Jul 20 2016
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Agency Options for Hospital Finance Better than Ever

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Today is a good day to be an issuer in the bond market. With paltry returns available through government bonds and investment-grade paper, fixed income investors are reaching for yield and aggressively bidding for nearly all non-investment grade municipal bond credits, including hospitals. However, not all hospitals are a good fit for tax-exempt bonds. Restrictive covenants, transaction and borrower size, and cost of the issuance are a few factors that may make a public bond issue unfeasible. Fortunately, there is a low-rate, long-term, covenant-light solution. The U.S. Department of Housing and Urban Development (HUD)/Federal Housing Administration’s (FHA) Section (Sec.) 242 program and the U.S. Department of Agriculture’s (USDA) Community Facilities (CF) program both made significant capital contributions to hospitals during 2015. Further, each program made strides toward becoming more user friendly, specifically with HUD’s new loan documents and USDA’s emphasis on processes and uniformity. Until recently, the FHA Sec. 242 program used closing documents, covenant package and regulatory agreements that were created in 1973. This led to some of the terminology and legal concepts being outdated. The antiquated documents resulted in closing delays and additional costs, as a borrower and its lender counsel would have to negotiate changes to update and revise language. In 2016, HUD introduced a new set of documents that are expected to be finalized later this year. Although the documents do not introduce sweeping changes, much of the terminology and standard loan document provisions have been included. The changes should help alleviate the closing delays that…

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Apr 25 2016
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President’s Message

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As your 2015-2016 President, I have been honored to assist in leading the chapter to achieve great success in delivering value to our chapter members. The time, like most things, has passed oh so quickly and it’s truly hard to imagine that my leadership as President has come to an end. However, I have grown so much having been involved for so many years and plan to do so moving forward. The value one can gain within HFMA is sometimes unmeasurable from education, leadership skills and most importantly the ability to truly impact and be impacted by great relationships forged over time and life lasting. Our goal this year was to continue to build upon the foundation that previous leadership has engrained in each of us. The South Texas Chapter has done an incredible job in accepting all the changes we have undertaken this year to better enrich each members experience within HFMA. As I stated from the outset, we would be making significant changes to better serve our members with new locations, new website, new chapter administrative support with DeMarse Meetings, thought provoking education and most of all more FUN! Yes, we have met some challenges but the overriding fact remains you the membership like what we are doing and with each and every event it is reflected in your evaluations. The National Theme this year was, “Go Beyond”, and we have and continue to do that. Coming out of HFMA LTC this year the theme is, “Thrive”! I…

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Apr 21 2016
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Planning for the Unknown: Triple Aim

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“In preparing for battle I have always found that plans are useless, but planning is indispensable.” This quote attributed to Dwight Eisenhower is good advice for strategizing in an environment where one knows that the conditions will change. Such is the case with the future of revenue for health care providers in America. U.S. health care is a $2.9 trillion complex and adaptive system of entities including insurance companies, hospitals, pharmaceutical companies, medical equipment manufacturers, technology companies and increasingly more stakeholders. Until recent years, the federal government had largely been a reactive participant since the advent of Medicare. For many Americans, the system has worked relatively well, with the average consumer enjoying access to quality care, state-of-the-art technology and a fair amount of options. However, the Medicare system has some glaring flaws that make it unsustainable as the population ages. The primary flaws include the unacceptably large percentage of the population without insurance and costs growing much faster than the rate of overall inflation, which led to the adoption of the Patient Protection and Affordable Care Act (ACA). While the ACA aimed to accomplish several things, perhaps the single biggest long-term change was the creation of the Center for Medicare and Medicaid Innovation (CMMI). CMMI is intended to drive changes through new payment models and performance metrics. Currently, CMMI is testing innovative payment and delivery system models that show important promise for maintaining or improving the quality of care in Medicare, Medicaid and the Children’s Health Insurance Program (CHIP), while…

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Apr 12 2016
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Denials Management – Post ICD10

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A number of years ago, I wrote an article entitled “Denial Ain’t Just a River in Egypt”, and it was picked up by several State HFMA‘s and a national publisher. At the time it appeared to be spot on with advent of the HIPAA transaction file and a good attempt at standardization and how to start a Denial Program. As with every morphing technology, Denial management” became the catch-all phrase for any process that healthcare providers hoped could lead to cleaner claims, standardized denial codes, and fewer denials from third party payers. Then along came ICD10, the Y2K of coding. Well, to the payers surprise it was the Y2K of 2015 all over. The healthcare providers did the hard work of absorbing the extra cost of setting up their systems and processes, testing them, running in parallel and making sure the transition would be as smooth as possible. The sky did not fall thanks to the efforts of the healthcare provider. Today, still, denial management can be part of an entire electronic medical record/billing system, or it can be a “bolt-on” to an existing system, possibly a Web-based system that reviews claims and normalizes data, it can also be a manual, retroactive review of denied claims off an excel spreadsheet. It is most often paid for through the up-front purchase of software within the current system, from the billing software, or by contracting with a vendor for a bolt on product for a percentage of collections or fixed monthly fee….

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Jan 28 2016
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President’s Message

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Here we are once again, another year quickly passed and winter setting in. Holidays bring about a slower time to celebrate family, work, life in general and be thankful for what we have. During this time I always ask myself, how did we get here so fast, where did the time go, followed by, did I accomplish any or all my goals I set personally and professionally? I’m sure for most that’s a common theme within your work place or home as we all are busier than we used to be it seems. As I like to say, “Another day another opportunity”! The South Texas Chapter is hard at work on our calendar of events for 2016, wrapping up the final speakers and initiating the format for future events. We are excited about the future and what is being delivered to our membership. Our goals this year were to foster a more diverse offering of education, instill more fun/networking into the regional events and position the events within our membership region that allows for more of our colleagues to join us and experience the difference HFMA provides them in their careers. The Board of Directors recently met for our annual Mini-LTC in San Antonio to discuss how the chapter can better serve our membership, gauge where we are in delivering on our national and regional metrics. We identified a need for more social events involving not only your peers but your families. We see this as an integral part of…

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Jan 12 2016
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Long-Term Acute Care Hospitals: Can They Be Financed?

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Although long-term acute care hospitals (LTACHs) have been around for some time, they have historically been lost in the shuffle by financiers. While many may compare them to a traditional skilled nursing facility (SNF), there are several key differences which make it more difficult for LTACHs to obtain long-term financing. This begs the question; are there any consistent financing options for LTACHs similar to those in the skilled nursing sector? To determine the answer, we must first understand what LTACHs are and the factors which affect their financial health. LTACH Overview According to the American Hospital Association, LTACHs furnish extended medical and rehabilitative care to individuals with clinically complex problems that need hospital-level care for relatively extended periods of time.1 The major differentiation between LTACHs and SNFs is the type of care that is provided. LTACHs, much like a typical acute care hospital, provide care for more complex medical conditions than SNFs. In 2011, Medicare recognized LTACHs for the first time. In order for LTACHs to receive reimbursement, the inpatient length of stay must be greater than 25 days. The average length of stay for an LTACH is 30 days. Typical patients require prolonged ventilator use, ongoing dialysis, intensive respiratory care or multiple IV medications or transfusions, or complex wound care. Almost all LTACHs are licensed under the same criteria as an acute care hospital. There are some states in which an LTACH can be licensed as a “specialty hospital,” but Medicare will still certify the facility as an acute…

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Oct 28 2015
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President’s Message

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October has arrived which normally means cooler weather, shorter days and leaves turning those magical colors. “Not so fast”, to quote Lee Corso on ESPN during the Saturday Game Day show. Most of Texas has experienced excessive rain fall in the spring, extended heat this summer met with lack of rain, drought conditions and most recent in North and Central Texas, flooding rains again; meaning I still have to mow the yard! Slow to come but I think fall is finally upon us!! As we all know fall normally signifies football and I have noticed a trend that most conversations, business and personally start with something about our little league team, our college team and or our favorite pro team on what happened that weekend or what will happen in the next game (basic trash talking). I recall in my travels this summer seeing team shirts on fans 6-8 weeks out from the season with anticipation of great things to happen. As I reflect on what I just said it reminds me of today’s healthcare; expecting one thing and getting another. Uncertainty of what tomorrow will bring, how will we cope, can we survive the storm, what will it look like when its passed…..my friends I don’t know that anyone has the complete answer but what I do know is that we are blessed to live in a great nation and a great state that can and will survive whatever storm you may encounter. National HFMA & the South Texas…

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Oct 19 2015
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Getting to the Essentials in Evaluating Value/Risk Contracts

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By Debra L. Ryan and Andrew S. Cohen Transition of the nation’s healthcare system toward a value-based business model requires healthcare providers to move toward value-based contracts and care delivery models. Twenty-two percent of hospital and health system leaders anticipate such contracts will constitute 50 percent or more of their payment arrangements within 24 months, up from 7 percent of those leaders six months ago, according to a recent Kaufman Hall survey. Under many value-based contracts, organizations accept greater financial risk by agreeing to deliver defined services to a specified population at a predetermined price and quality level. Organizations must develop a contracting and corresponding care delivery strategy that involves careful planning, skills development, and a phased approach. Thorough assessment of contracting options and specific contracts is essential. Identifying best-fit contracting options Evaluating risk- and value-based payment arrangements involves weighing organizational resources, capabilities, and goals against contract terms, including potential risks and rewards. Executives must be able to articulate the organization’s short- and longer-term goals, and its most appropriate role in the emerging population health management environment. Examples include an integrated delivery system suited to be a “population health manager” responsible for the full care continuum, a regional provider best positioned to maintain a clinically integrated delivery network of defined scope as a “population health comanager,” or a community hospital that will be part of a network managed by a population health manager or comanager. Healthcare leaders should assess the hospital’s or health system’s care delivery model and network, and…

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