NJ Physician Magazine April 2014

JULY 2014 2012 APRIL Visit us now online at

www.NJPhysician.org

Feet ‘N Beyond of New Jersey, P.A. Pioneers of Advanced Technologies in Podiatric Medicine, Wound Care and Foot and Ankle Surgery Also In This Issue: Top Ten Changes Physician LLC Members Should be Concerned About in New Jersey New Jerseyans Find it Hard to Find Doctors Who Accept Their Insurance Physician Group Says Medical Practices are Good for Economic Health Barnabas Health Received Largest Donation in its History

Publisher’s Letter Dear Readers, Welcome to the April edition of New Jersey Physician magazine, the only publication covering the entire state, and published right here at home.

Since the start of the ACA, many states have elected to opt out of the law’s Medicaid expansion leaving each state’s decision to participate in the hands of the nation’s governors and state leaders. I thought you might find it interesting to see where each state stands on this issue since the ruling. Please see the map inside for a clear view of where the state’s stand on this issue.

In March of this year, the New Jersey Revised Uniform Limited Liability Company Act became effective. There are a number of important changes in New Jersey LLC law. It is most important that physician members of LLCs understand how these changes can affect their employment. Frank Ciesla provides us with the top ten changes LLC members should be concerned about.

Even physicians occasionally have to visit a doctor. New Jerseyans are finding it harder and harder to find a practitioner who accepts their insurance. In fact, New Jersey residents are more than four times as likely as the national average to have difficulty finding a doctor who accepts their coverage, according to a new Rutgers report.

The average private medical practice supports 10.5 jobs and provides $1.74 million in annual economic activity in New Jersey.

The study comes at a time when advocates for medical practices are warning policymakers and insurers that cuts to reimbursements could harm medical practices and the communities surrounding these practices.

Feet ‘N Beyond is a podiatric practice that has amassed advanced training in every sub-specialized area of podiatry. Whether it be complete ankle reconstruction, wound care treatment that includes hyperbaric care, surgery to correct bunions or any of the myriad of foot and ankle problems, they are at the cutting edge in the use of advanced technologies to treat diseases of the lower extremities. With offices in both Parsippany and Hackettstown, and affiliations with many of the area hospitals, including the Saint Clare’s Wound and Hyperbaric Center, these practitioners are highly recommended.

With warm regards,

Michael Goldberg Michael Goldberg Publisher

Published by Montdor Medical Media, LLC

Co-Publisher and Managing Editors Iris and Michael Goldberg

Contributing Writers Iris Goldberg Michael Goldberg Andrew Kitchenman Catherine Hollander Chad Terhune Beth Fitzgerald

Layout and Design - Nick Justus

New Jersey Physician is published monthly by Montdor Medical Media, LLC., PO Box 257 Livingston NJ 07039 Tel: 973.994.0068 F ax: 973.994.2063 For Information on Advertising in New Jersey Physician, please contact Iris Goldberg at 973.994.0068 or at igoldberg@NJPhysician.org Send Press Releases and all other information related to this publication to igoldberg@NJPhysician.org Although every precaution is taken to ensure accuracy of published materials, New Jersey Physician cannot be held responsible for opinions expressed or facts supplied by its authors. All rights reserved, Reproduction in whole or in part without written permission is prohibited.

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Contents

Feet ‘N Beyond of New Jersey, P.A.

Pioneers of Advanced Technologies in Podiatric Medicine, Wound Care and Foot and Ankle Surgery

4

On the cover from left-Dr Vilayvanh Sysounthone, Dr Yong J. Zhu and Dr. Helene T. Nguyen.

CONTENTS

12

Medical News

23

Medical Bills You Shouldn’t Pay

16

Top Ten Changes Physician LLC Members Should be Concerned About Regarding New LLC Law in New Jersey

25

Legal Issues

18

New Jerseyans Find It Hard to Find Doctors Who Accept Their Insurance

25

20

Legislative Issues

Christie Administration Recognizes National Healthcare Decisions Day April 16

22

Physician Group Says Medical Practices Are Good for Economic Health

27

Hospital Rounds

2 New Jersey Physician

Cover Story

Feet ‘N Beyond of New Jersey, P.A.

Pioneers of Advanced Technologies in Podiatric Medicine, Wound Care and Foot and Ankle Surgery Surgical photography by Michael Goldberg

By Iris Goldberg Most people don’t spend much time thinking about their feet until a problem occurs. Whether it’s the pain of a bunion, an inflamed tendon or something as significant as a wound that won’t heal or a serious fracture, a podiatric problem can literally stop us “dead in our tracks.” Also, some conditions that affect the foot can be caused by serious medical conditions, such as diabetes, that may be yet undiagnosed or inadequately managed.

For these reasons a routine check-up with a podiatrist annually is right in line with the current recommendations for patients to focus on maintaining wellness. When an illness of the foot is diagnosed, it is crucial that patients have access to specialists who provide the highest level of care, utilizing the most current, evidence-based treatments available.

With offices in Parsippany and Hackettstown, the physicians of Feet ‘N Beyond of New Jersey, P.A. are expertly trained in all facets of podiatric care and continually update treatment modalities, when appropriate, as exciting clinical data emerges. Among them, Helene T. Nguyen, DPM, Yong J. Zhu, DPM and Vilayvanh Sysounthone, DPM, have amassed advanced training in every sub-specialized area of podiatry and offer their patients cutting edge approaches to maximize treatment results for the entire gamut of diseases that affect the foot and ankle in adults and children. These include but are not limited to:

4 New Jersey Physician

•

Achilles Tendon

• Skin and Nail Disease

• Hammertoes

• Calluses

• Ankle Instability

• Soft Tissue Masses and Tumors

• Heel Pain

• Corns

• Ankle Sprain

• Sprains and Fractures

• Ingrown Toenails

• Diabetic Foot

• Arch Disorders

• Sports Injuries

• Neuromas

• Flat Feet

• Arthritis

• Tendon and Joint Pain

• Neuropathy

• Fungal Toenails

• Athlete’s Foot

• Trauma Injuries

• Plantar Fasciitis

• Foot Infections & Ulcerations

• Biomechanical problems

• Warts (Laser removal)

• Poor Circulation

• Geriatric Foot

• Bunions

• Wounds

Dr. Nguyen candidly reveals that in order to ensure that she and her colleagues can provide proper treatment plans and protocols without being concerned about receiving sufficient reimbursement for their services, Feet ‘N Beyond has recently joined with many podiatry practices across the state to form a “super group.” This practice model is becoming a popular choice in many specialties, where physicians retain autonomy within their individual practices but have greater leverage when negotiating with insurance companies and with vendors, as well. “With this structure we are able to provide the highest level of care, offering our referring physicians the

highest standards and protocols for their patients,” Dr. Nguyen makes a point of sharing.

One example of cutting edge technology utilized by the physicians at Feet ‘N Beyond, PinPointe FootLaser™, is the most current and effective treatment for onychomycosis (toenail fungus).

The infection, which causes the nail to have an unsightly appearance, can live in the layer of dead skin around the nail, in the space under the nail and in the nail itself. Dr. Nguyen shares that although diabetics are more prone to nail infection, anyone can be susceptible, especially those with an active lifestyle.

from the end of the first metatarsal, which joins with the base of the big toe (metatarsophalangeal joint), is done.

Then both the big toe and metatarsal bones are reshaped.

Dr. Nguyen uses the PinPoint FootLaser™ to treat toenail fungus.

The PinPointe FootLaser™, which is FDAapproved, is a much safer alternative to oral anti-fungal medications which are often associated with unpleasant side effects. Performed in the office, the treatment takes about 30 minutes and is virtually pain-free.

Many patients require only one treatment to achieve clear nails but some with more severe infections will need up to four.

Unfortunately, as Dr. Nguyen explains, right now most insurance companies do not cover laser treatment, classifying it as cosmetic. Hopefully, this policy will change going forward, as onychomycosis is definitely a medical problem affecting millions of people across the country.

Many patients are seen at Feet ‘N Beyond for the treatment of bunions, which are bony bumps that form on the joint at the base of the big toe. Often, the big toe deviates towards the other toes. When this occurs the base of the big toe pushes outward on the first metatarsal bone, forming a bunion.

Since the bunion occurs on a joint that bends during normal walking, the continuous force of the entire body weight exerted on that joint can cause bunions to be extremely painful.

“Bunion surgery is probably the most common procedure we perform in our podiatry practice,” informs Dr. Nguyen. “Most patients are women because of the types of shoes we tend to wear,” she adds, explaining that tight fitting shoes will exacerbate the

problem, even though some bunions are hereditary. Dr. Nguyen goes on to share that hammertoes, in which muscle imbalance on tendons and joints force the toe into a hammerhead shape, are often associated with bunions and like bunions, are more common in women because of the shoes they wear. Hammertoes can be a serious problem in diabetics or others with poor circulation.

During bunion surgery, generally, an incision is made in the top or side of the big toe joint to remove and realign soft tissue (ligaments) and bone. This is done to relieve pain and restore normal alignment to the joint. Absorbable pins or titanium screws are used to hold the bones in place. Sometimes it is necessary to make small cuts in the bones and fixate them into a more normal position.

In certain cases removal of the bone

Before Bunion Surgery

In the case of hammertoes, which most often occurs because the patient is walking with the toes gripped downward to compensate for the bunion, a straight positioning of the toes must be recreated and maintained.

This is accomplished by shaving down the interphalangeal joint.

Next, depending upon the severity of disease, either a removable pin or a tiny implant is placed in the joint to maintain the straight position. Dr. Nguyen emphasizes that for younger patients, especially those who are diabetic, permanent fusion of the joint is preferable to maintain straightness indefinitely.

Plantar fasciitis, which is the most common cause of heel pain, is another condition that is often treated at Feet ‘N Beyond. Caused by repeatedly straining the ligament (plantar fascia) that supports the arch, plantar fasciitis can eventually cause tiny tears in the ligament that lead to pain and swelling.

“Especially at this time of year, when people come outdoors after staying inside during the winter months, they want to be active again,” Dr. Nguyen has found. “But this sudden change can put extra stress on the feet,” she adds, further explaining that the body has an asymmetric response to activity with one side (foot) bearing more of the weight. This is what causes the ligament to become strained and inflamed, putting pressure on the nerves, which causes the heel pain.

After Bunion Surgery April 2014

5

Once an x-ray establishes there is no fracture, Dr. Nguyen explains that conservative treatment, including injection, stretching exercises and a recommendation for orthotics to lend more support is undertaken. This is usually sufficient for most patients but for those who still have discomfort after several months of treatments, a simple outpatient procedure can be done. “We make a tiny cut on the inside part of the plantar fascia and this relieves the pressure in the area, thereby resolving the problem,” she reports.

At Feet ‘N Beyond the physicians are expertly skilled in the treatment of pediatric foot disorders as well. For example, many children are treated for plantar warts, which occur on the sole (plantar) of the foot. These are usually harmless but can be painful. The size of plantar warts varies and they usually appear with bleeding black dots on their surface which are actually from the dilated blood vessels in the wart.

These lesions can be quite resistant to treatment and the recurrence rate is high.

A CO2 laser, along with cryotherapy and topical chemical applications, are some of the modalities effectively used by the physicians at Feet ‘N Beyond to treat persistent pediatric plantar warts.

These treatments are associated with minimal pain and discomfort and are well-suited to this younger group of patients.

Flatfoot deformity can often be diagnosed during childhood, usually when pain occurs during sports activities.

Early intervention is important and as Dr. Nguyen shares, can involve conservative treatments to prevent injury, such as strapping, taping and custom orthotics.

Sometimes surgical reconstruction is necessary. The physicians at Feet ‘N Beyond closely monitor pediatric patients to choose the best treatment modality for growing feet.

Without question, diabetics comprise a significant percentage of any podiatry practice.

Unfortunately, diabetes has become almost epidemic within our society and bears great responsibility for the difficulties our healthcare system has sustained. Each

6 New Jersey Physician

Dr. Zhu specializes in diabetic wound care, Many patients are treated at the Center For Wound Care and Hyperbaric Medicine at Saint Clare’s Hospital in Dover. of the physicians at Feet ‘N Beyond treats diabetic patients who, as a result of their disease can have a host of problems affecting the feet, sometimes with devastating consequences.

Diabetic neuropathy is experienced by many patients as a result of nerve damage caused by diabetes over time.

Painful burning and stinging as well as loss of feeling in the feet not only affect quality of life but also bring risk for more serious conditions down the road. Neurovas is an in-office physical therapy modality in which leads are connected to the patient to stimulate damaged nerves in order to recondition them. This is helpful to mitigate some of the pain and most importantly to restore feeling. Any type of foot wound can be catastrophic for a diabetic because of their diminished capacity for healing. It is crucial for diabetics to avoid wounds completely but if one does occur, to be able to feel it immediately. Unfortunately, amputations result from wounds that progress out of control.

Dr. Zhu specializes in diabetic wound care. “As podiatrists we take care of diabetic foot ulcers. This is a category of wound that only occurs in diabetics,” Dr. Zhu specifies, explaining that neuropathy renders them incapable of feeling pain, especially in the extremities. As a result, even a tiny

blister on the foot, left untreated, can become a huge problem. “With no mechanism in place to let the diabetic patient know that something is wrong, he or she will continue to walk on the wound, not caring for it properly and it becomes infected,” Dr. Zhu informs.

“Also, diabetics are more prone to infection because the disease compromises their immune system,” he adds. “So it becomes somewhat of a vicious cycle,” Dr. Zhu continues.

He explains that many times it is only when the infection has progressed to a dangerous point, when the patient can actually smell it or see the gangrene that has developed, that it is brought to a doctor’s attention. “By that time it’s too late. They may show up in the emergency room with a high fever and a terrible abscess and often they still do not feel pain,” Dr. Zhu shares.

“Unfortunately, at this point, they are candidates for amputation,” he notes with regret.

Of course, as Dr. Zhu emphasizes, the only way to reduce the number of amputations suffered by diabetics is with a vigilant approach to their overall care. Certainly, every at-risk diabetic patient should be seen by a podiatrist every two to three months to be closely examined for any signs of a wound. Additionally, Dr. Zhu

Hyperbaric chambers provide the ideal environment for accelerated healing. Patients breathe 100% oxygen.

“The more oxygen there is, the more healing that takes place,” Dr. Zhu explains. echoes the recommendations of the American Diabetes Association (ADA) and other healthcare professionals, that in order to best manage their disease, diabetics should be closely monitored by a multidisciplinary team of specialists, including primary care physicians, endocrinologists, cardiologists, nephrologists and ophthalmologists, in addition to podiatrists.

When Dr. Zhu sees a diabetic patient with a foot ulcer that will not heal on its own, or when a soft tissue deficit results from the removal of infected tissue and bone, he is pleased to report that innovative technology does provide him with methods that, in many cases, can stimulate re-growth of soft tissue and prevent amputation or limit further amputation.

Skin grafts have traditionally been used to promote healing by providing healthy living cells but as Dr. Zhu points out, autografts (taken from the patient’s own body) should not be used for diabetic patients. “In diabetics this is not a favored method because in order to take skin from another part of the body you are starting a new wound,”

he mentions, explaining the risk of an infection developing at the donor site as a result.

“We now have technology that allows us to grow skin in a laboratory,” Dr. Zhu reports. “Believe it or not, healthy fetal foreskin after circumcision is donated. The skin cells taken from one individual foreskin can replicate in the laboratory to grow up to a football field’s worth of skin graft,” he emphatically states, realizing that it takes a moment for the listener to digest this information. Dr. Zhu goes on to explain that fetal foreskin is ideal for growing skin grafts because its cells are highly replicating.

While having an endless supply of premier skin graft is an important advancement for successfully healing diabetic foot ulcers, the process needs further enhancement for optimal results.

Hyperbaric chambers provide the ideal environment for accelerated healing to occur.

“The healing process of a diabetic foot ulcer or amputation must include conjunctive therapy, meaning we use everything at our disposal at the same time,” explains Dr. Zhu. Patients

receive treatment at an outpatient wound center or long term acute care facility where there are skin grafting capabilities and hyperbaric oxygen chambers on site.

Treatment involves 90 minutes in the hyperbaric chamber, Monday through Friday until the healing process is completed, usually within three to four weeks. Dr. Zhu shares that while normally only 10% of the air we breathe is comprised of oxygen, inside the chamber, the patient is breathing 100% oxygen under pressurization equal to that which would be experienced scuba diving at 66 feet below the surface.

Dr. Zhu discusses the tremendous benefits of having patients breathe 100% oxygen during the time they spend in the chamber each day. “First, the more oxygen there is, the more healing that takes place. A traumatic area needs oxygen to heal. Secondly, oxygen is actually toxic to most of the bacteria that infect a diabetic foot ulcer,” he offers. “So any residual bacteria left in the wound will be killed,” Dr. Zhu continues. “Third, by pressurizing the chamber, we actually April 2014

7

is treated it continues to recur. “The problem is, you can’t just treat the wound,” Dr. Sysounthone adamantly states. “It’s the biomechanics of the foot, the way the bone sits and the structure of the foot - that causes the wound to occur in the first place.”

Dr. Sysounthone goes on to describe that in these patients, when the wound has been treated and has closed, as soon as they start to walk, the wound will break down and re-open. “That’s where reconstruction comes in,” she says. As Dr. Sysounthone explains, correcting the biomechanics of the foot involves delicate, complex and tedious surgery. “You have to cut bones out, put them in different positions, realign the foot and place plates and screws,” she shares. “It’s complicated. The surgery can take up to five hours,” Dr. Sysounthone informs. “There are many foot and ankle surgeons, whether they’re podiatrists or orthopaedists that don’t get involved with this.”

Correcting the biomechanics of the foot involves delicate, complex and tedious surgery. Here, Dr. Sysounthone is shown during a reconstruction procedure. hyper-oxygenate the patient so that the bloodstream brings more oxygen to the traumatic area.”

Most importantly, Dr. Zhu wants to reiterate the importance of having diabetics in general and wound patients, in particular, cared for by a multidisciplinary team of physicians, specially-trained in treating each of the complications associated with diabetes.

Sometimes, even with advancements in more conservative treatment, diabetic foot ulcers often lead to eventual amputation of part of the foot, the whole foot and ultimately, the leg. However, despite the more than 71,000 diabetic limb amputations in the United States, annually, the progression from neuropathy, vasculopathy and foot deformity to amputation is not necessarily inevitable. Recent advancements in diabetic surgical care have made it

8 New Jersey Physician

possible to avoid that grim prognosis in many cases.

At Feet ‘N Beyond, Dr. Sysounthone sees patients who have had persistent foot ulcers and are in danger of progressing to amputation. Speciallytrained in foot and ankle surgery, Dr. Sysounthone performs the entire gamut of foot and ankle surgeries such as ankle fusion, correction of flatfoot deformity, Charcot foot reconstruction, Achilles tendon repair and ankle trauma surgeries, including repair of compound ankle fractures, to name a few. She is most passionate about the limb-salvage in diabetic foot reconstructions she performs.

“Patients come to me after being told by their doctors that they need to have their leg cut off,” Dr. Sysounthone relates. “Most of them have a chronic wound or ulcer that has been on the bottom of the foot for years,” she adds, explaining that after the wound

Certainly, undertaking this surgery requires a tremendous commitment of time on the part of the surgeon.

Dr. Sysounthone evaluates the patient carefully over time to ascertain eligibility. Besides the wound itself and the biomechanics of the foot, she needs to assess how well the patient’s diabetes is managed and what, if any, other complications the patient might have. Also, she must determine, through frank discussions, if the patient is willing to comply with the arduous healing process, which can take up to a year. “You are going to be involved with that patient for a long time,” Dr. Sysounthone remarks.

Dr. Sysounthone confides that reimbursement for this is significantly low, considering the time and effort she must spend. “I definitely do not do this for the money,” she strongly states. “My reward is to see the patient keep his or her leg.” She is pleased to report that she has had some wonderful results with some patients up and around after only six months. “I understand why some surgeons don’t do this or give it up after a while,” Dr. Sysounthone says.

Especially when patients don’t comply and the procedure is not successful, she understands how disheartening that can be. “Right now, for me, I am thrilled when I can make them better,”

Dr. Sysounthone exclaims.

Greg Orvetz is a diabetic who suffered for years with a non-healing foot ulcer. He saw numerous physicians and underwent several unsuccessful procedures to reconstruct his Charcot foot which resulted from years of diabetic neuropathy. Eventually it was recommended that he undergo a below the knee amputation.

Despondent about not being able to walk his daughter down the aisle, he was referred to the Wound Care Clinic at Saint Clare’s Hospital and met Dr. Nguyen. She led him to Dr. Sysounthone, who ultimately performed successful reconstructive surgery to save his foot and leg.

“That was back in April of 2011,” Mr. Orvetz relates. “It’s healed!”he exclaims, sharing the frustration of enduring several unsuccessful operations on the bottom of his foot before he found Dr. Sysounthone.

“She remained extremely persistent, diligent and very positive throughout the entire journey. And to be very honest, she kept me afloat emotionally. She really kept my spirits up,” Mr. Orvetz shares.

“There was never a moment when she would let me give up and she saved my foot,” he says with great emotion in his voice. After three years, Mr. Orvetz is happy to report that his foot remains healed, allowing him to continue to enjoy a better quality of life.

Charcot foot is a deformity that results from nerve damage (neuropathy) in the foot or ankle. The nerve damage causes a loss of sensation that increases the risk of injury to the feet. When the foot is repeatedly injured, the weight-bearing joints start breaking down. Most often caused by diabetes, neuropathy from other causes can cause Charcot foot to develop.

Gail Russo-Martin is a nurse who developed Charcot as a result of back surgery that caused nerve damage to her spine with resulting neuropathy in her leg and foot. She is happy to share her experience with Dr. Sysounthone. “I am a nurse who has worked with many physicians over the years and I found her to be really fantastic,” says Ms. RussoMartin. “She’s very compassionate and caring. She gives you all the information you need – the pros and cons – to

Here, the nurse holds the Charcot foot as Dr. Sysounthone drills into the heel.

April 2014

9

During Grand Rounds at Saint Clare’s Hospital, Dr. Sysounthone speaks to other physicians about foot reconstruction surgery she performs.

help you make the correct decision about your surgery,” Ms. Russo-Martin continues.

“Dr. Sysounthone goes further than most doctors do in order to make sure her patients do well,” she adds, mentioning the hand-made orthotic Dr. Sysounthone constructed for her.

“I’m walking now and doing very well.

She has done an absolutely amazing job,” Ms. Russo-Martin happily states.

“And my foot looks fantastic!”

For the 23 million Americans living with diabetes, it is important to emphasize that saving a patient’s limb can ultimately save that patient’s life.

Both Dr. Sysounthone and Dr. Zhu allude to data which suggests that once a diabetic has one amputation, the likelihood of having to undergo another one increases.

Most significantly, undergoing the loss of

one’s leg will eventually impact upon that patient’s longevity.

Further, saving limbs helps our healthcare system save money. Prior to successful reconstruction surgery, diabetic patients with chronic wounds have multiple emergency room visits and/or hospital admissions.

These require multidisciplinary management and comprehensive and costly diagnostic testing as diabetic infections can be life threatening as well as limb-threatening.

After reconstruction, as Dr. Sysounthone shares, patients will manage their diabetes and their health more carefully as they enjoy a better quality of life.

Besides helping patients to reclaim their lives and the self-satisfaction she receives, Dr. Sysounthone knows that by performing diabetic limb

reconstruction/salvage, she is helping to reduce the skyrocketing healthcare costs incurred by diabetic patients.

For these reasons the physicians at Feet ‘N Beyond continually stress the importance for diabetic patients to have the benefit a multidisciplinary approach. The goal is to make sure that everything possible is being done to adequately manage the disease from all perspectives in order to avoid the progression to possible limb amputation.

In fact, all of the patients treated by the physicians at Feet ‘N Beyond, are evaluated and cared for as a whole person. As Drs. Nguyen, Zhu and Sysounthone know only too well and as the name of their practice suggests, for them, providing exemplary care is not just about treating the foot.

For more information or to schedule an appointment, Feet ‘N Beyond has 2 locations: Troy Office Center - Building 3 1259 Route 46 East Parsippany NJ 07054 (973) 263 - 5500

Patriot Medical Office - Suite 105 57 Route 46 East Hackettstown NJ 07840 (908) 576 - 0880

Practice Affiliations: Chilton Medical Center, Kindred Hospital, Saint Clare’s Health System, St. Joseph’s Health System, Arden Courts of Wayne, Care One, Hoboken University Medical Center and the Health Center of Bloomingdale.

10 New Jersey Physician

Medical News

Medical News Where the states stand on Medicaid expansion 26 states, D.C. expanding Medicaid

The Supreme Court ruling on the Affordable Care Act (ACA) allowed states to opt of the law's Medicaid expansion, leaving each state's decision to participate in the hands of the nation's governors and state leaders.

The Daily Briefing and American Health Line editorial teams have been tracking where each state stands on the issue since the ruling, combing through lawmakers' statements, press releases, and media coverage. In this latest iteration of our Medicaid map, we've determined each state's position based on legislative or executive actions to expand coverage to low-income residents using ACA funding.

A state-by-state look at expansion EXPANDING COVERAGE (26 STATES AND THE DISTRICT OF COLUMBIA) • Arizona: On June 17, 2013, Gov. Jan Brewer (R) signed into law legislation that will expand Medicaid to an additional 350,000 people in the state. The signing came after Brewer called a surprise special session on the 2014 budget and Medicaid to try to resolve a deadlock among lawmakers on the two issues.

• Arkansas: Gov. Mike Beebe (D) on April 23, 2013, signed the state's expansion plan into law. Under the plan, Arkansas would accept the federal money for Medicaid expansion provided through the ACA but would use it to buy private insurance for about 250,000 eligible low-income residents. The federal government approved the plan in September 2013.

• California: Gov. Jerry Brown (D) on June 27, 2013, signed legislation that would expand the state's Medicaid program, MediCal, to more than 1.4 million additional residents under the ACA. • Colorado: Gov. John Hickenlooper (D) signed the expansion into law on May 13, 2013. He says that the expansion will save the state $280 million over 10 years and help cover an additional 160,000 adults.

• Connecticut: Gov. Dannel Malloy (D) was among the first governors to sign up for the Medicaid expansion after the ACA was enacted. The state was one of five states that opted to expand eligibility early.

• Delaware: Gov. Jack Markell (D) in January 2013 reiterated his support for the Medicaid expansion, including an additional $35.8 million for Medicaid in his FY 2014 spending plan. On July 1, 2013, Markell signed a FY 2014 budget plan that includes $29.8 million to "fund the State's Medicaid commitment."

• District of Columbia: D.C. Mayor Vincent Gray (D) in a statement on June 28, 2012, said, "The District is not at risk of losing any Medicaid funding as a result of [the Supreme Court] ruling, because District officials have already begun implementation of the ACA's Medicaid-expansion provisions and will continue to implement the expansion." D.C. sought permission from the federal government to expand its Medicaid program on May 13, 2010. The move expanded Medicaid to an additional 35,000 residents.

• Hawaii: Gov. Neil Abercrombie (D) has said his state will participate in the expansion. In a statement on June 28, 2012, Abercrombie said, "The Affordable Care Act is our ally in this effort" to "to support a healthcare system that ensures high quality, safety and sustainable costs." According to the Department of Human Services, the state is expanding Medicaid eligibility through the ACA. • Illinois: Gov. Pat Quinn (D) signed Medicaid expansion into law on July 22, 2013. Approximately 342,000 low-income Illinois residents will be newly insured under the expansion.

• Iowa: On Dec. 12, 2013, Gov. Terry Branstad (R) announced that his administration and the White House had agreed on the finals details of his plan to expand Medicaid. Two days earlier, CMS approved Iowa's alternate expansion proposal, which would allow the state to use federal funding under the ACA to help more than 100,000 low-income residents purchase private health coverage through the new Iowa Health and Wellness Plan. Branstad also proposed a small additional premium for certain beneficiaries.

Under the agreement, Iowa will levy the additional premium on individuals with incomes exceeding 50% of the federal poverty level beginning in 2015. The state promised that it will not drop individuals' coverage if they fail to make payments.

• Kentucky: On May 9, 2013, Gov. Steve Beshear (D) said that expanding Medicaid is the right choice for Kentucky, noting that it would halve the number of uninsured in the state. He reiterated that sentiment in a Sept. 26, 2013, opinion piece in the New York Times. On Sept. 3, 2013, a federal judge cleared the way for the state to participate in the Affordable Care Act, ruling that the governor has the authority to expand Medicaid and establish an insurance exchange.

12 New Jersey Physician

• Maryland: On May 5, 2013, Gov. Martin O'Malley (D) signed into law HB 228 to fully implement the Affordable Care Act. • Massachusetts: On July 5, 2013, Gov. Deval Patrick (D) signed into law HB 3452, requiring Massachusetts to come into compliance with new federal regulations under the ACA. On July 12, 2013, Patrick signed into law the state's FY 2014 budget, which supports full implementation of the Affordable Care Act, including the Medicaid expansion.

• Michigan: On Sept. 3, 2013, the Michigan House voted 75-32 to grant final approval to a bill that would expand the state's Medicaid program beginning in April 2014. Gov. Rick Snyder (R) signed the bill into law on Sept. 16, 2013. The proposal contains cost-sharing provisions for Medicaid beneficiaries; it received federal approval in December.

• Minnesota: Gov. Mark Dayton (D) in February 2013 signed legislation that expanded Medicaid to an additional 35,000 childless, low-income adults in the state.

• Nevada: Gov. Brian Sandoval (R) in December 2012 became the first GOP governor to commit his state to expanding Medicaid under the ACA. According to Sandoval's announcement, nearly 78,000 Nevadans would be covered by the expansion.

• New Hampshire: On March 27, 2014, Gov. Maggie Hassan (D) signed bipartisan legislation (SB 413) to expand Medicaid coverage to an estimated 50,000 low-income state residents. Starting in April 2014, the state will move eligible residents into Medicaid programs. The plan then calls for enrolling those residents in private coverage options through the ACA insurance exchange in 2016, which would require a federal waiver. The law requires the state to receive that waiver by March 31, 2015; failure to do so would result in termination of the program three months later.

• New Jersey: Gov. Chris Christie (R) on June 28, 2013, signed a state budget that includes $227 million for Medicaid expansion in the state. However, he vetoed legislation that would have made the expansion permanent in the state.

• New Mexico: Gov. Susana Martinez (R) on Jan. 9, 2013, announced that the state would participate in the Medicaid expansion.

• New York: On June 28, 2012, in an announcement immediately following the Supreme Court's ruling on the ACA, Gov. Andrew Cuomo (D) said the state would participate in the expansion.

• North Dakota: Gov. Jack Dalrymple (R) in April 2013 signed legislation expanding Medicaid in the state.

• Ohio: The state's Controlling Board—a special bipartisan legislative panel—approved Medicaid expansion in 5-2 vote on Oct. 21, 2013, allowing Gov. John Kasich (R) to expand the program on Jan. 1, 2014, without approval from Ohio's Republicancontrolled Legislature. Conservative lawmakers have pledged to mount a fierce legal campaign against the move.

• Oregon: The state has moved forward on Medicaid expansion with the support of Gov. John Kitzhaber (D). Starting on Jan. 1, 2014, state residents earning up to 138% FPL will qualify for Medicaid, up from 100% FPL in 2013.

• Rhode Island: On July 3, 2013, about one week before the state General Assembly adjourned for the year, Gov. Lincoln Chafee (I) signed a fiscal year 2014 budget measure that included a plan to expand Medicaid, which he endorsed in June 2012 and outlined in his 2014 budget proposal.

• Vermont: Health Care Access Commissioner Mark Larson in July 2012 said that Vermont would receive federal funds to expand its Medicaid program under the ACA. The expansion is expected to insure an additional 47,000 state residents.

• Washington: Gov. Jay Inslee (D) on June 30, 2013, signed a state budget that would expand Medicaid in the state.

• West Virginia: Gov. Earl Ray Tomblin (D) in May 2013 announced that the state would expand Medicaid, extending coverage to an additional 91,500 state residents.

CONSIDERING EXPANSION (3 STATES) • Missouri: Although Gov. Jay Nixon (D) favors expanding Medicaid, the General Assembly did not include funding for an expansion in the state's 2013 budget. Lawmakers in the state still are discussing whether to participate in the expansion.

Missouri's House Interim Committee on Medicaid Transformation on Oct. 28, 2013, held a hearing to discuss Medicaid expansion, and discussed a model similar to the expansion model in Arkansas. However, legislation to expand the program in the state will not be considered until the 2014 session.

• Pennsylvania: On Sept. 16, 2013, Gov. Tom Corbett (R) unveiled a health reform package that includes a plan to improve access to Medicaid for hundreds of thousands of residents through a so-called premium assistance model. Under the model, as many as 520,000 eligible low-income residents would receive federal subsidies to purchase private coverage through the state's federally run insurance exchange, and federal Medicaid expansion funds would be used to help eligible residents purchase commercial insurance. The state Legislature has not yet acted on the proposal, which would require federal approval.

• Utah: Gov. Gary Herbert (R) on Jan. 23, 2014, announced that "doing nothing" on expansion was not an option and said the state will expand health insurance coverage to low-income residents. The state Legislature has endorsed two possible expansion plans: One plan would use ACA expansion funds to help eligible low-income residents purchase private coverage, and the other plan would offer subsidies to help eligible residents purchase private policies. However, Herbert has not yet indicated how he plans to expand Medicaid, and his final proposal may require approval from the federal government. Moreover, state House Speaker Becky Lockhart (R) has indicated that she would reject any expansion plan that relies on federal funding.

April 2014

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NOT EXPANDING AT THIS TIME (21 STATES) • Alabama: On May 18, 2013, Gov. Robert Bentley (R) reiterated his opposition to expanding Medicaid, saying the state cannot afford it. Despite Democratic lawmakers declaring expansion to be one of their top goals for 2013, they failed to advance such legislation. According to a recent poll conducted by the Joint Center for Political and Economic Studies, two-thirds of state residents support expansion.

• Alaska: On Feb. 28, 2013, Gov. Sean Parnell (R) said that based on what he knows about the federal budget, he does not support Medicaid expansion and will not ask the state Legislature for funding or authorization to boost the program's eligibility limits. State Rep. Andy Josephson (D) in March 2013 introduced HCR 8, a resolution to compel the governor to take action on the expansion, but the resolution did not gain traction among Alaska lawmakers.

• Florida: On May 3, 2013, the Florida Legislature ended its session without granting final approval to a compromise measure that would have authorized an expansion of Medicaid, which Gov. Rick Scott (R) supports. No further action on expansion is expected this year.

• Georgia: Gov. Nathan Deal (R) on Jan. 16, 2013, confirmed he does not support Medicaid expansion. On March 28, 2013, both the House and Senate adjourned for the 2013 session. A bill to encourage Deal to consider expanding Medicaid died in the House in February 2013. Deal in May 2013 signed legislation creating the Joint Study Committee on Medicaid Reform, but it was "for the purposes of determining an appropriate plan for Medicaid reform," not specifically expanding the program under the ACA. • Idaho: Gov. Butch Otter (R) on Jan. 7, 2013, in his state-of-the-state address said Idaho would not expand Medicaid. The state House and Senate both adjourned on April 4, 2013.

• Indiana: State and federal officials in September 2013 finalized a deal for a one-year extension to the Healthy Indiana pilot program, which serves low-income residents that do not qualify for Medicaid and resembles a health savings account. Gov. Mike Pence (R) has said that any future expansion of Medicaid would be through a plan that resembles Health Indiana, and state officials said that the extension negotiations with the federal government left the door open for such a move in the future.

• Kansas: Gov. Sam Brownback (R) punted the decision on expanding Medicaid to state lawmakers, and the state Legislature wrapped up its session for the year on June 2, 2013, without taking action on any expansion proposals.

• Louisiana: On Feb. 6, 2013, Gov. Bobby Jindal (R) reiterated his opposition to expanding Medicaid in Louisiana. In an op-ed for the Washington Post, Jindal argued that the expansion would cost his state $1 billion over the first 10 years. The Louisiana Senate in May 2013 rejected an amendment that would permit state voters to decide on Medicaid expansion, effectively ending any possibility for action on the issue before the Legislature recessed for the year.

• Maine: On June 17, 2013, Gov. Paul LePage (R) vetoed a bill (LD 1066) that would have expanded the state's Medicaid program.

LePage objected to the cost of expansion and also noted that previous hikes to Medicaid eligibility—which he termed "a massive increase in welfare expansion"—have not worked to reduce the number of uninsured in the state. Two days later, on June 19, 2013, House lawmakers failed to gain the two-thirds majority necessary to override the veto.

• Mississippi: Republicans in the Legislature in June 2013 blocked plans to expand Medicaid to an additional 300,000 state residents under the ACA. • Montana: Republicans in the statehouse in April 2013 rejected plans to opt into the Medicaid expansion, which could have added another 70,000 state residents to the program.

• Nebraska: In May 2013, Republicans in the Legislature filibustered the Medicaid expansion, which is also opposed by Gov. Dave Heineman (R). The expansion could have extended Medicaid coverage to up to 80,000 residents.

• North Carolina: Gov. Pat McRory (R) on Feb. 12, 2013, announced that his state would not participate in the Medicaid expansion.

McRory also signed legislation—passed in the House and Senate—confirming that the state would not participate.

• Oklahoma: Gov. Mary Fallin (R) rejected the Medicaid expansion in November 2012 and has not proposed an alternate model for expanding insurance coverage for low-income state residents. However, some administration allies have said she has "not closed the door" on a possible, future plan to expand coverage.

• South Carolina: On March 12, 2013, the state House Republican majority rejected an expansion of Medicaid, opting instead to allocate $80 million in state and federal funding in South Carolina's budget for a hospital incentive payment program. Gov. Nikki Haley (R) announced in July 2012 that she opposes expansion.

• South Dakota: In an interview with the Associated Press on Oct. 25, 2013, Gov. Dennis Daugaard (R) said he is leaning against expanding Medicaid. He said he will ask the Legislature to hold off on any Medicaid expansion plans until there is more evidence on how the ACA is working nationally.

• Tennessee: During brief remarks to reporters on Oct. 30, 2013, Gov. Bill Haslam (R) said that the state has been engaged in discussions with the federal government for a possible expansion of TennCare, the state's Medicaid program. However, those talks have slowed, and Haslam said that a decision with the government on an expansion plan is not expected before the New Year.

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• Texas: Gov. Rick Perry (R) and the Republican majority in the state Legislature have unanimously rejected the Medicaid expansion, although Democrats have introduced legislation (HB 3791) that would establish a strategy to expand Medicaid. The bill is pending in the House.

• Virginia: In March 2013, Gov. Bob McDonnell (R) sent a letter to HHS Secretary Kathleen Sebelius stating that he and the state's General Assembly have agreed not to expand Medicaid under the ACA. The letter said that the state will not consider participating in the expansion unless there are "dramatic, verifiable cost-saving reforms of the program." However, on Nov. 5, 2013, Terry McAuliffe (D) was elected governor; he supports Medicaid expansion and could move forward a plan to expand the program in the state in 2014.

• Wisconsin: Gov. Scott Walker (R) on Feb. 13, 2013, said Wisconsin will not participate in the ACA Medicaid expansion, but will pursue its own strategy to expand health coverage across the state. In addition, the legislature's Joint Finance Committee in June 2013 voted against the expansion.

• Wyoming: Gov. Matthew Mead (R) in December 2012 said that he would not support Medicaid expansion in Wyoming. On January 31, 2013, the state Senate struck down a bill that would have expanded Medicaid.

Visit us now online at www.NJPhysician.org April 2014

15

Top Ten Changes Physician LLC Members Should be Concerned About Regarding New LLC Law in New Jersey On March 1, 2014 the New Jersey Revised Uniform Limited Liability Company Act (ìRULLCAî) became effective, and the New Jersey Limited Liability Company Act (the ìOld Actî) was repealed. RULLCA has made a number of important changes in New Jersey limited liability company (ìLLCî) law. This article will examine the top ten changes in LLC law under RULLCA that physician members of LLCs should be concerned about with respect to their participation in a New Jersey LLC. As a result of the changes under RULLCA, it is more important than ever for physician LLC members to ensure that they have a written operating agreement in place to govern their LLCs. Distributions. Under the Old Act, unless otherwise specified in the operating agreement of the LLC, each member was entitled to share profits or losses of the LLC based on the agreed value of each memberís capital contribution to the LLC. However, under RULLCA, each member of an LLC is entitled to an equal share of the profits or losses, regardless of capital contributions or ownership percentages, unless the LLCís operating agreement provides otherwise.

Voting. Under the Old Act, unless otherwise provided in the LLCís operating agreement, most matters, including mergers and consolidations and sales of assets, were decided by a majority of the membersí current profit percentages. Under RULLCA, unless otherwise provided in the LLCís operating agreement, ordinary matters are decided by a majority of the members, with each member having one vote, regardless of the memberís profit percentage interest in the LLC. Under RULLCA, unless otherwise provided in the operating agreement, extraordinary matters such as mergers, consolidations and sale of all or substantially all of the LLCís assets, are decided by the unanimous vote of the members (including in LLCs that are manager-managed). However, the ability to alter the default rule in the operating agreement is qualified by some special rules relating to approval of certain merger, conversion and domestication transactions in which a member will have personal liability.

Fiduciary Duty of Loyalty. Under the Old Act, no specific fiduciary duties were imposed on managers or LLC members. Under RULLCA, in a member-managed LLC, members now have a fiduciary duty of loyalty and in manager-managed LLCs, managers now have a fiduciary duty of loyalty. This new duty of loyalty requires the persons managing the LLC to account to the LLC and to hold as trustee for it any property, profit or benefit derived (1)†in conducting, or winding up, of the LLCís activities, (2)†from the use of the LLCís property, and (3)†from misappropriation of any business opportunities of the LLC. Persons managing the LLC are now also required to refrain from competing with the LLC and refrain from engaging in ìinterested transactionsî with the LLC, such as lending money to the LLC or leasing property to the LLC. However, there are certain limited defenses to the duty of loyalty which are available to LLC members.

RULLCA provides that an operating agreement of an LLC may eliminate or restrict the duty of loyalty specified under RULLCA, so long as doing so is not determined to be ìmanifestly unreasonableî (discussed in further detail below). For example, an operating agreement may identify specific types or categories of activities that do not violate the duty of loyalty (such as members of an LLC that owns a surgery center agreeing that members of the LLC may have other interests in other surgery centers located in other counties). Additionally, in lieu of the default requirement for all members to approve an ìinterested transactionî involving a managing person, an operating agreement may require a super-majority or majority of disinterested members to authorize or ratify an ìinterested transactionî violating the duty of loyalty after a full disclosure of material facts.

Whether an elimination or restriction of fiduciary duties is ìmanifestly unreasonableî is an issue of law to be decided by the court based on the circumstances as of the time the provision was added to the operating agreement of the LLC. The court can invalidate the limiting provision if it is readily apparent in light of the purposes and activities of the LLC, that the objective of the term is unreasonable or the term is an unreasonable means to achieve the termís objective.

Fiduciary Duty of Care. The Old Act did not impose any duty of care on managers or members in the operation of an LLC. Under RULLCA, in a member-managed LLC, each member owes a duty of care to the other members and in a manager-managed LLC, each manager owes a duty of care to the members (but members do not have a duty of care in a manager-managed LLC).

Under RULLCA, the duty of care requires a managing person to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct or a knowing violation of law. Unlike the fiduciary duty of loyalty, an operating agreement of an LLC cannot eliminate the duty of care (regardless of whether the elimination could be found to be not ìmanifestly unreasonableî).

However, the operating agreement of an LLC may alter the duty of care (if not ìmanifestly unreasonableî), except to authorize intentional misconduct or knowing violation of law.

Contractual Obligation of Good Faith and Fair Dealing. Under the Old Act, there was no statutory covenant of good faith and fair dealing. Under RULLCA, members and managers of an LLC are required to exercise their rights and perform their duties under both RULLCA and the LLCís operating agreement under a standard of good faith and fair dealing. Under RULLCA, the contractual obligation of good faith and fair dealing cannot be eliminated in an LLCís operating agreement, but it may prescribe standards by which to measure whether a member or manager has complied with the obligation.

16 New Jersey Physician

Oppression. Under the Old Act, there were no rights or remedies available to oppressed members of an LLC such as those available to minority shareholders of New Jersey corporations. Under RULLCA, a court can dissolve an LLC or appoint a custodian or provisional manager on grounds that the managers or controlling members (a)†have acted, are acting, or will act in an illegal or fraudulent manner or (b)†have acted or are acting in an oppressive manner that was, is or will be directly harmful to a member.

Under RULLCA, the rights and remedies available to oppressed members of an LLC may not be eliminated or altered in the LLCís operating agreement.

Resignations. Under the Old Act, a resigning member was entitled to receive fair value from the LLC for the memberís equity interest as of the date of resignation, less all applicable discounts (such as minority or marketability discounts), unless otherwise provided in the LLCís operating agreement. Under RULLCA, a member who resigns or withdraws from an LLC is not entitled to fair value for that memberís equity interest or any other distribution from the LLC, but instead simply becomes a disassociated member who continues to be entitled to distributions and a liquidating distribution on dissolution, without a right to vote or participate in the management of the LLC. However, the LLCís operating agreement can include provisions which address buyouts on resignations or withdrawals so as to avoid this issue.

Member Retention of Rights, Duties and Obligations After Transfer of the Memberís LLC Interest. Under RULLCA, unless otherwise provided in the LLCís operating agreement, when a member transfers a ìtransferable interestî of the member (the right to receive distributions), the transferring member retains the rights of a member other than the interest in distributions transferred and retains all duties and obligations of a member of the LLC. Under RULLCA, there is an exception under which a transferring member does not retain the rights of a member, but that exception requires the transferring member to be disassociated as a member of the LLC by being expelled by the unanimous consent of the other members of the LLC upon the transfer of all of the personís ìtransferable interestî in the LLC. Therefore, unless otherwise provided in an LLCís operating agreement, a transferring member of an LLC will continue to be a member of the LLC with all rights and duties, except the right to receive distributions, unless affirmatively expelled by the other members in accordance with RULLCA (in which case the expelled person would have no management rights but would remain liable for any liabilities and obligations incurred while a member of the LLC). Though a transferring member and the LLC could try to negotiate this issue at the time of transfer (to allow the transferee to obtain all member rights), it is in the interest of LLC members to have this issue resolved in their operating agreement so that no last minute negotiations of this issue will be necessary.

Oral and Implied Operating Agreements Permitted. Under the Old Act, an LLC was not affirmatively required to have an operating agreement, but if it had one, it had to be in writing to be enforceable. Under RULLCA, oral and implied operating agreements are permitted. If an LLC does not have a written operating agreement which addresses the concerns described above or otherwise modifies the default rules under RULLCA, physician LLC members may be faced with the very difficult task of proving their oral or implied agreements regarding the LLC in court in lengthy and expensive litigation.

Dissolution. Under RULLCA, dissolution of an LLC is now a two-step process under which the LLC must first file a certificate of dissolution with the New Jersey Division of Revenue, wind up the LLC and then file a certificate of termination upon the completion of the wind up of the LLC. RULLCA also contains detailed provisions regarding LLC dissolution procedures. Under RULLCA, unless otherwise provided in the LLCís operating agreement, any remaining funds of the LLC after payment of creditors and distribution of unreturned capital contributions is to be distributed equally to members and dissociated members (i.e., per capita). Under the Old Act, such liquidating distributions were to be distributed to members based on the percentages in which the members shared profit distributions, unless otherwise provided in the LLCís operating agreement.

For more information regarding the changes in New Jersey LLC law under RULLCA, please contact Patrick Convery, Esq. at (732) 219-5499 or pconvery@ghclaw.com.

April 2014

17

New Jerseyans Find It Hard to Find Doctors Who Accept Their Insurance Andrew Kitchenman Quest for physicians who take their health coverage proves much more difficult for NJ residents compared to national average New Jersey residents are more than four times as likely as the national average to have difficulty finding a doctor who accepts their health insurance, according to a new Rutgers University report.

Of state residents between the ages of 18 and 64, 14.6 percent reported having trouble finding a doctor who would accept their insurance, while 9 percent of those 65 and older had difficulty.

These numbers are much higher than the national averages of 3.3 percent of those 18 to 64 and 2.1 percent of those 65 and older.

The figures are from a Rutgers Center for State Health Policy report, which drew on a state survey of residents.

While the numbers are troubling, center Director Joel Cantor said the reason for the disparity isn’t clear. He said further study of the issue is needed.

“It’s possible that there’s a fair number of physicians in New Jersey who don’t accept Medicare,” as well as private insurance, said Cantor, noting that problem was found across all age groups.

The Rutgers report is the fourth in a series intended to provide more state-level information on the implementation of the Affordable Care Act here.

It aims to provide a baseline to understand what the state’s needs were before the January expansion of health insurance through the federal marketplace and Medicaid eligibility expansion.

“It really grows out of the concern that as the number of people with health insurance increases, that there will be stress on the physician supply,” said Cantor, who is an NJ Spotlight columnist.

The state Behavioral Risk Factor Surveillance System survey that the report was based on was conducted between January 2012 and June 2013.

Cantor said that it’s possible that the relatively high percentage of people who had difficulty finding a doctor who accept their insurance may be because New Jersey residents having higher expectations.

But it’s “more likely that New Jersey physicians are less likely to accept all comers,” Cantor said.

Most state residents didn’t have a problem finding a general doctor, such as a primary-care doctor, who accepted their insurance.

The report found that only 5.1 percent reported having difficulty finding a general doctor, including 1.8 percent who never found one.

More residents reported difficulty finding a specialist who took their coverage, with 6.4 percent having difficulty, including 2.5 percent unable to find a specialist.

Not surprisingly, the problems were greatest for people insured through New Jersey FamilyCare or Medicaid, which reimburse doctors at a much lower rate than Medicare or private insurers. Of Medicaid recipients, 9.5 reported having difficulty finding a general doctor and 13.6 reported problems finding a specialist.

“That’s consistent with other studies, not only in New Jersey, but around the country,” Cantor said.

The percentage of people who reported being told by a doctor that their insurance wasn’t accepted was higher than the percentage of those who reported having difficulty finding a doctor.

People with frequent mental-health problems were among those with the greatest difficulty finding access to doctors. Of those who reported having four or more “bad mental health days” in the prior month, 19.6 percent said a general doctor told them that their health insurance wasn’t accepted, while 18.8 percent had that experience with a specialist.

“It raises questions about the network adequacy” of these patients’ insurance plans, Cantor said. Insurers are legally required to provide an adequate network of providers.

The challenge that some New Jerseyans have in finding a doctor wasn’t a surprise to the New Jersey Academy of Family Physicians, according to Raymond J. Saputelli, academy executive director.

“I think as good as it is for the state to see more people covered as a result of the ACA, I think it’s only going to exacerbate the problem,” said Saputelli, referring to various financial pressures on family doctors.

Saputelli noted that New Jersey is a “net exporter” of family doctors, with the number of physicians trained in the state exceeding the number who chose to practice in it.

“They leave school with a tremendous amount of debt and when they look at the potential for paying that debt, the payment is far inferior in New Jersey,” Saputelli said.

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Saputelli said the high cost of practicing in the state threatens to make New Jersey a “primary-care desert.” The academy wants the state government to reduce family doctors’ medical school debt, among other steps to encourage them to practice in the state.

“The primary-care environment in the state is toxic to family medicine,” he said. “I think the ACA -- as hopeful as it might be in terms of covering people -- is going to expose and exacerbate the creation of that desert pretty quickly if we don’t change some things. “ He also noted the poor Medicaid reimbursement rate in the state. Medicaid fees amount to only 45 percent of Medicare reimbursement rates in the state, which is the second-lowest ratio in the country, behind only Rhode Island, according to Kaiser Family Foundation statistics.

The Rutgers Center for State Health Policy plans to continue to study residents’ access to doctors as the number of people with insurance increases. In 2011, Cantor and other Rutgers researchers estimated that 444,000 state residents would gain insurance as a result of the ACA.

April 2014

19

Legislative Issues

SGR, ICD-10 extensions approved by Senate

By Catherine Hollander The Senate approved a bill that prevents steep cuts to Medicare physician payments from going into effect for one year and delays the conversion to ICD-10 diagnostic and procedure codes for at least one year.

The Senate voted 64-35 in favor of the Protecting Access to Medicare Act of 2014, which the House approved. Assuming the president signs the legislation, it will be the 17th such patch that Congress has enacted since the so-called Medicare sustainable growth-rate formula became law in 1997.

Many senators made their disappointment with this short-term solution clear.

Sen. Tom Coburn (R-Okla.) said it was an example of “why the American people are disgusted with (Congress). “We should be fixing this problem, instead of delaying the problem,” Coburn said before the legislation passed.

Sen. Ben Cardin (D-Md.) gestured in frustration as he urged Congress to pass a permanent solution to this perennial problem.

“We have two options: Another temporary fix, continuing uncertainty, continuing this problem down the road, asking those who didn’t cause it to pay for it, even though it’s already been paid for before—or we could really take care of it.”

It wasn’t to be. The Protecting Access to Medicare Act of 2014 will freeze Medicare physician payments only through March 2015. Senate Majority Leader Harry Reid (D-Nev.) said the legislation was “not ideal,” but that he lacked the votes for a permanent solution. Without the patch, physician payments would have been cut by 24%. The measure was approved by the House.

Ardis Dee Hoven, president of the American Medical Association, said in a statement her organization, on the other hand, was “deeply disappointed” with the patch. “This bill perpetuates an environment of uncertainty for physicians, making it harder for them to implement new innovative systems to better coordinate care and improve quality of care for patients,” Hoven said.

The Federation of American Hospitals praised Congress for averting the cut. “Absent the immediate option of a comprehensive overhaul to permanently repeal and replace the sustainable growth rate, the (Federation of American Hospitals) believes action now through the passage of this patch is necessary for hospitals and patients, especially seniors and vulnerable Americans as well as residents of rural areas, to avoid reduced access to care,” the trade group for investor-owned hospitals said in a statement.

Hopes had been high that Congress would pass a permanent solution this year. The momentum began building in February 2013, when the nonpartisan Congressional Budget Office unexpectedly cut the cost of a permanent fix by over $100 billion based on lower projections for Medicare spending. Last month, the House Energy and Commerce and Ways and Means committees and Senate Finance Committee released a bipartisan proposal for reforming the formula, a rare example of bipartisan, bicameral cooperation in Congress—they just couldn’t agree on how to pay for it. That continued to be a sticking point.

Sen. Ron Wyden (D-Ore.), the new chairman of the Senate Finance Committee, asked the Senate to consider a unanimous consent to pass a permanent replacement for the SGR funded by savings from winding down the war in Afghanistan. Sen. Jeff Sessions (R-Ala.) objected, then put forward his own solution: repealing the Affordable Care Act’s mandate for individuals to have health insurance, which would produce savings because the government would pay less in subsidies if fewer people get coverage.

Wyden immediately objected to Sessions’ request for the Senate to pass that measure by unanimous consent, stopping it in its tracks.

The exchange was repeated later, with Sen. Orrin Hatch (R-Utah), the ranking member on the Finance Committee, volleying with Wyden over the same legislative proposals. Wyden ultimately voted no on the temporary fix passed by Congress.

Still, talk of a permanent fix didn’t stop even as it became clear how the vote would play out. “We’re farther down the road than we’ve ever been before,” said Julius Hobson, a senior policy adviser at Polsinelli who closely follows doc fix negotiations.

“Once this legislation is signed into law, we need to get back to the negotiating table,” Hatch said.

The House passed the same bill previously by voice vote, which means it will now go to President Barack Obama. The White House did not respond to a request for comment on whether the president would sign the bill into law.

The CMS had been holding firm to an October deadline for the healthcare industry to implement ICD-10 codes, even though the AMA, the Medical Group Management Association and others continued to express serious concerns about the feasibility and costs of meeting it. The American Hospital Association, on the other hand, strongly opposed delaying ICD-10 implementation for an additional year.

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The American Health Information Management Association expressed disappointment with the delay and asked for an explanation of the wording “at least one year” that describes the delay in the legislation. “On behalf of our more than 72,000 members who have prepared for ICD-10 in good faith, AHIMA will seek immediate clarification on a number of technical issues such as the exact length of the delay,” AHIMA CEO Lynne Thomas Gordon said in a statement.

The inclusion of the ICD-10 delay in the bill came as a surprise because CMS Administrator Marilyn Tavenner said one month ago that there would be no extension. The ICD-10 issue was not a focus of the floor debate over the bill.

The bill passed would also partially delay enforcement of a controversial inpatient payment rule for hospitals, the “two-midnight rule,” for six months.

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April 2014

21

Physician Group Says Medical Practices Are Good for Economic Health

Andrew Kitchenman

Study finds that average NJ doctor supports 10.5 jobs, generates $1.74 million in economic activity New Jersey doctors provide healthcare to the state’s residents – and they also help keep the state’s economy healthy, according to a new study.

The average New Jersey doctor in private practice supports 10.5 jobs and $1.74 million in annual economic activity, according to the study by IMS Data on behalf of the American Medical Association.

The study comes at a time when advocates for medical practices are warning policymakers and insurers that cuts to reimbursements could harm medical practices.

Jobs generated by doctors’ activity range from the nurses, billing personnel and scheduling staff who work at doctor’s offices to employees of medical supply companies, electronic medical record companies, medical liability insurers, and vaccine and pharmaceutical manufacturers.

Lawrence Downs, CEO of the Medical Society of New Jersey, said it’s important to look at physicians as more than just medical practitioners. The society is the AMA’s state affiliate. He noted that the study found that New Jersey doctors generate $1.7 billion in state and local taxes.

“It’s certainly something that any policymakers should be mindful of,” said Downs, adding: “Medical practices also support local economies, not only in their contributions as taxable entities, but also in supporting good-paying jobs.”

Downs added that the study provides an updated snapshot of a previous study that the society did in 2010 in conjunction with Rutgers University’s Bloustein School of Planning and Public Policy.

That study found that while the rest of the state’s economy had been stagnant in adding jobs over the previous decade, doctor’s offices had fueled constant expansion.

Downs didn’t identify any particular policy proposals as being posing a threat to doctors, but he said doctors’ economic contributions shouldn’t be ignored.

“I don’t know if there is a threat, but as we continue to look at downward pressure on the rates that physicians are paid by insurers and the federal government, (and) physicians’ practices need to be financially viable to continue to contribute those kinds of economic gains to the state,” Downs said.

Downs noted that the study only covers a portion of the economic benefits from doctors’ work, since it didn’t include the additional productivity from workers who are healthy due to the medical care they receive. He also noted that the study was limited to private practices and didn’t include the economic impact of hospitals and federally qualified health centers.

While policy analysts have focused on the rising cost of healthcare, Downs noted that the study also reflects the important economic activity related to these costs.

“Efficiencies are there to be gained – no one disputes that,” Downs said, but he added: “The offices of private physicians are a major source of economic activity that the state and local and county governments benefit from. Too often the healthcare system in general and physicians in particular are seen as too expensive or as charging too much…there is a significant economic benefit.”

Nationally, doctors’ offices generate 9.97 million jobs -- one-third as direct employees and two-thirds indirectly through vendors.

The $1.6 trillion in economic activity nationwide equals 10.2 percent of the gross domestic product, a slightly higher percentage than the 7.7 percent of gross state product from $39 billion of activity generated by New Jersey doctors. This includes the total value of goods and services generated by the doctors’ offices, as well as the industries that are supported by those offices.

22 New Jersey Physician

Medical Bills You Shouldn’t Pay

By Chad Terhune

In a controversial practice known as "balance billing," health-care providers are going after patients for money they don't owe As health-care costs continue to soar, millions of confused consumers are paying medical bills they don't actually owe. Typically this occurs when an insurance plan covers less than what a doctor, hospital, or lab service wants to be paid. The health-care provider demands the balance from the patient. Uncertain and fearing the calls of a debt collector, the patient pays up.

Most consumers don't realize it, but this common practice, known as balance billing, often is illegal. When doctors or hospitals think an insurer has reimbursed too little, state and federal laws generally bar the medical providers from pressuring patients to pay the difference. Instead, doctors and hospitals should be wrangling directly with insurers. Economists and patient advocates estimate that consumers pay $1 billion or more a year for which they're not responsible.

Yolanda Fil, a 59-year-old McDonald's (MCD) cashier in Maple Shade, N.J., got tangled up with balance billing after gall bladder surgery in 2005. She and her husband, Leon, a retired state transportation worker, have coverage through Horizon Blue Cross Blue Shield of New Jersey. Horizon made payments on Fil's behalf to the hospital, surgeon, and anesthesiologist. Then, in 2006, Vanguard Anesthesia Associates billed Fil for an unpaid balance of $518. Soon, a collection agency hired by Vanguard started calling Fil once a week, she says. Although she thought her co-payment and insurance should have covered the surgery, Fil eventually paid the $518, plus a $20 transaction fee. "I didn't have any choice," she says. "They threatened me with bad credit."

CAUGHT IN THE MIDDLE Luckily for Fil, her insurer decided to get tough with Vanguard. In December 2006, Horizon Blue Cross sued the medical practice for balance billing Fil and more than 8,000 other policyholders who received invoices for a total of $4.3 million for service from 2004 to 2006. A New Jersey judge last year ordered Vanguard to stop billing the patients and provide refunds to those who had paid. Fil is awaiting her $538 refund. Vanguard didn't respond to requests for comment.

National statistics aren't available, but there's little doubt that many consumers unwittingly fall victim to balance billing. The California Association of Health Plans, a trade group in Sacramento, estimates that 1.76 million policyholders in that state received such bills in the past two years, totaling $528 million. The group found that 56% paid the bills. "Patients think they owe this money, and it causes tremendous stress and anxiety for people," says Cindy Ehnes, director of the California Managed Health Care Dept. "It is inappropriate to put the patient in the middle of this."

Balance billing most frequently occurs when medical providers participating in a managed-care network believe the plan's insurer is imposing too deep a discount on medical bills or is taking too long to pay. California, New Jersey, and 45 other states ban in-network providers from billing insured patients beyond co-payments or co-insurance required by the plan. Similarly, federal law prohibits providers from billing Medicare patients for unpaid balances.

These laws require medical providers to seek payment only from the insurer for services covered by the plan. Many states also shield insured patients from balance billing by out-of-network hospitals and doctors in emergencies, since patients usually don't control who treats them in those situations. (Bans on balance billing generally don't apply when a patient gets an elective procedure, such as cosmetic surgery, or seeks out-of-network, non-emergency service without a referral.)

Some physicians, hospitals, and labs take advantage of consumer befuddlement, argues Jane Cooper, CEO of Patient Care, a Milwaukee firm that employers hire to help insured workers fight billing mistakes. "Medical providers count on the fact people will pay these bills because they don't have time to figure it out," Cooper says.

Quest Diagnostics, the country's largest lab chain, with revenue last year of $6.7 billion, has faced investigations and lawsuits over allegations of balance billing. A private suit that seeks class-action status in federal court in Newark, N.J., alleges that Quest has balance-billed thousands of patients covered by private insurance and Medicare, turning over many accounts to debt collectors. Quest, based in Madison, N.J., denies any wrongdoing.

In a separate case in 2003, the New York Attorney General's Office alleged that Quest encouraged consumers to overpay or billed them after Quest had already been paid by insurers. The company denied wrongdoing in the New York case and said only five people were due modest refunds. Quest agreed to pay New York $150,000 in legal costs and revise some practices, such as waiting longer to dun patients while a claim is pending with an insurer. A Quest spokeswoman says: "The vast majority of our transactions occur problem-free when correct information is provided by patients, physicians, and payers."

As some authorities get tougher, physicians are trying to overturn prohibitions on balance billing. The American Medical Assn. is lobbying Congress to allow balance billing within the Medicare program, as was allowed until 1991. Two Republican congressmen, Tom Feeney of Florida and Tom Price of Georgia, have sponsored legislation that would accomplish that goal.

The AMA cites declining reimbursements from Medicare and private insurers in support of its bid to bill patients directly. AMA member David McKalip, a neurosurgeon in St. Petersburg, Fla., says patients can trust doctors to behave ethically and not gouge the poor: "Doctors will know up front which patients are willing to pay" beyond what the government reimburses.

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FIGHTING BACK Consumers overwhelmed by medical bills might dispute that. Many lack the resources to fight balance billing on their own. With an eye on their legal fees, private attorneys hesitate to take on individual disputes over amounts that usually don't exceed $1,000.

Glenn Siglinger is one exception. He fought a lengthy battle against a surgeon all the way to the Connecticut Supreme Court. In 2006 that court upheld a trial verdict awarding the Siglinger family nearly $40,000 in punitive damages from a doctor.

The case began in December 1995, when Siglinger's wife, Laura, and his daughter, Allison, then three, were injured in a car accident. Both were taken to the emergency room at Bridgeport Hospital, where Dr. Charles Gianetti, the plastic surgeon on call, stitched a cut on Allison's face. The Siglingers' insurer paid Gianetti $1,981 under a contract with the family's health plan.

Later in 1996, he claimed the Siglingers owed him an unpaid balance of $4,496. The Siglingers refused to pay, and Gianetti sued them. Ruling for the Siglingers, the trial judge ordered Gianetti to pay their legal fees, in addition to the punitive damages. The Siglingers say he hasn't paid them anything.

"It was traumatic enough seeing my daughter go through a serious accident, but then to go through this," says Siglinger, a real estate investor. He and his wife have since divorced; Allison is now 15. "I wonder how many people paid these bills without giving it a second thought," he says. The Siglingers are among 150 patients Gianetti has sued for unpaid balances, according to state records. The Connecticut Attorney General's Office is scheduled to go to trial next year against Gianetti, having accused him in a civil suit of improper billing.

Gianetti, 69, no longer practices medicine, but he continues to pursue former patients in court. He says the state of Connecticut has "nothing on me," declining other comment.

Even routine office visits can lead to balance billing. In Illinois, federal prosecutors say Dr. Janet Despot and Rickey Weir, her husband and office manager at the Cardinal Respiratory medical practice in Springfield, overbilled Medicare, private insurers, and patients by more than $800,000 from 1997 through 2007. Despot, 50, pleaded guilty to a misdemeanor charge of balancebilling Medicare patients in February. She didn't receive jail time, but has paid a $10,000 fine and forfeited $2.5 million that will be used for restitution and additional fines. Federal officials are considering barring her from the Medicare program; the Illinois medical board separately is seeking to discipline her. For now she remains in business.

William Gass, a 41-year-old recycling coordinator, successfully took Despot to small-claims court in 1999 to get $300 in improper bills erased from his credit report. "It's unconscionable to me she can still practice medicine," Gass says.

Despot says her husband, Weir, from whom she is getting divorced, handled all billing. She claims she wasn't aware that patients were being hounded for money they didn't owe. A Medicare ban "would end my career," she says. "I didn't understand medical billing." Weir has pleaded not guilty to fraud charges and awaits trial in November. He declined to comment.

Regulators in most states have been slow to take action in billing disputes. But in July, California officials sued Prime Healthcare Services, seeking to force the 12-hospital chain based in Victorville, Calif., to stop balance billing. Last September, Thomas Lai was rushed to the emergency room at Prime's Huntington Beach Hospital because of severe chest pain. The 51-year-old musician stayed for four days, but doctors didn't find anything seriously wrong.

His wife, Tess, says she asked the hospital staff to transfer Thomas to a hospital covered by his Kaiser Permanente network—but to no avail. She had taken him to the hospital closest to home, which Kaiser advised her to do. Kaiser paid a discounted rate for the hospitalization, and the Lais thought that was the end of it.

They were shocked to receive a bill from Prime in May for more than $16,000. A collection firm threatened to report them to credit agencies. "I'm concerned about our credit report with this huge bill hanging over us," Tess says. Kaiser instructed the Lais not to pay anything while the state case unfolds.

Asked about the state action, Prime said: "This frivolous suit is not about the actions of one provider but the failure of the [state] to do its job to regulate HMOs and provide assistance to providers who have the right to be reimbursed properly for emergency services rendered to HMO enrollees." Prime didn't comment on the Lais.

Cindy Ehnes, the director of California's managed-care department, says her agency isn't taking sides between providers and insurers. It holds insurers accountable for paying promptly, she says. Medical providers should use proper channels to press their claims, such as an independent dispute-resolution system crafted by the state, she adds. "Patients are having their credit destroyed at a time when they are already sick and vulnerable."

24 New Jersey Physician

Legal Issues

Legislature Expands Codey Law Exception for Lithotripsy Referrals The New Jersey Legislature recently amended N.J.S.A. 45:9-22.5 (known as the “Codey Law”) to expand the scope of facilities where lithotripsy referrals may be made. The Codey Law generally prohibits physicians from referring patients to health care services with which the physician or his or her immediate family has a financial interest, but provides for several exceptions.

Previously, there was an exception in the Codey law which allowed physicians to refer patients to an ambulatory surgery facility that provides lithotripsy services even if the physician had a financial interest in the ambulatory surgical facility, under certain conditions. The physician had to personally perform the procedure; the physician’s remuneration had to be directly proportional to his or her ownership interest and not be based on the volume of their referrals; all clinically related decisions had to be made by the facility’s practitioners and in the patient’s best interests; and the physician had to disclose the financial interest of the patient at or prior to the time the referral was made. The amendment to the Codey law expanded the locations where lithotripsy referrals can be made if a physician has a financial interest in the facility. Under the amendment, referrals are permitted to freestanding ambulatory care facilities licensed to provide lithotripsy, in addition to referrals for lithotripsy provided in licensed ambulatory surgical facilities. Referrals to freestanding ambulatory care facilities licensed to provide lithotripsy will be subject to the same conditions as are currently imposed on referrals to ambulatory surgical facilities.

Medical News

Christie Administration Recognizes National Healthcare Decisions Day April 16 In recognition of April 16 as National Healthcare Decisions Day, the New Jersey Department of Health is encouraging Garden State residents to discuss their healthcare preferences and plan ahead for end-of-life care decisions with their physicians and family. National Healthcare Decisions Day highlights the importance of documenting your health care preferences.

"The best way to ensure that your dignity and autonomy are honored should you become unable to make your own health care decisions is by sharing your wishes about end of life medical treatment," said New Jersey Health Commissioner Mary E. O'Dowd.

"By reviewing options for care and having discussions in advance, individuals can alleviate some of the challenges that come along with a serious illness."

Individuals should consider what type of care and treatment they would prefer near the end-of-life. For example, as part of planning they may want to review palliative care and hospice programs. Palliative care focuses on improving life and providing comfort to people of all ages with serious, chronic, and life-threatening illnesses. Hospice programs provide medical services, emotional support and spiritual resources for those with terminal illness. Hospice also offers support to family members as they face the challenge of caring for a loved one with a terminal illness. Individuals may also want to consider specific medical interventions they would like to have when they are near the end of life. Some people would prefer to have every medical treatment taken to prolong their life, while others may not want to have their life sustained with medical support such as the use of a ventilator or feeding tube.

In 2011, Governor Chris Christie signed New Jersey's Practitioners Orders for Life-Sustaining Treatment (POLST) law, which allows patients with a life-limiting illness, in collaboration with their health care provider, to identify goals of care and preferences for treatment. The Department worked closely with the New Jersey Hospital Association (NJHA) Institute for Quality and Patient Safety on the development of a form and guidance to implement the law. Since then the Department and NJHA have developed and released the POLST form, Guidance for N.J. Healthcare Professionals and materials for patients and providers in several languages, all of which is available at http://www.njha.com/quality-patient-safety/advanced-care-planning/polst/. Recognizing April 2014

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that many residents travel to nearby states for employment, recreation and for health care, the Department has also shared information on POLST with neighboring states to assure recognition of and compliance with New Jersey's POLST law.

"New Jersey's POLST form is designed to be completed jointly by an individual and a physician or advance practice nurse. It truly is a partnership between the patient and the healthcare professional" said Elizabeth A. Ryan, Esq., NJHA President and CEO. "We're working with healthcare providers, through Webinars and other training programs, to emphasize the importance of POLST and its great potential to improve the end-of-life care experience."

A POLST form provides instructions for health care personnel to follow for a range of life-sustaining treatments such as feeding tubes, ventilators and medication. The POLST form is designed to document end-of-life care preferences of those who have a terminal illness or a compromised medical condition.

While POLST is focused on residents who are facing a life-limiting illness, Advance Directives can be used by individuals in any stage of life. Advance Directives are an important tool to document preferences for care in a situation where an individual can no longer communicate.

In New Jersey, there are two kinds of advance planning documents that allow individuals to document end-of- life care preferences.

A "proxy directive" and an "instruction directive" are both legal documents that residents can complete on their own. They only go into effect if a physician has evaluated the patient and determined that the patient is unable to understand the diagnosis, treatment options or the possible benefits and harms of the treatment options.

A proxy directive, which is sometimes known as a durable power of attorney for health care, allows individuals to designate a "health care representative" to make health care decisions on their behalf should they become unable to make their own. An instruction directive, sometimes known as a living will, is a document that records an individual's values, beliefs and goals as they relate to preferences for certain medical treatments.

"It is important to have conversations with your loved ones and your doctors about the care and treatment you want to have in case you are unable to speak for yourself. It is the ultimate act of empowerment, to make sure that you are cared for and treated in a manner consistent with your wishes should you become seriously incapacitated or nearing the end of your life - or both," said James W. McCracken, the state's Long Term Care Ombudsman.

The National Institutes of Health has a web page dedicated to helping individual prepare for the end of life, which includes types of care available and questions that individuals should consider when planning. This web site can be found at: http:// nihseniorhealth.gov/endoflife/preparingfortheendoflife/01.html

26 New Jersey Physician

Hospital Rounds

HOSPITAL ROUNDS

Barnabas Health receives largest donation in its history

By Beth Fitzgerald Saint Barnabas Medical Center received the largest single donation in its history — a stunning multimillion-dollar gift from the Leon and Toby Cooperman Family Foundation that will go toward the construction of a new wing at the Livingston hospital.

The Leon and Toby Cooperman Family Foundation has pledged $25 million to the project.

"Leon and Toby Cooperman have provided the instrumental stimulus to engage the community for the successful future of Saint Barnabas Medical Center," Barnabas Health Chief Executive Barry H. Ostrowsky said. "The Cooperman family's generosity is unparalleled in our history and assures our neighbors of the importance and magnitude of this project. We are exceptionally grateful."

The gift represents the cornerstone of a strategic vision to create a new 200,000-square-foot, five-floor Cooperman Family Pavilion.

Dr. John F. Bonamo, the chief executive of Saint Barnabas Medical Center, said the gift will help Saint Barnabas maintain its lofty goals and standards.

"We are determined to build on our exceptional reputation by developing a world-class infrastructure that represents the level of excellence our patients deserve and have come to expect from Saint Barnabas," he said. "We are tremendously honored and fortunate to have the support of Leon and Toby Cooperman."

Leon Cooperman has been involved with the medical center for nearly three decades, first as a trustee and then as chairman of the Saint Barnabas Medical Center Foundation, where he now serves as chairman emeritus.

"Mr. Cooperman has been incredibly generous to the medical center with his time, expertise and financial resources," Bonamo said. "We are grateful for his vision, inspiration and guidance throughout the years."

The Coopermans have signed on to the Warren Buffett Giving Pledge, an initiative by the legendary investor to increase charitable giving by the wealthy. The Giving Pledge is a commitment by the world's wealthiest individuals and families to dedicate the majority of their wealth to philanthropy.

"Next to my children and grandchildren, helping others is the most enjoyable part of life," Cooperman said.

For Cooperman, the gift made sense.

"Over the years, our family has benefited from the excellent care provided by the medical center," he said. "We are thrilled to be in a position to make this gift.

"Saint Barnabas Medical Center is very important to our family. More than ever, hospitals need the support of private citizens to assure their continued provision of quality medical care to the communities they serve, and I encourage others to follow my lead."

Cooperman is a former general partner of the investment firm Goldman Sachs, where he had a 25-year career before launching his own private investment firm, Omega Advisors.

Toby Cooperman recently retired from a career as a special-education specialist at the Early Childhood Learning Center in Chatham.

The Cooperman Family Pavilion will feature a floor dedicated to a new neonatal intensive care unit and new units on three floors with all private rooms.

The ground floor will offer cardiac, vascular, pulmonary and electroencephalography diagnostic services in a location convenient for outpatients. Other key elements of the overall West Wing Initiative will include a new expanded surgery center, a parking garage that connects to the new building and two new parking areas on campus that will be designed to provide better access for patients and visitors.

Saint Barnabas Medical Center celebrates its 150th anniversary in 2015.

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New Jersey Federal Court Rules St. Peter’s Healthcare System Retirement Plan is Not a Church Plan Many religiously affiliated organizations consider their employee benefit plans to be “church plans” and, therefore, to be exempt from ERISA. A recent federal court decision now casts some doubt on this position.

In Kaplan v. Saint Peter’s Healthcare System, the United States District Court for the District of New Jersey ruled that a defined benefit pension plan established and maintained by a Catholic non-profit healthcare system was not eligible for the church plan exemption. Adopting a narrow construction of the definition of “church plan” in Section 3(33) of ERISA, the Court stated that a “church plan” is “(1) a plan established and maintained by a church, or (2) a plan established by a church and maintained by a tax-exempt organization, the principal purpose or function of which is the administration or funding of the plan, that is either controlled by or associated with a church.” The Court concluded that a plan must actually be established by a church in order to be considered a “church plan.” The Court held that the defined benefit plan established by Saint Peter’s Healthcare System–which was not itself a church–could not satisfy the requirements for classification as a church plan.

Of particular interest is the fact that Saint Peter’s had previously received a private letter ruling from the IRS that concluded that its plan was, in fact, a church plan. The Court declined to give the IRS ruling deference and, moreover, argued that similar rulings by the DOL and IRS “seem to be somewhat responsible for the over broad application of the church plan exemption.”

Similar cases are working their way through the courts in a variety of jurisdictions. Religiously affiliated healthcare systems and educational institutions that sponsor employee benefit plans would be wise to monitor this issue.

Hackensack, Palisades searching for ways to improve partnership

By Beth Fitzgerald The clinical affiliation launched in 2012 between the Hackensack University Health Network and North Bergen's Palisades Medical Center will continue, as Hackensack and Palisades explore new ways to work together.

Both boards passed a resolution to strengthen the partnership, said Robert C. Garrett, chief executive of Hackensack.

Garrett said Palisades "is a very good, solid community hospital" and new details about their extended affiliation will be announced over the next few weeks.

Bruce J. Markowitz, CEO of Palisades, said that over the past two years, the partnership has enabled Palisades to better coordinate care between his local Hudson County community hospital and Hackensack "to provide more of a continuum of services to our community."

The relationship is a two-way street that has strengthened Palisades. "It has enabled us to expand the scope of services at Palisades" in areas like specialized care of newborns, vascular surgery and neurosurgery, Markowitz said. It also facilitates the transfer of patients to Hackensack for services that Palisades does not offer, such as invasive cardiac procedures and complex neurosurgical cases.

"It has been a really positive relationship," Markowitz said.

Markowitz said the two institutions have realized there are a number of positive and significant things that came out of the first two years. "We have decided to explore whether there are opportunities for us to work together in a more coordinated way to serve our community."

For example, Palisades does not currently have an accountable care organization. Created by the Affordable Care Act, ACOs bring doctors and hospitals together to deliver more efficient care and the medical community shares in the savings that result.

Markowitz said one possibility might be for Palisades to explore joining Hackensack's ACO, which has already yielded millions of dollar in savings for Medicare.

More than 70 percent of Palisades' revenue comes from government payers such as Medicare and Medicaid.

"So we would stand to benefit from the whole ACO concept," he said.

Going forward, he said the partnership will look into different ways to better position itself for the transformation to the new health care markets that are being driven in part by national health care reform under the ACA. Garrett declined to comment on whether the affiliation could result in a merger, but Markowitz said the two institutions are not engaging in merger talks.

Visit us now online at www.NJPhysician.org 28 New Jersey Physician

Atlantic Health System, UnitedHealthcare launch new ACO partnership

By Beth Fitzgerald The accountable care organization movement is continuing to gain traction in New Jersey.

This week, the ACO of Atlantic Health System, whose hospitals include Morristown and Overlook Medical Centers, and the health insurer UnitedHealthcare announced an ACO partnership that will seek to provide coordinated health care that improves quality and reduces costs for New Jersey residents enrolled in UnitedHealthcare's employer-sponsored health plans.

Atlantic ACO, a subsidiary of Atlantic Health System, has more than 1,700 primary care physicians and specialists who coordinate care and are accountable for quality, cost and patient satisfaction. The Atlantic ACO started out working with Medicare to improve the care delivered to Medicare patients and has since been expanding into ACO partnerships with commercial insurers.

The new ACO with UnitedHealthcare will launch June 1 and aims to help shift the New Jersey health care system based on volume of care to one that rewards quality and value. Atlantic ACO and its physicians will manage all aspects of patients' care with the goal of providing the right care in the right place at the right time.

"Atlantic ACO is pleased to join with UnitedHealthcare on a model that will enhance health services and improve coordination of care for patients," said Dr. David Shulkin, president, Atlantic ACO and Morristown Medical Center, and vice president of Atlantic Health System. "We have had great success in improving wellness and managing costs for the more than 120,000 people enrolled in our ACO and look forward to expanding to include UnitedHealthcare employer-sponsored health plan participants."

And this is UnitedHealthcare's first ACO in New Jersey.

"Atlantic ACO is a leader in accountable care in New Jersey with extensive experience in coordinating quality care that leads to better health outcomes for patients," said Michael McGuire, president & CEO, UnitedHealthcare of New York and New Jersey. "We believe our ACO partnership will deliver enhanced quality and efficient care for our health plan customers in New Jersey."

30 New Jersey Physician

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HBCBS, HackensackUMC announce new health care reform initiative

By Beth Fitzgerald New Jersey's latest patient-centered health care reform initiative was announced Tuesday between Horizon Blue Cross Blue Shield of New Jersey and an affiliate of Hackensack University Medical Center.

Horizon is partnering with the accountable care organization of the Hackensack-Physician Hospital Alliance in order to improve medical care and clinical outcomes for more than 16,000 Horizon members.

Under the ACO agreement, Horizon will provide care coordination payments to the ACO to take on additional accountability for improving health and the patient experience as well as controlling the cost of care for Horizon patients. The ACO and its physician practices – provided they meet certain health improvement, patient satisfaction and cost goals – have an opportunity to share in the financial savings with Horizon.

The Hackensack ACO already has a shared savings program with Medicare that has saved the federal government about $10 million so far by better coordinating the care patients receive and reducing excess hospital admissions.

Throughout New Jersey, ACOs are now being broadened beyond Medicare and are enrolling commercial insurance plan members in the enhanced patient-care program that ACOs were created to foster. Horizon has launched ACOs with JFK Medical Center, Lourdes Health System, Barnabas Health, Partners In Care and Summit Medical Group, among others.

This new ACO collaboration between Hackensack and Horizon will include more than 450 primary care doctors in Bergen County.

"This ACO reflects Horizon's continuing commitment to collaborate with providers to deliver better quality care at lower cost," said Jim Albano, vice president of Network Management and Horizon Healthcare Innovations at Horizon.

ACOs strive for measured patient quality outcomes and to decrease unnecessary and duplicate medical tests and treatments.

"As the nation focuses its attention on providing efficient, accountable care, HackensackUMC is proud to collaborate with New Jersey's largest health insurer. Working together, we can improve the quality of care delivered to thousands of patients by coordinating care and controlling costs," said Dr. Morey Menacker, president of Hackensack Alliance ACO. Horizon, which has 3.7 million members in New Jersey, has been developing a number of innovative, patient centered programs in the last few years, including patient centered medical homes. It now has more than 500,000 of its members in these programs.

32 New Jersey Physician

The attorneys in the Health Care Practice Group at Giordano, Halleran & Ciesla, counsel clients on a broad range of issues, integrating traditional legal principles with the special body of federal and state law governing the health care field.

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