NJ Physician Magazine February 2014

JULY2014 2012 FEBRUARY Visit us now online at

www.NJPhysician.org

Naveen Ballem, MD and Harvey Rainville, MD

Pioneering the Latest Technology to Successfully Transform the Lives of Obese Patients Also In This Issue: NJ Loses Nearly $8M in Standoff Over Affordable Care Act Funds AMA Seeks to Stop ICD-10, Cites Soaring Costs Physicians-Independent Contractors or Employees?

Healthcare Employment Dips in January, As Slowdown Continues

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Publisher’s Letter Dear Readers, Welcome to the February issue of New Jersey Physician, reaching over 31,000 practicing physicians in the state who have opted in to receive this magazine.

New Jersey lost a $7.67 million federal Affordable Care Act grant last week, due to a failure on the part of state and federal officials who could not reach an agreement on how the money could be spent.

We are all quite concerned about the ICD-10 medical coding set mandate. The American Medical Association released a study showing that projected physicians’ implementation costs for this program will be as much as three times higher than initial estimates.

Once again, the surgical facility bill passed the state Senate committee. This bill has passed before but was pocket vetoed by Governor Christie because of a 2.95% tax assessment on singleroom facilities, required by Centers for Medicare and Medicaid Services.

Published by Montdor Medical Media, LLC

Co-Publisher and Managing Editors Iris and Michael Goldberg

Contributing Writers Iris Goldberg Michael Goldberg Andrew Kitchenman Beth Fitzgerald Gina Perrone Melanie Evans Frank Ciesla Barbara Williams Joe Carlson

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Accountable Care Organizations are finally showing signs of savings.

The Hackensack University Health Network ACO saved Medicare at least $10M. New Jersey currently has about 18 Medicare ACOs but most have not operated long enough to generate savings.

New Jersey Physician is published monthly by

All eight members of the state Health Planning Board have unanimously agreed to allow a for-profit company to purchase the financially struggling St. Mary’s Hospital in Passaic. California based Prime Healthcare Services will buy Passaic’s lone remaining hospital for $25 million.

F ax: 973.994.2063

Drs. Naveen Ballem and Harvey Rainville have dedicated themselves to being on the cutting edge of bariatric surgery.

What separates them from the pack, however is their ability to maintain relationships with their patients, offering support, stateof-the-art physical training and counseling to keep patients on the right path. The surgeons are affiliated with and perform surgery at New Jersey hospitals identified as Centers of Excellence by the American Society of Metabolic & Bariatric Surgery.

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Contents

Naveen Ballem, MD and Harvey Rainville, MD

Pioneering the Latest Technology to Successfully Transform the Lives of Obese Patients

4

CONTENTS Medical News

17

Hakensack University Health Network ACO Saved Medicare At Least $10M

13

Affiliated Practice

18

Hospital Rounds

16

Surgical Facility Bill Passes Senate Committee Again

18

Explainer: Prescription Monitoring Program Enters Crucial Phase

9

2 New Jersey Physician

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Cover Story

Naveen Ballem, MD and Harvey Rainville, MD Pioneering the Latest Technology to Successfully Transform the Lives of Obese Patients

Surgical photography by Michael Goldberg

By Iris Goldberg The statistics speak for themselves.

Losing weight is not only about improving one’s appearance.

For years, the data has confirmed an indisputable link between obesity and a myriad of serious medical conditions that sabotage the quality of life and for many shorten its duration. The consequences for our healthcare system are equally dire in terms of the costs incurred. With the emphasis on promoting health and wellness now a widely accepted strategy amongst medical professionals, the quest to wage war on the obesity epidemic is perhaps, the highest priority within the healthcare community today.

While behavior modification, including eating healthier foods that are low in fat and carbohydrates and increasing physical activity, is still key to a successful weight loss program, the reality is that for many, diet and exercise alone do not work. Especially for those who are morbidly obese, with 100 pounds or more to lose and/ or those overweight individuals with type II diabetes and all of its associated complications, surgery is their best chance for getting the weight off more quickly, keeping it off and resolving the diabetes and other weight-related conditions.

To this end Naveen Ballem, MD and Harvey Rainville, MD have dedicated themselves to keeping at the forefront of novel developments within the field of bariatric surgery. In fact, by utilizing state-of-the-art technology and customizing surgical procedures to the specific needs of each individual patient, Drs. Ballem and Rainville have helped countless New Jersey patients lose their excess weight. Further, the surgeons continue to follow bariatric patients on their journey towards a happier and healthier life.

With offices in Glen Ridge/ Montclair, Clinton and Denville, the surgeons see patients who come from locations throughout New Jersey and surrounding

4 New Jersey Physician

amount of bariatric procedures statewide. It is also important to note that in addition to bariatric surgeries, Dr. Rainville and Dr. Ballem use their advanced laparoscopic skills to perform the full gamut of general surgical procedures each year, including laparoscopic hernias, gallbladders, colon resections, reflux surgery, etc.

Working together, Drs. Ballem (Rt) and Rainville have dedicated themselves to keeping at the forefront of novel developments within the field of bariatric surgery. regions to undergo bariatric surgery.

Whether performing gastric bypass surgery, sleeve gastrectomy, Lap Band® adjustable gastric banding or Revisional surgery, their advanced laparoscopic skills and glowing recommendations from former patients and referring physicians have served to distinguish Dr. Rainville and Dr. Ballem as experts in bariatric surgical techniques.

The surgeons are affiliated with and perform surgery at New Jersey hospitals deemed to be Centers of Excellence by the American Society of Metabolic & Bariatric Surgery (ASMBS): • Clara Maass Medical Center (Belleville)

Dr. Ballem completed specialty training at the Cleveland Clinic in both Endocrine and Advanced Laparoscopic Surgery and also served as a Clinical Instructor at the Cleveland Clinic’s Lerner School of Medicine. He continued with his training as a Fellow in Advanced Endoscopy and Laparoscopy at the University of Alabama at Birmingham Medical Center. Dr. Ballem has published extensively and presents at conferences nationally and internationally.

Completing his surgical residency training in New York at the Albert Einstein College of Medicine at the Montefiore Medical Center, Dr. Rainville is one of only a handful of bariatric surgeons in the region who is fellowship-trained in Robotic Bariatric and Endoscopic Surgery, completing

• Hunterdon Medical Center (Flemington)* • St. Claire’s Hospital (Denville) Certainly the backgrounds of Drs. Ballem and Rainville, both of whom have received the highest level of advanced training, have contributed greatly to their significantly positive reputation, allowing them the opportunity to perform a large *Preliminary

Dr. Rainville at the controls of the daVinci robot.

that training at the University of Texas at Houston. He utilizes this expertise performing many weight loss surgeries robotically with the assistance of the da Vinci Surgical System® which is known for providing maximum precision.

Like Dr. Ballem, Dr. Rainville has many publications in the field of minimally invasive surgery and has presented at numerous conferences.

Equally noteworthy, the multidisciplinary team approach embraced by the surgeons that includes the services of specialists such as bariatric nurses, dieticians, clinical psychologists and exercise physiologists, who work with patients prior to and long after surgery, is an integral part of their impressive rate of long-term success. Dr. Ballem and Dr. Rainville discuss the challenges faced by those who are seriously overweight and explain how they have structured their practice to address those safely and effectively, providing each patient with the best chance for a successful outcome.

Speaking about the benefits of bariatric surgery, Dr. Ballem says, “A lot of the emphasis over time has been placed on just the weight loss but when we deal with our patients, I think we really emphasize all of the medical improvements that occur as a result and put less emphasis on the weight loss.” The serious medical conditions to which Dr. Ballem refers include type II diabetes, hypertension, cardiovascular disease, sleep apnea, osteoarthritis and even infertility.

The surgeons are particularly gratified to witness resolution of diabetes after weight loss surgery. “Obviously diabetes is not a surgical disease but with surgery we are able to improve that disease significantly,” Dr. Ballem adds. In fact, as the surgeons relate, while diabetes improves after each type of bariatric procedure as the weight reduces, after gastric bypass surgery diabetes resolution usually occurs immediately, within days or sometimes even hours after surgery.

Certainly, not related to weight loss at this point, the instant resolution of diabetes after gastric bypass surgery is somehow connected to the procedure.

Dr. Rainville suggests changes in the intestinal hormones and also the rerouting of the path taken by the food through the intestine after gastric bypass surgery as possible reasons for the rapid resolution of diabetes. “These are some of theories but it has definitely been established through the literature that this occurs,” he emphasizes.

The two main principles behind gastric bypass surgery are restriction and malabsorption. During the first part of the procedure the stomach is drastically reduced to the size of a small pouch. The “new” stomach can only hold a fraction of what it could before, creating a feeling of satiation and significantly restricting the number of calories that can be ingested.

During the roux-en-Y stage, the small stomach is reconnected to the jejunum. the first part of the duodenum (small intestine). Then Dr. Rainville or Dr. Ballem reconnects the small stomach to the jejunum, which is further down.

As a result of the roux-en-Y, food passes directly from the stomach into the jejunum, bypassing the duodenum.

This leads to reduced absorption of calories and nutrients.

While gastric bypass had been considered to be the gold standard of bariatric surgery for many years, Dr. Ballem and Dr. Rainville report that most recently sleeve gastrectomy has become the procedure of choice in many cases. Although diabetes resolution is not immediate after the sleeve procedure, the surgeons have found that over time, consistent with weight reduction, the resolution of diabetes is almost equivalent to the

During the second stage of the surgery, known as roux-en-Y, the small stomach pouch is disconnected from

Dr. Rainville performs gastric bypass surgery assisted by the daVinci Surgical System.

Dr. Ballem begins the sleeve gastrectomy surgery.

February 2014

5

bypass, as is the percentage of total weight loss (65-70% of excess weight) and resolution of other comorbidities.

Dr. Rainville explains that the sleeve gastrectomy is basically performed by stapling off and thereby removing the distensible part of the stomach. Like the bypass, this greatly reduces the size of the stomach, limits the amount of food that can be eaten at one time and as a result, allows patients to feel satiated with an intake of significantly fewer calories.

There are distinct benefits with sleeve gastrectomy that make it a preferable choice for many appropriate patients.

Like the bypass, the sleeve procedure reduces the size of the stomach and limits food intake. However, no intestines are removed or bypassed.

“We remove about 85 percent of the stomach, taking it from the size of a two liter soda bottle down to the size of a banana,” Dr. Ballem shares, referring to the narrow gastric tube or “sleeve” that remains.

He goes on to share that the part of the stomach which is removed contains the hormones ghrelin and leptin that stimulate appetite. When these are significantly reduced, patients’ appetites diminish as well. “Among the lap band, the bypass and the sleeve, the sleeve has the strongest appetite suppression effect,” informs Dr. Ballem.

Staples are seen separating the new stomach from the part that will be removed.

Dr. Rainville agrees that the sleeve gastrectomy has become more popular in recent years. He shares that technically, the sleeve procedure is somewhat less challenging than the bypass, shortening the operative time. “This is appealing to patients,” he notes. “Also, when you describe the sleeve versus the bypass to them you explain that you’re not manipulating the intestines so that the food is still traveling in the same manner anatomically as before,” Dr. Rainville adds. Obviously, this is preferable to patients as well. “When you talk about patient satisfaction, in my opinion, I think patients report the greatest amount of satisfaction with the sleeve,” Dr. Rainville offers.

Furthermore, some of the complications associated with the gastric bypass such as vitamin deficiencies and dumping

Dr. Ballem looks at the monitor as he positions the surgical stapler.

6 New Jersey Physician

syndrome are less often associated with the sleeve gastrectomy and there is no chance of developing an internal hernia.

Additionally, among the three bariatric procedures, patients who undergo the sleeve procedure are somewhat less restricted in terms of the foods they can eat afterwards, so patients can enjoy a wider variety of foods post-operatively.

Surprisingly, post-gastric banding patients have the greatest amount of dietary restrictions..

As far as Lap Band® gastric banding is concerned, Dr. Ballem and Dr. Rainville report that the number of patients who undergo this procedure has declined substantially. As they explain, banding is appropriate for only a limited number of patients. Specifically, young, healthy, physically active individuals who are capable of exercising regularly and are

During the sleeve gastrectomy about 85% of the stomach is removed.

pure volume eaters will benefit the most. Most of these patients are male.

need to be discussed. She actually takes patients to the supermarket each month, in order to teach them how to read labels and to introduce them to new food options which they might not have been aware of.

Basically, the procedure involves placing an adjustable silicone band around the upper part of the stomach, squeezing it into a small pouch capable of holding only a small amount of food. A plastic tube runs from the band to a device under the skin, through which saline can be injected into or removed from the band, making it looser or tighter as needed. Unlike gastric bypass and sleeve gastrectomy, gastric banding is completely reversible.

In order to decide which procedure is the most appropriate for each individual patient, Dr. Ballem shares that he and Dr. Rainville have a discussion with the patient and his or her family to make the best decision in each case.

“We thoroughly inform them of all the risks, benefits and alternatives of each procedure,” he says.

At the other end of the spectrum from banding, generally, gastric bypass is usually reserved for people who have severe type II diabetes and are on insulin and multiple other medications.

Also, people with serious weight-related conditions that disrupt the quality of life such as GERD or Barrett’s disease would probably benefit from bypass surgery as well. Dr. Rainville and Dr. Ballem report that most patients fall in the category between gastric banding and gastric bypass. Presently, for the majority of individuals the surgeons, most often, recommend sleeve gastrectomy.

When discussing what it is that distinguishes the practice from some others, Dr. Ballem does not hesitate to respond. “Our in depth experience in both laparoscopic and robotic surgery, our volume of surgeries and our excellent outcomes,” he states.

Dr. Ballem specifically cites the weight loss centers established by Clara Maass Medical Center and Hunterdon Medical Center, where he serves as Chief of Bariatric Surgery.

“Both hospitals have a great deal of dedication to the program and to the success of each and every patient. The postoperative program tailored by registered nurses, psychologists and exercise physiologists helps to ensure that their patients not only lose weight but maintain it long term” Dr. Ballem shares.

Rosemary Logue, RD, MS

Rosemary Logue, RD, MS is one of the dieticians at the Center for Advanced Weight Loss for Hunterdon Medical Center. The multidisciplinary team of health and wellness experts that includes dieticians, nurses, exercise physiologists and behavioral therapists, begin their work with bariatric surgery patients well before surgery takes place. “I usually see patients at least two or three times before surgery in order to assess what their eating style is - what types of food they’ve been eating, what their weight history has been, what kind of dieting they’ve tried before - and then, to get them ready for what life will be like after surgery,” Ms. Logue shares.

In terms of nutrition, Ms. Logue explains that patients need to be educated about how and what to eat. For example, adding a regimen of vitamins, focusing on quality rather than quantity with more whole grains, fruits, vegetables and lean sources of protein are some of the important dietary changes that

“Our facility holds three support groups every month and one is dedicated to nutrition,” Ms. Logue relates, referring to the importance of offering continual help for bariatric patients with making healthy food choices. “Whether you’re preparing for a band, a sleeve or a bypass, you’ll get the same amount of education before and after surgery,” she adds.

Most importantly, Ms. Logue and the other specialists remain extremely accessible to patients after surgery to help them succeed. Whether through a support group, phone or email, patients are encouraged to reach out. “Bariatric surgery is not a quick fix,” Ms. Logue emphatically states. “You still have to work at your diet, increase physical activity and make the necessary lifestyle changes. Having surgery alone will not work,” she wants prospective patients to know.

Exercise physiologist Steven Gonnelli, BS, CPT works with patients at the New Jersey Bariatric & Metabolic Institute at Clara Maass Medical Center. There, too, a multidisciplinary team of weight loss specialists follows bariatric patients before and after surgery to maximize the potential for a successful outcome and to help patients keep the weight off permanently.

Before surgery is performed, Mr. Gonnelli spends a great deal of time with each patient in order to assess his or her

Bariatric patients exercising at The Center for Advanced Weight Loss.

February 2014

7

The pool at Hunterdon’s Center for Advanced Weight Loss is a great place for post bariatric patients to swim laps.

Steven Gonnelli, BS, CPT

physical condition in terms of activity level and also the medical situation regarding problems such as diabetes or hypertension, etc.

Additionally, it is important for him to know what medications the patient takes.

“I also want to find out what physical things are bothering them at the time.

Very often, patients in the pre-op stage are dealing with back pain, knee pain, shoulder pain, or the like – almost every one of them has this type of discomfort,” Mr. Gonnelli reports. “At this stage I usually focus on providing exercises to them to increase their balance and help get them stronger where they need to be,” he adds.

Once surgery has been performed, as Mr. Gonnelli explains, the goal is to help the patient lose as much weight as possible without losing too much muscle mass. “Muscle mass helps to keep your metabolism moving and allows you to burn more calories,” informs Mr. Gonnelli. He goes on to share that strength training, as well as cardiovascular training is exceptionally important for optimal weight loss.

“Again the emphasis is on strength or resistance training and cardiovascular exercises,” he reiterates.

Like Ms. Logue and all of the specialists at the weight loss centers, Mr. Gonnelli is extremely accessible to patients by phone and email. He too, attends monthly support groups with patients in order answer questions and to provide ongoing encouragement. He knows that working with the multidisciplinary

8 New Jersey Physician

team of experts available will make the difference between success and failure for bariatric patients. “Those that stick to the program achieve their goals,” Mr. Gonnelli shares. “They really do and that’s very important to us.”

Thirty year-old Brett P. had gastric bypass surgery last June. His story serves to exemplify the exceptional level of care and dramatic weight loss results received by patients who choose to have their surgery with Dr. Ballem and Dr. Rainville. At 338 pounds just before surgery, Brett suffered all of the usual adverse effects of obesity such as fatigue and difficulty with physical activity. Most concerning, he had a serious case of sleep apnea, putting his life at significant risk.

Eight months later, at 213 pounds, Brett’s life has totally changed for the better. The sleep apnea is gone. He now goes to bed at a normal hour, able to spend the evening with his wife because he’s not always exhausted. He has energy to do the things he enjoys, especially keeping up with his two yearold son. “My life is completely different now,” Brett happily shares.

Brett attends support groups twice a month and credits the entire team for his success. He is incredibly grateful to Dr. Ballem and staff for making sure he had access to all of the specialized care before and after his surgery. “They covered everything from all bases,” he relates. Right now Brett eats most normal foods, limiting the quantity and tries to minimize carbohydrate intake.

He exercises at the gym regularly and

continues to maintain his healthy weight.

Brett remembers meeting a postsurgical bariatric patient in the hospital who was treated elsewhere and did not receive the comprehensive pre-surgical care that he had. “He was not doing very well,” Brett mentions. “He wasn’t sure about what he should or shouldn’t eat and was just trying foods on his own to see what would work, finding out the hard way when something didn’t.”

In his own experience, Brett is certain that the continuous information and support he has received is why he has been able to get the weight off, stay healthy and keep it off. “I intend to keep going to my support group,” he states.

“There are people there who have been coming for years. And it’s very important because the surgery is just a tool,” Brett acknowledges. “You need that support to make sure it works,” he says with conviction.

The surgeons are in total agreement.

Dr. Ballem and Dr. Rainvilles’ goal is to continue to use their skills and the latest technology to offer the most effective and appropriate weight loss surgery in each individual case. Under the direction of Drs. Ballem and Rainville, each patient will have the assistance of a comprehensive multidisciplinary team, providing extensive education preoperatively in order to ensure an excellent surgical outcome. This same team will be dedicated to helping these patients achieve their weight loss and medical goals and to maintain their healthy weight in the years to come.

Office Locations: 230 Sherman Avenue Glen Ridge NJ 07028 973-744-5315

1738 Route 31 North Clinton NJ 08809 908-735-3912

16 Pocono Road Denville NJ 07834 973-744-8585

Medical News

Medical News NJ Loses Nearly $8 Million in Standoff Over Affordable Care Act Funds

Andrew Kitchenman

Deadline passes with no agreement on use of federal grant intended for creation of state-run insurance marketplace New Jersey lost a $7.67 million federal Affordable Care Act grant as state and federal officials failed to reach agreement on how the money could be spent.

The crux of the dispute appeared to be over Medicaid costs. While the state largely wanted to use the money to support expansion of the state’s Medicaid program, federal officials maintained that the grant must be used more directly to support the ACA insurance marketplace.

The state received the grant in February 2012 for use in building a state insurance exchange. After Gov. Chris Christie announced a year later that the state would opt for a federal insurance marketplace, rather than a state-run one, state and federal officials began discussions about how the money could be spent.

The state wanted specifically to devote the bulk of the money to support a call center answering questions about New Jersey FamilyCare, the state’s largest Medicaid-funded program; advising residents with chronic infectious diseases about the best health coverage options available to them; and building the computer connections to exchange state data with the federal marketplace.

State Department of Banking and Insurance (DOBI) Commissioner Kenneth E. Kobylowski publicly revealed those details yesterday in a letter to U.S. Secretary of Health and Human Services Kathleen Sebelius.

In the letter, Kobylowski noted that the only requests that federal officials approved were for purposes that the state later found were unnecessary, such as a request for $600,000 to address a surge of inquiries to the state Office of Consumer Protection that never materialized.

“In short, we find ourselves with preliminary approval to use a small portion of this grant in ways that are unnecessary while we are unable to use the bulk of this funding to meet needs that are urgent and growing ever greater as we approach the end of the initial enrollment period,” Kobylowski wrote.

Federal officials would have approved a range of uses for the grant, including marketing the insurance marketplace to the public, a use supported by a coalition of advocates for expanding healthcare access, as well as by the state’s Democratic members of Congress and the Legislature.

Raymond J. Castro, senior policy analyst for New Jersey Policy Perspective, said DOBI officials failed to make significant changes in its plans for the grant months after they knew the federal government wouldn’t approve the plans.

Kobylowski said the state’s request to use part of the grant on information technology was based on a document attached to a December 2012 letter from Sebelius to Christie that said the grant could be used in this area.

However, federal officials said that an earlier federal regulatory guidance ruled out that use.

The state made three proposals to the federal government, according to the letter. In July 2013, DOBI asked to spend $4.86 million to increase the capacity of the call center for New Jersey FamilyCare, has been growing since Christie agreed to expand eligibility for Medicaid. In addition, the state sought $2.39 million for computer systems.

After the July plan was largely turned down, the state submitted a revised proposal in October, reducing the computer system portion of the spending to $1 million and adding a $780,000 request to help residents with chronic infectious diseases maintain coverage as their income fluctuates. This request was also largely turned down.

Kobylowski made a final appeal for the state plans in December.

HHS spokesman Fabien Levy said the federal government remained “committed to working with New Jersey to support their efforts to successfully implement their Marketplace.” His use of the phrase “their Marketplace” shows how far apart federal and state officials’ thinking on the ACA is, since state officials have emphasized that it’s a federal marketplace.

“We have reached out to the state numerous times over the last few months in order to avoid a last minute scramble, but unfortunately the state has yet to send us a request to re-scope their grant for any allowable activities,” Levy wrote in an emailed response to questions.

Despite rejecting the grant plans, the federal government would still cover much of the cost for New Jersey FamilyCare, as February 2014

9

part of its commitment to fund Medicaid. The state would have to provide a matching amount – for some projects, the federal government would cover 90 percent of the cost and the state would cover 10 percent.

Kobylowski said the state FamilyCare program has hired 75 call center staffers through a combination of state and federal matching funds, but remains 25 staffers short of the level advised by the call center operator, which is straining to handle the large volume of calls while processing a significant influx of applications.

“Throughout the negotiations between our two departments, one recurring theme has emerged, in my view: New Jersey consistently has sought the flexibility to use this grant to meet the unique needs of our residents and we have been advised repeatedly that the permissible uses for this grant are limited – highlighting a fundamental flaw of the Affordable Care Act,” Kobylowski wrote in his letter. “Given the ease with which the federal government continues to grant itself flexibility in regard to myriad statutory and other provisions of the Affordable Care Act, it is my view that providing a modicum of flexibility to New Jersey should not be a burden.”

Castro sharply criticized Kobylowski’s stance, saying that if the state wanted flexibility, it should have opted for a state exchange.

This would have led to up to $200 million in additional federal grants, Castro said.

He added that the state was already obligated as part of Medicaid to cover some expenses, such as updating its outdated computer system. And, Castro said, Kobylowski essentially admitted in the letter that the state isn’t upholding its responsibility.

“That’s really chutzpah, to even say that,” Castro said of the computer system plans. “It doesn’t make sense, because the state needed to do this anyway.”

Castro said the state’s requests were clearly inconsistent with federal guidelines for the grant, since the money was supposed to be spent directly on the marketplace. He recently wrote a report estimating that 95,000 additional uninsured New Jerseyans could gain insurance if the state spent the grant to increase public awareness of the ACA. New Jersey Policy Perspective is a member of New Jersey for Health Care, a coalition of groups advocating for increased access to healthcare. Castro said the group was planning to announce enrollment goals in the coming weeks, but the failure of the state to spend the federal grant on advertising the marketplace will make this harder.

“We’re going to try to get the state to do more,” Castro said. “We know that we don’t have the resources, particularly in the area of media (advertising), which can be costly – this particular fight is over, but the bigger fight is not.”

Friendly, Compassionate Staff to Serve the Urban Patient The Smith Center for Infectious Diseases and Urban Health was developed to address infectious diseases in the inner city.

This non-profit center, which is initially focusing on HIV, recognizes that inner city patients face many unique challenges in their daily lives. These challenges interfere with treatment of infectious diseases and foster an environment where infectious diseases are easily spread.

When you treat a person with HIV, you greatly reduce the chances of transmission and treat the whole community. In the past 10 years there have been incredible advances in HIV treatment. We at the Smith Center believe that by using novel approaches we can rid New Jersey of HIV. We have designed programs to incentivize patients to continue their medications. We have created a personal atmosphere, where each patient is known by her or his first name. We work with our patients to ensure that we are providing the best service possible.

Dr. Stephen Smith - named a Top Doctor of New Jersey by Castle Connolly 310 Central Avenue, Suite # 307 • East Orange, NJ 07018 Phone: 973-809-4450 Fax: 973-395-4120 • www.smithcenternj.org

10 New Jersey Physician

State wants to repurpose $7.6M in ACA funds to meet ‘urgent’ health care needs

By Beth Fitzgerald

Faced with a Thursday deadline to avoid losing $7.6 million in federal funds, the state of New Jersey is seeking permission to use the money for three purposes: Responding to the high level of inquiries from Jerseyans about N.J. FamilyCare, the state's Medicaid program that is now undergoing a huge expansion; advising people with chronic diseases on their best health plan coverage options; and investing in IT to enable the state to exchange data with the federal health insurance exchange.

On Thursday, State Insurance Commissioner Ken Kobylowski made public a letter he sent Wednesday to Kathleen Sebelius, secretary of the federal Department of Health and Human Services, seeking permission to create new uses for the $7.6 million.

The money is left over from a 2012 planning grant DOBI received from HHS to help plan the creation of a state-run exchange where New Jersey residents would buy health plans under the ACA. Gov. Chris Christie decided against building a state exchange, so New Jersey residents are buying coverage on Healthcare.gov — and the $7.6 million remains in limbo.

Kobylowski made it clear he's not optimistic that HHS will agree to repurpose the planning grant.

In his letter, the commissioner said, "Unfortunately, to date your department has determined that none of (the three suggested uses) represent 'allowable' uses of this grant, despite our good-faith efforts to show that they fall squarely within the guidance your own department has provided. While we have been told that a small portion would be allowable for other purposes, our experience to date has been that those needs are less than we initially anticipated. In short, we find ourselves with preliminary approval to use a small portion of this grant in ways that are unnecessary while we are unable to use the bulk of this funding to meet needs that are urgent."

John Sarno, president of the Employers Association of New Jersey, said DOBI's proposal for repurposing the $7.6 million "is an excellent policy choice."

He said one issue that is not fully appreciated is that it is imperative that the Healthcare.gov exchange, where Americans are now buying subsidized insurance plans, is successful.

"If the exchange does not succeed for the carriers, then they will have to raise prices," Sarno said.

He predicted that if enrollment is too low on the exchange, the insurance carriers will raise premiums both for subsidized plans sold on the exchange and for policies sold in the traditional insurance market.

Sarno said low enrollment could turn the exchange into a high-risk pool, rather than the broad insurance market that was envisioned where enough insurance policies are sold and premiums collected to make coverage affordable.

"Everyone is a stakeholder in the exchange not becoming a high-risk pool," Sarno said.

In his letter, Kobylowski said his department last July sent HHS a detailed proposal for using the grant money. He said DOBI proposed using the bulk of the funding, $4.9 million, "to enhance the capacity of the NJFamilyCare call center to respond to inquiries from residents regarding the requirement of the Affordable Care Act and its new coverage options." Kobylowski said the money would enable the call center to "increase staffing, quickly and temporarily, to meet the additional demand."

The letter said DOBI also sought $2.4 million for data system interfaces.

Kobylowski said HHS initially advised DOBI that only $410,000 of DOBI's proposal was likely to be approved. He said that last October, DOBI submitted a revised proposal to use $780,000 "so the New Jersey Department of Health could develop a system to track persons with infectious diseases as their incomes fluctuate and to assist them in maintaining seamless coverage as their eligibility for various types of public assistance and subsidies changes."

He said HHS at this point deemed $960,000 of the repurposing to be allowed, but rejected the NJFamilyCare call center expansion and the infectious disease tracking.

"New Jersey consistently has sought the flexibility to use this grant to meet the unique needs of our residents, and we have been advised repeatedly that the permissible uses for this grant are limited — highlighting a fundamental flaw of the Affordable Care Act," Kobylowski said. "Given the ease with which the federal government continues to grant itself flexibility in regard to myriad statutory and other provisions of the Affordable Care Act, it is my view that providing a modicum of flexibility to New Jersey should not be a burden."

Maura Collinsgru, health policy advocate for New Jersey Citizen Action, pointed out that DOBI didn't ask HHS for permission to use the money for outreach to help more people buy coverage on the exchange — something she contended is imperative to decrease the ranks of the uninsured in New Jersey.

"There is not one mention of promoting the health exchange marketplace, where more than 600,000 people in New Jersey who are uninsured are going to qualify for benefits," she said.

Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute, said what the state needs is a flexible common February 2014

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sense approach for the $7.6 million.

"New Jersey residents need information about how to get health insurance. If this isn’t resolved the money goes back to the U.S Treasury for other purposes," Schwimmer said. "Our congressional delegation should get behind Commissioner Kobylowski’s proposal to spend the funds to support Medicaid enrollment and data transfer between New Jersey and the federal government."

"The important thing," she added, "is that this money goes to help New Jerseyans get health coverage. That’s the bottom line. " Raymond Castro, senior policy analyst for New Jersey Policy Perspective, said New Jersey "is again requesting to use the funds for activities that were already denied by the federal government, rather than being proactive and using the funds for crucial outreach and education activities that would likely be approved by the federal government. Furthermore, many of the state’s proposed activities relate only to NJ FamilyCare and do not support the federal marketplace, which was the intent of the grant."

"That is very unfortunate since the state has made it clear that it will not help individuals who have been denied NJ FamilyCare but are eligible for insurance in the federal Marketplace," Castro continued. "This hands-off approach is inexcusable and insensitive to the needs of uninsured New Jerseyans."

Castro said it was surprising that the letter does not even mention using these funds for outreach and education, which is sorely needed in the marketplace.

"Hundreds of organizations in New Jersey and elected officials in Trenton and D.C. have urged the governor to use these funds for this purpose," Castro said. "There is a very good reason for that: Polls consistently show that most of the uninsured are not aware of the subsidies that are available to make insurance affordable in the marketplace, so they do not plan to seek help they need. Where are New Jersey’s uninsured to turn? The state will not help them, and now it is clear nothing will be done to help the federal government reach them."

Visit us now online at www.NJPhysician.org 12 New Jersey Physician

AMA Seeks to Stop ICD-10, Cites Soaring Costs In a letter to HHS Secretary Kathleen Sebelius, the American Medical Association asks her to "strongly" reconsider the ICD-10 medical coding set mandate, which the AMA says will place a "crushing burden" on physicians.

The American Medical Association on Wednesday released a study it sponsored showing that projected physicians' implementation costs for the federally mandated ICD-10 medical coding set will be as much as three times higher than initial estimates.

Couple with the release of the study, AMA President Ardis Dee Hoven, MD, released a copy of the letter she sent to Health and Human Services Secretary Kathleen Sebelius asking her to "strongly" reconsider the ICD-10 mandate, which takes effect Oct. 1.

"The markedly higher implementation costs for ICD-10 place a crushing burden on physicians, straining vital resources needed to invest in new health care delivery models and well-developed technology that promotes care coordination with real value to patients," Hoven said in the letter. "Continuing to compel physicians to adopt this new coding structure threatens to disrupt innovations by diverting resources away from areas that are expected to help lower costs and improve the quality of care."

To bolster support Wednesday, the AMA also introduced the #StopICD10 hashtag on Twitter.

A 2008 study by Nachimson Advisors estimated that the cost to implement ICD-10 averaged about $83,000 for a small practice, $285,000 for a mid-sized practice and $2.7 million for a large practice. However, Nachimson Advisors in a follow up study released this week for AMA found huge cost variables for each practice size based on specialty, vendor and software. Small practices costs ranged from $56,600 to $226,000; mid-sized practice costs ranged from $213,000 - $825,500; and large practice costs ranged from $2 million to $8 million.

Affiliated Practice

PHYSICIANS – INDEPENDENT CONTRACTORS OR EMPLOYEES? Written By: Gina Perrone, MST, CPA · SaxBST LLP · GPerrone@SaxBST.com Worker classification has always had a high place on the IRS radar. Scrutiny is expected to intensify in 2015, when the temptation to classify an employee as an independent contractor increases due to the administrative burden and excessive cost of the employer mandate of the Patient Protection and Affordable Care Act. Effective in 2015, businesses with 100 or more employees will be required to provide a reasonable level of health insurance to at least 70% of full-time workers or face penalties of up to $3,000 per employee. Added to the already costly assessment of past employment taxes and penalties and interest, the cost of misclassification of employees as independent contractors can become a substantial burden on employers.

This article focuses on the factors used in determining the proper worker classification of physicians and other health care professionals (referred to as providers for the remaining part of this article). First, the 20-common law factors are discussed, followed by an examination of rules and guidelines released by the IRS to help determine worker classification of health care providers. The factors used by the Court are then discussed. The article concludes with suggestions (best practices) on minimizing the risk of reclassification by the IRS. The term “practice” used in this article refers to hospitals/health systems, medical centers, ambulatory surgery centers and physician practices. Please note, this article only discusses the Federal rules of worker classification. State rules may differ.

Determining Worker Classification of Health Care Providers – Factors Used by the IRS The IRS has the power and authority to reclassify independent contractors as employees. There is no bright-line test to determine the proper classification of workers; rather the determination is made from an analysis of the relevant facts and circumstances of each specific relationship or situation. The analysis is based on the concept of control – who has the “right to exercise dominion and control over the activities of the [service provider], not only as to the results but also as to the means and methods used to accomplish the result”.

Generally, an employer-employee relationship exists when the person whom the services are performed has the right to control the detail and means of the worker (i.e. what shall be done and how it shall be done). The IRS developed a list of 20 factors (known as the 20-common law factors test) that businesses should consider in determining the existence of an employer-employee relationship. The test is based on recent cases and rulings and includes such factors as whether a business has the right to control the worker; if the worker has a significant investment in facilities used in performing the work; and whether the worker makes his services available to the general public. The 20 factors in the test are meant to highlight whether the degree of control is sufficient enough to establish an employer-employee relationship.

The 20 factor test has been criticized as being too subjective and broad. Applying the factors to every type of worker could lead to inconsistent interpretations and incorrect assertions of employee status by the IRS. For providers, putting such a heavy weight on the degree of control is problematic, since their degree of control is often limited by professional ethics, contractual relationships and other ethical and legal barriers.

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Generally providers offering services to the public are independent contractors and not employees. However, if there is a sufficient degree of control and supervision over the services provided by the physician, an employer-employee relationship exists. In this regard, it is not necessary that the employer actually control or direct the manner in which the services are performed; rather it is the employer’s right to do so that is indicative of an employer-employee relationship.

The IRS set forth the following four factors or criterion to determine whether this requisite of control and supervision exists to classify a physician as an employee – • The degree which the physician has become integrated into the operating organization of the practice which the services are performed; • The substantial nexus, regularity, and continuity of the provider’s work for the practice; • The authority vested in or reserved by the practice to require compliance with its general policies; and • The degree to which the physician has been accorded rights and privileges that the practice has created or established for its employees.

The first criterion refers to the manner which the provider’s services are integrated into the particular operation. Examples include the manner of payment (i.e. whether the physician provider is paid a percentage, salary or guaranteed minimum); whether the provider can hire associates or substitutes, and if so, who is responsible for paying the substitutes; and whether the provider is permitted to engage in private practice.

The second criterion is present if a schedule of definite and fixed hours is agreed to between the provider and the practice and such schedule is followed without substantial deviation.

When the provider is subject to the direction and control of the practice (via chief of staff, medical director or other authority figure) to require compliance with the practice’s general policies, the third criterion is met.

Regarding the forth criterion, the relationship more closely resembles and employment relationship when the provider is given substantially similar rights and privileges as employees of the firm, such as fringe benefits, vacation and holiday pay and malpractice insurance.

In 1992, the IRS published additional guidelines addressing classification of health care providers. The guidelines identify eight factors that indicate a health care provider is most likely an employee. This is true even if the contract between the provider and the practice describes the position as an independent contractor – • The provider does not have a private practice.

• The provider is paid a straight wage by the practice.

• The practice provides supplies and professional support staff.

• The practice bills for the health care provider’s services.

• There is a percentage division of provider fees with the practice or vice versa.

• Practice regulation of, or right to control the health care provider, is present.

• The provider is on-duty at the practice during specified hours.

• The provider’s uniform bears the practice’s name or insignia.

Later, the IRS identified five misleading factors that are conventional to nearly all health care provider-practice relationships and therefore should be excluded when applying the 20-common law factors – (1) compliance with practice policies; (2) required completion of the practice credentialing process; (3) use of facilities by the provider; (4) the practice’s right to terminate the provider’s privileges for cause; and (5) a requirement that the work be performed on the practice’s premises.

Determining Worker Classification of Health Care Providers – Factors Used by the Courts The courts are not bound by the IRS tests or guidelines. The following are recent court cases setting forth factors deemed relevant by the courts in making worker classification determinations. A great deal can be learned from reviewing the factors that influenced the courts’ decisions.

In 2009, the United States Tax Court deemed the following factors as relevant in evaluating whether a health care provider is an employee or an independent contractor: • Degree of control the practice exercised – Did the practice require the provider to work a specified number of days or control his hours worked? Did the provider render medical services under the supervision of the practice members? Such factors indicate an employee relationship.

• Which party invests in work facilities used by the provider – Absent of a private practice, any investment by the provider is most likely offset by the practice’s investment in office locations and equipment. This factor supports employee status.

• The provider’s opportunity for profit or loss – Health care providers engaged in a private practice and performing services

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outside of the relationship with the practice for a fee presents an opportunity for profit and is vital for independent contractor status.

• Whether the practice can discharge the health care provider – The manner which the provider can be terminated is important (i.e. by one or both parties, at any time, with or without notice). The right to discharge a worker and the worker’s right to quit at any time indicate employee status (i.e. at-will employment). Independent contractors are usually bound by a written agreement requiring notice of termination.

• Whether the work is part of the principal’s regular business – A provider integrally involved in the business operations of the practice usually indicates employee status.

• The permanency of the relationship – An ongoing relationship indicates an employee relationship. A relationship that is transitory and that establishes a specified objective indicates an independent contractor relationship; and • The relationship the parties believed they created – Is the intended relationship – employee or independent contractor – expressed in a written agreement or contract between the parties? Did the practice withhold payroll taxes and report the provider’s compensation on Form W-2 (employee)? Did the practice provide the provider with employment benefits, including medical and malpractice insurance, participation in a retirement plan and continuing education reimbursement? Such factors support an employer-employee relationship.

There are multiple court cases from 2001 and 2002 that uphold the classification of providers as independent contractors. The key factors viewed by the courts as sufficient to support such classification and rule against IRS allegations of employee status include – • Documentation – Practices had documentation supporting the fact that the providers were independent contractors, based on the 20 common-law factors.

• Intent of parties – Contracts entered into by the providers and the practices clearly state the providers were independent contractors.

• Degree of control – Practices did not control the day-to-day activities of the health care providers, including the hours worked, and did not require the providers’ presence at any set time.

• Opportunity for profit or loss – The providers were engaged in private practice and did not provide services exclusively to the practice. Many functioned through their own medical corporations and were employees of these corporations. Further, the providers did not maintain an office at the practice.

Best Practices – • Treat workers consistently and document the factors supporting the workers’ classification. File all required information and other returns (i.e. Form 1099-MISC) consistently with that status.

• Before the provider performs any services for the practice, the parties should execute a written agreement between the provider and practice that incorporate the key factors used to support the intended worker classification of the provider such as the type employment relationship (employee or independent contractor), term of the contract, responsibilities and payment of provider, responsibilities of the practice, and contract renewal and termination. Some practices require providers to acknowledge in writing that the provider performs services to more than one practice.

• Document the factors used in the determination of worker status. Common documents that demonstrate an independent contractor relationship include a copy of the provider’s professional license, proof that the provider performs similar services outside of the practice for a fee, and verification that the provider supplies his own malpractice insurance.

• IRS Form SS-8, Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholdings, lists questions that highlight factors the IRS consider important in making this determination. The form can be filed by businesses and workers to get help from the IRS in determining a worker’s status.

• Do not overly rely on industry practices. Every relationship is unique.

Conclusion – For years, the health care industry has been the target of many IRS audits involving reclassification of workers and assessment of substantial employment tax liabilities. When determining whether a worker is an employee or independent contractor, it is important that all factors are considered. Though some factors may indicate different treatments, the key is to look at the entire relationship and the degree or extent of the right to control the worker. Finally, it is important to document each factor used in coming up with the determination and to carefully prepare and execute written agreements between the physician and practice.

Remember – The key to substantiating independent contractor status for a provider is to demonstrate a lack of the right to control such professional.

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

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Healthcare employment dips in January, as slowdown continues

By Melanie Evans Healthcare employment declined in January, according to preliminary federal data, although officials revised their December figures for the industry from a loss of 6,000 jobs to a gain of 2,400.

The data show healthcare employment declined by 400 jobs last month.

January's numbers from the U.S. Bureau of Labor Statistics suggest the remarkable slowdown in healthcare hiring, typically a bright spot even in bad times, could be more than a fluke. The industry's total employment was 14.6 million, largely unchanged from the prior month.

Hospital employment declined for the second straight month, the preliminary data show. Hospitals employed 4,500 fewer workers in January after a decline of 4,700 jobs the prior month. The sector's job losses last year contributed to the first decline in annual hospital employment since 1994, based on revised figures released this month.

The U.S. economy added 113,000 jobs in January, an increase of 0.1%, and the unemployment rate stood at 6.6%, a tenth of percentage point lower than December. The biggest gains were in manufacturing and construction.

Overall healthcare hiring for the 12 months that ended in January totaled 198,300 jobs, an increase of 1.4%. And according to revised figures, hospitals shed 400 jobs over the course of 2013. The agency's preliminary figures, released last month and since revised, had shown an increase of 9,800 jobs at U.S. hospitals last year, according to an analysis by the Altarum Institute. The last year that hospital employment declined was 1994, when the sector lost 6,200 jobs.

Ambulatory care added 9,000 jobs in January, according to the new round of preliminary numbers. Within that category, physician office hiring cooled, adding 900 jobs compared with 3,100 in December.

Medical News

Surgical facility bill passes Senate committee again State Sen. Joseph Vitale's (D-Woodbridge) efforts to get single-room surgical facilities under the same regulatory umbrella as other surgical facilities advanced Monday, as his proposed legislation moved through the Senate's Health, Human Services and Senior Citizens Committee unanimously.

Vitale sponsored the same bill in the last legislative session after a study by the New Jersey Health Care Quality Institute authored a report finding many of the one-room facilities in New Jersey had deficient patient safety standards. The bill was pocket vetoed

by Gov. Chris Christie because of a 2.95 percent tax assessment on single-room facilities, required by Centers for Medicare and Medicaid Services.

"The bill that passed out of committee is in its original form, from last session, which included the assessment that the governor had a concern with, that I shared that concern with," Vitale said. "We're going to try to move the bill along as it is, and try to address that issue. I'd rather not have to apply the assessment, but we may, at the end of the day, not have a choice."

"CMS requires that we apply any assessment equally, so the assessment we now apply to multiple suite facilities would have to apply to single-suite facilities, because they're the same, they deliver essentially the same services," Vitale said, adding he would explore the possibility of a waiver from CMS. The legislation would ensure all surgical facilities are licensed and inspected by the Department of Health and Senior Services.

Vitale said the bill has the support of the New Jersey Hospital Association and the Quality Institute in addition to his fellow committee members.

"They're recognizing not only the importance of the issue, which is making sure that they are properly inspected and licensed, but that we can ensure there's a comfort level on patient safety. The members obviously believe that," Vitale said.

Better Care at Lower Cost: If Patients Comply

by Frank Ciesla, Esq.

New legislation is being introduced in the Senate by Democratic Senator Ron Wyden and Republican Senator Johnny Isakson and in the House by Democrat Peter Welch and Republican Erik Paulsen. It is known as the Better Care Lower Cost Act of 2014. The focus of the proposed legislation is the elimination of fee for service reimbursement and switching to a concept of pay for performance.

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What providers, and their various group representatives, such as the AMA or the AHA, need to be aware of, is the shifting of the risk of the noncompliant patient from the payor (be it the Medicare program or any other payor) to the provider.

Currently, the costs involved with the provision of health care for noncompliant patients generally is being borne by the Medicare program or other third party payors. No effective mechanism has been implemented by the Medicare program that would require the patient to comply with the medical protocol designed by the providers. Terms such as “navigator” or “health coach” are being used to describe individuals in the health care systems who will assist the patient in accessing the appropriate care needed. However, we have not seen any proposals which would impose upon the patient in those circumstances in which the patient is noncompliant.

As a provider, each of you can look at your own patient base to determine whether or not patient noncompliance with treatment protocols is an issue that you need to be concerned about. My discussions with many doctors indicates that a significant percentage of patients regrettably are noncompliant.

The issue of the noncompliant patient and the cost associated with the noncompliant patient needs to be resolved in any pay for performance reimbursement system going forward. Such a system will only be effective if there is an effective patient compliance program developed.

Affiliated Practice

Hackensack University Health Network ACO saved Medicare at least $10M Accountable Care Organizations (ACOs) finally showing signs of savings

By Beth Fitzgerald Medicare announced Thursday the first round of savings they've seen from “Accountable Care Organizations,” a new program created under the Affordable Care Act where doctors and hospitals endeavor to reduce waste in the Medicare system while also improving patient care.

New Jersey has about 18 Medicare ACOs, but most have not operated long enough to generate savings. One that has been successful is the Hackensack University Health Network ACO, which started in April 2012 and has saved Medicare at least $10 million through the end of 2013.

The government announced that nationwide about half, or 54 of the 114 Medicare ACOs launched in 2012, already have lower expenditures than projected. Of these, 29 generated "shared savings" totaling more than $126 million, meaning they generated enough savings to be eligible to share the money that Medicare is saving.

Dr. Morey Menacker, chief executive of the Hackensack Physician Hospital Alliance ACO, said he was surprised that in the first year of the program only 29 Medicare ACOs nationwide generated enough savings to be in line for a portion of the Medicare savings.

"I expected that there would be more programs that had shown savings, and more significant savings," Menacker said. Hackensack is in line to receive 50 percent of the Medicare savings it generated, or at least $5 million.

Hackensack was successful for several reasons: its ACO was created as a partnership between the doctors and hospitals to get buy-in from all sides. The ACO also invested in the staff to coordinate medical care and IT to do the required analysis. It all started with "a smaller group of physicians who were willing to make changes in practice patterns, recognizing that there is a long term benefit associated with it," he said.

Linda J. Schwimmer, vice president of New Jersey Health Care Quality Institute said "We believe that the principles behind the ACO make sense and will show results over time. Now we are seeing changes and savings in areas where financial incentives are in place such as reducing (hospital) readmissions and in-patient days. These results are being driven by simple interventions such as bedside medicine reconciliation and primary care providers seeing patients within 48 hours of discharge."

Schwimmer said Medicare and private payers "are using carrots and stick to drive these changes. Moving forward, even more dramatic change will occur. This is a journey not a race, but it is the right path to follow."

Menacker said he believes his ACO has saved Medicare more than $10 million, and perhaps as much as $15 million. He expects to receive a shared saving payment from Medicare this summer, and the money will provide "bonuses to the physicians who have been working hard at this program." It will also provide funding to expand the ACO in coming years.

The ACO began with 12,000 Medicare patients and is now expanded to 20,000 patients. ACO was able to reduce hospital readmissions for the patients in the program by about half of what they would otherwise have been without the ACO, he said.

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Hospital Rounds

New Jersey health planning board approves sale of St. Mary’s Hospital

BY BARBARA WILLIAMS The state Health Planning Board has given a for-profit company approval to buy the financially-struggling St. Mary’s Hospital in Passaic.

All eight members present voted in favor of the sale. Their vote came two days after staff members in the Department of Health recommended that California-based Prime Healthcare Services buy the city’s lone remaining hospital for $25 million.

Health Commissioner Mary O’Dowd, the state Attorney General’s Office and a Superior Court judge also must approve the sale.

“Prime is an answer to a prayer,” Sister Elizabeth Cahill, a nun with the Catholic Sister’s of Charity of St. Elizabeth, which founded the hospital, told the board prior to the vote. “I looked into Prime’s history and they maintain care to the poor and respect the call to healing.”

But opponents of the sale noted that Prime, which owns 25 hospitals nationwide, is under federal investigation for billing practices at one of its California hospitals.

St. Mary’s, which emerged from bankruptcy in 2010 and has been on the verge of financial ruin for years, will close without a large infusion of cash, hospital leaders said,. Prime has promised $40 million in capital improvements and has already put in about $5 million.

Medical News

Explainer: Prescription Monitoring Program Enters Crucial Phase Andrew Kitchenman

State considers whether to increase requirements for doctors to participate in PMP What it is: The New Jersey Prescription Monitoring Program (PMP) is a database established by a 2008 state law and launched in 2012 that collects information on all controlled dangerous substances (CDS) and human growth hormone dispensed to New Jersey residents. All pharmacies are required to submit this information weekly, enabling doctors and other prescribers, as well as pharmacists, to track whether patients are using drugs appropriately.

Why it’s needed: There has been surge of prescription drug abuse, which combined with heroin use, has led to a rise in overdose deaths. Some patients seek prescriptions from multiple doctors to support their own habits or as part of gangs that resell the drugs on the street, while some doctors have worked with organized crime to issue prescriptions.

State officials see the PMP as a tool that can be used to combat this increase in abuse, making it possible for doctors and advanced practice nurses who prescribe CDS -- and the pharmacists who dispense them – to know if their patients have been receiving

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more prescriptions than is appropriate, such as by receiving them from multiple sources.

Low participation: Only 15 of the state’s prescribing doctors and advanced practice nurses actually make use of the database to check if their patients have a pattern of misusing the drugs. This low level of use has been criticized by former Gov. James E. McGreevey and other members of a task force launched by the Governor’s Council on Alcoholism and Drug Abuse. Members of the task force on heroin and other opiate use by young people in New Jersey, including state First Assistant Attorney General Thomas Calcagni, have recommended that all doctors who prescribe dangerous drugs participate in the PMP. Law enforcement’s push: Criminal investigators and prosecutors have limited access to the PMP. The State Commission on Investigation in a report on prescription drug and heroin abuse issued in July, recommended that law enforcement access to the database be expanded. Instead of having access limited to targeted investigations, subpoenas and court orders, the SCI recommended that law enforcement instead be able to access the PMP as part of broader investigations.

Pushback from doctors: Some doctors, including members of the State Board of Medical Examiners, oppose mandating that all dangerous-drug prescribers check the PMP. They argue that while it may be appropriate to require pain specialists to check the database, most other doctors do not prescribe dangerous drugs in such quantities that their patients are likely to abuse them.

For example, emergency room doctors issue prescriptions for limited numbers of painkillers after surgeries. Members of the State Board of Medical Examiners said some doctors would be less likely to prescribe appropriate pain medication to avoid what they see as the bureaucracy of checking the PMP. This could deny patients the pain relief that they need.

The next step: It’s not clear what the final recommendations of the task force on heroin and other opiate use will be -- a draft report has been bottled up at the Governor’s Council on Alcoholism and Drug Abuse since last summer, with its release date being pushed back repeatedly. Task force members said state officials told them that the final report wouldn’t be released until GCADA -- which currently has an acting executive director and acting chairperson -- has permanent leadership.

In addition, state Sen. Joseph F. Vitale (D-Middlesex) has said that changes to the PMP could be included in comprehensive legislation he is working on with other legislators to strengthen prevention, treatment and recovery of opioid addiction.

Medical Marijuana Advocates Urge Overhaul of Law, Regulations Andrew Kitchenman

State reports progress, but legal pot dispensaries express frustration with limits More New Jersey residents than ever before have access to medical marijuana, but advocates for the treatment assert that problems with restrictive regulations -- as well as with the law itself -- are limiting the program's reach and its usefulness.

One of those advocates is Ken Wolski, a registered nurse and executive director of the Coalition for Medical Marijuana. Speaking at an Assembly Regulatory Oversight Committee meeting yesterday, Wolski argued that the program fails “to meet the needs of the vast majority” of patients in the state.

Wolski said that state restrictions -- including those that limit the amount of the active ingredients allowed in the plants – have resulted in low-quality marijuana reaching a limited number of people.

“We believe that the rules are not consistent with the intent of the legislation and only prevent the vast majority of patients from gaining safe and legal access,” Wolski said.

Michael Weisser, chief operating officer of the Garden State Dispensary in Woodbridge, laid out a multipronged agenda for increasing access to the program, indicating that New Jersey's rules are the most restrictive of any state that has legalized medical marijuana. He spoke on behalf of all of the state’s alternative treatment centers (ACTs), which grow and dispense marijuana.

According to Weisser, chronic pain should be added to list of approved illnesses that qualify a patient for medical marijuana, and doctors should no longer be required to register in a publicly available database to participate in the program.

The alternative treatment centers also want adults to be able to consume edible marijuana, which the state recently permitted children to do.

“Quite frankly, we have more product than we can sell,” Weisser said. “People (are) just not getting on this program,” due to the various restrictions.

The alternative treatment center operators’ critique of the state's medical marijuana program encompassed other issues.

For one thing, they want the state to reduce its annual fee for participants from $200 to $25. For another, they want patients to have more time to recertify for the program. They currently have as little as 30 days; Weisser wants it extended to a year.

The ATC operators also are very much concerned with access.

For instance, they want hospice patient to receive marijuana directly from an ATC or through a nurse and allow nursing home nurses and home health aides to pick up the product. Finally, they want ATCs to dispense the product to hospitals to provide to registered patients -- if the hospitals are willing.

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Originally opened in 2013 as Compassion Care Centers of America, Garden State Dispensary is one of New Jersey's three alternative treatment centers. The two others are Greenleaf Compassion Center in Montclair, which opened in 2012, and Compassionate Care Foundation Inc. of Egg Harbor Township, which opened in 2013.

The three ATCs have dispensed more than 132 pounds of marijuana to patients, according to state officials. There are more than 1,700 patients registered with the program and nearly 80 percent of them have received marijuana. There are 250 participating doctors.

State Health Commissioner Mary E. O’Dowd submitted testimony to the Oversight Committee yesterday about the program’s progress.

In a statement read by department legislative service director Victoria Brogan, O’Dowd said that a fourth ATC, Breakwater, is working on building out its warehouse. She also said that state labs have approved nine strains of the plant, while 20 more strains are being grown.

“With the capacity of the current dispensaries and more scheduled to come online in the future, the department is committed to an effective, safe, and secure program,” Brogan said. The Department of Health is finalizing two reports that will provide details on the most common medical conditions of patients and the percentage of patients served by each center.

State officials noted that a large portion of all patients qualify for a reduced fee of $20, which covers two years, instead of the annual fee of $200. That’s because they have demonstrated financial need through participation in government safety-net programs.

Evan Nison, executive director of the state chapter of the National Organization for the Reform of Marijuana Laws (NORML NJ), said his organization is contacted on a “weekly basis” by registered patients who have been arrested for marijuana. He said local police should be better trained about the law, adding that the arrests are discouraging other patients from registering.

Gov. Chris Christie has said that he is opposed to further steps to increase access to the program, saying that the ultimate goal of proponents for increased access is to legalize marijuana.

CentraState will launch its own health plan in March Aims to offer more affordable coverage for CentraState members

By Beth Fitzgerald Freehold-based health care system CentraState will launch its own health plan on March 1 that aims to offer more affordable coverage when members use CentraState's hospital and physician network.

Targeting small employers, members will also have the option to pay more out of pocket to use the extensive statewide and national provider network of QualCare, which provides health plans to employers statewide.

Being administered by QualCare, the new plan addresses the impact on the health care system of the Affordable Care Act and the long-term trend of rising health care costs, said John T. Gribbin, chief executive of the CentraState Healthcare System.

"Part of our mission here at the hospital is to improve the health and well-being of the people in our area," Gribbin said.

Gribbin said CentraState recognized that small employers are "having significant problems with their rates and they are slowly being priced out of the market. That was a big concern."

Gribbin said CentraState was able to create the cost effective plan because the hospital and more than 175 affiliated physicians in the health plan agreed to provide discounted rates to plan members.

In addition, the new plan extends the health and wellness initiatives that CentraState provides its own 2,300 employees to a wider community. Gribbin's credits this with helping keep the system's health care cost increases in the low single digits for the past decade.

"We've been involved very heavily over the last decade in an employee wellness and fitness and risk management program, starting with a health risk assessment," Gribbin said. "We have made changes to our plan design and created carrots and sticks so that employee who are at high risk in their health can move themselves to moderate risk and people at moderate risk can move to low risk. And by doing this over a decade now, we've been able to demonstrate savings in our own benefits costs."

Wellness programs are common among large employers like CentraState, which wanted to "figure out a way to put some of those same advantages behind a product and offer it to small businesses that don't have the wherewithal to do these things," Gribbin said.

The CentraState Community Health Plan is a partnership with the Affiliated Physicians and Employers Health Plan, a multiemployer health plan managed by QualCare. APEHP was launched nearly 13 years ago and now covers about 800 member employers and 13,000 lives. Like APEHP, the CentraState plan is a multi-employer, self-insured health plan that carries stop-loss insurance to protect it from spikes in medical claims.

20 New Jersey Physician

Dawn Wright, vice president of insurance services for QualCare, said the new plan has a two-tiered network. Members are only charged co-pays if they stay within the tier one network, which includes the CentraState hospital and outpatient facilities and more than 175 CentraState-affiliated physicians. When members use providers in tier two, which is the entire QualCare state and national network, they are subject to a $2,000 deductible; however, if the services they need aren't offered in tier one, they will access the tier two network at tier one rates, Wright said.

"We know that people still might still want to use a particular specialist, or if they are out of the area they want to be able to access another provider. So we've given them the full QualCare network on tier two," Wright said.

The CentraState plan's coverage area will span several areas in central Jersey and offer prices about 15 to 17 percent lower than APEHP's existing small group portfolio, Wright said. Each employer group that joins the plan will get a rate for their group, which she estimated would on average be in the low-$400 a month range for a single individual and generally under $1,000 a month for family coverage.

The long-term cost saving will come from better coordinating patient care and reducing the health risk factors that lead to higher medical bills, Gribbins said.

He said small employers "don't have the wherewithal to manage the health factors of their employees; they are just not big enough and they don't have the expertise. We have been working on wellness, prevention and risk management for a decade now, and we have learned that there are ways that you can actually improve the health of your employee workforce. Not only does that help them, but it comes back to the employer in stabilizing our benefit costs over the long term."

Asked if creating its own health plan was also in the long-term interests of CentraState, Gribbin said that was certainly the case.

The ACA has put pressure on all health care providers, including hospitals and doctors, to operate more efficiently and reduce unnecessary spending; hospitals have been under intense pressure to reduce admissions and provide more outpatient care.

"This is an opportunity where we think we can help our people in this service area deal with what is a very serious problem. But yes, of course it will help CentraState also," Gribbin said.

He said the ACA "without a doubt is forcing all hospitals to rethink their business models." This is because much of the effort to slow the growth of health care spending involves spending less on hospital care.

"And so we've got a tremendous task ahead of us to try to figure out a different way of functioning in the future and part of it is going to be taking some risk in doing things like this to help us manage that transition," he said.

Gribbin said a decade ago, 61 percent of CentraState's revenue came from traditional in-patient care, and now it's about 47 percent.

"We made a conscious effort to develop capabilities in the outpatient, wellness and prevention areas, and we have a large ambulatory care campus that is an integral part of the hospital. So that is a clear direction that we have been following over the past decade."

Only docs can sign off on inpatient admissions, two-midnight rule says

By Joe Carlson Hospital nurses, medical residents and physician assistants can all write the orders to admit Medicare beneficiaries to the hospital. But newly clarified CMS rules say a physician must sign off on the admitting paperwork and “accept responsibility” for the decision before the patient is discharged.

The rules were published (PDF) as part of the ongoing effort to define the CMS' new two-midnight policy, which says admitting physicians must have good reason to believe that a patient will require two nights in the hospital to quality for Medicare's higherpaying hospital rates. Otherwise, the care is considered outpatient, which pays less.

CMS officials said during a national conference call on Tuesday that Medicare's recovery auditors will not be allowed to audit inpatient claims under the two-midnight rule until after Sept. 30. However, the agency said its administrative contractors, which process the bills and do some auditing work before payment, will continue to probe small numbers of cases and “educate” hospitals on whether the claims broke the new rules.

For example, the new regulations say that a nurse can document a physician's “verbal order” to admit a patient in the medical record, even though the nurse lacks the authority to admit a patient independently. An admitting physician must countersign the decision before the patient leaves the hospital.

If it later turns out that the doctor disagrees with the decision to admit and refuses to sign the order, the hospital can still send the bills through Medicare's Part B system for outpatient care, according to the rules.

Likewise, a medical resident, physician assistant or nurse practitioner may write the inpatient admitting order as a proxy for the physician. But that applies only when a physician “approves and accepts responsibility for the admission decision by countersigning the order prior to discharge.”

February 2014

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Decisions to admit patients to the hospital have become fraught territory for hospital officials, who complain that Medicare rules have been unclear even though providers are subject to extensive data-mining and auditing after the fact.

The result was that growing numbers of patients were placed in hospital beds but classified as outpatient observation cases, which can protect the hospital from auditing but exposes patients to copayments and bills for post-acute rehabilitation care that would otherwise have been covered fully by Medicare.

The two-midnight policy, announced last fall as part of the 2014 Medicare inpatient payment rates, was intended to reduce the number of long observation stays by clarifying that any patient sick enough to get at least two nights of hospital care is now presumed to have had a legitimate hospital stay.

But hospitals predicted that the rule would deny them full inpatient payments for short hospital stays that are legitimate admissions. Several hospitals have laid the groundwork for potential litigation on the matter, and interest groups such as the American Hospital Association have supported legislation to delay implementation of the rule.

Englewood Hospital appoints new CMO

By Beth Fitzgerald Englewood Hospital and Medical Center announced Friday the appointment of Dr. Michael T. Harris as senior vice president and chief medical officer.

Harris joined EHMC in 2012 as chief of surgery. He came to EHMC from The Mount Sinai School of Medicine in New York where he held a variety or roles including vice chairman of the school's Department of Surgery. He was an attending surgeon at Mount Sinai since 1993.

Harris said chief medical officer at EHMC will differ from how the job is defined at many other healthcare organizations. This is because the nursing, physician and quality leadership will all report to him, making him "really a chief clinical officer where nursing, physician leadership and quality all report up through a single clinical office. The idea is to break down silos."

He said the new model intermingles the staff rather than looking at them as separate department entities. This new model is in sync with how health care reform is transforming medical care.

"There has never been a time in my 25 years in medical practice when there has been a more natural alignment between physicians, nurses and hospitals."

Traditionally, he said, there has been tension, especially between doctors and hospitals.

"The 'suits versus the white coats' type of issue. But given the regulatory environment and given the way that people expect their care now, this alignment is natural, and a big part of my job is to help everybody move in the same direction and improve care and do it in an efficient and cost effective way," he said.

Harris said that about two years ago Englewood created a multi-specialty physician practice that now has 130 physicians, some employed directly by the hospital and some not.

This large practice, he said, is the way of the future.

It is more difficult as time goes on for small physician group to invest in the infrastructure needed to meet government requirements, he said.

Now underway at EHMC is a $90 million construction project to construct a new Cancer and Wellness center, to be completed in 2016, and modernize and expand the Family Birth Place maternity facility, to be completed this fall.

"For a small community hospital we have really done an amazing job at being at the forefront of high technology medical care," Harris said. In the past, some area residents thought "you had to cross the river (to New York) to get this kind of care, but you don't. We have really tremendous specialists, particularly in cardiac and cancer care, which is becoming more and more what our community requires for their care. We have assembled and continue to assemble experts from all over, as well as technology."

He said the new cancer center will "provide multi-disciplinary care, with navigators to help patients and their families to ensure they are getting the best care. We are investing heavily in this over the next couple of years and it all comes back to providing the highest quality care to our community."

And his new office of chief medical officer is where "all of the various types of care are coordinated to benefit patients and their families."

Warren Geller, chief executive of EHMC, said of Harris: "His extensive clinical and administrative experience will be instrumental during an extremely transformative time, as we expand multiple services."

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