Platinum Moss Adams LLP REDW LLC. The Outsource Group. Gold. Discovery Healthcare Consulting Group. Medical Protective

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1 In This Issue President's Message Chapter Received Two Awards at ANI Determing the Impact of Revenue Cycle Outsourcing Moss Adams LLP - Platinum Annual Sponsor How Will Quality Metrics Impact a Hospital's Credit Rating? The Outsource Group - Platinum Annual Sponsor October Save the Date - Fall Conference President's Message Greetings New Mexico HFMA Chapter, We are off to a new chapter year with a new board. I am happy to see all of the new faces on the board and their willingness to learn and help the chapter thrive! We are always looking for committee members and suggestions for improvement so if you are interested in being more involved in the chapter, please don't hesitate to contact any of us on the board. July/2014 Report: Fewer People Having Trouble Paying Medical Bills REDW LLC - Platinum Annual Sponsor Medicare: Data Sheds Light on Medicare Payments to Physicians Welcome Members who have recently joined the New Mexico Chapter New Mexico HFMA Annual Sponsors Officers, Board of Directors and Committee Chairs NM HFMA Offers Free Job Postings to its Members Classified Ads ANNUAL SPONSORS At the Annual National Institute held in Las Vegas, the New Mexico Chapter won 2 awards. The Bronze Award for Education and the Bronze Award for Chapter Performance in Certification. Heidi Atencio was there to accept both awards on behalf of the chapter. (pictured below) We are very proud of our continued focus on valuable educational events and we welcome input and suggestions from all of you! Please feel free to contact any of us on the board for comments, suggestions or your interest in helping. We also want to congratulate Josh Trujillo for successfully passing the HFMA Certification Exam this past year! If you are interested in learning more about the exam, study materials, what it entails, etc. please contact Josh Trujillo or myself and we would be happy to provide you any information. The chapter will pay for study materials and the exam for 2 individuals if you are interested in taking the exam. Just a reminder to please renew your NMHFMA membership if you have not already done so. The grace period has passed so many members were dropped this month. Remember, we are here to help you so please don't hesitate to contact any of us with any questions you may have. Our contact information is on our website I would like to also take this opportunity to thank our annual sponsors. Without their continued support we would be unable to provide the educational events and other resources the chapter offers! Please mark your calendars now for our next big Fall Event to be held October 15th and 16th at the Embassy Suites. Julie Nickerson New Mexico HFMA Chapter President Chapter Receives Two Awards at ANI

2 Platinum Moss Adams LLP REDW LLC The Outsource Group Gold Discovery Healthcare Consulting Group Medical Protective Passport Health Communications Inc. The SSI Group, Inc. Silver HUB Southwest Heidi Atencio, NM HFMA President, accepts two award receiving congratulations from Kari Cornicelli, FHFMA, HFMA Chair and Steve Rose, FHFMA, HFMA Chair Determining the Impact of Revenue Cycle Outsourcing Health care providers have several options when it comes to choosing revenue cycle services to outsource. Experts in health care collections recently discussed the impact of full revenue cycle outsourcing during ACA International's Spring Forum in March Terry Armstrong, president of State Collection Service Inc., in Madison, Wis., moderated the session, which featured panelists Stephan Bernard, vice president of professional services for Connance Inc. in Waltham, Mass., and Gregory M. Snow, vice president of corporate solutions strategy for Conifer Health Solutions in Carmel, Ind. "When we talk about full outsource, this is the whole continuum of what happens in a revenue cycle from scheduling all the way through the admissions, discharge, medical records and then the billing and receivables," Armstrong said. Bernard discussed different pieces of the revenue cycle that a provider can choose to outsource, including scheduling, financial clearance, patient receivables management and coding. "You have to ask yourself the question, of these functions, which ones benefit from economies of scale [and] which ones are portable, meaning they can be centralized and possibly be moved off site," he said. "Pretty much every hospital does outsource some component of revenue cycle management. Generally speaking, it will be highly specialized, such as charge reconciliation or clinical documentation or bad debt collections. Most hospitals outsource bad debt collections." "In general it's the question of, is this the direction the industry is going? To some extent I would say yes it is. Full service revenue cycle has established itself and it is here to stay," Bernard said. According to Bernard, hospitals elect to outsource services because: * The most appropriate rationale for using full outsourcing is the core competency concept. Is

3 the health care provider in business to manage a revenue cycle or is it just an ancillary function that frankly distracts from core competencies? For most hospitals, managing the revenue cycle is not a core competency. * They know they need to update the revenue cycle, and they don't have the capital to do it themselves. Using an investment partner is one of the key motivating factors in acknowledging that a revenue cycle has been left unattended for many years. * It has come into a state of disrepair, and management has lost confidence in their ability to execute. Most often this occurs when new leadership comes into an organization, takes over, does an assessment of their own internal operations and feels they need to essentially bring in someone new who can really shake things up. Snow addressed another aspect of revenue cycle management that can be outsourcedpre-service clearance. "In the future, other than identification for security, the patient will be greeted and told the doctor will see them. It is to perform everything that needs to be performed... from an administrative point of view prior to the patient coming in for service," he said. "What you're attempting to do is make that visit 100 percent clinical in nature versus being half clinical and half administrative." The health care payment system is highly fragmented, inefficient and expensive to administer, Snow explained. Published with permission from ACA International Moss Adams LLP - Platinum Annual Sponsor How Will Quality Metrics Impact a Hospital's Credit Rating? Which ratings matter most to hospitals? The number of groups evaluating and awarding top grades to health care organizations is growing. Consumers can pick from the government's web site Medicare Hospital Compare or a handful of assessments from private and nonprofit organizations, such as U.S. News and World Report, Consumer Reports, Truven Health Analytics, and the Joint Commission, among others. Hospital ratings vary widely as each rater uses a different methodology that can provide vastly different results. As the Affordable Care Act's (ACA) provisions are implemented, quality metrics will become a bigger agenda item in a hospital's board room. Medicare's quality incentive program has sent

4 a large signal to other insurers and the health care industry at large with its risk-based contracts to achieve quality and cost targets via incentives, or in some cases, financial penalties. Additionally, both payors and purchasers have stepped up their demand for high-value health care with the start of mandated insurance changes this year. Those agencies and organizations that rate hospital performance are paying particular attention to the sea change and currently are determining how to incorporate quality measurements into their methodologies. Evolving Credit Ratings In the near future, quality measures could impact a hospital's cost of capital as health care reform focuses on transitioning from a fee-for-service to a fee-for-value model, with hospitals expected to take on risk and deliver measurable quality of care. From a capital markets perspective, the ability to access capital at low rates and competitive terms often depends on the evaluation that matters most to investors-the investment grade rating assigned to the bond issue by one of three credit rating agencies (CRAs). The group, often dubbed the Big Three, consists of Moody's Investors Service, Fitch Ratings and Standard & Poor's. Traditionally, each CRA has its own criteria and methodology, with varying degrees of transparency, to determine a hospital's credit rating. Key quantitative categories include credit profile ratios for liquidity, profitability and capital structure. Qualitative (nonquantifiable information) factors, such as the economy, local market demographics, competition and the strength of a hospital's management and board, also impact an organization's credit assessment. (Suggested Read: "Making the Grade: Choosing the Right Rating Agency.") However, CRAs are in the process of determining what quality indicators matter going forward, particularly in regards to Medicare's evolving incentive programs, and how to apply those metrics in their evaluations. Adding Quality to the Mix Medicare's inpatient quality incentive program, known as Hospital Value-Based Purchasing (HVBP), is part of the Centers for Medicare & Medicaid Services' (CMS) three-prong effort to use Medicare's payment system to improve clinical outcomes, patient safety and experience. HVBP uses the hospital quality data reporting system, previously developed for the Hospital Inpatient Quality Reporting program, to assess quality based on peer comparison and year-over-year improvement through value-based quality incentives. Additionally, Medicare's Hospital Readmissions Reduction Program and Hospital Acquired Conditions Penalties work alongside HVBP to further drive clinical outcomes, patient safety and patient experience. For about half of those hospitals participating in the HVBP program the financial impact is negligible, according to Kaiser Health News and NPR. These organizations are gaining or losing less than a fifth of one percent of what Medicare otherwise would have paid. Others are experiencing greater spreads. Overall, more hospitals were penalized. Last October, CMS raised payment rates for 1,231 hospitals while reducing payments for 1,451 hospitals, with the average penalty greater than the previous year. It is important to note that critical access and certain specialty hospitals are exempt from the HVBP program. As mentioned, the amount of reimbursement at risk currently is small; however, the combined penalties of all three Medicare quality programs could add up to as much as 5.5% for providers that do not toe the line. It's very apparent that CMS is indicating to the marketplace that quality is important and other payers will follow Medicare's lead. Therefore, it should be expected that investors will begin incorporating quality indicators into their evaluation processes. Erik Carlson, a health care management expert based near Omaha, Neb., believes a value-based system will be adopted in due course. "Quality will increasingly drive decisionmaking in the health care industry and have a financial impact," Carlson said. "This will be further magnified as Medicare patients are likely to increase as a percentage of hospitals'

5 payer mix due to the aging population." Considering Quality Measures Rating agencies will be collecting supplemental information from hospitals for specific data points measuring quality for some time before giving value-based measures explicit weighting in their rating process. For now, they recognize that hospitals providing a high quality level of care are likely to be more profitable, have stronger balance sheets than their average peers, invest more in technology and take a long-term view for results. To get an impression of how CRAs are dealing with the evolving environment of quality metrics, let's look at two-moody's and Fitch: Moody's Investors Service-Moody's introduced six new indicators in a 2013 report to more accurately capture the changing payment and care models. It will use the following to measure demand: * Unique patients: the number of people who received care at the hospital in a 12-month period, both inpatient or outpatient. * Covered lives: the number of people within the community for which the hospital is responsible along the continuum of care-either through exclusive contract, the hospital-owned health insurance plan, an ACO contract or through an ACO-like structure provided by Medicare, Medicaid or other commercial payors. * Employed physicians: this figure serves as a predictor of referrals. (Incidentally, hospital doctors better utilize electronic medical records and coordinate care, which the rating agency recognizes as a credit positive.) For reimbursement risk, Moody's will initially focus on the following indicators initially: * Medicare reimbursement rate: Since Oct. 1, 2012, CMS started penalizing hospitals with high Medicare readmission rates for congestive heart failure, heart attack and pneumonia. * "All-payer" readmission rate: This measurement of patients covered by other insurers will include readmissions within 30 days of discharge, no matter the diagnosis, unless it is a part of the plan of care. * Risk-based revenues: hospitals currently with or in the process of obtaining a Moody's credit rating will need to annually provide data on the type of reimbursement methodology used in its contracts. Risk-based revenues will include new reimbursement models, such as bundled payment and pay-for-performance. Moody's will use this metric along with traditional forms of payment, such as DRGs, per diems and capitation in its evaluation. Fitch Ratings-Although the rating agency already considers quality metrics in its criteria and credit analysis, it's assessing if hospital boards and senior staff are giving quality sufficient attention in the transition to a fee-for-value model. As part of its credit evaluation, Fitch reviews scores from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), the first national standardized survey of patients' perspectives of hospital care. The scores, which are posted on the CMS website, are used to determine value-based reimbursement and readmissions bonuses and penalties. Additionally, Fitch asks hospitals to estimate potential future Medicare rate penalties related to HCAHPS or readmissions as well as provide data on the level of patient revenues that are "at risk" for quality performance under their payor contracts. In evaluating creditworthiness, Fitch recognizes that tracking and reporting quality and

6 safety indicators will impact a provider's reimbursement and competitive positioning, which are key credit factors. The rating agency will review a hospital's publicly available quality scores, which may include readmission rates and value-based purchasing metrics, as well as its overall commitment to establishing a culture centered on delivering safe, high-quality care. According to Fitch, it focuses on IT investments in its assessments and asks hospitals to report on meaningful use, ICD-10 readiness and their Health Information Management Systems Society (HIMSS) level. Overall, the rating agency focuses on consistent improvement across industry standards and results compared with competing hospitals as part of a broader analysis on clinical strategy and competitive positioning. In assessing quality measures for hospitals, credit rating agencies will be gauging whether a hospital has the clout (scale) to deliver the metrics when needed along with each's own mix of quantitative and qualitative indicators. Not all hospitals will be at the forefront of innovation and new health care strategies because of their size and scope; however, all providers should focus their efforts in developing an informed leadership, expanding access and, especially, improving quality and the patient experience. To remain competitive, hospitals should implement best practices on a large scale and manage costs to keep pace with reimbursement cuts. Finally, when looking to access the capital markets, hospitals need to be familiar with the credit evaluation process, how ratings are evolving in the new normal and be prepared to benchmark themselves to investment-grade medians. Quintin Harris, Lancaster Pollard The Outsource Group - Platinum Annual Sponsor

7 October Save The Date - Fall Conference Embassy Suites is the location for the big Fall Conference on October Look for more details... Report: Fewer People Having Trouble Paying Medical Bills The percentage of people having problems paying their medical bills is declining, according to an April 2014 report from the National Center for Health Statistics, which is part of the U.S. Centers for Disease Control and Prevention. Specifically, the percentage of people under age 65 who were in families having problems paying medical bills decreased from 21.7 percent (57.6 million) in the first six months of 2011 to 19.8 percent in the first six months of The report defines "family" as an individual or a group of two or more related people living in the same home. "Almost 5 million fewer people than two and a half years ago are in families having problems paying medical bills," said report co-author Robin Cohen, a statistician with the U.S. Centers for Disease Control and Prevention, in a HealthDay News article. According to the report, the percentage of people under age 65 with private coverage who were in families having problems paying medical bills decreased from 15.7 percent in the first

8 six months of 2011 to 14.1 percent in the first six months of For those with public health insurance, that rate decreased from 28 percent in the first six months of 2011 to 24.7 percent in the first six months of It also states that in the first six months of 2013, among people under age 65, 34.3 percent of those who were uninsured, 24.7 percent of those who had public coverage and 14.1 percent of those who had private coverage were in families having problems paying medical bills in the past 12 months. More information: Published with permission from ACA International REDW LLC - Platinum Annual Sponsor Medicare: Data Sheds Light on Medicare Payments to Physicians As part of the Obama administration's work to make the U.S. health care system more transparent, affordable and accountable, the Department of Health and Human Services has released new privacy protected data on services and procedures provided to Medicare beneficiaries by physicians and other health care professionals. According to HHS, the new data also shows payment and submitted charges, or bills, for those services and procedures by provider. It has details for more than 880,000 distinct health care providers who collectively received $77 billion in Medicare payments in 2012, under the Medicare Part-B Fee-For-Service program. With the data, it will be possible to conduct a wide range of analyses that compare 6,000 different types of services and procedures provided, as well as payments received by individual health care providers. Physicians and other health care professionals determine what they will charge for services and procedures provided to patients and these "charges" are the amount the physician or health care professional generally bills for the service or procedure.

9 "Data transparency is a key aspect of transformation of the health care delivery system," said Centers for Medicare and Medicaid Services administrator Marilyn Tavenner. "While there's more work ahead, this data release will help beneficiaries and consumers better understand how care is delivered through the Medicare program." Kaiser Health News reports that the data release marks 35 years since a court issued gag order restricted anyone from sharing Medicare Part B payments to individual doctors. "The uses of this data can and will go significantly beyond the identification of fraud, waste and abuse," said Niall Brennan, the Medicare official who oversaw the development of the database, in the article. More information: and Published with permission from ACA International Welcome to the Members who have Recently Joined the New Mexico Chapter Michael A Ell CE Manager Horizon Health Phillip J. Gonzales Accountant Miner's Colfax Medical Center Monica Sosa Accounting Analyst San Juan Regional Medical Center New Mexico HFMA Annual Sponsors Platinum Sponsors Gold Sponsors

10 Silver Sponsors HUB Southwest Officers, Board of Directors and Committee Chairs President Julie C. Nickerson Director of Finance/Operations New Mexico Oncology Hematology Consultants, Ltd. President-Elect Eric S. Burgmaier CPA Managing Partner Burgmaier and Helton, CPAs, LLC Vice President Joshua F. Trujillo CHFP, CPA Senior Manager REDW, LLC Secretary Tammy Tanner Business Office and Coding Manager Women's Specialists of New Mexico, Ltd. Treasurer Purvi Mody Harville Executive Director Compliance & Audit University of New Mexico Hospitals Director (Voting) Shawna R. Gonzales, CPA Exec. Director of Finance/Controller University of New Mexico Hospitals Director (Voting) Renee Ennis Chief Financial Officer Tricore Reference Laboratories Director (Voting) Andrea M. Solin Chief Finance Officer Lovelace Rehab Hospital Director (Voting) Janet Pacheco-Morton Partner CliftonLarsonAllen LLP

11 Director (Voting) Abigail A. Gonzales Community Relations Specialist ITT Technical Institute Past Chapter President Heidi S. Atencio Vice President Collection Resources Inc. Link Committee Chair Bret Goebel CPA Principal Bret Goebel Consulting DCMS Contact Julie C. Nickerson Director of Finance/Operations New Mexico Oncology Hematology Consultants, Ltd. Founders Contact Julie C. Nickerson Director of Finance/Operations New Mexico Oncology Hematology Consultants, Ltd. Program Chair Tammy Tanner Business Office and Coding Manager Women's Specialists of New Mexico, Ltd. Sponsorship Chair Abigail A. Gonzales Community Relations Specialist ITT Technical Institute Certification Contact Joshua F. Trujillo CHFP, CPA Senior Manager REDW, LLC New Mexico Chapter of HFMA P.O. Box 9723 Albuquerque, NM Forward This was sent to by Update Profile/ Address Rapid removal with SafeUnsubscribe Privacy Policy.