Summer 2013 Heartbeat Newsletter


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Volume 66 | Issue 1 July 2013

H E A LT H C A R E F I N A N C I A L M A N A G E M E N T A S S O C I AT I O N S E R V I N G T H E K A N S A S C I T Y C H A P T E R Programming .............................2 Webinars ....................................2 President’s Corner ......................3 Sponsorship ...............................6 Officers & Directors ....................6

Region 8 Connection...................7 Disproportionate Share ...............8 Region 8 Institute .....................10 Virtual Conference ....................10 ANI 2013 ..................................11

KHA Update ..............................12 Chairs/Co-Chairs ......................13 Joint Fall Conference ................13 Sponsor Spotlight .....................14 New Members ..........................14

Annual Awards .................15 & 16 MHA Update .............................17 LTC 2013..................................18 Golf Tournament .......................19

Health Plan Readiness to Operationalize Value-Based Payment Models AN AVAILITY RESEARCH STUDY

INTRODUCTION No matter where you go in health care, conversations about payment reform abound. The industry is fully engaged with discussions around structuring health plan payments based on ‘value’ versus ‘services rendered’. Pressure from the federal government to lower costs, coupled with employer and consumer frustration with the overall state of our health care system, make a shift to new payment structures highly likely. The message is clear: payments should be based on good care resulting in quality outcomes, not the volume of services rendered. Over the past several years we have seen accountable care organizations (ACOs) begin

to pepper the landscape. Pay for performance (P4P) and patient-centered medical home (PCMH) initiatives appear regularly in news releases and media conversations. Bundling payments continues to intrigue health plans, physicians, and patients. All carry great promise to make the transition from ‘fee for service’ to ‘fee for value.’ They likewise carry new risk profiles that by and large the industry is unprepared to broadly embrace. For these reasons, many in the industry are asking, “How many of these new payment models are in place? How many health plans and providers have adopted them? When will we start to see the savings

and cost containment these models predicted?” To assess where the industry stands in terms of achieving the goals of value-based payment models (lower costs and better outcomes) requires us first to understand how well prepared health plans are to operationalize the models, and then how well enabled providers are to adopt them. Efficient operations that limit, or better yet, eliminate, labor-intensive processes are necessary for value-based payment models to work. Article continues on page 4

mark your calendars Heart of America Programming

National Webinars

The topics listed are subject to change and will be more clearly defined as the program year progresses:

JULY 16, 2013

JANUARY 16, 2014

Medicare Update

Regulatory ComplianceHot Topics for CMS, OIG and OCR Compliance

Light Breakfast 7:30 –11:30 AM

$45

AUGUST 21, 2013

Lunch 12:00 PM - 4:30 PM

Regulatory Update from MHA & KHA

FEBRUARY 20, 2014

Light Breakfast 7:30 –11:30 AM

$45

SEPTEMBER 19, 2013

Employer Response to Healthcare Reform Lunch 12:00-4:30

$65

Understanding the Spectrum of Value-Based Healthcare Options: What’s Best for Your Organization

July 31

Metro Health Case Study: Using Patient Financing to Develop Positive Outcomes for Your Patients, Community, and Bottom Line

August 8

High-Impact Service Contracts: Balancing Risks and Savings to Lower Costs

August 15

Leveraging the Latest RFID Technology to Support Your Supply Chain, Manage Costs, and Improve Clinician Workflow

$45

MARCH 20, 2014

Back by popular demand! Healthcare 101

NOVEMBER 13, 2013

CEO/CFO Panel Lunch 12:00 PM - 4:30 PM

July 24

$65

Benchmarking-Using Evidence Based Strategies to Improve Revenue Cycle operations Light Breakfast 7:30–11:30 AM

Learn about timely healthcare finance topics and earn CPEs. Most live webinars are free for HFMA members and $99 for non-members, unless otherwise noted.

Lunch 7:30 AM – 4:30 PM $65

$45

APRIL 24, 2014

Leadership/Organizational Skills & Awards Banquet Lunch 12:00 PM – 4:30 PM

Region 8 Webinars August 13 12-1:30pm CST

$65

Accounting, Auditing and Compliance Update. Program cost is free, additional information will be sent to members via email.

View all on-demand webinars HFMA provides webinars available one calendar year following the live webinar date and year. Most on-demand webinars are free for HFMA members and $99 for non-members, unless otherwise noted. Available until March 6, 2014

ICD-10 Implementation: Effective Steps for Successful Adoption & Strategies

Available until April 4, 2014

The Role of Transparency in Driving Operational Excellence

Available until April 22, 2014

Revenue Cycle: Emerging Trends

Available until April 30, 2014

Surviving Medical Necessity and Short Stays: Practical Strategies to Protect Revenue, Reduce Costs, and Achieve Compliance – page 2 –

Andrea Lindsay, President

Hello Heart of America members! I am Andrea Lindsay and I am very excited to serve as your chapter President for the 2013-2014 year. I have been a chapter member since 2007 and began volunteering almost immediately. I have served on various committees, served as the Sponsorship Co-Chair, participated on the Board of Directors and began my officer rotation in 2010. I can’t believe how time flies! We have assembled a great leadership team this year between our Officers, Board Members and Committee Chairs and Members. The time and effort they graciously provide is greatly appreciated. I would like to thank John Maschger for his leadership of the Chapter last year and for the support he has shown me in transitioning to President. We had a great year under John’s leadership and the Chapter will be receiving 4 awards at ANI. We will receive 2 Yerger awards: Single chapter award for Membership Recruitment and Retention Improvement and a Multi-Chapter award for Innovation with Development of the Region 8 Leadership Communication Network. We are also receiving the Henry Hottum Award for Educational Performance Improvement and the Gold Award for Excellence in Membership Growth and Retention. Congratulations to everyone who assisted with these chapter improvement awards! At this year’s Leadership Training Conference, HFMA National’s new Chairman, Steven Rose, introduced this year’s theme which is titled, “Whatever It Takes”. Steven explains that “In health care today, we all need to do whatever it takes to provide high-quality care at a lower cost in an environment where delivering value is more important than ever. That means pitching in and working together to accomplish tasks or solve problems that are not typically within the finance domain. Such opportunities present themselves in a myriad of small ways every day.” I completely agree with Steven and am reminded the theme “Whatever It Takes” is not only pertinent to the demand in our respective places of employment but also in our volunteer organizations. As I previously mentioned we had a great year last year and won several awards. However, this increases the chapter goals this year making them much more difficult to meet.

The leadership team recently had a strategic planning meeting and has identified the following areas to focus: - We will continue to provide education opportunities at different locations to better serve all of the metropolitan areas. We are also planning to extend our Road Shows to additional healthcare providers. - We will increase our membership growth and satisfaction levels by enhancing relationships and participation. We have developed plans to get new and current members more involved in the various chapter events. We are also developing plans to increase student memberships. - We will improve upon our current website by making more timely updates and by adding additional pages for special chapter events. We are also working to develop a members only section of the website for a member directory, program handouts and much more information reserved only for our members. - We are committed to providing our members with updates regarding the chapter’s performance by giving updates at our educational programs, announcements on the website and in our newsletters. HFMA has been a valuable resource to me over the years and I have treasured the relationships that I have developed. Your participation, suggestions and contributions help this chapter fulfill it purpose. If you are looking for ways to get involved please reach out to any of the chapter officers and we would be happy to connect you with a committee. It is privilege to serve as your President and I appreciate the opportunity.

! s e k a t t i r e v e t a wh – page 3 –

Health Plan Readiness, continued...

KEY FINDINGS Value-based payment models are a priority for health plans, who forecast significant business impacts in transitioning to them. - 82% of respondents cite the development of new payment models as a ‘major priority’ for their organizations. - 90% expect value-based payment models to impact their top three (3) business objectives. - 46% expect a ‘major’ impact, while 44% anticipate ‘some’ impact Value-based payment models support a small amount of health plan business today, but expectations for growth are high. - Just 20% of health plan respondents say value-based models support more than half of their businesses today. - 40% of health plans predict that in three years, value-based models will support more than half of their businesses. - Nearly 60% of respondents predict that in five years, value-based models will support more than half of their businesses. Employer Group plans and Medicare plans are the leading focus for payment model migration. - More than 75% of respondents say they are focusing value-based payment efforts on their Employer Group plans. - 54% say Medicare plans are a priority for payment model transition. - 46% and 44% cite Medicaid plans and Individual plans, respectively, as priority targets for value-based payment models. Health plans resoundingly agree that valuebased payment models require new types of information from providers, and the exchange of that information needs to be automated. - 90% of health plans not only agree that value-based payment models will require different types of information, but also cite automating the exchange of that information as critical to program success. - Nearly 75% of respondents plan to automate the exchange of information needed for value-based payment models within the next 12 to 18 months.

- The vast majority – 85% – believe that enabling real-time information exchange between health plans and physicians will provide the highest value relative to valuebased payment program operations and objectives. Few health plans have achieved the desired level of automation viewed as critical to the success of value-based payment models. - 90% of health plans use a hybrid automated/manual process for information exchange. - Less than 50% have real-time automation capabilities.

SURVEY RESULTS 01 HEALTH PLAN PRIORITIES Value-Based Payments Touted as a Top Strategy to Achieving Health Plan Goals Driving cost down and growing the business are the top priorities for health plans nationwide. Not surprisingly, doing so in a way that protects and improves their market positions and ability to compete comes in at a close third. Value-based payment models top the list of most health plans (82%) as a means to achieving their business priorities, with nearly half forecasting a major impact from the models on their operating objectives. Figure 1.1 Business priorities Over the next 12–18 months, what would you identify as your health plan’s top 3 business initiatives?

Reducing costs Expansion/growth Market alignment/competition Preparing for health care exchanges Provider enrollment/relations Customer service

– page 4 –

Priority of payment reform Over the next 12–18 months, please rate the level of priority that payment reform or the development of new payment models represent to your health plan. 82% Major priority 15% Minor priority 3% Not a priority Impact of value-based payment models Briefly describe the impact that value-based payment models will have on your health plan’s business lines, initiatives and objectives. 46% Major impact 44% Some impact 5% No impact 5% Unsure Tipping Point for New Payment Models Could Be Reached in as Few as Five Years While value-based payment models represent only a small amount of health plan business today, most plans expect that to change significantly over the next five years. Health plans report that 20% of their business is supported by value-based models today, but anticipate that figure rising to 60% by the end of 2017. Figure 1.2 Business supported by payment models How much of your business (by %) do you expect to be supported by value-based payment models over the follow time frames:

Greater than 50% 26% - 50% Less than 25%

Article continues on next page

Health Plan Readiness, continued...

Employer Group Business is Primary Focus for New Payment Models The most popular target for implementation of value-based payment models is Employer Group business, at 77%, with Medicare plans following in second place at 54%. The focus is not surprising given the amount of business employer groups represent for most commercial and BlueCross BlueShield plans. Within those numbers, nearly 60% of health plans expect the new payment models to impact their high-deductible plans, which have grown in popularity with employer groups over the past several years. Consumer-driven health plan designs Do you expect value-based payment models to have an impact on your organization’s high-deductible and consumer-driven health plan designs? 59% Yes 33% No 8% Don’t know Figure 1.3 Business lines—focus for future development Over the next 12–18 months, which of the following business lines will your health plan focus the development of value-based payment models?

02 PROGRAM ENABLEMENT/OPERATIONAL READINESS

going to have to exchange different types of information than under traditional fee-forservice arrangements. And that exchange needs to be automated to be effective (93%), with real-time automation delivering the highest value according to 85% of health plans. Manual Processes for Exchanging ‘New’ Information with Providers Still Prevalent Though the focus is on automating information exchange in support of new payment models, most health plans (90%) report that their processes are a hybrid of manual and automated at best, with 74% focusing on more automation in the next 12-18 months. Nearly half have real-time capabilities in place, though the ability to use those capabilities to exchange new information types is unclear. 03 CURRENT SCOPE OF VALUE-BASED PAYMENT MODELS Data Suggests ACOs Will Be Most Prevalent Value-Based Payment Model in Two Years Of the six value-based payment models reviewed in this study, Patient Centered Medical Home (PCMH) is the most mature model today, with 62% of all respondents having implemented the model, with 19% more in some phase of implementation. And while only 47% of health plans report that they have implemented an Accountable Care Organization (ACO), another 40% state they are in the implementation process and expect those models to be fully operational in the next 12-18 months (raising that total to 87% if plans hold). ACO shared savings program Groups of providers, known as accountable care organizations, which voluntarily assume responsibility for the care of a population of patients and share payer savings if they meet quality and cost-performance benchmarks.

Automating Information Exchange Critical to Payment Model Success For value-based payment models to work, 94% of health plans agree that they are

Implementation Plans 13% No plans 47% Currently implemented 40% Planning to implement Patient-centered medical home A physician practice or other provider is eligible to receive additional payments if medical home criteria are met. Payment may include calculations based on quality and cost performance using a P4P-like mechanism. Implementation Plans 19% No plans 62% Currently implemented 19% Planning to implement Payment for coordination Payments are made to providers furnishing care coordination services that integrate care between providers. Implementation Plans 34% No plans 46% Currently implemented 20% Planning to implement Hospital pay-for-performance Hospitals receive differential payments for meeting or missing performance benchmarks. Implementation Plans 37% No plans 45% Currently implemented 18% Planning to implement Physician pay-for-performance Physicians receive differential payment for meeting or missing performance benchmarks. Implementation Plans 23% No plans 67% Currently implemented 10% Planning to implement

Article continues on next page – page 5 –

Health Plan Readiness, continued...

Bundled payment A single ‘bundled’ payment, which may include multiple providers in multiple care settings, is made for services delivered during an episode of care related to a medical condition or procedure. Implementation Plans 42% No plans 24% Currently implemented 34% Planning to implement

BACKGROUND AND METHODOLOGY The Health Plan Readiness to Operationalize Value-Based Payment Models study, sponsored by Availity, was conducted to obtain feedback on the challenges, needs, and trends related to payment reform initiatives. The study was administered by independent research firm Porter Research in the fourth quarter of 2012. Porter Research completed interviews with qualified participants of 39 health plans who were knowledgeable about their organizations’ value-based payment model plans and programs.

Target participants included Quality Management leadership, Medical Directors, and Chief Medical Officers. All interviews were in-depth telephone interviews and respondents were made aware of Availity as the sponsor of the study. Study results are considered directional or observational.

Excerpted from Health Plan Readiness To Operationalize Value-Based Payment Models - http://www.availity.com/news-resources/case-studies/). Used with permission.

Officers and Directors 2013 HEART OF AMERICA CHAPTER OFFICERS

BOARD OF DIRECTORS 2012-2014

President President-Elect Vice President Secretary Founders/DCMS Treasurer

Robert Fowle Janis Richardson Natalie Lee

Andrea Lindsay Jim Mozena Paul Knudtson Michelle Narayan Michelle Narayan Todd Kenney

2013 PUBLICATION COMMITTEE Jessica Baird, Co Chair Cathy Kindle, Co Chair Michelle Decker Sharon Fiene

2013-2015 Mea Austin Heath Leuck Cathy Kindle Karrie Pence Mary Knollmeyer Michael Quintero

816-407-2041 816-691-2010 913-338-5955 816-691-2505

Deadline for submission of articles for the next newsletter is September 15, 2013.

2013 Corporate Sponsorship PLATINUM

SILVER

BKD, LLP Bank of America Merrill Lynch Haase & Long Human Arc McGladrey LLP

Account Recovery Specialists, Inc. Avadyne Health Country Club Bank HRS Erase Nuance Communications

GOLD Bank of Kansas City Commerce Bank – page 6 –

Sincere appreciation is extended to our coproate sponsors for 2013. Your support of our Chapter significantly improves our ability to offer quality programs to our members. Please consider joining our fantastic group of sponsoring organizations. if you are a service provider, please contact: Mea Austin 785-842-0726 Mary Knollmeyer 913-791-3500 x 4018

Randy Hoffman, Region 8 Regional Executive

HFMA Greetings My name is Randy Hoffman and I am honored to introduce myself as your Region 8 Regional Executive for the June 2013 through May 2014 chapter year. I am a member of the Nebraska Chapter as well as your representative on the HFMA Regional Executive Council.

I would like to extend a sincere thank you to my predecessor, Mike Dewerff, for his service as our Regional Executive this past year. He enthusiastically represented our region and has set the stage for our continued success!

The primary responsibilities of the Regional Executives, from the eleven regions, are:

Tracy Packingham from the Greater St. Louis Chapter is the Regional Executive-Elect for Region 8. I am excited to be working with Tracy! She already has been instrumental in the planning of the MidAmerica Summer Institute (the first Region 8 conference), which I hope to see you all at on August 21-23 in St. Louis.

- To serve as the primary volunteer and policy liaison between the chapters and HFMA National; - To assist chapter leaders in serving members; - To foster dialogue and effective communications between national HFMA and the individual chapters; - To represent the needs and interests of chapter leaders to the HFMA Board and management, and - To encourage chapters to collaborate and help other chapters.

During the week of April 22, 2013, your chapter leaders attended the Leadership Training Conference (LTC) in Anaheim. LTC enables your elected leaders and various committee chairs to receive the training needed to fulfill their responsibilities. I have always found LTC to be energizing and very rewarding. It really sets the tone for the upcoming year. I encourage you to support your leaders and their goals for the June 2013 through May 2014 chapter year. How can you do this? It can be as simple as attending chapter meetings, attending national meetings or volunteering for a committee. Based on my experience, you will get more out of it then what you put into it. That is one of the many great things about HFMA. This year’s Chairman’s Theme is “Whatever it Takes”. I have had the privilege of working with each of your chapter Presidents over the past year and have already seen them practicing this theme. Your chapter leaders have you, the members, in mind when they develop their chapter goals. As Regional Executive, I look forward to assisting your chapter in a successful year! Thank you for the opportunity to serve Region 8, the best region in HFMA! I look forward to working alongside your chapter leaders and meeting many of you. My telephone number is 402-330-2660 and my email address is [email protected] . I welcome your questions and comments at any time!

Power comes from being understood.SM When you trust the advice you’re getting, you know your next move is the right move. That’s what you can expect from McGladrey. That’s the power of being understood. For more information, contact Natalie Lee at 816.753.3000. Experience the power. Go to www.mcgladrey.com/healthcare

© 2013 McGladrey LLP. All Rights Reserved.

– page 7 –

Michael Thomas, BKD CPAs and Advisors Michael has more than seven years of experience assisting health care providers with reimbursement consulting and revenue cycle solutions. His experience includes Medicare cost report preparation, revenue cycle operations, disproportionate share and bad debt analysis.

Long-Awaited Disproportionate Share Instructions in the 2014 IPPS Proposed Rule The Centers for Medicare & Medicaid Services (CMS) released the 2014 IPPS Proposed Rule on April 26, 2013, proposing several payment revisions as a result of the Patient Protection and Affordable Care Act (PPACA). Perhaps the most highly anticipated issue within the proposed rule is the revision to the disproportionate share hospital (DSH) calculation. PPACA required an adjustment to DSH payments as a result of the anticipated reduction in uninsured as well as distribution of payments based on hospital comparison of uncompensated care costs. The proposed rule discusses these changes in detail— and provides a curve ball along the way.

Determining Eligibility for Uncompensated Care Payment This article focuses on the most common criteria to qualify for DSH payments, such as geographic designation, bed size and the hospital’s disproportionate patient percentage, which comprises Medicaid and Medicare SSI volumes. The historical DSH formula remains unchanged in FFY 2014 and beyond. However, reimbursement under the historical formula, referred to by CMS as the empirically justified Medicare DSH payment, is reduced to 25 percent of current payments. CMS will continue to pay this portion of the DSH payment as an add-on to the Medicare DRG payments.

As a result of the proposed new payment methodology, some hospitals will receive increased DSH payments while others will see their payments decrease. While reductions were expected, few believed hospitals might actually receive more DSH payments under the new calculation. However, given information released within the proposed rule, hospitals can reasonably estimate their federal fiscal year 2014 DSH payments, and several hospitals may actually receive more DSH payments under the new method than the historic method. This means less-fortunate hospitals could face drastic reductions.

The existing DSH formula also determines eligibility for the new payment methodology taking effect in FFY 2014. This portion of the formula is referred to as the uncompensated care payment. PPACA applies the new payment methodology to “subsection (d) hospitals” otherwise receiving a “disproportionate share payment … made under subsection (d)(5)(F).” Therefore, only hospitals receiving DSH using the empirical formula will receive the uncompensated care payment for the specific year as determined by the hospital’s cost report. Article continues on next page

Here is the proposed DSH payment formula for FFY 2014:

– page 8 –

Disproportionate Share Instructions, continued...

Reviewing the New Payment Methodology – “Uncompensated Care Payment” In addition to receiving 25 percent of empirically justified Medicare DSH payments, PPACA requires payments be distributed based on uncompensated care costs incurred by hospitals. CMS will make interim payments for the uncompensated care portion on a periodic basis rather than as an add-on to the DRG payment. CMS revealed several key estimates in the proposed rule specific to this payment methodology, including the following: - Factor 1: 75 percent of the estimated DSH payments otherwise made under the old DSH methodology (section (d)(5)(F) of the Social Security Act) - Factor 2: One minus the percent change in the percent of individuals under the age of 65 who are uninsured (minus 0.1 percentage points for FFY 2014, and minus 0.2 percentage points for FFY 2015 through FFY 2017) - Factor 3: A hospital’s amount of uncompensated care relative to the amount of uncompensated care for all DSH hospitals expressed as a percentage

Factor 1 PPACA grants CMS authority to make various estimates within the uncompensated portion of the formula. The first estimate CMS proposes relates to the 75 percent of DSH payments otherwise made in FFY 2014 using the old DSH methodology. The Office of the Actuary projects Medicare DSH payments twice per year based on the most recently filed Medicare cost reports. The office’s February 2013 estimate is the most recent FFY 2014 DSH estimate available. If the proposed rule for Factor 1 is finalized, CMS will use the July 2013 Medicare DSH estimate to determine Factor 1 in the FFY 2014 Final Rule. The Office of the Actuary’s FFY 2014 DSH payment estimate is $12.338 billion. Therefore, Factor 1, representing 75 percent of DSH payments made under the historical formula, equates to $9.2535 billion. This estimate cannot be reviewed or appealed. In addition, this factor will be annually adjusted based upon the office’s estimates.

Factor 2 Based upon estimates from the Congressional Budget Office (CBO), the percentage of all nonelderly residents who are insured in FFY 2013 is 82 percent. Therefore, the uninsured population for FFY 2013 is 18 percent. According to the formula, the FFY 2013 uninsured percentage will be used as the baseline for FFY 2014 through FFY 2017. CMS proposes using the same source for FFY 2014, which estimates the uninsured population at 16 percent.

Factor 2 = 0.888 This factor will be adjusted for FFY 2015 based upon CBO estimates of the uninsured population in 2015 and will be reduced by 0.2 percentage points rather than 0.1 percentage points. By multiplying Factors 1 and 2, the uncompensated care portion of the DSH pool is $8.217 billion.

Factor 3 Finally, CMS must allocate payments based upon uncompensated care cost incurred by hospitals. Worksheet S-10 of the Medicare cost report might appear to be the logical choice to allocate payments. This worksheet includes hospital information for both charity and nonMedicare bad debts, which typically define “uncompensated care.” However, CMS stated its concern about the accuracy of the data reported on S-10. Furthermore, hospitals with high cost-to-charge ratios would reap benefits in uncompensated care DSH payments over more efficiently performing peer hospitals. CMS expressed concern about creating a policy using S-10 uncompensated care amounts that could create incentive for states to avoid Medicaid expansion. For these reasons and others, CMS proposed to not use Worksheet S-10 for FFY 2014 payments. However, CMS may adopt a revised methodology using Worksheet S-10 in future periods after it establishes the accuracy and reliability of the data. As an alternative and surprising twist to using Worksheet S-10, CMS proposes using the “utilization of insured low-income patients” as a proxy for uncompensated care costs, with low-income patients defined as “inpatient Medicaid days plus days of Medicare SSI patients … ”—in other words, the same criteria in place for the current DSH payment methodology. As a result, Factor 3 is: Individual Hospital Medicaid Days + Medicare SSI Days All DSH Hospital Medicaid Days + Medicare SSI Days CMS computed this ratio for expected DSH qualifying hospitals using Medicaid Days from the 2010/2011 Medicare Cost Reports and the FFY 2010 SSI database. The table including this ratio is available on the CMS website; the file is titled “Medicare DSH Supplemental Data File.” CMS has proposed using the 2010/2011 Medicare Cost Reports to allow time for audits to occur and has proposed using the 2011 SSI File if it becomes available by the final rule publication. Implications Factors 1 and 2 of the proposed methodology appear logical and consistent from year to year. Many feared the reduction estimate of the uninsured from FFY 2013 to FFY 2014 would be overstated and ultimately reduce the DSH pool. However, a reduction from 18 percent to 16 percent is modest; one could assume the inability to mandate Medicaid expansion is partially responsible.

As a result, Factor 2 is as follows: - Percent of individuals without insurance for 2013: 18 percent - Percent of individuals without insurance for 2014: 16 percent - 1 – [(0.16 - 0.18)/0.18] = 1 – 0.111 = 0.889 (88.9 percent) - 0.889 (88.9 percent) – 0.001 (0.1 percentage points) = 0.888 (88.8 percent) – page 9 –

Article continues on next page

Disproportionate Share Instructions, continued...

Factor 3, on the other hand, will be cause for much discussion in the coming months. While there is no perfect data source for standardizing uncompensated care reporting, CMS’ chosen method doesn’t account for uncompensated care occurring on an outpatient basis. An alarming number of uninsured patients seek care in hospital emergency departments, which is not considered when using an inpatient proxy. Secondly, the redistribution of funds creates winners and losers. Unfortunately, some of the hardest hit will be smaller hospitals that rely on the safety net of DSH payments. Hospitals with greater-thanaverage Medicare utilization are, in general, more negatively affected than those hospitals with below-average Medicare utilization. How Should Hospitals Prepare? - It is critical to continue to perform Medicaid eligibility reviews and document-eligible days in accordance with Medicare cost report filing regulations. Medicaid volume will remain a factor for determining 25 percent of DSH payments and will affect the uncompensated care formula in FFY 2014 and potential future years. - Hospitals must proactively educate and enroll Medicare beneficiar-

ies into SSI where eligible. Publicly available information suggests SSI enrollment is significantly lower than SSI-eligible persons. Education should occur within communities and health settings to assist the low-income, elderly population. The proposed rule also included a section dedicated to Medicare Advantage (MA) days and the Allina case. CMS reaffirms its position that MA days should be included in the SSI fraction and not the Medicaid fraction of the historical DSH formula. - Hospitals should review their charity policies and accurately report information on Worksheet S-10. CMS could adopt a new methodology to compute uncompensated care costs using Work sheet S-10. We recommend hospitals become more familiar with the instructions and develop reporting mechanisms to accordingly track and record charity and bad debt charges. - Given information in the IPPS proposed rule, hospitals can reasonably estimate their FFY 2014 DSH payments. We recommend using information within this article as well as the table for Factor 3 referenced above to determine future DSH payments. If a hospital is not included in CMS’ table and ultimately qualifies for DSH, CMS will make the payments at cost report settlement.

BKD has developed a tool to help estimate the DSH reimbursement impact to your hospital as a result of the newly proposed DSH payments. For more information on how the disproportionate share instructions could affect your organization, contact your BKD advisor.

HFMA’s Virtual Conference is back! HFMA Members Free Last Remaining Live Date in 2013: October 16 Mark your calendar for the last live event – free to HFMA members. HFMA’s Virtual Conference provides you with unique and cutting edge programming – all from the convenience of your home or office! The last session will offer new education content including a keynote presentation, a session that presents the latest findings from HFMA’s Value project and a real-world case study that provides solutions to improve the quality of care and reduce costs. Attend the remaining live event to receive up to 3 CPE credits (1 CPE credit for each live presentation attended).

Region 8 MidAmerica Summer Institute The HFMA Region 8 MidAmerica Summer Institute has established a LinkedIn group to communicate updates on our Region 8 Conference! Please join our group to find out more exciting information about the conference! Connect with us on Linkedin. Mark your calendars for August 21-23, 2013 Ameristar Hotel & Casino in St. Louis, MO The Region 8 Conference Committee has put together a fantastic line-up of programs and a fun-filled evening at Busch Stadium!

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ani 2013 orlando june 16-19 National Institute Awards Two Yerger Awards - Single Chapter Award for Membership Recruitment and Retention Improvement - Multi-Chapter Award for Innovation with Development of the Region 8 Leadership Communication Network Henry Hottum Award for Educational Performance Improvement Gold Award for Excellence in Membership Growth and Retention

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HOA’s Paul Knudtson and Diane Watkins were presenters at ANI. Their conference session entitled How Saint Luke’s Health System Enhanced Its Revenue Cycle Process to Improve Total Payment Collections and Service Quality was well attended. John Maschger, HOA President 2012-13; Andrea Lindsay, HOA President 2013-14, and; Paul Knudtson, Vice President. HOA’s Paul Knudtson and Dan Williams

The not-so-serious side of John Maschger!

Attendees heard from HFMA’s top leadership during the annual conference, including Ralph Lawson, 2012-13 Chair. – page 11 –

Chad Austin, Senior Vice President, Government Relations, Kansas Hospital Association

Legislative Brief The 2013 Kansas Legislative Session came to a close in the early morning hours on Sunday, June 2nd. At the core of this year’s issues were the discussions surrounding the state’s fiscal year 2014 budget and revisiting the state’s tax policies as the temporary sales tax increase was set to expire on July 1st. In the end, the governor and legislative leaders were able to muster enough support in both chambers to pass a revised tax package as well as a state budget. The tax agreement that was reached maintains the state sales tax at 6.15 percent, lowers state income tax rates, gradually reduces itemized deductions (except for charitable contributions), and expands the number of counties eligible for the Rural Opportunity Zone program. In total, it is anticipated that the

new tax package will increase state revenues by $777 million over the next five years. As for the budget, the legislature approved a package that is roughly $67 million below the governor’s original recommendation. The budget agreement contained several health care related provisions, such as maintaining the state’s share of disproportionate share hospital (DSH) funding at the current level regardless of any potential reduction in federal dollars. Health care issues were also at the forefront this session. Two specific topics that were discussed focused on the implementation of the governor’s KanCare program and the consideration of Medicaid expansion. While most of the KanCare discussion

surrounded how best to structure a legislative advisory committee, the debate on Medicaid expansion was much more contentious. Opponents to Medicaid expansion introduced House Concurrent Resolution 5013 in an effort to express their desire to reject expansion within the state. The resolution ultimately passed the House Appropriations Committee but met strong resistance once it was placed on General Orders in the House. Even though the legislative session ended without a definitive decision by the legislature or governor on whether Kansas will adopt or reject Medicaid expansion, the issue will most assuredly be discussed during the 2014 legislative session.

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Insight. tĞĂƌĞĐŽŶƐƚĂŶƚůLJ ŝŶŶŽǀĂƟŶŐƚŽƉƌŽŵŽƚĞLJŽƵƌ ĮƐĐĂůŚĞĂůƚŚĂŶĚŚĞůƉLJŽƵ ŵĂŶĂŐĞƚŚĞĐŚĂůůĞŶŐĞƐŽĨ ŚĞĂůƚŚĐĂƌĞƌĞĨŽƌŵ͘ JůŝŐŝďŝůŝƚLJĞŶƌŽůůŵĞŶƚ J KƵƚͲŽĨͲƐƚĂƚĞDĞĚŝĐĂŝĚ JĞŶŝĂůĂƉƉĞĂůƐ J >ĞŐĂĐLJƐLJƐƚĞŵĂĐĐŽƵŶƚƐ J^,ƐĞƌǀŝĐĞƐ JƵĚŝƚƌĞƐƉŽŶƐĞƐĞƌǀŝĐĞƐ &ŽƌŵŽƌĞŝŶĨŽƌŵĂƟŽŶĂďŽƵƚ ŽƵƌŐƌŽǁŝŶŐĨĂŵŝůLJŽĨƐĞƌǀŝĐĞƐ͕ ĐŽŶƚĂĐƚƵƐĂƚ816.363.8989 Žƌ800.828.6453͘

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– page 12 –

joint fall conference The HFMA Joint Fall Conference is coming back to Kansas City! Please mark your calendars, and plan to join us for three days of excellent educational and networking opportunities.

October 23 through October 25, 2013 Adams Pointe Conference Center | 1400 NE Coronado Drive, Blue Springs, MO 64014

2013-14 Committee Chairs/Co-Chairs: Audit Committee Keeley Roach 816-474-4253, x21507 By-Laws Committee Janis Richardson-Chair 816-292-4234 Sponsorship Committee Mea Austin, Co-Chair 785-842-0726 Mary Knollmeyer, Co-Chair 913-791-3500 x4018 Membership Committee Niki Phelps, Co-Chair 913-384-7254 Brandi Rudd, Co-Chair 913-390-5966

Website Paul Kim, Co-Chair 816-221-6300 Matthew Robertson, Co-Chair 913-234-6660

Certification Damara Linneman, Chair 816-781-7200

Fall Workshop Committee Jim Mozena, Chair 913-647-6404

Publications Committee Cathy Kindle, Co-Chair 816-691-2010 Jessica Baird, Co-Chair 816-407-2041

Networking Committee Heath Leuck Co-Chair 816-347-2859 Kalinda Tenborg Co-Chair 913-234-6654

Programs Committee Paul Knudtson, Co-Chair 816-932-0336 John Travis, Co-Chair 816-201-1465

Directory Robert Fowle, Chair 913-319-6209

Nominating Committee John Maschger, Chair 816-922-8971 – page 13 12 –

60th Anniversary Committee Andrea Lindsay, Chair 816-932-2496

Come Join Us! HFMA volunteers receive opportunities for professional development, information, networking, and advocacy and earn Founders points when they participate in a chapter committee.

Welcome New Members!

Pamela Hannah, Revenue Cycle Executive, Cerner Corporation Work Phone: (816) 201-2519 Email: [email protected]

Pete Hubbard, Revenue Cycle Architect, Cerner Corporation Work Phone: (816) 885-3577 Email: [email protected]

Kristie Michiels, Director PFS, Children’s Mercy Hospital Work Phone: (816) 701-5179 Email: [email protected]

Terri Houchen, Director of Candidate Progression, B.E. Smith Work Phone: (913) 752-4564 Email: [email protected]

Cindy Patterson, Reimbursement Specialist, Heartland Regional Medical Center Work Phone: (816) 271-7861 Email: [email protected]

Amy Freeman-Pierce, VP & Corporate Counsel, Cerner Corporation Work Phone: (816) 201-1019 Email: [email protected]

Jeff Tindle, Administrator/CEO, Carroll County Memorial Hospital Work Phone: (816) 276-7580

July Sponsor Spotlight: BKD om experience ideas BKD NA NATIONAL ATIONAL TIONAL HEAL HEALTH H LTH TH CARE GROUP Health car care e pr providers o oviders wan want a single sour source ce to assist with compliance, re eimbursements and othe e elated to perfor reimbursements otherr matters rrelated performance. mance. BKD National Health Car e Gr oup understands. Our advisors serve Care Group more care more than 3,500 health car e providers providers nationwide. As one of the lar gest CPA CP PA A and advisory firms firms in the country, country, w eo ffer industry largest we offer industry expertise and insights to providers providers ranging ranging from from major urban hospitals to large large physician practices. BKD National Health Care Group

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– page 14 –

annual awards & installation Heart of America Leadership Meeting HFMA’s Heart of America Chapter Leadership Meeting was held April 25, 2013, at the Ritz Charles in Overland Park, Kansas. The program began with the presentation of awards and the installation of officers and board members. Award recipients are as follows: Outstanding Education Award – Mea Austin Outstanding Membership Award – Sharon Fiene Outstanding Networking Award – Kalinda Tenborg

Outstanding Newsletter Award – Jessica Baird President’s Award for Outstanding Contribution – Andrea Lindsay Lifetime Membership Award – Jim Franklin

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Sharon Fiene – Recipient of the Outstanding Membership Award

Jim Franklin – Recipient of the Lifetime Membership Award

2013-14 HOA Leadership: Andrea Lindsay, President; Jim Mozena, President-Elect; Paul Knudtson, Vice President; Michelle Narayan, Secretary; Board Members – Natalie Lee, Mea Austin, Mary Knollmeyer, Karrie Pence, and Cathy Kindle (Not pictured: Todd Kenney, Treasurer; Board Members – Robert Fowle, Janis Richardson, Heath Leuck, and Michael Quintero) – page 15 –

annual awards & installation Heart of America Leadership Meeting, continued... Andrea Lindsay, incoming president, thanked those who have encouraged and supported her involvement with HFMA and reminded the members that as a team, we can do “Whatever It Takes” to accomplish our chapter goals. Attendees were also privileged to hear from two great speakers. The keynote presentation was given by Ralph Lawson, HFMA National Chair, who discussed healthcare’s mega challenges and six essential strategies to ensure financial viability. Les Norman, former Kansas City Royals outfielder and radio sports talk show host, addressed the need for teamwork in an ever-changing healthcare culture.

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Andrea Lindsay, Incoming HOA Chapter President

Les Norman – Speaker John Maschger, HOA Chapter President 2012-13

Networking event at Coach’s following the awards and leadership conference

– page 16 –

6

Andrew B. Wheeler, Vice President of Federal Finance, Missouri Hospital Association

Federal Legislation and CMS Proposed Rule Updates As the weather warms up and summer begins, it indicates that it is time for the Centers for Medicare & Medicaid Services to issue proposed rules updating each Medicare payment mechanism. This year’s updates include many controversial topics that will influence hospital operations throughout the state. The proposed inpatient prospective payment system updates will have a relatively neutral reimbursement effect on Missouri. As a state, IPPS payments are expected to increase $537,000 on a revenue base of $2.6 billion, or .02 percent. This payment increase does not take into account the 2 percent reduction caused by sequestration. The hospital readmission penalty significantly decreased for Missouri between federal fiscal year 2013 and the proposal for FY 2014, ensuring the neutral effect on payments. Without this work, the state would have seen a net reduction in payments. The IPPS updates also include revisions to the Medicare disproportionate share calculation and methodology, admission and medical review criteria for inpatient service guidance, documentation and coding adjustments, and changes to quality reimbursement programs.

MHA coordinated a regional wage index initiative with a consulting firm and received very good participation from Missouri hospitals. The regions consisted of St. Louis, Kansas City and rural areas. The project yielded strong increases to the wage index, comparing the “as filed” cost report data to the “proposed rule”. MHA applauds the efforts of the hospitals that participated in this effort. On the federal legislative front, MHA continues to encourage Congress to reform the Medicare audit program. In March 2013, Reps. Sam Graves, R-Mo., and Adam Schiff, D-Calif., introduced the Medicare Audit Improvement Act of 2013. Since then, 81 co-sponsors have signed as supporters of the bill, including Missouri Reps. Vicki Hartzler, Billy Long, Blaine Luetkemeyer and Ann Wagner. In addition, Sens. Roy Blunt, R-Mo., and Mark Pryor, D-Ark., introduced a companion bill in the Senate, S. 1012. MHA applauds the leadership and support from the Missouri congressional delegates who support this effort.

The long-term hospital PPS will realize a relatively modest rate increase of $65,000 on a revenue basis of $83 million, or 0.1 percent. This rate change does not take into account the 2 percent sequestration adjustment. The updates include changes to the LTCH quality reporting program, the “25 percent threshold” rule and chronically ill criteria. Payment rates for inpatient rehabilitation facilities will increase in aggregate by $3 million on a revenue base of $133 million, or 2.3 percent. The increase stems from the marketbasket update and changes to the wage index and labor-related share. This rate change does not take into account the 2 percent sequestration adjustment. This year’s proposed rule updated the case mix group weights, revised the “60 percent rule” code list and quality measures. CMS recently released the proposed rule to decrease Medicaid disproportionate share payments, which will take effect in FY 2014. The proposed rule decreases the national pool of DSH payments by more than $13 billion between 2014 and 2020. An issue brief from the Missouri Hospital Association describes changes for the IPPS and LTCH, skilled nursing facility, IRF, hospice and Medicaid DSH changes.

– page 17 –

LTC 2013 Leadership Training Conference – April 21-23

So we heard...

When Paul Knudtson checked into the hotel, the front desk was very excited to tell him that the room he was in had a headboard that lights up. He laughed and told the lady he was there by himself so he didn’t need any mood lighting!

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Heart of America Chapter Leaders attend LTC in sunny Anaheim, California

Jim Mozena, Todd Kenney, Niki Phelps, Andrea Lindsay, Michelle Narayan

If you can eat it all, it’s free!

Andrea – Always on the search for new members!

– page 18 –

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