Eighteen counties will have a choice between Anthem Blue Cross and California Health & Wellness Plan as the plan administrators. Seven counties in the northern part of the state will contract with Partnership Health Plan. You may have already received a visit from a plan representative or enrollment documents in the mail.

Here is what this means:

• For future Medi-Cal patient services rendered, you will be billing both the Managed Care Plan and the Medi-Cal program. Two bills for each patient visit; your billing staff will need to make arrangements and may need to learn more procedure code billing.
• In order to be reimbursed correctly, each clinic will need a Code 18 rate (“wrap around”) set up in addition to their current Medi-Cal PPS rate(s). This rate will vary according to whether your managed care plan is capitated or fee-for-service based.
• These two reimbursements must be reconciled annually on the PPS Reconciliation form to DHCS in order for you to receive your complete PPS rate per visit. It will be one more claim type to track the patient visits and payments.
• Due to this two-step process, you could be receiving less money up front per visit than in the past if you do not set your Code 18 rate accurately!

There are new DHCS PPS reconciliation forms now being used as of January. The State has incorporated the reporting to include Code 02 (crossovers), Code 18 (wraparound), Code 19 (Healthy Family) and Code 20 (Medicare Advantage). All these patient visits and payments must be reconciled annually to DHCS. Be aware that frequently your only notice for late reporting from the state will be to notify your clinic that you are subject to Medi-Cal payment withhold!

How will you handle the anticipated increase in Medi-Cal patient volume in the next few years? Are you adding an additional clinic location or otherwise expanding the range of services your clinic offers? If you’re adding a new site, there are many state licensure and Medicare/Medi-Cal enrollment and rate setting issues to resolve before you can see patients. All of this amounts to a multi-step process that will take many months to conclude successfully.

HFS has worked with hundreds of clinics over the past twenty years and our experienced staff knows all the inner workings of the various state and federal agencies. We can assist in strategic planning; licensing and enrollment; expansion of scope of services; interim/initial and final rate setting for all Medi-Cal codes; PPS reconciliations and cost reporting; and all other components of clinic development.

If you have any questions regarding your clinics, give us a call, or contact any member of our clinic development staff: Steve Rousso, srousso@hfsconsultants.com; Diana Surber, dsurber@hfsconsultants.com; Bill Deane, bdeane@hfsconsultants.com; or Cecilia Murillo at cmurillo@hfsconsultants.com, or call us at 510-768-0066.

Q: If you have a deceased patient, does HIPAA still apply?

A: Yes, the medical record remains confidential regardless of the

patient’s status.

Q: What are the rules for emailing or texting protected health information (PHI) to outside vendors?

A: It must be under a Business Associates Agreeement and it must have an encrypted secure line. Standard text messaging is not HIPAA compliant.

Q: If you have had no claim denials, do you need to monitor for accuracy?

A: Yes. Just because there are not denials, it does not mean an accurate claim.

Q: Can I rely on my coding grouper to accurately code diagnoses?

A: No, you should concurrently review codes for accuracy. Medicare is not only auditing for upcoding, they are also monitoring for consistent undercoding as well.

Q: If someone who did not have the “need to know” authorization for a patient accessed a medical record, is that a reportable event?

A: Yes, you need to report all incidences to the local district office of the California Department of Public Health (CDPH), as a result of legislation over the past several years.

HIPAA Compliance Policy

HFS Consultants has experience creating HIPAA compliance policies for healthcare facilities. For more information, please contact Becky Carroll, R.N., at 510-768-0066 ext. 285, or beckyc@hfsconsultants.com.

The state is proactively moving toward healthcare reform using the Medi-Cal managed care network as a key element, and re-configuring many programs with the Medi-Cal managed care delivery system at the core.

Re-designed Medi-Cal programs in 2013 include:

Medi-Cal Managed Care Rural Expansion

Beginning in June 2013, Governor Brown’s budget expands managed care in rural counties that are now receiving only Fee-For-Service Medi-Cal. The expansion shifts the risk of managing individual patient care to the health plans.

DHCS is working with stakeholders in the 28 non-managed care counties to ensure the most beneficial and effective managed care program. However, these counties have been solicited in the past for managed care coverage, and each has rejected participation. It remains to be seen how sucessful a more forceful  effort will be.

Existing Medi-Cal Managed Care

• Currently, there are 4.5 million Medi-Cal managed care enrollees in 30 counties.
• DHCS operates under the direction of the Medi-Cal Managed Care Division and contracts for healthcare services through an established network of providers.
• Providers who wish to provide services to managed care enrollees must participate in the managed care plan’s provider network for the counties in which their patients reside.

The state’s plan for expanded Medi-Cal coverage will be remedied through the following, which will be implemented over the next two years:

Expansion of Low Income Health Plans (LIHP)

• Short-term plans bridging the gap until 2014
• Currently, 500,000 California adults, in 15 LIHPs in 51 counties
• Each LIHP has its own branded name
• Available to adults ages 19 to 64 who aren’t eligible for Medi-Cal, Child’s Health Insurance Program, or are pregnant
• Income eligibility requirements vary for each LIHP program
• Each LIHP will decide whether to establish cost sharing for enrollees
• In 2014, the majority of enrollees will convert to either expanded Medi-Cal or the state implemented California Benefit Health Exchange

Healthy Family Program Conversion to Medi-Cal

• In March 2013, Healthy Family enrollees begin transition to Medi-Cal
• One-year implementation program
• The state estimates providers will receive 15 percent less under Medi-Cal
• Demonstration Program for Dual Eligibles
• In 2013 Q2, the state begins a three-year demonstration program to coordinate care delivery for those eligible for both Medicare as primary coverage and Medi-Cal as the secondary
• Estimated 1.1 million Californians are dual eligible
• Payment method will be a capitation model using the state’s existing network of Medi-Cal managed care health plans
• Responsibility of health plans to case manage both Medicare and Medi-Cal benefits through their provider networks

Medi-Cal Physician Reimbursement

• For many years, Medi-Cal has reimbursed at a lower rate than the federal Medicare program for the same services
• Effective January 2013, states must pay physicians 100 percent of the rate Medicare would have paid for specified primary care services
• States will receive 100 percent of the difference from CMS based on a formula developed by CMS
• Physicians who did not previously treat Medi-Cal patients may begin to accept those patients due to the higher reimbursement

Providers Should Consider

• Evaluating their inclusion or exclusion from Medi-Cal managed care networks
• Updating and expanding Medi-Cal analyses to model the new role Medi-Cal will play in the implementation of the ACA
• Making Medi-Cal key strategic decisions to avoid impacting current and future service lines

Medi-Cal Program Consulting
For additional information regarding Medi-Cal programs, including assistance with analyzing Medi-Cal program participation, please contact Nancy Arata at 510-768-0066, or nancya@hfsconsultants.com.

The state of California’s Unclaimed Property Law requires organizations to review their records annually to determine if they are holding any funds, securities or other properties that have been unclaimed for the required dormancy period. The unclaimed property program is administered by the California State Controller’s Office, which has established annual reporting deadlines and developed guidelines for reporting unclaimed property. John Chiang, California State Controller, made returning property to its rightful owners one of his top priorities when he took office in 2007.

In recent years the State Controller’s Office has added additional steps in the reporting and remitting of unclaimed property. Organizations are now required to perform “due diligence” for all properties valued at $50 or more before reporting it and eventually escheating (i.e., forwarding) the funds to the state. Each organization must:

• Institute a multi-year process requiring establishing and maintaining an unclaimed property
• Update database annually
• Follow up with owners of unclaimed property
• Submit required reporting and escheating of funds.

The state of California website details the procedure for reporting unclaimed property.

Not only does the state no longer have an amnesty program for the reporting and escheating of unclaimed property, but it is actively advocating for reforms such as restoring interest paid on claims and stricter penalties on businesses failing to comply with the law. If an organization has failed to report in a timely manner, the state will assess penalty interest from the period that funds should have been remitted to the state. Upon receipt of the penalty assessment, an organization can file an appeal, which is reviewed by the legal department, not the department assessing the penalty.

HFS can assist hospitals, clinics, medical groups and other health care organizations with the full spectrum of identifying and reporting unclaimed property to the state of California. For more detailed information or assistance with the unclaimed property process please contact Nancy Arata at (510) 768-0066 or by email at nancya@hfsconsultants.com.

Davis, who is a founding Oakland Spark member, has mentored three students over the last two years, providing one-on-one technology apprenticeships at HFS’s Oakland offices. In addition, HFS has provided financial support to the organization through its corporate sponsorship program.

The CHNA requirements become effective starting with the first tax year beginning after March 23, 2012, and must be filed every three years.

Specific community healthcare needs and how the hospital is meeting them must be identified by the CHNA. The hospital must also develop action plans to meet the needs of the community, monitor them and report progress on their implementation.

Specific CHNA requirements:

• Definition of service area
• Discussion of how the CHNA was conducted, including methodologies used to collect and analyze data
• Input of community and hospital stakeholders
• List of prioritized community healthcare needs and how the hospital will (or will not) address them
• Schedule of available resources needed to address community needs
• Board adoption of the hospital’s action plan and CHNA

The CHNA is not the same as tax preparation. Healthcare market and strategy professionals who are experienced in areas such as surveys and stakeholder interviews, and market supply/demand analysis should work with hospital executives to complete the CHNA. The process takes six to 12 months.

There is a $50,000 fine per year for not filing a CHNA, and the bigger issue is that failing to file endangers the hospital’s tax-exempt status.

For more information, please contact John Pfeiffer, Principal, at 510-867-1314, or johnp@hfsconsultants.com; or David Robeson, Director of Feasibility, Valuation and Capital Planning, at 510-768-0066 x304, or davidr@hfsconsultants.com.

The CEO of a rural hospital just resigned after 10 years on the job; there is no succession plan and the Board has never recruited a new CEO. The Board was so comfortable with the incumbent that it didn’t consider what it would do without him/her. The CFO and CNO are too busy to assume these responsibilities. They are getting ready to break ground on a new building and the departing CEO was leading this effort. The CFO is leading the implementation of a new Clinical Information System (CIS). In addition, the CEO was very involved in local community activities, which will continue to need attention. There is no COO or CIO.

Q: Where should they begin?

A: Considering the rural hospital cannot do without this critical leadership function, the Board should quickly evaluate its immediate options. Should an interim CEO be hired? There are many factors to consider, given the work that lies ahead to hire a permanent CEO.

Q: What do you mean the “work ahead”?

A: Let’s first review the reasons to put an interim CEO in place. Hiring a permanent CEO can take months. It is likely that the Board needs to conduct an organizational assessment before starting the search. HFS, like many consulting companies, maintains a network and recruits interim “C-suite” professionals. The healthcare organization needs to keep construction and new CIS projects moving forward. Acting immediately by placing a good interim executive who has already been vetted, proven and can be on site within a couple of weeks will facilitate an orderly succession. Doing so will help ensure that the organization maintains its strategic direction and sustains day-to-day operations.

Q: What should be considered when hiring an Interim?

A: Establish the objectives for the interim so the mission is clear. For example, the Board probably wants an interim who has served as a CEO or COO. Construction experience and community relations expertise are also important. In addition, considering that this is the first CIS implementation that the current CFO has been involved with, expertise in this area would also be very beneficial. Finally, avoid giving false signals to a temporary appointment. It may be helpful to use the title “interim CEO,” which is more accurate than “acting CEO.” It may be advisable to leave the CEO’s office vacant, especially if the interim CEO is an internal candidate for the position.

Q: Describe an organizational assessment?

A: This involves working with a Board and search committees. An experienced consultant such as HFS typically leads this. The consultant becomes familiar with the organization’s mission, operations, strategic direction, challenges and opportunities. The standard and framework for the entire search are developed during this process.

Q: Should the hospital form a Search Committee or have the entire Board as its Search Committee?

A: Most search committees consist of seven to nine people. A larger group might become slow and unwieldy, while a smaller group might not represent a cross-section of views. Based on the consultant’s organizational assessment, he can assist in guiding the Search Committee through the selection process for a new CEO with the skill set necessary to maintain its strategic direction.

“Trahan Whitten has exceptional management qualities and deep industry knowledge, making him uniquely qualified to lead HFS successfully into the future,” says Rousso, who is chairman of HFS’s board of directors. “He has distinguished himself with his results-driven leadership style.”

“Electing Trahan to the CEO role is in line with our future plans,” says Gianello. “HFS is experiencing significant growth, and the appointment of Trahan is a testimony to our success and strategic direction.”

Whitten worked for HFS as one of its first employees, but he left in 1993 to work for a large public accounting firm.

He returned to HFS in 2008 as director of the Government Programs and Reimbursement services practice area. He is an industry leader in reimbursement strategy validation and implementation, mergers and acquisitions, and strategic financial management.

Whitten’s career path includes leading KPMG’s West Coast division followed by becoming the national managing partner of Ernst & Young’s government programs, reimbursement and compliance service lines in the United States. He was a three-time recipient of the National Outstanding Practice Leadership award; and in 2004 he received both the National Innovation and Distinguished Mentor awards.

Whitten has a master’s degree in business administration from Colorado State University and a bachelor of science degree from the University of Utah.

We sat down with Whitten in late January when he was three weeks into his new role to talk with him about HFS and what he envisions for the firm.

Congratulations on being named CEO. Any comments regarding your new role?
I am humbled and excited about the opportunity HFS shareholders have given me. I am honored to lead this outstanding organization of professionals who have exemplary credentials and are some of the brightest, most talented people in our industry. The quality of their work is a key strength of HFS. I am committed to ensuring that HFS meets its mission and core values as it has been doing since 1991.

Explain how your background has prepared you for the CEO role.
As a partner at public accounting firms, I was provided with a good education and training on how to run profitable programs. For me, it was like getting a Ph.D. in consulting. I know the importance of focusing on the people around me, both employees and clients. By doing that, success follows.

Have there been other influences on your leadership philosophy?
A great deal of my leadership philosophy comes from the book Execution: The Discipline of Getting Things Done by Larry Bossidy and Ram Charan, which was recommended to me early in my career. It examines various companies and lessons learned from those who execute well. It presents a discipline for meshing strategy with reality, aligning people with goals and achieving the promised results, all of which I work to adhere to and see as a major job of business leaders.

What do you look forward to as CEO?
I look forward to seeing that our clients are served well, with a focus on quality and compliance. I want our clients to know that we are a consulting firm with close to 100 employees, and we successfully impact how healthcare providers run their organizations and facilities. Our tagline says it all: “Complete Solutions for Healthcare Management.”

What is your vision for the company?
The company’s growth and success make it perfectly positioned at this time to move from a small company to a mid-sized firm, while at the same time maintaining its current culture and commitment to clients. We are flexible enough to adjust and adapt quickly to the continuing changes in the healthcare industry.

Check out the video below to learn what will be in store during this informative discussion addressing the challenges of transforming operations to meet the needs of the changing health care environment.

Up until this recent mandate, RHC re-certifications had been a lower priority for the district offices, and many RHCs had not been surveyed in years. As a result, we’ve noticed that many sites have become a bit lax in their adherence to RHC requirements. We are aware of one RHC that received a 42-page Plan of Correction for deficiencies after having a surprise re-certification site visit.

Some examples of recurring problem areas include: healthcare environment (equipment maintenance, entry/exit access, cleanliness, functioning fixtures), patient safety (sterilization and disinfecting of space and equipment, medication management and storage, emergency procedures) and documentation (staff training, annual evaluations, testing, policy review).

CDPH utilizes a survey tool titled “Rural Health Clinic Survey Report” (CMS-30), which lists all Conditions of Coverage mandated by Medicare for RHC participation. You should review this report to become familiar with the Prefix Tags (J codes) in each section to learn what the surveyor expectations will be.

If you have any questions regarding RHC surveys or the survey tool, please contact Bill Deane at 510.768.0066 x246 or billd@hfsconsultants.com.