The Following Medal Of Honor Award Recipients Were Honored .

MANAGED CAREAs I begin my year as President of the Massachusetts-Rhode Island HFMA chapter I want to expressmy gratitude to my predecessor Kathleen Maher for the Chapter’s achievements and successesduring the 2007-2008 year. The quality of the chapter’s educational programs was evidenced bythe high attendance and the positive feedback submitted in our program surveys. Recognition of thechapter’s successes also came from HFMA National through 2 awards made at this year’s AnnualNational Institute (ANI): membership growth and retention and for excellence in certification.I also want to acknowledge the great contributions made to the chapter by Jim Heffernan, Immediate Past President of the chapter as he leaves the Board of Directors where he has served with greatdistinction since 1997. Jim provided visionary leadership in guiding the chapter through the consolidation with the RhodeIsland chapter and the corporate reorganization of the chapter. The overall quality of the chapter improved greatly underJim’s leadership.The chapter also benefited from the involvement of the following directors who departed the board at the end of the 20072008 year: Joe Capezza, Rich Silveria, Rick Markello, Phil Geissinger and Bob DeVey. I thank them for their contributions and wish them well in their future endeavors.I also want to welcome the new directors who have joined the board for the 2008-2009 year: Dennis Chalke, David Dillon,Tim Hogan and Rosemary Rotty. I look forward to working with them on several new program initiatives during the yearahead.The HFMA National theme for this year is “Making Connections”. Certainly the chapter’s educational and social networking activities offer numerous opportunities for our members to make new as well as strengthen existing connectionswithin HFMA. Taking advantage of HFMA activities will also promote connections beyond HFMA to other individuals andhealth care organizations that will benefit members in their career.Upcoming social activities include the annual golf tournament on August 7 in Juniper Hill Golf Club in NorthboroughMassachusetts. Previous tournaments have attracted more than 200 attendees and have been very enjoyable events.The chapter’s corporate sponsors provide great support to HFMA activities and are an integral part of the chapter’s success over the years. I want to thank our sponsors for their continued support. Our sponsors will be individually acknowledged during the August golf tournament. New sponsors for the 2008-2009 year will also be acknowledged in the nextissue of Mass Media due out in October.On September 19 our educational programs resume with the “New To Healthcare” program at Simmons College. Thisprogram provides an excellent orientation to health care finance for individuals within your organization who are new tothe world of health care.I want to encourage all members to attend this year’s educational programs and to promote these programs through participation on one of the educational committees. I personally discovered that the benefits of HFMA membership increasedsignificantly when I joined a committee. Committees play a major role through organization of educational programsas well as through the submission of articles to the Mass Media journal. Chapter committees cover a wide range of issues and I encourage you to consider joining one of the committees. I also encourage committees to submit two or morearticles on the topics they address this year to Mass Media. The combination of programs and Mass Media articles ensurethat educational material is widely disseminated to our members.Thank you to all of the chapter’s members for their ongoing support. Again I look forward to meeting and working withyou during the year ahead. Please reference the chapter’s website at www.masshfma.org for additional information.Please also feel free to direct any questions and concerns to my attention at president@masshfma.org.Regards,Marvin BerkowitzPresident, HFMA Massachusetts-Rhode Island Chapter

MANAGED CAREThe Devil is in the Details –the 2008 Form 990 InstructionsBy: Jeanne M. Schuster, Executive DirectorErnst & Young LLPThey say the “Devil is in the Details”1 and with theinstructions to the “new” Form 990,2 they reallymean it. First, there is a substantial amount of“details” – over 300 pages to the instructions. Itmight be the perfect solution for insomnia.A few of the surprises: the definition of “key” employees,3 another complex definition for determining who is an “independent” board member,4 and,some flexibility in disclosing your organization’sFIN 48 footnote.5Definition of “Key” EmployeeIn the “old” Form 990, the filing organization wasrequired to provide compensation information forthe organization’s trustees, officers and “key” em-Issue 6ployees. “Key” employees were individuals withresponsibilities similar to an officer, but, withoutthe title of “officer.” For example, an organization may not have a Chief Financial Officer. If thejob duties of the Senior Vice President of Financewere similar to those of a Chief Financial Officer,the Senior Vice President of Finance would beconsidered a “key” employee and the compensation of the Senior Vice President of Finance wouldneed to be disclosed. The “old” Form 990 wentbeyond the “C” suite of officers (CEO, COO, and,CFO). It considered individuals with control overthe organization’s activities or finances to be “key”employees. So, many healthcare organizationsneeded to evaluate whether other individuals, suchas the head of the medical staff, the top facilities(continued on page 10)7

Current and Future Issues Affecting GraduateSpeaker and program coordinator,Chris Francazio.Michael Rosenblatt, MD, spoke on the future ofundergraduate medical education, and the resulting considerations for academic medical centers.Research &EducationCommitteeCo-Chair,Joel Gardinerof Deloitte& Touche LLP,with speakerTerence Flotte,MD, andLisa Beittel,Associate toDr. Flotte.8Mass Media

and UndergradUndergraduate Medical EducationMay 16, 2008Members and non-members gathered on Maymetrics. In addition, attendees received the16th at the Doubletree in Westborough, Massa-“inside scoop” from the American Associationchusetts for Current and Future Issues Affectingof Medical Colleges.Graduate and Undergraduate Medical Education,The Research & Education Committee woulda program presented by the Research & Educa-like to thank the days’ esteemed speakers:tion Committee. This half day program helpedKaren Fisher, JD, American Association ofattendees gain a perspective on what is happen-Medical Colleges; Michael Rosenblatt, MD,ing with undergraduate medical education andTufts University School of Medicine; Ter-potential impacts on Graduate Medical Educa-ence Flotte, MD, University of Massachusettstion in the future. The program offered manySchool of Medicine; Kip Perlstein; Deloitteinsights on the latest regulatory trends and theirConsulting; Chris Francazio, Hinckley, Al-associated impacts, the impact of regulatorylen & Snyder; and J. Mark Waxman, Foley &issues on operations and finances, and leadingLardner. Their presentations and insight madepractice financial measurement approaches tofor a wonderful program. GME financial measurement and performanceThereʼs a Word That Describes WhatBeecher Carlson is Doing for Healthcare Risks. (continued on page 9) Issue 67

MANAGED CARE(continued from page 7)person, the person in charge of Information Technology, and, the leader of nursing, were “key”employees. The old definition worked just fine formost healthcare entities.The draft Instructions to the new 2008 Form 990released on April 7, 2008 define “key” employeesas persons with overall responsibilities for the organization as a whole, as well as certain personswho manage or have authority to control 5%or more of the organization’s activities, assets,income, expenses, capital expenditures, operating budget, or compensation for employees ifthe individual’s compensation exceeds 150,000(Emphasis added).6 As an example of the devil inthe details, there is a potential inconsistency in thedefinition of “key” employee. While the Highlightsto the Instructions state that “key” employees arethose who control “more than 5%,” Part VII of theInstructions states that “key” employees are thosewho control “5% or more.”7Financial Protectionfor Health Care ProfessionalsInsurance Medical Malpractice Business & Workers Compensation Health Insurance ProgramsFinancial Services Discounted Group Disability & Life New Physicians Retirement Program Deferred CompensationMedical Services Office SuppliesLaundry ServicesCommercial LendingEHR Financing800.522.7426www.piam.coma subsidiary of theMassachusetts Medical SocietyNow, 990 filers will need to review numerous additional job descriptions in light of the new, moreexpansive definition. While the 150,000 threshold for compensation should assist in narrowingthe positions to be reported and evaluated, we allknow that threshold amounts in the Form 990 arenot necessarily inflation adjusted, or adjusted oftenenough to keep pace with economic changes. So,while 150,000 sounds like a fairly large amounttoday – who knows whether 150,000 will be theequivalent of 50,000 in another decade.Complex Definition of an “Independent”Board MemberIn two separate places, the new form requires thefiling organization to state the number of “independent” voting members of the governing body. Atrustee is ‘independent” according to the Instructions released on April 7, 2008 only if four factorsare met throughout the tax year:1. The individual is not compensated as an officeror other employee (with an exception for thosewho are part of a religious organization andhave taken a vow of poverty).2. The individual did not receive total compensation exceeding 10,000 from the filing entityor from related organizations as an independent contractor. However, total compensationdoes not include expense reimbursements.3. The individual did not receive “materialfinancial benefits” from the organization or arelated organization. A transaction in excess of 50,000 is automatically a material financialbenefit.4. The individual does not have a family member that received compensation or other material financial benefits from the organization ora related organization.In addition, an individual will not lack independence solely because the individual is a majorcontributor (i.e. donor) to the filing organization.And, any benefits received in the ordinary courseof the organization performing its exempt purposeare excluded.One difficulty of the above test is the definition(continued on page 11)10Mass Media

MANAGED CARE(continued from page 19) support services. Except for this outsourcedportion of the EMR System, the use of, andaccess to, the rest of the EMR System that remains on the Buyer’s site would be expected tobe the same as with an On-Site EMR System.To the extent that any component other thanthe EMR software is in the possession of theVendor, the structure will be moving towardsthe below-described ASP Services model.tion that is necessary to support the portion ofthe Buyer’s healthcare services that is managedby the EMR System; and all of those components of the EMR System will be under theVendor’s control and accessed electronicallyby end-users in the Buyer’s offices. (Of course,the Buyer’s end-users will exert some controlover the data processing and related activitiesvia that remote access.)ASP Services: When the Buyer obtains theVendor’s services via an ASP Services model,the responsibility for the operation and maintenance of virtually all of components of theEMR System actually or figuratively will betransferred to the site of the ASP Services Vendor. That transfer will include the EMR software and other associated software, telecommunications equipment and servers, patientrecords and any other associated data/informa-In contrast to Hosting Services, in an ASPServices model, the Buyer is only purchasingservices from the Vendor. As a consequence,the software components of the EMR Systemdo not necessarily have to be licensed to theBuyer, because the software neither resides atthe Buyer’s facility nor is under the Buyer’scontrol. The exception to that licensing situation occurs when a “client” component of theEMR software, which enables the Buyer tocommunicate with the Outsourced EMR System, is distributed to the Buyer. In that case,use of the client software will be governed bya software license that probably will have tobe agreed to by each end-user in the Buyer’sorganization before the EMR software can beaccessed by an end-user. However, generallysome type of license that establishes the conditions for on-line access to the EMR software isassociated with the ASP Services model.Search resultsPhillips DiPisa style.IT Contract Terms that are uniquelyApplicable to Outsourcing TransactionsIn healthcare executive search, it's all about you.Your team. Your culture. Your choice of just theright executive. Our focus on you is why youshould look to us for your next search. Call DanPhillips or Ralph DiPisa today.(781) 740-9699www.PhillipsDiPisa.com20The contractual provisions discussedbelow address the fact that the responsibility forcertain elements of the Buyer’s EMR System andits related IT operations are no longer operated orcontrolled by the Buyer. In essence, these provisions describe the procedures that apply to the legal and operational relationship established by theBuyer and Vendor and, in addition, allocate various obligations and liabilities between the parties.It also is true that in many respects, an outsourcingrelationship more closely resembles a partnershipthan a typical vendor/buyer relationship, which(continued on page 21)Mass Media

MANAGED CARE(continued from page 20)may affect how the resulting relationship ismanaged.An example of how this different relationship isreflected in an outsourcing contract is demonstrated by the differences between the productwarranty usually offered by a software vendor andthe services warranty of an outsourcing servicesprovider. When software is licensed directly toan end-user, the license generally states that thesoftware will function in substantial conformitywith the product’s specifications or descriptiveliterature. If the software does not function as warranted, the accompanying remedy of repair/replacewill only be available to the licensee for a statedperiod of time, e.g., ninety (90) days, after deliveryof the software.While there may be specific performance obligations placed on a provider of outsourced services,as further discussed below, a vendor’s warrantyfor the performance of its services is less specificand is based on the application of a negligencestandard to the services. However, the outsourcingvendor’s services warranty will be in effect for theentire period during which the services are provided, not just the first ninety (90) days of the EMRsoftware’s operation.The following discussion is about the specific provisions that mostly are found only in contracts foroutsourced services. As a result of that limitation,this article will not address, e.g., confidentiality,indemnities for a third party’s claims of infringement of its Intellectual Property rights, choice oflaw or other like provisions that routinely wouldbe part of any IT transaction. Each of the belowcontract provisions is applicable in varying degrees to both Hosting Services and ASP Services. Ownership of Buyer’s Data: If the Buyer’s orits patients’ data or information (collectively,(continued on page 22)Issue 621

M ANAGEDC ARE(continued from page 21) customizeservicesto betterorassistthe opera“Data”), CMHCalso redesignedthe budgettectedby lawsand regulations(e.g., HIPAA),processlink thethe Vendordevelopmentof thebudgetresidestowithor a thirdpartyhiredmorecloselywiththeorganizationby theVendor,outsourcingstrategy.contract Tomustgether,Financeworkedtoprovidethat (i)andtheoperationsData is theleaderspropertyofdefinethe financialexpectedthe Buyer;(ii) the skillsVendoracquiresofnomanagers.ownerFinally,the managers’bonusprogramship rightsin that Dataor anyoutputwasfromrevisedtheto Vendor’sprovide aservicessystem ofthatincentivesincludes, foror isimprovedthe resultfinancialperformance.of, processingthat Data, unless that output alsoincludes the Vendor’s proprietary data; (iii)the Buyer has the right, which may have some conditions placed on it, to demand the returnIn ofCMHC’srealizingthe Dataexperience,within a timecertaintheandpotentialin a formof thatEnterprisePerformanceManagementrequiredis useable by the Buyer; and (iv) nation of the outsourcing relationship, tiof Data eitheris to beto thea yed, with an appropriate certification bydeterminedtheregap betweeninthe Vendorthat wassucha destructionhasmakingoccurred. Meeting the Challenge of Change(for over 25 years) ADVISORS TO HEALTH CARE MANAGEMENT availableand puttingit to useto make formationSecurity:At a minimum,the Buyerneedstogoodbusinessdecisions.CMHCengagein aninvestigationthat concludedis sufficienttheretoare assurethree essentialelementswhich an organizathe Buyerthat the toconfidentialityandtionsecuritymust attendwhen aimingto bydeployEnterobligationsimposedthe outsourcpriseingPerformancecontract andManagement.applicable Federal and Statelaws/regulationson anyData undercontrol First, create a singleversionof the ing a reliable Business IntelligenceVendor.The investigation also should proplatform.duce an understanding of the procedures that Second, develop a Performance Managementthe Vendor will employ to back-up and storesystem to focus operations leaders on aligningthe Data and any output from the outsourcedtheir efforts with key corporate strategies toservices, as well as the level of security thatimprove business performance. Use dashwill be applied by the Vendor to both the Databoards, scorecards and KPIs to provide usersand its other relevant obligations. Additionally,with all the information needed to make effecin today’s insecure environment, the process oftive decisions without being overwhelmed.obtaining and maintaining the appropriate level erformancedisaster contingenagementfrom theoryand potentialcyand urabledifferenceintheexecutionthe Vendor’s use of third parties to provide ofstrategyby addressingcriticalthird owledgeablepeople.Thebenefitof Entercan result in security gaps and other operaprise PerformanceManagementcan shouldonly bebetionalproblems. re in inconsulted regarding several of those mattersplacewhichassupportac-thisthisbullet,they areoperationsbeyond theleaders’scope ofcessanduseofthenewtools. Article.) Service Level Agreements (“SLA’s”): Asmentioned earlier, the warranty that the VendorAbout the Authorsis likely to provide for its outsourcing servicesShannonBanksunspecific,is ManagingbutPartnerof can closewill be hat gap by setting both standards for the Venwithto nceremediesif the Vendorbanksbellwether@gmail.comfails to meet those obligations. To be effective,however,the SLA’sincludea scheduleWayneBennettis Vi

The following Medal of Honor Award recipients were honored at the Annual Social and Awards Night on May 28th: Peter Leone, McDermott, Will & Emery; James Sulli