of “hunting and fishing” and not enough onnurturing their existing customers. Engage your staff’screativity to determine how your team can make eachcustomer encounter special.

A motivated staff is the next benefit. This is the lynchpinto creating customer loyalty – creating staff loyalty withinyour own organization. Engaged, educated, empowered,enriched, and energized team members will apply theirdiscretionary efforts at work to ensure your customers aresatisfied. It is leadership’s responsibility to model behaviorthat is caring, trusting, and supportive. In other words, takecare of the people you have entrusted with the care of yourcustomers.

How would you like fewer complaints while serving moreclients? Does it sound too good to be true? With greatercustomer loyalty, over time it becomes a reality. This freesyou and your staff to pursue more productive work.

The fourth benefit is pure magic as your customersbecome your promoters. As you quickly close the loop oncomplaints and anticipate the needs of the customers, theywill tell the story of your outstanding service to otherpotential customers. Most understand that things go wrong.

What they don’t understand is why it took so long to fix, whyit happened again, why they had to keep calling back forupdates, and why there was no sense of urgency with yourstaff.

Think of it this way. People are going to tell stories of theirexperiences. When your company “blows it”, your customersare going to tell their peers, friends, and whoever else willlisten. It is nothing personal. They do not think about thishurting your reputation in the industry. Resolvingcomplaints timely, effectively, and to the customers’satisfaction puts you in control of the end of the story. Nowthey still tell the story but with a happy ending where youand your staff are the heroes.

Finally, a stronger, more predictable bottom line willresult as the first four benefits become reality.

Organizations struggling to achieve distinction in theirindustry, to impress their clients and to show profitability ontheir bottom line need to focus on creating loyalty with theircustomers. They want confirmation that choosing yourorganization was a wise decision. They want you to do whatyou promised and respond to their needs and requests timely.Your challenge is to do this and provide the “what else.”

So how are you doing? Maybe a Customer Loyalty initiativecould help.

Tim Larkins is the CEO of E5Xcellence. Hisopinions are his own. He may be reached at:[email protected]



Disaster Preparation Includes Your Managed Care Agreements

By: James G. Fouassier, JD(Writer’s Note: This is a revised version of an article that ran in Newscast in April, 2006. SuperStorm Sandy is a reminder that the subject may be worth revisiting.)


Will you get paid for the services you provide during a state of emergency ? Most hospitals have engaged in comprehensivedisaster planning to ensure continuity of patient care, but how many have considered what will happen to the revenuestream if a disaster should impact upon the ability to submit claims and comply with the administrative requirements ofmanaged care contracts?

The arcane administrative requirements of managed care agreements will not be uppermost in mind when the urgent needsof throngs of patients become the only priority of a hospital during a disaster. Assuming that it even can keep its doorsopen, all hands will be engaged for weeks or even months in critical life sustaining patient care, with little regard for billingand claims formalities and a lot of contractual red tape. Only much later, after a return to some semblance of normalcy,when all concerned have to weigh the inevitable financial costs of such emergencies, will those long neglected administrativedetails resume their proper place.

Equally problematic is how a provider gets paid from its commercial payors under terms of a contract which may not beaffected by government decree. By planning ahead providers may ameliorate some of the financial consequences of theadministrative failings inevitable in a disaster or other emergency without having to rely exclusively on the good graces ofpublic officials or the vagaries of the courts in compelling commercial payors to excuse substantial performance with theterms of the contract.

Disasters and emergencies should not excuse a managed care organization from its obligation to pay claims for its members,and commercial MCOs may not be required by law to loosen or suspend submission and payment criteria. No one wantsto rely on litigation to secure reimbursement long after services are rendered, and there is a dearth of authority over justhow far the courts will go in re-writing a managed care agreement between two sophisticated parties dealing at arms’length. In this day and age providers will be hard pressed to argue in court that these types of losses were unforeseeable,thus not expected to have been anticipated by the parties and addressed in contractual arrangements.

Maybe Medicare and Medicaid will accommodate your payment needs by relaxing documentation and technical submissionrequirements (see, for example, Waiver Under Section 1135 of the Social Security Act, issued 9-23-05 by HHS SecretaryMichael O. Leavitt, in the wake of Hurricanes Katrina), but maybe they will not, or maybe a waiver will not be broad enoughto address your particular payment situation. Political initiatives may facilitate some equitable arrangements withgovernment and commercial payors but relying on such events actually happening is imprudent. Interestingly, in the wakeof Super Storm Sandy a number of commercial plans did step up and do the right thing by waiving several significantadministrative requirements. For example, on November 3 Emblem Healthcare, a leading health plan here in themetropolitan New York area, notified providers that in response to Hurricane Sandy it was suspending all of its authorizationrequirements. Empire BlueCross-Blue Shield, the largest health plan in the area, went even further in advising that fromNovember 5 through November 12, all ER and urgent care doctors would be considered “in network”. (This might haveunanticipated consequences, however, if out-of network physicians who otherwise might have been paid at higher OON ratesnow are getting lower in-network rates and then will pursue their patients for the balances.) Pre-authorization andcertification also were “not required at this time”.

Consequently, providers must be sure that their managed care agreements address these important issues. With respect tocurrent contracts, open a dialogue with your payor representatives at a high enough level to assure that this important issueis not given short shrift. While you cannot compel them to amend existing agreements it is not unreasonable to expect that


they will want to make some accommodation, if not out of concern for public relations and publicity as much as for reasonsof fairness.

For those providers engaged in negotiations toward new or renewed contracts, now is the time to bring these issues to thetable.

A provider will want language which defines precisely when a disaster or emergency arises, usually referring to an officialdeclaration of some government agent or authority. Do not give credence to any argument that a provider is protected bya standard “force majeure” clause. Such clauses merely excuse performance (i.e. payment) and in other ways will work tofrustrate what a provider is trying to accomplish by raising these issues in the first place. The provider also should insiston a “tail” or “run out” of at least ninety (90) days after the formal cessation or withdrawal of the emergency declarationbefore normal claims and payment criteria are deemed to resume. This will give a facility some breathing space and allownormal systems and operations to come back on line before contractual requirements again will be deemed controlling.

Provide for the suspension of claims submission time frames and precise claims formats (the inability to document in anemergency may translate into the later inability to properly code claims) and work with the MCO to devise a fair alternativegiven the realities of a disaster scenario. A provider also must be relieved from requirements for authorization or notificationfor admissions, treatment or discharge. Eliminate the need for admission and treatment to be prescribed by a “gate keeper”.Language should suspend any concurrent utilization reviews; odds are the provider will not have adequate numbers of staffto make entries in medical records, let alone compile and copy them for case managers, in the event of a real disaster. Itis not unreasonable for payors later to ask for some evidence of medical necessity, but work on language which will allowalternate showings of proof, such as physicians’ affidavits, copies of x-rays, etc. Also, try to get the payor to agree thatservices and care mandated by government officials and undertaken by the facility in compliance with lawful orders (likemass testing or inoculations) will be paid regardless of medical necessity. This will be critical if the provider is requiredto quarantine or isolate patients pursuant to orders issued by the local or state health departments, or other governmentagencies.

Contemplate situations in which the care rendered, while adequate, may not precisely comply with quality benchmarks andguidelines and hence might otherwise be subject to denial. Payors should be required to pay for services rendered if theprovider, in good faith and despite best efforts, has been unable to comply precisely with TJC, NCQA, EMTALA or legallymandated “minimum hospital standards”, for example. Think about addressing payment issues which may arise whencompetent medical personnel who otherwise may not be licensed in your jurisdiction nevertheless render care and treatmentat your facility (presumably subject to a lawful waiver issued by some governmental authority but nevertheless incontravention of some contract requirement).

Lastly, be sure your arrangement protects you if there should be a later determination that the declaration of emergency,or some aspect of it which impacted upon your facility, was invalid, illegal or improper. You acted in good faith in providingservices under what certainly will turn out to be horrible conditions, and you should have a legally enforceable expectationof payment.

To sum up: these are some of the issues that should be addressed in your contracting discussions:

1. When do the relief provisions kick in and for how long do they apply? What geographic areas are to becovered by a declaration to make it applicable to your facility ?

2. Authorizations and precertification should be waived.

3. Routine case management should be excused. This does not mean that the plan is being asked to pay formedically unnecessary claims. It just means that the provider is excused from daily concurrent review andappeal activities that it likely cannot perform due to personnel shortages or physical facility impairment.However, if an emergency law or regulation or a government official orders services to be performed thenany of them that are covered for a plan’s members must be paid without any necessity reviews.


4. Claims for covered services should not be denied because a clinician is not credentialed to the plan and/ornot licensed in the provider’s jurisdiction as long as licensure has been waived by government authorities.

5. To the extent not otherwise consistent with the law the failure of a provider strictly to comply with EMTALAor any other “minimum standards” of operation and treatment imposed by law or regulation will notconstitute a basis for payment denial.

6. A subsequent determination of invalidity (such as a court decision after a lawsuit) or an order revoking orotherwise retroactively affecting the emergency declaration will not affect the emergency protections theparties have negotiated into the agreement.

James Fouassier, Esq is the Associate Administrator of Managed Care for Stony Brook University Hospital. Hisopinions and comments are his own and may not reflect those of Stony Brook University Hospital, the StateUniversity of New York or the State of New York. He may be reached at [email protected] contained in this presentation constitutes legal advice and the same shall not be relied upon to anyextent whatsoever as legal advice. Legal advice only may be obtained from legal counsel engaged for thatpurpose pursuant to express agreement.



Dedicated Observation Units: The Clinical and FinancialImplications

By: Cyndy Kowalski, RN, MPA, C-CDIS


Current healthcare reform efforts have identified inefficiencies in access, cost, and quality of care within acute carehospitals. The Affordable Care Act is strengthening the case for dedicated observation units. Medicare’s payment penaltiesfor excess 30 day readmissions will place more pressure on hospitals to decrease inpatient readmissions. In thisenvironment of increased scrutiny, few opportunities exist with the potential to reduce cost, enhance patient satisfaction,and improve the quality of care. Although hospitals have explored the concept of observation, many have not developed suchunits for reasons that include limited space, resources, or an understanding of the clinical and financial implications.

Visits to Emergency Departments (ED) exceed 120 million each year1¹, inpatient beds are scarce and expected to becomemore so, Medicare payments are becoming less, and audits and denials are becoming greater. The decision to develop anytype of observation service begins with a solid commitment from Senior Leadership and strong Physician and NurseLeadership.

The Center’s for Medicare and Medicaid Services (CMS) define observation care as “ongoing short term treatment,assessment, and reassessment before a decision can be made regarding whether patients will require further treatment ashospital inpatients or if they are able to be discharged from the hospital.” Observation care is intended to be a time-limitedoutpatient service. According to CMS, “the decision whether to discharge a patient from the hospital or to admit the patientas an inpatient can be made in less than 48 hours, usually in less than 24 hours.”

It is our experience that patients placed in dedicated observation units are more accurately diagnosed, discharged to homefaster, payers avoid costly admission charges, and scarce inpatient bed capacity is more appropriately utilized. Morefrequent use of observation can reduce unnecessary admissions and improve fiscal performance for the hospital whileincreasing patient satisfaction.

Patients who are managed in dedicated (versus virtual) observation units are more likely to receive necessary testing, haveshorter lengths of stay and lower overall care costs, in addition to enhanced patient satisfaction. Providing an alternativeto avoidable admissions, observation units allow the hospital to reserve inpatient beds for those patients that need it andrelieve ED overcrowding.

The virtual model is certainly inexpensive, presents as easy to implement, using beds located throughout the hospital, andexisting staff however, it does contain potentially significant drawbacks, including inconsistent care and delays. It can bea “culture shock” for inpatient clinical staff to care for observation patients whose care requires timely and more frequentassessments and testing. It is unfortunate to lose sight of managing these patients within the 12-24 hour window.

Understanding the profitability of a dedicated observation unit starts with the basic hospital profit equation in which profitequals revenue minus costs. Observation units can convert previously unprofitable inpatient admissions into profitableobservation stays. Hospitals must be careful about shifting too many cases into observation units.

To finish the profit equation and assist in determining the profit potential of an observation unit, costs must be considered.There are fixed costs; which will include start up and maintenance of the unit and staffing costs. The number of observationpatients that one nurse must manage is often higher than inpatient ratios. Variable costs, such as linen and paper chartingsupplies are relatively insignificant.


For every patient treated in an observation unit and discharged who would have otherwise been admitted, an inpatient bedcould be occupied by a patient with the intensity of service which necessitates the acute level of care. Chest pain is one ofthe more common observation diagnoses. A patient admitted vs. placed in observation may result in a denial due to lack ofmedical necessity and recoupment of the MS-DRG. If the patient is most appropriate for observation, the facility has theopportunity to bill outpatient charges such as observation hours and infusion services. An efficient observation unit providesopportunity to manage patients as outpatients and determine the most appropriate plan of care.

Observation units can convert previously unprofitable hospital admissions into profitable observation stays while stillproviding appropriate evaluation, treatment, and risk stratification.

For more information, please contact Cyndy Kowalski, RN, MPA, C-CDIS at 609-514-1400 or [email protected].

REFERENCESCenters for Disease Control and Prevention, for Health Statistics. (2010) Selected patient and provider characteristics forambulatory care visits to physician offices and hospital outpatient and emergency departments. 2008.


Great. Just when you thought that you’d be able to catch upon some stuff gathering dust on your desk, in an emailattachment comes yet another boilerplate networkagreement from a managed care organization. You glancethrough it and take note of anything unusual, different orespecially burdensome. Later on, when you have time toreview it in detail, you identify proposed requirements thathave your facility or group doing something for this plan orpayor that is new or different from your usual modusoperandi. You think it through, discuss it with teammembers directly involved, and conclude that, yes, maybeyou can. You aren’t sure, however, that you will be able to doit to the precise requirements of the language of theagreement, or that all of the information will be accurate, orthat the information will be useful. Maybe you aren’t evensure that your organization will want to be bothered doing itat all. You don’t want it to become another in a long list ofserious issues in the document, however, so you proposeadding the old stand-by: “The Provider will use its bestefforts . . . . .” or “The Group will use good faith . . . . .”.There; that ought to do it. Next issue.

You know the pushback you’ll get from your plan colleague;maybe you’ve made the same argument yourself the last timea plan proposed “best efforts” language when you asked it toagree to something you wanted it to do. “This “best efforts”language gives us nothing because we can’t hold you to afirm obligation.” That’s the point, you explain. You want todo your best but don’t want to be held to any firm obligation.Both you and your plan colleague operate from thepresumption that “best effort” language – on both sides -doesn’t really require either of you to do anything. Besides,how can anyone know what “best efforts” are? Isn’t it only amatter of each side’s self-serving opinion in any givencontext?

Although it isn’t a health law case, Maestro West ChelseaLLC v. Pradera Realty, Inc. is a recent New York decision thatreminds us that, no, it isn’t just about our opinions, and yes,“best efforts’ can give rise to firm, legally binding and legallyenforceable obligations and duties. In Maestro a real estatedeveloper wanted to build a tall development but needed air

rights from the guys next door and contracted to pay forthem. The deal had to close by a date certain, and theneighbor had thirty days to secure a waiver from itsmortgage holder. A down payment was made. The contractrequired the neighbor to use its “best efforts” to secure thewaiver, and if it couldn’t then the developer had the right totry itself to get the waiver from the mortgage holder. If therewas a delay in getting the waiver then the closing date couldbe extended by the developer “in its sole discretion”. Well –you guessed it – the neighbor didn’t get the waiver, and whenthe developer went to the mortgage holder directly it foundthat the mortgage holder wanted millions for a waiver.Eventually the neighbor offered the down payment back butinstead of accepting it the developer sued for breach ofcontract.

In a motion to dismiss, the neighbor argued that thecontract’s “best efforts” clause is invalid and unenforceablebecause it contains no objective criteria or guidelinesagainst which the neighbor’s actions (or inactions) can be measured. How can you decide if any conduct rises to aparticular level if the level, the measure, isn’t established inadvance ? Not a bad argument, and probably what many ofus would say under similar circumstances. The judgeacknowledged that the law on the issue is far from clear andthere are many cases on both sides of the question. Here’sthe way this court analyzed it.

First, the judge said that even if a contract does not containan actual “best efforts” clause, parties to a contract alwaysare required to use “best efforts” because of what New York(and many other states) say is a part of every commercialtransaction, whether expressly stated or not: the “covenantof good faith and fair dealing”. I’ve written on this before.All parties to a contract are required by law not to doanything which would diminish the value or purpose of theagreement. Acting in accordance with express contractterms does not violate the covenant; its intent is to “fill in”the way that the parties are supposed to behave toward oneanother and perform their duties under the contract withoutexpress language, so that each party furthers the reasonableexpectations the other which were formed at the time the

“BEST EFFORTS” IN COMMERCIALCONTRACT TERMSAnother Potential Trap for Providers

By: James G. Fouassier, JD


agreement was made. The idea that there may not be someprecise measure or guideline against which “best efforts”may be measured is not the end of the court’s inquiry.

The problem with working without guidelines, however, isthat the court may end up imposing its own idea of what theparties meant, or should have done, or should not have done,rather than basing its decision solely on the evidence of whatthe parties themselves expressed as their mutual agreement.

Is it true, though, that because the parties themselves didnot specifically recite objective criteria or guidelines in thecontract itself, there exists no measure against which theirconduct may be gauged? No, says the court. “If externalstandards or circumstances impart a reasonable degree ofcertainty to the meaning of the phrase “best efforts” theclause can be enforced.” Standard rules of contractinterpretation should apply: if a contract is ambiguous thecourt may turn to extrinsic evidence for guidance as to whichparty’s interpretation should prevail, the judge said.

“A best efforts clause imposes an obligation to actwith good faith in light of one’s own capabilities.Best efforts requires that [a party pursues] allreasonable methods . . . . and whether suchobligation has been fulfilled will almost invariably . .. . involve a question of fact.”

This means that the issue cannot be resolved as a matter oflaw on a motion to dismiss the lawsuit; instead it must bedetermined by a trial, at which time the facts are explored.Did the mortgage establish just what this neighbor had to dowhen asking for a waiver? What has the neighbor done insimilar circumstances? What do other property owners dowhen they contract to sell their air rights? Only after all thefacts are explored at trial (meaning witnesses, documentdiscovery, expert testimony, etc) will a court, as a last resort,find that a contract is unenforceable as a matter of law forbeing too indefinite.

So, this one will go to trial. If the finder of fact (in a contractcase it’s usually the court but a party may demand a jurytrial) concludes that under all of the circumstances theneighbor did not act as reasonably required then it willassess monetary damages for breach of contract.

A firm contract condition requires performance no matterwhat (barring certain excuses which the law recognizes forsituations beyond a party’s control). On the other hand,despite a party’s stated intention a variety of practical orunanticipated problems reasonably may precludeperformance, and if those possibilities present themselvesbefore the contract is signed then the use of a “best efforts”clause is prudent. The moral of the story, however, is thatyou should not promise to employ “best efforts” unless youmean to, and after the deal is signed you’d better act like youmeant to.

James G. Fouassier, Esq. is the Associate Administratorof the Department of Managed Care at Stony BrookUniversity Hospital, Stony Brook, New York. His opinionsare solely his own. He may be reached at:[email protected]. The information contained in this presentation is forgeneral guidance on matters of interest only. Nothingcontained in this article constitutes legal advice and thesame shall not be relied upon to any extent whatsoeveras legal advice. Nothing herein may be used as asubstitute for consultation with an attorney who isengaged for that purpose pursuant to expressagreement.

What’s “New” in the OIG Work Plan

By: Kathy Ruggieri, Senior Director, Revenue Cycle Services


The U.S. Department of Health and Human Services, Office of Inspector General (OIG) has recently issued the FiscalYear (FY) 2013 OIG Work Plan. This is an annual Work Plan that addresses the current focus areas of the OIG, includingprojects still in process from prior FYs in addition to new focus areas for the upcoming year.

Although the Work Plan addresses initiatives for all types of providers, this article will focus on some of the new hospitalaudits. Some of these audits may or may not be indicative of future Medicare payment reductions. It is recommendedthat Hospitals stay abreast on these focus areas throughout the year to best anticipate future revenue reductioninitiatives.

1. Diagnosis Related Group (DRG) Window

The DRG Payment Window Policy has been a component of the Inpatient Prospective Payment System(PPS) regulations since 1983. There have been changes to this policy over the years, and in 2012, theDRG Payment Window was expanded to include wholly owned physician practices. The OIG focus for2013 will be to analyze claims data to determine how much CMS could save if it bundled outpatientservices delivered up to fourteen (14) days prior to an inpatient hospital admission into the DRGpayment. The current DRG payment Window Policy bundles all outpatient services delivered three (3)days prior to an inpatient admission. The OIG anticipates that significant savings could be realized if theDRG window was expanded from three (3) to fourteen (14) days. Hospitals should pay close attention tothese audits as an expansion to this program will have significant financial implications to hospitaloutpatient service revenue.

2. Compliance with Medicare’s Transfer Policy

The Medicare Post Acute Transfer Rule was implemented in FY 1998 and has been expanded in FYs 2005,2006, 2007, 2008 and 2012. Pursuant to federal regulations, a hospital discharging a beneficiary is paidthe full DRG amount. In contrast, a hospital that transfers a beneficiary to another facility is paid agraduated per diem rate for shorter lengths of stay. The OIG has performed significant audits of claimsthat were reimbursed the full DRG rate and has provided guidance to CMS on claims processing edits thatwould concurrently identify claims that were actually transferred to another facility and would result inthe lesser per diem rate. Based on these recommendations, the Medicare Administrative Contractors(MACs) have implemented claim edits to identify these situations to prevent overpayment situations.Historical OIG audits identified the effectiveness of these edits. OIG audit results have revealed an 85%effective rate with the claims processing edits. The MACs were charged with making additional changes tothese edits to further improve the effectiveness. In 2013, additional audits will occur to evaluate theeffectiveness of these claim edits to determine if the edits have improved.

3. Payments for Discharges to Swing Beds in Other Hospitals

The OIG will review Medicare payments made to hospitals for discharges that were coded as discharges toa swing bed in another hospital. Swing beds are inpatient beds that can be used interchangeably for acutecare or skilled nursing care. Currently, federal regulations allow for a full DRG payment for dischargescoded as “Swing Bed” (patient discharge status code of “61”). However, Medicare pays hospitals areduced payment for shorter lengths of stay when beneficiaries are transferred to another PPS hospital.This is based on the assumption that acute care hospitals should not receive full DRG payments for


beneficiaries discharged “early”, and then admitted to another post acute provider post discharge. SinceMedicare does not pay a reduced payment for discharges to a “Swing Bed”, the OIG will evaluate thesesituations and if appropriate, recommend that CMS evaluate their policy related to payment for hospitaldischarges to swing beds in other hospitals. In the event this change is implemented, hospitals whodischarge patients to “Swing Beds” and utilize patient discharge status code of “61” will experiencefurther claim reductions as additional claims will be impacted by the Medicare Post Acute Transfer Rule.

4. Non–Hospital Owned Physician Practices Using Provider Based Status

The OIG will assess the impact of non-hospital owned physician practices billing Medicare as providerbased physician practices. A determination will also be made with regard to whether provider basedstatus meets CMS billing requirements. Since provider based status can result in additional Medicarepayments, it also increases a Medicare beneficiaries’ coinsurance liabilities. Hospitals that bill with aprovider based status should evaluate whether the Medicare criteria specific to provider based physicianstatus is met.

It is clear that the OIG is looking for opportunities to further reduce Medicare reimbursement. It is important forHospitals to keep current on these potential revenue reductions. It is recommended that Hospitals continue to take fulladvantage of comment periods to communicate concerns with regard to payment reduction initiatives.

For more information, please contact Kathy Ruggieri at (732) 392-8227 or [email protected].

Documents

Volume 46 Issue 3 Winter 2013 - HFMA Metro NY · PDF fileCybersettle, Inc.-PayMD E-Management Associates, LLC Emdeon Group J HANYS Solutions, Inc. Health/ROI Jzanus Consulting, Inc