NJ Physician Magazine October 2013

JULY 2013 2012 OCTOBER Visit us now online at

www.NJPhysician.org

East Coast Advanced Plastic Surgery

Experts in Every Facet of Breast Reconstruction Who Are Restoring Much More for Their Breast Cancer Patients Also In This Issue: Investing in Health Care Facilities Providers Threaten Lawsuits Special Feature: Dana Holwitt, MD – Breast Surgeon and Patient Game Changing Technology for Forward-Thinking Surgery Centers

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Publisher’s Letter Dear Readers,

Published by

Welcome to the October issue of New Jersey Physician, the only publication serving the state’s medical community. On October 1, the Affordable Care Act began to sign up members to the exchange.

As in any new venture, there are some bugs to be corrected, but the jury is still out regarding the overall numbers of people who were able to work their way through the website and actually sign up. We are supposedly going to receive the initial numbers in early November.

Co-Publisher and Managing Editors

Some people are questioning how to make money in medicine.

Others are finding new avenues for profit. With that, I offer you “Investing in Healthcare Facilities”. Despite high fixed costs and increasing competition, hospitals have shown steady historical growth, in part because of government assistance through legislation. The stock prices in this sector have produced five year CAGR of 13.6% compared to the S & P 500 at 10%, according to a report published by Bank of America.

Lani M. Dornfeld

One room ORs in your office are not entitled to charge facility fees.

This decision, brought down by the Third Circuit court has made this determination which has been a significant revenue stream for many practices. I suggest you discuss this with your attorney to see if there is a way to charge fees legitimately.

Beth Fitzgerald

October has, for the past 10 years, been our Breast Cancer Awareness issue. Many times we have profiled various medical center programs including breast surgery and breast oncology. This year we offer East Coast Advanced Plastic Surgery to show what can be done post mastectomy. When we first sat down with Drs. Loghmanee, Cerio and Chalfoun, we asked these board qualified surgeons what they would like to feature in their cover story. Unanimously, they said they wanted to show the most advanced methods that are available to patients in post mastectomy breast reconstruction. In fact, the focus of their practice is to help patients return from disfigurement whether it be from breast surgery, burns or malignancies. Their devotion to their patients is quite noticeable, and the service they offer patients has earned them our highest respect. Their work is cutting edge and the results are just as wonderful for patients emotionally as they are in restoring physical appearance.

With warm regards,

Michael Goldberg Co-Publisher New Jersey Physician Magazine

Montdor Medical Media, LLC

Iris and Michael Goldberg

Contributing Writers Iris Goldberg Michael Goldberg Andrew Kitchenman Beth Kutscher Kevin M. Lastorino

John D. Fanburg Carol Grelecki Mark Manigan Debra C, Lienhardt Sidhu Sundar Susan K. Livio Maryann Brinley Sergio Bichao

Joe Macies Joshua Alston Don Babwin Layout and Design - Nick Justus

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

No part of this publication may be reproduced or transmitted in any form or by any means without the written permission from Montdor Medical Media.

Copyright 2010.

Subscription rates: $48.00 per year $6.95 per issue Advertising rates on request New Jersey Physician magazine is an independent publication for the medical community of our state and is not a publication of NJ Physicians Association

Contents

East Coast Advanced Plastic Surgery

4

Experts in Every Facet of Breast Reconstruction Who Are Restoring Much More for Their Breast Cancer Patients CONTENTS

10

Finance

25

University Hospital

12

Statehouse

26

Hospital Rounds

14

Medicare

16

29

Rutgers

Health Law Update

18

30

Amkai

Insurance Marketplace

32

Legal News

33

MacArthur

34

Food For Thought

20

Obamacare

21

Special Feature

23

Obamacare

2 New Jersey Physician

Talk to Bollinger about your Professional Liability …

Before entering this room.

• • • •

BROAD COVERAGE FORMS FINANCIALLY STRONG INSURANCE COMPANIES ADVANCED RISK MANAGEMENT SERVICES AND STRATEGIES HIGHLY COMPETITIVE PRICING

With one of the largest professional liability divisions in the region, Bollinger has the expertise and resources to help ensure that your liability threats are properly addressed.

To learn more about how Bollinger can help your practice, contact Brian S. Kern, Esq. 973-921-8497 or Brian.Kern@Bollinger.com

www.Bollinger.com/pro Coverage is subject to meeting eligibility requirements and company approval.

Cover Story

East Coast Advanced Plastic Surgery Experts in Every Facet of Breast Reconstruction Who Are Restoring Much More for Their Breast Cancer Patients surgical photography by Michael Goldberg

By Iris Goldberg Hopefully, someday in the not too distant future October will be known only as the month of pumpkins, autumn leaves and Halloween. For now, though, as Breast Cancer Awareness Month, October is still the time when we redouble our efforts to educate women about the importance of screening for breast cancer. The most recent statistics* indicate that in 2013, there will be 232,340 new cases of invasive breast cancer among women in the United States. Also in 2013, there will be 39,620 breast cancer deaths.

While we have not yet been able to eradicate breast cancer, the good news is that with advances in diagnosis and treatment and a heightened public awareness, more breast cancers have been found at earlier stages, when chances of survival are highest. Also, younger women who might be genetically predisposed are being tested to learn if they have inherited the BRCA gene mutation.

Many who test positive are undergoing prophylactic mastectomies.

Whether a patient has already been diagnosed with invasive breast cancer or is found to be BRCA mutation positive, the reality of having one’s breast(s) surgically removed is harsh, to say the least. Of course, unlike 50 years ago when mastectomy meant permanent disfigurement, since the mid1960s when implants were developed, methods of breast reconstruction have been continuously evolving. Still, just confronting cancer is a significant challenge. Having to deal with breast removal and reconstruction in addition can be overwhelming to even the bravest among us.

At East Coast Advanced Plastic Surgery (ECAPS), the physicians prioritize the importance of recognizing and addressing the emotional overtone

4 New Jersey Physician

The physicians and staff of East Coast Advanced Plastic Surgery of breast cancer. Cyrus Loghmanee, MD, Dean R. Cerio, MD and Charbel T. Chalfoun, MD spend hours consulting with their breast reconstruction patients pre-operatively in order to answer any and all questions and to discuss whatever concerns an individual might have. Whether undergoing mastectomy or lumpectomy, patients want to understand and feel comfortable with all that will be involved. Especially since often, the extent of the cancer is not definitely known until the sentinel node biopsy has been completed at the time of surgery, it is necessary for the physicians to carefully explain all of the potential reconstruction options.

If pre-operative testing and the information from the breast surgeon that will be performing the mastectomy indicate that the cancer is aggressive and/or if the sentinel node biopsy is positive, radiation will most likely be used to destroy any remaining cancer cells after mastectomy. It is crucial for those patients to understand that the radiated tissue will need to heal somewhat before the entire reconstruction process can be completed. Also, the surgeons at ECAPS want patients to understand how radiation can affect each of the reconstruction options so that they can make an educated choice. *Provided by Susan G. KomenÂŽ

The extent of cancer is not definitely known until the sentinel node (shown here) biopsy has been completed.

Even for those who will not require follow-up treatment and women who are having prophylactic mastectomy, it is still imperative for them to understand all of the possible options. In this way they can make the choice that is best-suited for their own particular needs and desires.

“I can’t stress strongly enough, the importance of the pre-surgical consultation,”Dr. Loghmanee says.“Patient education about the reconstructive process takes a long time because there’s a lot of information for them to take in,” he adds.

Dr. Loghmanee goes on to reveal that many times, because of their anxiety level after just receiving a diagnosis of breast cancer, patients will not absorb all that has been discussed. “That’s why we are very personal with our patients.

They have our cell phone numbers. They call, they text or they e-mail. However they communicate, we make sure to get back to them with the answers to their

The waiting room at ECAPS Hoboken location overlooks the Hudson River with views of the Manhattan skyline. questions,” he informs.

Next to their immediate worries about surviving breast cancer, patients are most concerned about the financial burden of breast reconstruction, as Dr. Loghmanee shares. “We have to do everything we can to calm them and reassure them that no matter what their situation, we are going to help them,” he firmly states.

Office manager Alina Pierce is an integral part of this process. She sits with patients to answer their questions and discuss any concerns. Her caring and compassionate demeanor goes a long way to help ease their fears.

Referring to legislation enacted during the Clinton Administration Dr. Loghmanee cites the right of every woman undergoing a mastectomy to have any and all options of reconstruction covered by insurance.

Unfortunately, as most surgeons know only too well, insurance companies rarely pay enough to compensate for the time spent, especially during the more complex procedures. The most advanced and innovative method of breast reconstruction available today , in which Drs. Chalfoun, Loghmanee and Cerio have extensive sub-specialty training and expertise, is microsurgical and takes at least eight hours to perform.

It is the hope of the physicians at ECAPS that with the implementation of the Affordable Care Act coinciding with Breast Cancer Awareness Month, the situation will not deteriorate further but rather, improve, even though things seem rather unsure at this point in time. Regardless, Dr. Loghmanee emphasizes the mission at ECAPS never to turn a patient away because of financial obstacles and reiterates the importance of treating every patient with dignity and compassion.

Drs. Chalfoun, Loghmanee and Cerio planning an upcoming breast reconstruction procedure.

Dr. Cerio and Dr. Chalfoun are of the same mind. In fact, all three surgeons share the philosophy that patients should be treated as one would treat a family member. “I think what distinguishes us is that we have a lot of positive energy October 2013

5

that we express in a very familial fashion amongst ourselves and we pass that along to our patients,” Dr. Chalfoun offers.

“We treat our patients like family and we really want the best for them.”

Dr. Cerio adds, “I think, in quite simple terms, what sets us apart is our philosophy. It’s one thing to have a philosophy and another to implement it. We have no trouble implementing our philosophy because we truly believe in it. We live it. We practice it and it comes through to our patients. Once we do meet a patient, I think that our passion for this type of work and for the patient’s well-being shows through,” he emphasizes.

With offices in Hoboken, Englewood, Chatham and Pompton Plains and affiliations with several of the state’s major hospitals and medical centers, the physicians at ECAPS specialize in all types of cosmetic and reconstructive surgery (see Fig.1).

In terms of breast reconstruction, Drs. Cerio, Chalfoun and Loghmanee strive to help each patient regain her own sense of wholeness by tailoring an individualized breast reconstruction plan that suits her particular goals and preferences. Also, the stage and location of her cancer is taken into consideration. There are several reconstruction techniques that can restore the breast to near normal size, shape and appearance. The surgeons of ECAPS have advanced training and expertise in each.

Originally introduced more than five decades ago, implants are still a popular option amongst breast reconstruction patients. The most significant advantage of implants is that both surgery time and recovery time are shorter than with other methods of reconstruction. The procedure is relatively simple. After mastectomy has been performed, an implant that serves as a temporary tissue expander is placed in the envelope formed by the skin and pectoral chest muscle. Over several months the implant is slowly filled with saline to allow the surrounding tissue to expand. This can be somewhat uncomfortable for the patient. Once the correct size is achieved the tissue expander is replaced with a permanent implant during another surgical procedure.

There

are

some

6 New Jersey Physician

disadvantages

Fig. 1

ECAPS PROCEDURES Body Scalp Reconstruction

Nose Surgery – Rhinoplasty

Vascular Lymph Node Transfer

Neck Lift

Chest Wall Reconstruction

Lip Augmentation Injections

Abdominal Wall Reconstruction, i.e. massive hernias, cancer resection

Chin Surgery

Perineal Reconstruction, i.e. urologic cancer reconstruction, rectal cancer reconstruction Lower Extremity Salvage, for trauma and cancer victims

Ear Surgery Fat Injections / Fat Grafting Facelift Surgery

Breast

Upper Extremity Salvage

ECAPS Center for Breast Reconstruction

Hand Surgery, including Microsurgery

Nipple Reconstruction Breast Reduction

Spinal and Ortho Hardware Soft Tissue Coverage

Breast Augmentation

Tummy Tuck Surgery – Abdominoplasty

Breast Lift Surgery – Mastopexy

Body Contouring Surgery

Male Breast Surgery – Gynecomastia

Arm Lift Surgery – Brachioplasty

Breast Augmentation Revision Surgery

Liposuction Surgery Liposuction and Tummy Tuck Labiaplasty

Face

Breast Asymmetry Correction Surgery

Skin Skin Cancer Excision and Reconstruction Mohs Reconstruction

Facial Reconstruction

Laser Hair Removal

Maxillo-Facial trauma

BOTOX® and other Injectables

Brow Lift

Dermabrasion

Eyelid Lift – Blepharoplasty

associated with implants. Even though the procedure itself is least invasive, the process takes months to complete, requiring the patient to return at regular intervals and then having to undergo a second surgery. Also, the results are less natural than with reconstruction methods that use the patient’s own tissue.

Finally, implants are more likely to cause complications, especially if the woman has undergone radiation therapy as a follow-up to her mastectomy.

Of course the surgeons at ECAPS have much experience with implants and go to great lengths in order to minimize any difficulties. In fact, they share that excellent results can be obtained but again, Dr. Chalfoun, Dr.Loghmanee and Dr. Cerio want their patients to understand the possible pitfalls before they decide and also to have a realistic expectation of how the breast reconstructed with an implant will appear.

The pedicled TRAM (Transverse Rectus Abdominus Myocutaneous) flap is more

complicated than reconstruction with implants. The procedure involves taking portions of skin and fat from the lower abdomen but leaving them connected to part of the abdominal muscle and its blood supply. The flap of tissue is then transferred under the upper abdominal skin to the mastectomy site in order to create the new breast.

While it is more natural to use the patient’s own tissue, the major downside of this procedure is that the abdominal muscle is sacrificed, which can lead to abdominal wall morbidity and possible hernia. Also, the fact that the flap remains tethered to the abdominal muscle, limits the distance and therefore the accuracy of its placement.

Somewhat similar to the pedicled TRAM flap, the free TRAM flap takes skin and fat from the lower abdomen but uses less abdominal muscle. The blood supply to the abdominal skin and muscle is temporarily cut and reattached to blood vessels in the chest, closer to the breast.

Dr. Chalfoun prepares the breast after mastectomy for an expander to be placed.

Drs. Cerio, Chalfoun and Loghmanee use the microsurgical techniques in which they have received advanced training in order to perform this procedure, which allows for better shaping of the abdominal tissues and more accurate placement. The new breast has a more natural appearance than the one created with the pedicled tram. Unfortunately, because a portion of the muscle has been sacrificed, abdominal wall morbidity is still a concern.

preserving as many nerves as possible so that the muscle will remain functional. A map of the blood vessels in the abdomen that has been obtained pre-operatively with MRI or CT angiography helps to guide the surgeons as to which vessels to choose.

It is important to note that Drs. Chalfoun, Loghmanee and Cerio have expertise in other muscle-sparing breast reconstruction techniques that can be employed when the patient’s abdomen is not an appropriate donor site. These include:

Once the DIEP flap is raised, the surgeons employ their microsurgical skills to transplant the tissue to a recipient set of blood vessels on the chest wall. The tissue is then used to create the new breast shape. The abdominal wall is repaired, leaving the muscle totally intact. The DIEP flap, which can take eight hours, or more is only offered by a small group of plastic surgeons in the New Jersey area who have been trained in the advanced microsurgical skills needed to perform this procedure.

• PAP (Profunda Artery Perforator) flap - utilizes the tissue of the posterior thigh.

The PAP flap has vigorous and lengthy blood vessels that allow for versatility in choosing reattachment vessels at the mastectomy site.

The distinct advantages of the DIEP flap are sparing of the abdominal muscle and a new breast that has a more natural appearance and feeling than with other breast reconstruction methods. This is because the microsurgical procedure allows a large amount of tissue with a direct blood flow to be transplanted. The resulting tissue is extremely viable and can be better shaped than flaps produced with other methods. Also important for patients to consider, is that after radiation has been completed, the DIEP flap will be extremely well-tolerated by the radiated tissue.

• ALT (Anterolateral Thigh) flap - from the exterior thigh, above the knee offers a donor site with a large amount of soft, supple fat and skin.

• TUG (Transverse Upper Gracilis) flap - harvested from the upper inner thigh.

Tissue in this area is typically soft and supple and therefore, conducive to breast and nipple reconstruction.

• GAP (Gluteal Artery Perforator) flap uses excess skin and fat from the gluteal (buttock) region. Like the DIEP flap, all of these techniques leave the muscle in place to preserve function.

In the rare situation when none of the afore-mentioned flaps are appropriate, as a last resort, the surgeons at ECAPS can use the Latissimus Dorsi flap in which the latissimus dorsi muscle (a small portion of skin and fat) is moved from the back to the mastectomy site. Then, a tissue

Whenever possible, if the patient is in relatively good health and has enough abdominal fat, the surgeons at ECAPS much prefer to use the DIEP (Deep Inferior Epigastric Perforator) flap, which is the most innovative breast reconstruction technique available today. Working together as a team, the three surgeons make a “tummy tuck” type incision to remove the abdominal skin and fat without harvesting any of the rectus abdominus muscle.

Instead, blood supply is provided through the perforator vessels that are carefully eased out from the rectus muscle through an incision, sparing the musculature and

After mastectomy has been performed, an implant that serves as a temporary tissue expander is placed in the envelope formed by the skin and pectoral chest muscle.

October 2013

7

Dr Loghmanee (left) and Dr. Cerio (right) performing the DIEP flap procedure, removing abdominal skin and fat while sparing the musculature. expander is placed under this muscle and tissue and is filled with increasing amounts of saline over a period of weeks, in order to allow the surrounding tissues to slowly expand to the desired size.

After that has been completed, the tissue expander is replaced with a permanent implant.

reconstruction tattoo artist comes in to complete the process for a finished product that is most aesthetically pleasing. For ECAPS patients, who for whatever reason, do not wish to undergo nipple reconstruction, the tattoo artist can create a 3-D nipple and areola tattoo that looks astonishingly real.

Whichever method of reconstruction a woman ultimately has, she also has the option of undergoing nipple and areola reconstruction. This stage of the reconstruction process is undertaken when the new breast(s) is appropriately healed and both the patient and ECAPS surgeons together are happy with the appearance (size, symmetry, shape, etc.).

The nipple is reconstructed by using the native skin of either the abdominal (or other) flap or breast. The skin is rearranged to produce a small mound that is reminiscent of a protruding nipple.

Certainly, for the post-mastectomy woman, having new breasts artistically created by the expertly-skilled microsurgeons at ECAPS is lifepreserving beyond defeating cancer. No matter her age, socioeconomic status or relationship situation, her ability to look in the mirror and see herself as a “whole” woman – as she was before cancer – has a value that cannot be measured. For Dr. Loghmanee, Dr. Chalfoun and Dr. Cerio, the satisfaction they derive from restoring these women, physically and emotionally is immeasurable as well.

When that has healed the final step is nipple and areola tattooing. The surgeons at ECAPS work with the patient to help her choose the correct pigmentation for her skin type. They look at photos from before her surgery in order to decide upon the most natural-looking nipple for her. Then a professional breast

8 New Jersey Physician

In fact, when asked, each of the surgeons cites the desire to positively impact people’s lives as the primary reason for choosing to specialize in plastic surgery. Besides breast reconstruction, the physicians at ECAPS use their surgical skills to perform reconstructive procedures on all areas of the body (Fig. 1). Also, pioneering innovative

techniques that build upon the ways in which they can help restore quality of life is a major priority.

For example, some women develop lymphedema after breast cancer treatment. The surgeons at ECAPS are the first in northern New Jersey and possibly in the entire state, to offer Vascularized Lymph Node Transfer (VLNT), a specialized microsurgical technique that helps treat patients with this disabling condition.

Besides the extensive specialized training that all three of the surgeons at ECAPS has received and the innovative work they do to help so many individuals overcome a myriad of life-altering conditions, what distinguishes East Coast Advanced Plastic Surgery and sets it apart are the physicians, themselves. Three vibrant contemporaries, who share the same passion for their specialty and for what they are able to accomplish have become so much more than colleagues. They are truly best friends who undoubtedly will continue to strive together for excellence in all they do for many years to come.

For more information or to make an appointment please call (201) 449-1000 or visit www.ecaplasticsurgery.com

October 2013

9

Finance

Investing In Healthcare Facilities

The healthcare facility industry includes hospitals, ambulatory surgery centers, long-term care and other facilities such as psychiatric centers. Many of the performance drivers are the same for the group as a whole, although hospitals face some unique challenges – they operate in a high fixed-cost environment with profit-loss centers such as emergency rooms that cannot turn away patients and thus rack up bad debt expenses. Surgery centers and long-term care have for-profit business models that have lower fixed costs and negligible bad debt.

Uniqueness of Hospitals Despite high fixed costs and increasing competition, hospitals have shown steady historical growth in part because of government assistance through legislation. Since most U.S. hospitals are not-for-profit and in rural settings where the hospital may be the only source of medical care for many miles around, the government has an unwritten obligation to ensure they are financially able to operate. Medicare reimbursement rates tend to be high enough to ensure most hospitals stay afloat, creating a downside buffer for publicly traded hospitals.

Therefore, any hospital that can maximize its profits by running efficiently through cost controls and garner market share by offering a better service and product (orthopedics, cardiac services and more renowned doctors) can grow faster than its peers. Over the past decade, hospitals' two-year EBITDA CAGR has been 10%, which is an extremely steady and strong growth over a full economic cycle.

Important Investment Metrics The stock prices of companies operating healthcare facilities are primarily driven by the Medicare reimbursement level. When Medicare makes changes to its payments, it often impacts profits and share prices to a greater degree than expected, both on the upside and downside. Other drivers include (data quotes are from Bank of America Merrill Lynch's report in April 2013): • Volumes or occupancy, which in the long run are tied to population growth plus demographic shifts, but also depend on the competition level. Historically, hospital volumes have shown growth of about 1-2%, but it is now closer to 0-1% because competition (surgery centers and long-term care) are stealing volumes. Some hospitals are now at risk for failing. As a result, the federal government has enacted laws that do not allow new outpatient faciliites to be built so that competition decreases.

• Pricing that insurance companies pay hospitals for patient services, also called commercial pricing (non-government health insurers), which is based more on market trends than government budgets and is negotiated between each hospital and insurer.

Historically, commercial pricing has seen about 5-7% annual growth.

• Cost growth - the largest components are labor and supply costs, and a hospital’s ability to contain them.

• Capital deployment in the form of acquisitions. Hospitals are high free cash flow businesses, and they usually go through acquisition cycles by employing their free cash flow plus leverage. Hospitals are not scalable, so investors should look for companies that buy underperforming assets in good locations (positive demographic/population) and where improving operational efficiency can increase margins. Acquisitions tend to be positive for stocks in the long run as margins improve. However, investors should be wary when companies make acquisitions to increase growth because the growth in their current facilities has slowed.

• Bad debt, which is the amount of uncollectible bills that hospitals write off from uninsured or under-insured patients. This tends to be a negative risk for stocks, because investors perceive bad debt as more negative to profitability than it actually tends to be, resulting in a downside risk to stock prices. Bad debt historically has shown 8-10% growth, but healthcare reform should mitigate it somewhat.

Decision Making When deciding whether to invest, the following should be considered: • Is the sector attractive? Prior to investing in healthcare facility stocks, investors need to determine if the regulatory environment will be positive. These stocks are subject to a tremendous amount of risk anytime the media reports on Medicare pricing changes - some of which impact a companies’ profits and some that impact from a purely psychological standpoint. For example, on Aug. 15, 2013, Medicare announced a reimbursement rate below expectations - an increase for 2013-14 that will only be 0.7% versus the expected cost increase of 2.5%. Community Health Systems (NYSE:CYH), one of the largest public hospital groups, saw its stock fall 5.9% on the day of and the day following the announcement.

• Following a positive sector call, the next step is to determine which type of facility is attractive. Of all the publicly traded healthcare facilities, hospitals have the largest market cap and offer the greatest number of stocks to choose from. The decision may not be an all-or-none choice. For example, if Medicare rates are expected to rise greater than expected, then investing in a hospital and long-term care facility may be prudent. The decision should also be based on expectations for competition levels and the expected regulatory environment (e.g. moratoriums on new builds for ambulatory surgery centers, etc.).

• Once the type of facility is chosen, then a deep dive into the individual names is required. Facility location is crucial to occupancy. If

10 New Jersey Physician

a facility is located in an area where population growth is expected to be greater than average due to migratory trends (immigration, baby boomers moving south, etc.), then those facilities should exceed the expected average volume growth of 0-1%. In addition, if the higher volumes are expected to result in more profitable procedures (cardiac or orthopedics), then the profit per volume growth will push EBITDA growth above the average. It is important to also note whether the volume growth will result in higher uninsured patients, potentially causing bad debt to increase above the average 8-10% level, resulting in a negative impact on profits. • Finally, the strength of the management team should be considered. Insight into successful acquisition strategies, ability to contain costs through prudent cost controls and the foresight to build or improve facilities are keys to a successful long-term investment.

Valuation Determining whether the stock is attractively priced is the final step. Healthcare facilities' stocks are best valued using an enterprise multiple metric. This is the preferred metric because it adjusts for leverage, which can be high during a strong acquisition cycle and for depreciation and amortization, which are impacted by building/real estate. Historically, hospital stocks have traded in an EV/ EBITDA range of 5.5-9.0. If using a price-to-earnings (P/E) multiple to compare against other sectors, the historical average P/E for hospital stocks has been 14.1, and in a range of 10-20. Valuation for long-term care and ambulatory surgery centers has been on a stock-by-stock basis since very few public companies are in each subsector. Any stock identified as being an attractive investment and trading below the average or outside the range should be considered a buy.

The Bottom Line Healthcare facilities can provide attractive investment opportunities. The stock prices in this sector have produced a five-year CAGR of 13.6% compared to the S&P 500 at 10%, according to a report published by Bank of America Merrill Lynch Global Research in April 2013. There are many key drivers, some of which are out of the companies' control. However strong fundamentals, including operating efficiency, should allow taking advantage of the key drivers. Medicare reimbursement is critical, as well as expected and actual volumes, bed occupancy rates and the competition level. EV/EBITDA is the preferred valuation metric and should be used to compare companies to find undervalued opportunities.

October 2013

11

Statehouse

NEW JERSEY

STATEHOUSE State Board Won't Let Doctors Work for Hospital-Owned Corporations

Andrew Kitchenman

Hospitals argue change is needed to ease integration with practices, but board members see variety of pitfalls The State Board of Medical Examiners has rejected a request to allow doctors to be employees of hospital-owned corporations that aren’t headed by doctors.

The board decision yesterday reinforced a long-standing rule in New Jersey that doctors and other healthcare professionals generally cannot work for corporations, because they may feel pressure to put financial considerations ahead of patients’ interests.

New Jersey doctors currently can be employees of hospitals as well as practices that are owned by physicians.

The issue could become a lasting source of conflict, as hospitals continue to look to buy a wide range of physician practices.

The New Jersey Hospital Association had petitioned for a change to the state regulations, saying it was needed to ease the integration of practices into hospitals.

But board members raised a variety of concerns with the proposal, saying that it could interfere with state regulators’ oversight of medical professionals.

Dr. Sindy Paul, a board member, said she was concerned that allowing doctors to work for corporations that aren’t under the oversight of the board could affect the quality of care offered.

“My concerns are along the lines of being able to protect the public,” Paul said, citing as an example the potential effect on setting the correct procedures for disinfecting medical instruments.

Paul also expressed concern that the change could affect compliance with federal and state laws that bar doctors from referring patients to services in which the doctor has a financial interest. In addition, both Paul and board President Dr. George Scott also said they wanted to ensure that doctors upheld their responsibility to provide care for indigent residents.

“We don’t want to have people who need medical care who have their access limited,” Paul said.

Scott was also troubled by the potential effects of anti-competitive practices in areas where a single hospital system dominates healthcare.

State Department of Banking and Insurance official Carol Miksad added her department’s concern about complications that could arise for patients when doctors and hospitals belong to different insurance networks.

The rule change would help in the leadership transitions of practices that are now owned by hospitals, according to Elizabeth Christian, an attorney with Red Bank firm Giordano, Halleran & Ciesla, who represented the association at the hearing.

Christian added that the proposed change was crafted to ensure that doctors would continue to control medical decision-making at the practices. She also expressed doubt that non-physician hospital officials would put doctors in a position where they could lose their licenses by not following correct medical practices.

But the arguments were soundly rejected by the board, which voted 14-1 against the proposal.

Hospital association spokeswoman Kerry McKean Kelly expressed disappointment with the vote, saying in a statement that the request was modeled on the structure used by the Minnesota-based Mayo Clinic.

“The existing regulation does create some hurdles for the continued integration of physicians and hospitals and their efforts to improve healthcare value through better coordination,” McKean Kelly said. “But I'm sure those integration efforts will continue regardless -- it clearly is the new model of providing healthcare services.”

12 New Jersey Physician

The state regulation is one of many adopted around the country to prohibit what is known as the “corporate practice of medicine.”

These rules started after a 1938 Pennsylvania state Supreme Court decision that barred the Gimbels department store from employing optometrists, ruling that corporations can’t fill the role of a medical professional.

“There is a fear or concern by the courts that if you have physicians being employed by entities other than hospitals where the entity is owned by non-physicians, the focus is going to be more on the profit motive than the health interests of the patient and thereby compromising the patient’s best interest, potentially,” said Bill Weiner, a lawyer specializing in health law for the firm Duane Morris.

Weiner noted that there are some arrangements in which doctors work in clinics in retail stores, such as pharmacies, by exploiting loopholes in the New Jersey regulations.

Weiner, a partner in the firm’s Cherry Hill office, said the Affordable Care Act and other developments in healthcare are going to increase the pressure to change the rule.

“In the healthcare environment that we’re living in, especially with Obamacare, bigger is better and there are more and more hospital acquisitions of physicians practices,” Weiner said. This is putting pressure on doctors who largely practice in hospitals, such as cardiologists and surgeons.

Visit us now online at

www.NJPhysician.org 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

October 2013

13

Medicare

Providers threaten lawsuits Advantage plans pass along 2% sequester rate cuts

By Beth Kutscher Healthcare providers are threatening to sue insurers that pass along a 2% rate cut imposed on their Medicare Advantage plan payments under the federal budget sequestration law.

Hospitals, physician groups and post-acute care providers accuse the Medicare Advantage plans of breaching contracts by unilaterally reducing payments. They are considering legal action by the end of this year to block the cuts, said attorneys who represent provider groups. Federal spending on the Medicare Advantage program totaled about $135 billion last year, so the dispute is over 2% of a large pot of money.

“The mere fact that premium payments have been reduced to health plans does not mean that payments to hospitals should be reduced by MA plans, unless contracts allow it,” said Jeffrey Gold, vice president of managed care and special counsel to the Healthcare Association of New York State. His association wrote an August letter signed by 17 state hospital associations asking the CMS to confirm that it did not intend for insurers to pass along the sequestration cut to providers.

Brian Foley, an attorney at Schenck, Price, Smith & King who is representing New Jersey providers on this issue, estimated that at least two-thirds of Medicare Advantage plans in that state are trying to pass along the rate cut, including plans operated by UnitedHealth Group and Aetna. “It's pervasive,” he said.

Medicare Advantage insurers say they have to pass along the cuts because they're increasingly squeezed by reduced payments because of sequestration and Medicare spending reductions included in the Patient Protection and Affordable Care Act. Kendall Marcocci, a spokeswoman for Aetna, said plans have reduced payments to providers “where contractually allowed.” She added that “providers reimbursed on current-year Medicare allowable rate fee schedules are subject to the same reduction required under sequestration.”

UnitedHealth did not respond to a request for comment. But in a quarterly earnings filing with the Securities and Exchange Commission, the company said it has reduced provider reimbursement “for those care providers with rates indexed to Medicare Advantage revenue or Medicare fee-for-service reimbursement rates.”

In its quarterly earnings filing, UnitedHealth estimated that the sequestration cut to Medicare Advantage payments will result in about $250 million to $300 million in lost earnings for the full year. The company currently has 2.9 million Medicare Advantage members, up 17% over the previous year.

But hospitals say they face their own payment squeeze from Medicare and private-sector payers. They cite May guidance from the CMS that they say demonstrates that the sequestration cuts were intended for the insurers, not providers.

The CMS memo said Medicare Advantage plans should review their individual contracts to determine how sequestration would affect payments. Hospitals interpreted that as a sign that the plans could not automatically pass along the cuts.

While providers await a response from the CMS to the August letter, “their only other alternative is litigation,” Foley said. With so many hospitals across the country reporting similar issues, hundreds of millions of dollars could potentially be at stake, he added.

About 14.4 million people, or 28% of Medicare beneficiaries, are currently enrolled in Medicare Advantage plans, and participation has more than doubled since 2006, according to the Kaiser Family Foundation and CMS data. The government, which pays the plans on a per-beneficiary, per-month basis, spent 24% of the $562 billion Medicare budget last year, or about $135 billion, on Medicare Advantage. Because payments to providers vary by plan, it's unclear how much of that figure trickles down to hospitals.

A March report from the Government Accountability Office found overpayments to Medicare Advantage plans of up to $5.1 billion in years 2010 to 2012, heightening political pressure to reduce payments to the plans.

The plans had been facing a 2.3% cut for 2014—until the CMS reversed course in April and gave them a 3.3% rate hike. Nevertheless, the ACA still mandates a $156 billion payment reduction to Medicare Advantage plans over 10 years.

In their August letter, the representatives from 17 state hospital associations asked the CMS for confirmation that the agency did not intend to pass along the sequestration cut to providers.

“Our hospital members advise us that a significant number of other MA plans appear to have a basic misunderstanding of sequester legislation, with the result that MA plans are automatically passing along the 2% payment reduction on to network providers, regardless of the terms of the contract,” the letter said.

Further clarification from the agency, it added, “would perhaps obviate the growing likelihood that hundreds of private disputes between providers and plans will need to be individually resolved.”

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Amanda Hayes-Kibreab, an attorney with the law firm Hooper, Lundy & Bookman in Los Angeles who represents healthcare providers, said providers are still trying to resolve the issue informally with Medicare Advantage plans. But she said filings for arbitration—and potentially lawsuits—could occur by the end of the year if no agreement is reached.

“I think it's probably going to end up in several arbitrations across the country,” she said.

State hospital associations do not dispute that the terms of some contracts would allow for payment reductions. “But what we've heard overwhelmingly is that the plans are not looking at the contracts,” said Sarah Lechner, general counsel for the New Jersey Hospital Association.

She added that at least 10 to 15 providers in the state have run into these issues.

In Washington state, the contract disputes have reached the state's Office of the Insurance Commissioner, which is looking into the matter, said Casey Moriarty, a healthcare attorney at Ogden Murphy Wallace.

Hayes-Kibreab said the issue is most significant in states where Medicare Advantage plans have the greatest penetration, such as Florida (34% of beneficiaries) and Arizona (37%). She added that physician groups and post-acute care providers appear to be facing the same issue as hospitals.

For their part, insurers claim the sequestration cuts along with the rate cuts and taxes under the healthcare reform law may force them to scale back their popular Medicare Advantage offerings and benefits.

“The depth of the underfunding of these benefits to seniors is causing us to exit certain market areas, reduce the number of plan offerings and reduce benefits in the majority of the local markets we serve,” UnitedHealth President and CEO Stephen Hemsley said on a second-quarter earnings call.

Aetna said in a 10-Q filing that the reduction to 2014 premiums represents “a meaningful revenue and operating results challenge.”

For the first time since 2011, health insurers will offer fewer Medicare Advantage plans in 2014 than they did the previous year. An analysis from Avalere Health found that the number of plans on offer will decline 5.3% to 2,522, from 2,664.

But the pullback is uneven, being most pronounced in the South and Midwest where about 80% of counties will have fewer plan options. In addition, insurers are replacing broader-network PPOs with HMOs. “Beneficiaries are in a bit of a panic,” said Margaret Murphy, associate director at the Center for Medicare Advocacy. “That's causing a big disruption for people.”

Still, Murphy argues that insurers' pullback in Medicare Advantage has less do with rate cuts and ACA-related provisions than with their growing interest in the new insurance exchange market created by the ACA. Covering elderly people with chronic conditions is much more difficult and expensive than covering healthy young people.

“There are a lot of low-hanging fruits with the Affordable Care Act creating markets for people who are relatively healthy,” she said.

October 2013

15

Health Law Update

HEALTH LAW Update CMS Issues Guidance on Physician Orders and Certifications for Inpatient Admissions

CMS has issued guidance on hospital inpatient admission orders and certifications. The recently-issued 2014 inpatient prospective payment system final rule requires a physician order and certification as a condition of payment for a Medicare Part A inpatient hospital claim.

Specifically, the guidance provides that “the physician certification, which includes the practitioner order, is considered along with other documentation in the medical record as evidence that the hospital services were reasonable and necessary.” The guidance describes the required content, timing and format of the certification, as well as who is authorized to sign the certification.

The beneficiary must be formally admitted for hospital inpatient care. The ordering practitioner must be knowledgeable about the patient’s care at the time of admission, licensed to practice by the state to admit inpatients to hospitals and have hospital privileges to admit inpatients. The ordering practitioner may, but is not required to, be the physician who signs the certification. The order may also be documented by an individual who does not possess these qualifications (i.e. a physician assistant, nurse practitioner or resident) provided that individual had a discussion with and was directed by the ordering physician to prepare such documentation as long as the transcripted documentation satisfies all applicable state law requirements, including without limitation scope of practice, hospital policies and medical staff bylaws.

For more information, contact: Kevin M. Lastorino | 973.403.3129 | klastorino@bracheichler.com Lani M. Dornfeld | 973.403.3136 | ldornfeld@bracheichler.com

OIG Approves Medigap Deductible Discount Program Among PPOs and Hospitals The Department of Health and Human Services Office of Inspector General (OIG) recently approved an arrangement among a Medicare Supplemental Health Insurance (Medigap) carrier, one or more preferred provider organizations (PPOs) and participating hospitals involving discounted deductibles (Advisory Opinion 13-12). As part of the arrangement, hospitals in a PPO’s network would offer discounts of up to 100% of Medicare Part A inpatient deductibles incurred by the PPO’s policyholders, which otherwise would be paid by the Medigap carrier, for patients who select participating hospitals. In turn, the Medigap carrier would pay an administrative fee to the PPO each time the carrier received the discount from a hospital. Additionally, the Medigap carrier would return a portion of the savings resulting from the arrangement to any policyholder who has an inpatient stay at a participating hospital in the form of a $100 reduction to the next premium due. The OIG approved the arrangement, concluding it would pose a minimal risk of fraud and abuse because of built-in safeguards, including that the arrangement would unlikely encourage overutilization, would not unfairly affect competition among hospitals and the deductible discounts and premium credits would not affect actual payments for inpatient services, costs of which are fixed and unaffected by beneficiary cost-sharing.

For more information, contact: John D. Fanburg | 973.403.3107 | jfanburg@bracheichler.com Carol Grelecki | 973.403.3140 | cgrelecki@bracheichler.com

New Jersey Medicaid Program Releases Balance Billing Guidance In a September 2013 Newsletter, the New Jersey Department of Human Services, Division of Medical Assistance & Health Services (DMAHS) and the New Jersey Department of Health (DOH) provided guidance regarding whether a health care provider may balance bill a Medicaid patient for services rendered. DMAHS and DOH reiterated their long standing policy that in accordance with both federal and state law, the practice of balance billing Medicaid beneficiaries is prohibited except in certain limited circumstances. A provider enrolled in the Medicaid program or in a Medicaid managed care program must accept as payment in full the reimbursement rate established by the Medicaid program or applicable managed care plan, and may not bill the beneficiary for any additional costs. The prohibition against balance billing does not include any Medicaid or managed care plan authorized cost sharing responsibilities on the part of the beneficiaries.

In certain limited instances, a provider may bill or balance bill a Medicaid beneficiary for services rendered. A provider may bill a Medicaid beneficiary when the beneficiary has been paid by Medicaid for services rendered by the provider and the beneficiary fails to remit to the provider that portion of the payment that the provider is entitled to receive. In addition, a provider may bill a

16 New Jersey Physician

Medicaid beneficiary for services rendered if all of the following conditions are met: (1) either the service is not a Medicaid covered service, the service is determined to be medically unnecessary before it is rendered or the provider does not participate in a Medicaid administered program that covers that service; (2) the beneficiary is informed in writing that one of the conditions in (1) above exists and voluntarily agrees in writing to pay for the service, or the beneficiary seeks care from a non-participating provider without referral or authorization and is informed by the provider of the consequences of obtaining out-of-network care; (3) the service is not an emergency; (4) the service is not a trauma service; (5) the beneficiary is not covered under any other federal healthcare program; and (6) the provider has not received any payments from Medicaid for that service.

For more information, contact: Carol Grelecki | 973.403.3140 | cgrelecki@bracheichler.com Mark Manigan | 973.403.3132 | mmanigan@bracheichler.com

Third Circuit Determines New Jersey One-Room OR Not Entitled to Facility Fees In Pain & Surgery Ambulatory Ctr. v. Conn. Gen. Life Ins., the United States Court of Appeals for the Third Circuit (which circuit includes New Jersey) affirmed the district court’s order granting summary judgment to Connecticut General Life Insurance Company (CGLIC), and dismissed Pain & Surgery Ambulatory Center’s (PSAC) suit for payment of facility fees for procedures performed in its one-room surgical facility.

PSAC brought suit against CGLIC after the insurer denied payment for facility fees because it determined that PSAC did not qualify as a “Free-Standing Surgical Facility” under the CGLIC-administered health insurance plan in question. The definition of Free-Standing Surgical Facility requires a surgical facility to have at least two operating rooms and to be licensed. PSAC’s facility is a one-room surgical practice that is not required to be licensed under New Jersey law.

PSAC argued that its facility was an “Other Health Care Facility” under the insurance plan, defined as “a facility other than a Hospital or hospice facility.” Examples of Other Health Care Facilities include, but are not limited to, licensed skilled nursing facilities, rehabilitation hospitals and subacute facilities. The Court agreed with CGLIC’s argument that this definition was meant to apply to inpatient facilities only and to include a one-room surgical facility such as PSAC’s facility would mean that the definition would, in fact, include all facilities other than a hospital or hospice, leading to a patently absurd result in interpreting the rest of the insurance plan terms.

For more information, contact: John D. Fanburg | 973.403.3107 | jfanburg@bracheichler.com Debra C. Lienhardt | 973.364.5203 | dlienhardt@bracheichler.com

New Jersey Bills May Impact Providers S2842/A4241, an act concerning medical marijuana, was signed into law on September 10, 2013 after being conditionally vetoed

by Governor Christie on August 19, 2013. The bill will amend the law to give minors access to marijuana upon the approval of at least two physicians.

A4347/S2867 was introduced in the Assembly on September 9, 2013. The bill expands the availability of insurance coverage for infertility related health benefits to certain women that are currently denied coverage for those benefits under certain health insurance plans.

S162 was reported favorably from the Senate Education Committee on September 12, 2013. The bill would establish loan redemptions program for physicians working in New Jersey for 10 years or more. The bill seeks to combat the worsening physician shortage in the State.

A2022/S2792, an act concerning mammograms, was amended by a floor amendment on September 9, 2013. The bill would require (i) health insurers to cover certain additional breast screenings and diagnostic testing under certain circumstances, and (ii) mammography reports sent to patients and patients’ physicians to contain certain information on breast density. The amendment would, in part, permit insurers to subject the additional benefit to utilization review.

S2100/A3133, which passed the Senate on August 19, 2013, was received in the Assembly on September 9, 2013 and referred to the Assembly’s Health and Senior Services Committee. The act would expand the definition and licensure requirements for health care service firms and require health care service firms to obtain accreditation. In addition, the bill would require companion services to be provided only by health care services firms or licensed home health agencies.

A3878, which passed the Assembly on April 29, 2013, was vetoed by Governor Christie. The bill would have required the Commissioner of Banking and Insurance to establish a public awareness campaign about the new federally-required health insurance exchange.

For more information, contact: John D. Fanburg | 973.403.3107 | jfanburg@bracheichler.com Mark Manigan | 973.403.3132 | mmanigan@bracheichler.com October 2013

17

Insurance Marketplace

Insurance Marketplace Insurance Marketplace Makes Its Debut As Heavy Interest Bogs Down Website

Andrew Kitchenman Despite federal shutdown, officials say new health exchange will move forward smoothly A stumbling start to the online health insurance marketplace didn’t deter those helping people enroll for insurance from predicting that the process will work smoothly in coming days.

The primary way to access the federally operated marketplace – the website healthcare.gov – was inaccessible for much of the first day, overwhelmed by the large-scale interest in the site. Federal officials said the problems weren’t related to the shutdown of the federal government that began yesterday.

Some people bypassed the website and instead reached out to local healthcare nonprofits yesterday, asking for help understanding the enrollment process. Officials with these organizations said they were taking down contact information and would be scheduling appointments to help residents enroll in the coming days, when they expect the site to be working more smoothly.

Republican members of Congress have proposed that short-term federal spending be linked to a one-year delay in the insurance marketplace and other provisions of the 2010 Afforable Care Act, including a mandate that individuals purchase insurance.

However, President Barack Obama and congressional Democrats have rejected linking spending with the healthcare law.

The marketplace is intended to be a one-stop shop for residents who aren’t insured by their employer to buy insurance and learn whether they are eligible for tax credits to subsidize the coverage. Residents are supposed to be able to apply for coverage through the website, by phone, by mail or in person.

Among those providing assistance to New Jerseyans looking to enroll in person are the five nonprofit organizations providing federally funded ”navigators”, including the FoodBank of Monmouth and Ocean Counties Inc. FoodBank spokeswoman Marion Lynch said the organization has opened two of the nine sites that it’s planning for “navigators” to help residents. Those sites didn’t draw much interest yesterday, but the organization received many phone calls about the marketplace, Lynch said.

Lynch said the organization is scheduling appointments with those who called.

“We want to avoid having people wait in line,” she said. “Today is day one.”

Lynch emphasized that while yesterday was the start of the six-month open enrollment period, insurance purchased through the marketplace won’t start until January 1.

Lynch said staff members had limited access to the marketplace website yesterday morning, but the site was inaccessible in the afternoon.

“It’s a problem today but it’s not going to be a problem moving forward,” she said.

The marketplace launch was marked by a series of rallies and health fairs around the state, which drew a varied crowd, including uninsured residents who are eager to enroll and people with insurance who wanted to know more about their options.

At a marketplace “kickoff” event in the parking lot of a Walgreens in East Orange, community health and insurance company officials shared information with residents. The event also drew state Sen. Nia H. Gill (D-Essex and Passaic) and Dr. Jaime Torres, the regional administrator for the U.S. Department of Health and Human Services.

Gill said the launch of the marketplace would prove to be a historic day for the millions of uninsuredAmericans.

“You know Obamacare must be good for us if they want to close down the federal government so that we won’t know to sign up,” Gill told a crowd of roughly 50 people. .

She expressed disappointment that the state is not operating its own marketplace, as the ACA allowed. Gov. Chris Christie cited concerns about the potential cost and a lack of answers from federal officials in vetoing a state-based exchange. Gill noted that this cost the state federal funding to conduct a public awareness campaign about the marketplace.

“What may be an obstacle is going to be an opportunity,” Gill said, predicting that community activists and others interested in healthcare would spread the word.

“We are a community that knows how to get the message out – we don’t care who thinks they’re going to stand in the doorway of our success,” Gill said. “We have to show that you can try to keep us down but you cannot keep us out of Obamacare.”

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Torres said the difficulty accessing the healthcare.gov site was a sign of “great curiosity by people who are ready to enroll and other people who are just curious. I think that we’re working on that right now and that’s to be expected,” adding that there are six months for residents to enroll through the marketplace.

Torres downplayed the impact of the government shutdown, saying that the marketplace funding is mandatory.

“Healthcare.gov, the enrollment and all the education will continue, because this is mandatory funding that had been already paid for” through the ACA, Torres said.

Donnette Williams will be one of the people at the front lines of enrolling residents as a newly certified application counselor with Newark Community Health Centers, which serve as federally qualified health centers – a primary source of care for low-income residents. She said center staff members were writing down the contact information for residents to schedule appointments at the centers “to have a little more privacy to get enrolled.”

East Orange resident Elsie Jeanty, an unemployed nursing assistant, said she was interested in getting new insurance, adding that she currently relies on charity care and is concerned that she would have to go to the emergency room if she became ill because she doesn’t have access to a primary care doctor.

“That’s why you have to get something in your hand,” Jeanty said, referring to an insurance card.

Scotch Plains resident Original Dixon has been a substitute teacher for East Orange public schools for roughly 30 years and is uninsured. However, she is primarily concerned about the potential cost of either the insurance or the penalties she might have to pay if she remains uninsured. The penalties are scheduled to increase from the greater of $95 or 1 percent of income in 2014 to the greater of $695 or 2.5 percent of income in 2016.

“I’m concerned about the penalty from the government and how much the premiums will be per month,” Dixon said. “I’m very concerned about being able to pick it up monthly, because my income is still unpredictable.”

The tax credits targettoward those with income between 138 percent and 400 percent of the federal poverty line, which currently amounts to between $15,856 and $45,960 for a single resident and between $32,499 and $94,200 for a family of four. The open enrollment period will last until March 31, 2014.

New Jersey activists opposed to the ACA issued a call yesterday for the law’s provisions to be delayed, similar to the position of congressional Republicans.

Daryn Iwicki, director of Americans for Prosperity’s New Jersey chapter, said in a statement that the law was a disaster. “While sympathizers with this administration tell us that federal subsidies will take care of (the ACA’s) exorbitant costs, they seem to forget where that money comes from: all of us, the taxpayer!” Iwicki said. “Whether or not it's reflected on our insurance bill, we're all paying for this train wreck of a law."

October 2013

19

Obamacare

ACA Exchange Marketplace Suffers Opening-Day Glitches

By Sindhu Sundar

The Affordable Care Act-mandated federal health insurance marketplace has posed technical problems for would-be enrollees in dozens of states since it went live Tuesday morning, a problem Centers for Medicare & Medicaid Services officials attribute mainly to high traffic volume and minor glitches they expected in a first-of-its-kind system in the U.S. Most of the technical issues faced by users in several of the 36 states supported by the federal health insurance marketplace are caused by unprecedented traffic volume rather than by any serious structural issues with the site, CMS Administrator Marilyn Tavenner told reporters at a press conference call Tuesday.

The federal health insurance marketplace has so far seen several times more traffic than the CMS websites have seen at any given time, she said, urging consumers to be patient while the agency works out technical kinks in enrollment that have surfaced on the first day the marketplace opened.

"A very important fact is getting missed here," Tavenner said Tuesday. "This is day one of a huge process. We're in a marathon, not a sprint, and we need your help."

The agency declined to say how many users have successfully enrolled in the federal marketplace so far, saying that it is still in the process of gathering accurate data, and that such details will be forthcoming. CMS officials did not indicate a specific time frame for such an announcement.

The officials stressed also that although enrollment opened today, consumers have until Dec. 15 to apply in order to start receiving health insurance coverage by January 2014. If they miss that deadline, their coverage will kick in later.

The ACA expands health insurance coverage to the roughly 15 percent of uninsured Americans, and will ensure that no one is denied coverage because of pre-existing conditions, according to the agency, whose officials on Tuesday spun the glitch-inducing traffic volume as encouraging proof of the public's resounding interest in the marketplace.

"This marketplace represents more than three years of policy and operation, and this is something that has never been done before," Julie Bataille, the director of CMS' Office of Communications, told reporters Tuesday. "We have seen more simultaneous users on the marketplace website than ever seen on Medicare.gov, and we're pleased with the remarkable interest we've seen."

Officials from states including Kentucky, Maryland, Colorado and Washington issued announcements Tuesday about technical issues hampering enrollment, similarly reassuring consumers that they are being addressed, and stressing that the enrollment period extends until mid-December to receive coverage by January.

Previously, Colorado, Oregon and the District of Columbia had announced last week that they would temporarily limit online enrollment when their health insurance exchanges debuted, amid issues linking new software that connects the exchanges with old Medicaid systems.

Consumers will have a choice of some 53 health plans on average in the federally-facilitated marketplace, with most of them able to chose among least two or more health insurance companies, according to a statement Tuesday by the CMS. The marketplace is also expected to lower premiums across the country by roughly 16 percent more than expected, the agency said, adding that roughly 95 percent of eligible uninsured are in states where premiums will be lower than expected, according to its statement.

The marketplace opened Tuesday despite the government shutdown that went into effect at 12 a.m. the same day, as funding for the health care law's implementation mostly comes from mandatory spending funds.

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Special Feature

Dana Holwitt, MD-Breast Surgeon and Breast Cancer Patient

Saint Clare’s Health System (SCHS) recently welcomed Dana Holwitt, MD, FACS, to its medical staff, utilizing both the Denville and Dover hospitals of SCHS. Dr. Holwitt is a board-certified fellowship-trained breast surgeon with a practice dedicated solely to breast health. She is currently located at the Women’s Health Center at Saint Clare’s Hospital in Dover, which is designated as a Breast Imaging Center of Excellence by the American College of Radiology. Dr. Holwitt will soon be expanding to a second location on Saint Clare’s Denville campus, which will offer the same comprehensive services that the Dover campus provides. Dr. Holwitt and the entire SCHS team are dedicated to ensuring residents of the region have access to the best possible breast care.

Dr. Holwitt offers annual clinical breast examinations, management of benign breast lesions, consultation to women who are at high risk for breast cancer, genetic counseling and genetic testing for BRCA 1 and BRCA 2, management of breast cancer, surgical intervention and post-operative support.

Dr Holwitt understands it is very important to a patient to work with a physician who participates with health insurance companies; therefore, she has made the decision to participate with insurance companies. Please contact the office if you would like more information by calling the direct line at 973-537-5600.

Dana Holwitt, MD October 2013

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Dr. Holwitt has been actively involved in professional and community efforts to promote breast health awareness and survivorship support.

Her own experience as a breast cancer survivor has given her a unique perspective into the patient experience and allows her to offer superior multidisciplinary care to breast cancer patients.

“After my own diagnosis with breast cancer and subsequent treatment, I identify on a much different level with others who have breast cancer,” said Dr. Holwitt. “My experience allows me to provide superior breast care as a breast surgeon as well as compassionate care as a fellow survivor.” She added, “I’m looking forward to working in northwestern New Jersey and providing women with comprehensive surgical options for breast disease. I have dedicated my career to helping patients understand the truth about breast care and treatment of breast cancer.”

“Saint Clare’s Health System has already made a significant commitment to breast services, especially at its dedicated Women’s Health Center,” said Holwitt. “The Center offers comprehensive services, including breast imaging, digital mammography, breast ultrasound, ultrasoundguided needle breast biopsy, stereotactic biopsies, and breast MRI. Patients have access to breast nurse navigators, complementary medicine and nutrition services, supporting the Center’s philosophy that women have unique health needs and concerns.”

Dr. Holwitt graduated cum laude from Colgate University and earned a medical degree from Virginia Commonwealth University/Medical College of Virginia, where she was elected to the Alpha Omega Alpha Medical Honor Society. During her residency, also at Virginia Commonwealth University, she was elected Surgical Intern of the Year and won the Basic Science Research Award.

After completion of a general surgery residency, she did a Fellowship in Breast Surgical Oncology at Washington University School of Medicine in St. Louis. As a Fellow in breast surgical oncology, she was invited to deliver two presentations at the 2008 American Society of Breast Surgeons Meeting and was awarded the Best Scientific Presentation Award for manuscripts that were published in the American Journal of Surgery in May 2009.

Dr. Holwitt can be reached for appointments and referrals by calling (973) 537-5600.

Dana Holwitt, MD, FACS Breast Surgeon Comprehensive Breast Care at the Women's Health Center Saint Clare’s Health System Morris County, New Jersey

22 New Jersey Physician

Obamacare

Health Care Reform Kickoff: What You Need to Know The government may have partially closed down, but after years of political fighting, a Supreme Court decision and lots of confusion, the 2010 Affordable Care Act (ACA) began implementation last week. For those who have health insurance coverage through their employers or through Medicare or Medicaid, you can pretty much drown out the noise.

If you are an uninsured U.S. citizen or legal resident, you must be enrolled in qualifying health coverage in 2014 or face a penalty. This is known as the “individual mandate” and it is the cornerstone of the ACA. The government has established a web site calledHealthcare. gov to manage all aspects of the ACA. Here’s a refresher on what you need to know: What is qualifying health coverage? Employer-provided insurance; government programs like Medicare, Medicaid, CHIP; COBRA; privately purchased insurance; or coverage you purchase on a state or federal marketplace.

What are “Exchanges” or “Marketplaces”? Starting today, there will be Marketplaces (also known as “exchanges”) for those who do not have insurance and for small businesses with up to 50 employees. The state and federal governments are not providing the coverage; rather they are aggregating the information for consumers through one platform—the Marketplace. It’s like using Travelocity to understand the cost of various airlines flying to your desired destination, rather than visiting each airline’s website to find the same information.

ACA envisioned that most states would establish and run their own online health insurance Marketplaces, with federally run Marketplaces as a backstop. However, only 16 states and the District of Columbia have done so; seven more are partnering with the federal government to operate their Marketplaces. In the other 27 states, people without insurance will use federally managed Marketplaces to shop for coverage.

Individuals can choose among 4 plans: bronze, silver, gold and platinum, which are intended to cover 60 to 90 percent of health costs that a health plan would pay for an average person. Insurers don’t have to offer all four plans, but within the health insurance marketplaces, all insurers must offer at least one silver and one gold plan. Costs of each type of plan vary by state.

What are the penalties for NOT having coverage? The greater of: • 2014: $95 per uninsured adult in the household, capped at $285 per household OR 1 percent of the household income • 2015: $325 per uninsured adult in the household, capped at $975 per household OR 2 percent of the household income • 2016: $695 per uninsured adult in the household, capped at $2,085 per household OR 2.5 percent of the household income Are there exemptions from penalties? Yes, for economic hardship (income below 100 percent of poverty level, those who are unable to pay for coverage that is more than 8 percent of household income), religious objections, American Indians, those without coverage for less than 3 months, undocumented immigrants and incarcerated individuals.

Will Uncle Sam help financially? Tax credits for individuals and families making between 100 and 400 percent of the federal poverty level to purchase insurance through the Marketplaces and are ineligible for coverage through an employer or a government plan, like Medicare and Medicaid. Current household income limits for 100 to 400 percent of the poverty line are: • $11,490 (100%) up to $45,960 (400%) for one individual • $15,510 (100%) up to $62,040 (400%) for a family of two • $23,550 (100%) up to $94,200 (400%) for a family of four If you are eligible for the credit, you can choose to have all or some of the credit paid in advance directly to your insurance company to lower what you pay out-of-pocket for your monthly premiums during 2014; or you wait to get all of the credit when you file your 2014 tax return in 2015.

Tax credits to buy health coverage will be available to small employers with up to 25 workers and who have average wages of $40,000 or less.

The government will also help low income people with out-of-pocket (unreimbursed) expenses. If income is between 100 percent and 250 percent of the federal poverty line ($23,550 to $58,875 for a family of four), you can qualify, BUT only if you enroll in a silver plan.

How will ACA change health benefits and coverage?

• Eventual elimination of lifetime limits on coverage and annual limits on coverage • Elimination of pre-existing condition exclusions by 2014 • Requirement to extend dependent coverage to age 26 • Insurers will not be allowed to charge women or persons with medical problems higher rates October 2013

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• Premiums of older people can’t be more than 3X as expensive as those of younger • Coverage will be portable, even if you leave a job • Limit any waiting periods for coverage to 90 days • Require health plans to report the proportion of premium dollars spent on clinical services, quality, and other costs and provide rebates to consumers. Insurance companies pay out 74 cents on every dollar-new rules will increase to 80-85 cents • Develop standards for insurers to use in providing information on benefits and coverage and to promote administrative simplification • Limit deductibles in the small group market to $2K for individuals ($4K for families) • Create a new federal body that could block insurers from raising rates Will there be changes to Medicare? Higher-income Medicare beneficiaries (those who earn more than $85,000 per person or $170,000 per couple) will pay slightly more for their prescription drug coverage, or Medicare Part D. This is expected to affect about 5 percent of beneficiaries.

Most Medicare recipients will see their drug costs go down as the ACA begins to close the “donut hole,” which is a coverage gap that forces Medicare beneficiaries to pay 100 percent of their prescription drug costs up to a certain amount. This gap is expected to be fully closed by 2020, but those who fall into the gap this year will get a 47.5 percent discount on certain brand-name drugs and a 21 percent discount on generic drugs until they reach the out-of-pocket limit.

Will there be changes to Medicaid? ACA will mean an expansion of Medicaid to anyone under 65, with income eligibility levels of 133 percent of poverty level.

When do employers have to do something? On July 2, 2013, the Obama Administration announced that it would delay implementation of the “Employer Mandate” until 2015. As of 2015, employers of 50 or more full-time workers that do not offer coverage will pay a fee of $2,000 per worker for each full time employee over the first 30 employees. Small businesses with fewer than 50 employees can start shopping for coverage on October 1st through the Small Business Health Options program, or SHOP Marketplace.

How much ACA cost? The net cost is now estimated to be $1.375 trillion over the 10-year period from 2014 to 2023, according to a July 30 CBO estimate.

Who is paying for ACA? • As of Jan 2013, the IRS levied an additional 0.9 percent increase in Medicare payroll taxes on individuals earning more than $200,000 and couples with income of more than $250,000 a year • As of Jan 2013, unearned income (interest and capital gains) subject to additional 3.8% tax • As of Jan 2013, a 10 percent tax on indoor tanning salons • Starting in 2014, the government will impose fees medical device manufacturers • A tax on individuals without qualifying coverage (see above) • Starting in 2018, there will be a new excise tax on high-premium (“Cadillac”) insurance plans. Tax = 40% of premiums paid on plans costing more than $27,500 annually for a family When will there be a reduction in health care costs overall? President Obama recently proclaimed, that in “the three years since ‘Obamacare’ passed, we’ve seen the slowest growth in health care costs on record.”

According to the Kaiser Family Foundation and CMS data, national health spending grew by 3.9 percent from 2009 through 2011, and near 4 percent in 2012; it’s projected to grow at a similar rate through 2013. Those are the lowest rates since the government started keeping track in 1960. BUT, independent experts believe the slowdown is largely due to the economy and a contraction of spending during the recession. Most agree that any cost savings provisions included in ACA have not yet been realized.

One of N.J.'s largest medical practices taking cautious approach on Obamacare

By Susan K. Livio The medical director of one of the largest medical practices in the state said today his group wants to first review the Affordable Care Act's new insurance and rates — due to be released Tuesday — before deciding how to participate in what is known as Obamacare.

"This is all new territory and we have to see how this all rolls out," Robert W. Brenner, medical director of the Summit Medical Group, told the Assembly Health and Senior Services Committee, which was discussing strategies hospitals and doctors are using to contain costs and improve care.

The health exchange — the online marketplace that will provide the public with information about available policies and financial assistance that will help low- and middle-income people pay for them — is "important," Brenner said. But he likened it to a "black

24 New Jersey Physician

box" because no one is sure whether there will be enough young healthy people to offset the sick, uninsured patients who are expected to enroll.

"Our sentiment is we want to provide care for people that need it," Brenner said in a subsequent interview this evening clarifying his testimony. "The position we are taking right now is the insurance companies need to present the product to us. At this point, we need to evaluate all aspects of it. ... A lot of details remain to be seen."

Brenner said he has spoken nationally about the need to improve patient access to care, and believes the exchanges will "close the gap." But a lot of physicians are approaching the Affordable Care Act cautiously until reimbursement rates are explained. Until then, he said, "a lot of organizations will end up sitting back to see how things unfold."

Open enrollment for the act, also known as Obamacare, begins Tuesday at www.healthcare.gov. Coverage begins in 2014. There are an estimated 1.2 million uninsured people in the state.

The Summit group, a physician-run practice based in Berkeley Heights, includes 382 medical professionals who practice in five counties and treat 180,000 patients a year, according to the practice's website.

Brenner said that even before passage of the law, Summit had adopted many changes that control expenses and improve patient health, such as doctors, nurse practitioners and "care managers" practicing as a team. He said the medical professionals earn performance bonuses each year if they can demonstrate that they have helped improve patient health and performed community service.

"We don't duplicate diagnostic tests" because electronic medical records link all the practices, Brenner said. "We are able to communicate ... and you can see a note in the chart" minutes after it is added."

After the hearing, he said the Summit accepted nearly every commercial health plan as well as Medicare, although he added that it did not take Medicaid because the reimbursement rates were too low.

He said the group would re-evaluate accepting Medicaid, the government health program for the poor, "once the rates are more reasonable."

New Jersey has the lowest percentage of primary doctors and specialists participating in the Medicaid program because the state's payment rate is among the lowest in the nation, according to a July report in Health Affairs, a monthly publication that deals with health policy issues.

Gov. Chris Christie has decided to expand the eligibility for Medicaid under Obamacare, which could provide medical coverage for an additional 300,000 residents.

University Hospital

University Hospital Caring for Breast Cancer Patients at University Hospital Meet a surgical oncologist with a soft, caring touch.

“The best part of what I do is the effect I can have on patients,” says breast cancer surgeon Ogori N. Kalu, MD. “They are devastated when they come to see me. In their minds, they have nowhere to go, no knowledge of what is happening to them, and so many questions. I guide them, treat them and take them through their journeys. It means so much to them to have someone treat them in a kind way and explain their disease process in simple terms. For me, the reward of seeing them so grateful, so happy…I can’t even put my feelings into words.”

Calm, reassuring, and wise-beyond-her-years – she is not yet 40 – Dr. Kalu always knew she wanted to become a physician. A surgeon and oncologist now at University Hospital (UH), this assistant professor in the Rutgers New Jersey Medical School’s Department of Surgery is a first-generation American, born to parents who came from Nigeria. “I grew up in Queens,” she says. Her father was an economics professor and her mother was a pharmacist. The second of four children, she recalls, “Science was there in our household from the very beginning. And my mother helped to nurture the idea of me becoming a doctor,” Dr. Kalu says. “My favorite game as a child was ‘Operation.’”

A 2004 graduate of New York Medical College where she also earned a Master’s in biochemistry, Dr. Kalu points to her mother’s leukemia diagnosis and subsequent death during her first year of medical school as pivotal in her decision to become a surgical oncologist. “It was tough and definitely shaped my outlook. I had already fallen in love with surgery and gross anatomy but knew then that I wanted to do something in cancer too.” She completed a residency at SUNY Downstate Medical Center where the urban environment and patient population are similar to Newark. “It was there that I became aware of cancer, especially breast cancer in October 2013

25

young women and particularly minorities.”

Ogori N. Kalu, MD

At UH since June 2012, Dr. Kalu likes the “academic environment and the research opportunities. I am actively starting a study on triple negative breast cancer here in this community and another study on the benefits of self-breast exams.” Nationally, on average, most women who are diagnosed with breast cancer are over the age of 50. However, the rate for invasive breast cancer among younger women is growing.

“The youngest patient I ever treated was only 28. That was about two years ago. The question is why are more young women getting breast cancer? We don’t know the answer to that and this is an active part of my research,” Dr. Kalu says. To prepare for this part of her career, she spent a year (2009-2010) earning a fellowship at Stanford University Medical Center in California studying the prevalence of aggressive breast cancer among African-American women. “It was a great experience and really started me on this research journey.” In Newark, Dr. Kalu is expanding the breast cancer center at University Hospital. She is also planning more education and community outreach programs to encourage more self-breast examinations, early detection and preventive care.

And while research and public health initiatives are high on her to-do list, patients are still central to her practice. Take the young woman she is still treating for Stage 2 breast cancer. “Just 30 years old, she had been bounced from doctor to doctor for a mass in her armpit. Someone treated her with antibiotics thinking she had an infection. But it never got better,” Dr. Kalu says. The patient came to University Hospital for another clinical consult where a doctor insisted that she see a breast surgeon. Not only did she have a lump under her arm, but there was also a mass in her breast and she had a family history of breast cancer. “She has gone through her surgery but is a young wife who was concerned about being able have children. And while her treatment is not yet complete, the good news is: she is pregnant.”

Dr. Kalu, whose last name means god of thunder in the mythology of the Igbo people of Nigeria, laughs easily about whatever significance that may have, if any. “My family is part of the Igbo ethnicity,” she says, “So it’s always an interesting topic of discussion.”

For patients with a scary breast cancer diagnosis, maybe a little god-like power is just what they need.

To contact Dr. Kalu for additional information or to refer patients, please call (973) 972-1110 - By Maryann Brinley

Hospital Rounds

HOSPITAL ROUNDS Robert Wood Johnson University Hospital, Somerset Medical Center sign merger agreement Sergio Bichao Robert Wood Johnson University Hospital and Somerset Medical Center have made it official and signed a merger agreement.

The agreement has been submitted to the state Attorney General’s Office for review and regulatory approval. Hospital officials said Tuesday that they expect the agreement to be finalized sometime next year.

The merger, first announced in June, combines the hospitals into a new 965-bed institution with campuses in Somerville, where Somerset Medical is located, and New Brunswick, where Robert Wood Johnson University Hospital is headquartered.

The two nonprofits are among many hospitals in the state that are pursuing mergers and partnerships to save money and leverage resources in a changing health care landscape.

Kenneth Bateman, Somerset Medical Center president and CEO, said the merger will create “one of the largest acute-care facilities in New Jersey.”

Each hospital has a transition team to plan the merger details.

John R. Lumpkinm Robert Wood Johnson University Hospital board of directors chairman, said officials “anticipate a smooth transition process” because the two organizations already share many of the same physicians and have existing clinical partnerships.

26 New Jersey Physician

BE ONE OF THE

12

NEW JERSEY PHYSICIAN 2014 cover stories Create an awareness of your practice or hospital program Generate physician referrals Share innovative technologies and procedures Enhance your website with a PDF of your story Receive reprints of your story for use as brochures Our 2014 cover story search is now in progress.

We are looking for 12 exciting specialty practices or hospital programs to share with our audience of over 30,000 physicians and healthcare executives.

If you would like your practice to be one of the 12 featured in 2014, contact Iris Goldberg for information about this unique opportunity.

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(973)994-0068

RUTGERS Rutgers

Robert Wood Johnson, Rutgers to create unique ACO

By Beth Fitzgerald Robert Wood Johnson University Hospital and Health System is collaborating with Rutgers University to create a Medicare accountable care organization that will be unique in New Jersey as it will involve academic researchers working with physicians.

The ACO, called Robert Wood Johnson Partners, plans to launch in January of 2014. Dr. Alfred Tallia, chair of the department of family medicine and community health at Rutgers - Robert Wood Johnson Medical School, will be the executive director.

Created by the Affordable Care Act, Medicare ACOs reward hospitals and doctors that deliver high-quality, lower-cost health care by allowing them to share some of the money Medicare saves when healthcare is delivered more efficiently.

Medicare has approved nine ACOs so far across New Jersey, but unlike Robert Wood Johnson Partners, most revolve around a hospital system.

“This is really the state’s major research university working with one of the larger hospital health systems, and it has a promise to be an example of what Rutgers can accomplish statewide,” Tallia said.

The goal, Tallia said, is to “create for the state of New Jersey something that benefits patients first and foremost and brings all the strengths of a major research university to bear on the problem of healthcare.”

The plan is to launch the ACO with about 30 physicians and about 6,000 Medicare patients, then expand beyond Medicare.

“We are going to very quickly look to do arrangements with commercial insurers as well, and that’s where the bulk of the patients will come from,” Tallia said.

Research collaborations with Rutgers have already begun, Tallia said.

For example, a project with the clinical psychology department of Rutgers is addressing “the whole issue of behavioral healthcare and how that is handled,” Tallia said. The project is co-locating behavioral health specialists within a primary care practice.

“The patients absolutely love it,” Tallia said.

He noted that there is an unfortunate stigma attached to seeing behavioral health professionals in their offices, but by co-locating them within the primary care practice “they get to see them while going to visit their family physician.”

“That is another example of how the Rutgers connection has helped in training the workforce for the future of healthcare, which is really going to be about interdisciplinary, cross-disciplinary collaborative care, bringing all the right resources to bear on the patient’s needs whatever they are,” Tallia said.

Tallia said he wants the ACO to study ways to empower patients to improve their health.

“None of these systems will work unless the patient is empowered to do the right thing, either with information or with incentives that promote behavior modification,” Tallia said. “How many people know they should exercise, but don’t? How many people know they need to diet better, but don’t for a whole variety of reasons? There are a lot of behavioral aspects of care; we need to figure out how best to engage the patient.”

Rutgers Scientists Discover Molecules that Show Promise for New Anti-Flu Medicines Chemicals block ability of flu virus to replicate in cells; goal is to develop medicines that fight much-feared pandemic influenza outbreaks A new way to attack flu viruses is taking shape in laboratories at Rutgers University, where scientists have identified chemical agents that block the virus’s ability to replicate itself in cell culture.

These novel compounds show promise for a new class of antiviral medicines to fight much-feared pandemic influenzas such as the looming “bird flu” threats caused by the H5N1 influenza A virus and the new H7N9 virus responsible for a 2013 outbreak in China.

Timely production of a vaccine is difficult when a pandemic flu strikes. A viable alternative is to treat with drugs.

“Right now there’s really only one effective oral drug for treating influenza,” said Eddy Arnold, Board of Governors Professor of chemistry and chemical biology in the School of Arts and Sciences at Rutgers and a member of the Center for Advanced Biotechnology and Medicine. And just as bacteria develop resistance to antibiotics, Arnold notes that some flu strains have developed resistance October 2013

29

to Tamiflu, the sole orally available anti-flu drug.

Arnold and his collaborators have been working to create drugs beyond Tamiflu, especially ones that target different parts of the virus, using an approach that helped in the development of powerful anti-AIDS drugs. By synthesizing chemical compounds that bind to metal ions in a viral enzyme, the researchers found they could halt that enzyme’s ability to activate a key step in the virus’s replication process.

In Arnold’s words, his team’s compounds “really gum up” the targeted enzyme of influenza virus.

“We’re at a key proof of principle stage right now,” he said. “It’s not trivial to go from this point to actually delivering a drug, but we’re optimistic – this class of inhibitors has all the right characteristics.”

Rutgers’ search for these binding compounds relies on technology that reveals the structure of this enzyme in extremely fine detail. Researchers Joseph Bauman and Kalyan Das first produced high-resolution images of an H1N1 flu enzyme, and Bauman and postdoctoral researcher Disha Patel screened 800 small molecule fragments for binding.

The researchers in Arnold’s lab worked with Edmond LaVoie, professor and chair of medicinal chemistry in the Ernest Mario School of Pharmacy, to modify those compounds, making them more potent and selective in blocking the flu enzyme’s activity. Working with virologist Luis Martinez-Sobrido at the University of Rochester, they were able to detect antiviral activity of the compounds in cells.

The enzyme that the scientists are attacking is especially crafty, Arnold noted, because it steals material from human cells to disguise the invading flu virus in a process called “cap-snatching.” These “caps” are a small chemical structure that prime the process for reading genetic information.“What we’re doing by blocking or inhibiting this enzyme is to interefere with flu’s ability to disguise itself,” he said.

Arnold cited research by universities and pharmaceutical companies nearly two decades ago that took this approach, but initially the technology to obtain high-resolution images of the influenza protein wasn’t available. One pharmaceutical company, Merck, later applied the approach of targeting metal-ion containing active sites in the HIV enzyme integrase and developed a highly successful anti-AIDS drug.

“It’s truly remarkable what they did, and we’re trying to pursue similar logic with influenza,” said Arnold.

The researchers have recently published their findings in the American Chemical Society journal ACS Chemical Biology (http://pubs. acs.org/doi/abs/10.1021/cb400400j). Some of the work was funded by the National Institutes of Health. Two additional publications in the journals Bioorganic Medicinal Chemistry and ACS Medicinal Chemistry Letters have described LaVoie’s synthetic medicinal chemistry used to make the new anti-flu agents and the observed structure-activity relationships.

AMKAI EMR: Game-Changing Technology for Forward-Thinking Surgery Centers Amkai

By Joe Macies, CEO, Amkai Solutions

As ambulatory surgery centers (ASCs) face increasing competition from hospitals and other ASCs, it is vital for physicians of surgery centers to examine different ways they can differentiate their facility, allowing them to attract new physicians, top staff and patients and pursue avenues that will improve the ASC's operations across the board.

Many ASCs are turning to an electronic medical records (EMR) system to be able to provide patients with the best care possible at the lowest cost while ensuring the facility remains a highly desirable destination workplace.

"ASCs cannot afford to fall technologically behind their competitors or they will risk losing cases and new surgeons to technologically superior facilities," says Nelson Gomes, president and CEO of Rutherford, N.J.-based IT services provider PriorityOne Group.

Joe Macies, CEO, Amkai Solutions

30 New Jersey Physician

Joan Mckibben, administrator of the Ambulatory Surgery Center of Somerset in Bridgewater, N.J., and Stacey Ferguson, clinical director of Tri-State Surgical Center in

Martinsburg, W. Va., join Gomes in providing commentary on how physicians switching their ASC to an EMR bring improvements to all areas of an ASC's operations.

Financial Benefits An EMR provides ASC administrators with tremendous amounts of financial data. With access to these statistics, the administrator can better perform detailed case costing and analysis, identify historical patterns and optimize physician schedules and the schedules of rooms, staff, equipment and anesthesia personnel.

Physicians transitioning their ASC from paper records will find an EMR brings numerous benefits like patient tracking, benchmarking and running financial reports. "It allows me to run volume reports and let the physicians know what their volume is by month, quarter or year," Mckibben says. "We can identify the most financially appropriate cases to perform at the center and look at certain insurance providers to decide whether we want to continue to carry that provider."

In addition, transitioning from paper-based to electronic systems provides immediate cost savings by reducing expenses associated with purchasing paper, assembling and copying, storage, backup systems and records retrieval. ASCs can slash overtime expenses — savings that go directly to the bottom line — and reallocate staff responsibilities by eliminating time-consuming paper-related tasks that are streamlined in an EMR. "Our EMR helped us manage our finances more easily because of the data that comes out of it," Ferguson says. "What was a two-person job before is now a one-person job."

Clinical Benefits Physicians that switch their ASC from paper records to an EMR receive immediate clinical benefits as well, notes Mckibben. "With an EMR, everything needed to properly and effectively treat the patient is right in the system," she says. "The blood work is there, as are medications, height, weight, allergies — all of the pertinent information is easily retrievable and legible."

Physicians will have greater confidence in the information in an EMR as the system not only eliminates the potential for illegible handwritten notes, it also holds staff members accountable, Gomes observes. "The system requires them to enter the information physicians need to provide high-quality care while keeping the surgery center compliant," he says.

In addition, says Mckibben, "Our system requires the nurses to chart certain areas, and they can't sign out of the EMR without charting these areas. This ensures the chart has the information the physician needs to ensure patient safety. It's always a complete record."

An EMR also provides physicians with the ability to access patient records from any computer terminal in the ASC, and certain systems even permit access from outside of the ASC. In the event that a physician wants to view a patient's records, the accessibility offered through an EMR eliminates the need for the slower, time-consuming tracking down of paper records.

Operational Benefits An EMR also offers noteworthy improvements in the operations of both the ASC and the physicians' practices. As noted earlier, surgery centers with an EMR do not need to rely on dedicated staff members to be in charge tasks such as recordkeeping and filing as these responsibilities are streamlined by an EMR. "The use of an EMR significantly improves staff efficiency, freeing up their time to tackle other critical tasks," Gomes says.

Physicians complete charting significantly faster through use of an EMR. Template and standardization tools in an EMR allow an ASC to create charts specific to a physician's specialty and procedures, eliminating the need to fill out repetitive information. This is particularly helpful for high-volume physicians that desire a quick turnaround between cases to remain on schedule and maximize their time in the ASC. "For almost everything we used to do with paper, our EMR decreases the man-hours involved," Ferguson says.

The EMR in use at Ambulatory Surgery Center of Somerset provides its physicians with the ability to remotely connect to the EMR from their office and view records and data. "They no longer have to come over to the ASC to retrieve a chart; that's a significant convenience factor," says Mckibben.

When there's interoperability between a physician's practice and ASC EMR, and the systems can communicate on the same language, this eliminates the need for a number of manual tasks performed by staff members in the practice. "An EMR in an ASC helps improve the productivity and efficiency of the physicians' practices," Gomes says.

The lack of an EMR in an ASC can ultimately hinder physicians' abilities to provide care in the manner they desire, Gomes notes.

"Physicians who are used to electronically accessing records and patient information in their practice will often find it frustrating to revert to the use of paper charting in an ASC without an EMR," he says.

Making the Switch An EMR may not be a small investment upfront, but it's a purchase ASC physicians can expect to financially benefit their facility.

Selection of an EMR that is configurable to an ASC's specific specialties and workflow requirements will maximize the value of the investment, and the financial, clinical and operational benefits the new technology brings will make an ASC much stronger, in both the short and long term.

"Use of an EMR delivers significant direct and indirect financial improvements for an ASC," Gomes says. "While an EMR is a significant investment, the return on investment over time easily surpasses the cost of the system."

October 2013 31

Legal News

LEGAL NEWS

Brach Eichler Debuts Criminal Practice With Former NJ AG

By Joshua Alston Brach Eichler LLC announced its foray into criminal litigation this week as it launched its new criminal defense and government investigations practice, which will be headed by a former New Jersey assistant attorney general with extensive experience in health care and insurance fraud cases.

Riza Dagli, who will be leading the group, started as a partner with the Roseland, N.J.-based firm on Tuesday. He has 13 years of experience at the attorney general’s office, where he served in various roles including director of the Medicare fraud control unit, deputy director of the division of criminal justice and head of the office of insurance fraud prosecution. Dagli said that he’s excited to build a new practice from the ground up.

Riza Dagli

“There’s a lot of independence from the standpoint that it’s a brand new practice group, and so there’s a lot of creativity and energy because of the fact that it’s new and you don’t really have a lot to base it on,” Dagli said. “Because of my background, we’re looking to make it as broad as possible. Brach Eichler is very well-known for health care matters, but it also has an excellent reputation for environmental, labor and tax issues, and all of those have potential criminal components.”

Dagli, who received his law degree from Rutgers School of Law-Newark, said the practice was still in its initial planning stages, and that he wasn't yet aware what its staffing needs would be or how large it would grow.

John D. Fanburg, Brach Eichler’s managing member and the chair of its health law practice, said the new group would help the firm’s clients navigate New York and New Jersey’s complex regulatory landscape.

“We recognize that New Jersey and New York are served by multiple county, state and federal agencies whose goal is to investigate and prosecute fraud committed by health care professionals,” Fanburg said in a statement. “As the cost of health care increases, the efforts of these agencies also increase, resulting in greater scrutiny, investigation and prosecution of providers.”

Dagli also said the overlapping jurisdictions of so many agencies necessitated an attorney knowledgeable enough to cut through the red tape.

“It can be very complex because there are so many agencies that aren’t streamlined and are not well coordinated with each other,” he said.

Health care fraud litigation in particular is likely to get more lively in the coming months, as the health insurance exchanges established by the Affordable Care Act come online and create unforeseen issues, Dagli said.

“Because of the past couple of years, both myself and Brach Eichler have been keeping our clients abreast of the health care changes and preparing our clients for what’s coming long before it arrives,” he said.

32 New Jersey Physician

MacArthur

2013 MacArthur ‘Genius’ Grant Winners Unveiled-Jeffrey Brenner of NJ a winner

By Don Babwin

The old man couldn't control his diabetes, no matter how closely he followed his doctor's instructions. A nurse visited him to find out why the insulin wasn't working, only to watch the nearly blind man inadvertently inject himself with a syringe filled with nothing but air.

It sounds simple to track a patient outside of office visits. But the Chicago-based John D. and Catherine T. MacArthur Foundation found the idea genius.

Jeffrey Brenner, a doctor and founder of the organization that dispatches medical professionals to the doors of the desperately poor residents of Camden, N.J., was named Wednesday as one of 24 to receive a $625,000 "genius grant" from the foundation.

"This is an acknowledgment that we are headed in the right direction," Brenner said.

The 44-year-old created the Camden Coalition of Healthcare Providers as a means to find and track the poorest patients with the most complex medical issues. Those patients are visited wherever they are — at home, in shelters — and escorted to doctor's appointments.

"We cut, scan, zap and hospitalize (patients)," said Brenner, whose group is now working with 10 communities to develop similar systems. "But we forget we need to take care of them."

The eclectic group of grant recipients includes scientists, artists, historians, writers, a lawyer, a statistician and a photographer. They can spend the money however they like, for seeing things others haven't, asking questions others haven't asked and finding new solutions to old problems.

The awards, given annually since 1981, are doled out over a five-year period. This year's class brings the number of recipients to nearly 900, and also will be given the largest amount ever — $125,000 more than last year. Shrouded in secrecy, the selection process involves anonymous nominators and selectors who make final recommendations to the foundation's Board of Directors.

A National Public Radio report about the Library of Congress worrying about damaging old recordings just by playing them sparked the imagination of Carl Haber, a 54-year-old experimental physicist at Lawrence Berkeley National Laboratory in California.

He began to think how one could use precision optical measuring techniques employed in particle research to try to pull sounds from fragile or crumbling cylinders as well as discs and tinfoil.

"Using scientific cameras and measurement tools that just use light, we create essentially a picture ... and then write a program where the computer analyzes the image and calculates mathematically how the needle would move rather than use the needle," he said.

The result: Bringing alive the voices of the dead, from Alexander Graham Bell's voice from the 1800s to a Native American language that fell silent with the last of its possessors. The thousands of recordings from bygone eras around the world are of "great value to anthropologists, the study of folklore, national culture," he said.

But there's more to it, as Haber found out when he heard Bell respond to a small mistake made during the recording.

"To hear someone caught off guard, you are actually seeing the humanity of these people," Haber said.

Robin Fleming's work has been to show the humanity of nations passed over in history books. A Medieval historian at Boston College, she has focused on Great Britain after the fall of the Roman Empire, starting in the 5th century, by analyzing things like coins, pots and even tooth enamel found in settlements and cemeteries to create a picture of their lives.

What she discovered was the people of the time were so determined to carry on the ways of those who came before, they went to cemeteries to dig up artifacts that would help them do that — including containers that held cremated remains.

"They knock(ed) the ash out, give them a wash and put them on the table," Fleming, 57, said.

With an eye to a more contemporary, but just as forgotten, issue, attorney Margaret Stock focuses on military personnel and their families who she says are victimized by the nation's immigration laws.

After Sept. 11, as politicians asked the nation to take care of those fighting for their country, Stock was getting call after call, hearing things like a soldier begging her to stop immigration officials from deporting his wife to Mexico.

"He's on the tarmac ... about to be deployed and says his wife took a wrong turn into a construction zone, was picked up by immigration, they had her in jail and were trying to deport her." said Stock, who lives in Anchorage, Alaska. "The pain that's being caused right now is tremendous."

To help, Stock created the American Immigration Lawyers Association Military Assistance Program, which puts volunteer attorneys across the nation with military families that need help.

Recipients of the grants say the money will only aid their work, giving them time to research and time off from figuring out how to pay for it.

Fiction writer Karen Russell worked at a veterinarian clinic part-time while writing the acclaimed novel "Swamplandia." Her grant money buys her time.

"Just the idea of having a stretch of time where you can commit your time wholeheartedly to a project, nobody gets that," the New York City resident said.

For Stock, her thousands of dollars will mean one thing: People will be seeing more of her.

"This is going to let me advocate more," she said.

October 2013

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Food for Thought

Verona Inn Verona, New Jersey

By Iris Goldberg

We’re always on the lookout for a great hamburger. Over the years we’ve found them in a variety of places from trendy upscale restaurants to “down and dirty” bars. They’ve been piled high with assorted toppings or served plain with just the bun and a heap of fries. Whenever we hear of a place that might be the one to get the next fantastic burger, Michael and I make it our business to give it a try.

So on a recent crisp October night we headed over to the Verona Inn. The place has quite an interesting history. It was first opened back in 1947 by a masonry contractor who had always dreamed of opening a restaurant. He actually built it in the basement of his home for friends and employees to enjoy.

As the place become more and more popular, he constructed a separate building on his own property and the Inn operated there for 62 years under the management of only a few different owners, with the continuing mission to offer “the very best burger on a great bun and the coldest beer available.”

None of the owners were able to purchase the property from the family of the contractor and so in 2010 the Verona Inn opened on its present spot on Bloomfield Avenue, not too far from the original location. Inside, it’s like most taverns with a long bar, tables and chairs and of course, no shortage of flat screen TVs. We were shown to a high round table for two. The menu is much as one would expect, with favorite bar appetizers like nachos and buffalo wings. There are assorted salads, wraps and sandwiches, as well as house specialty plated dinners. Somewhat unique are the Signature Spuds, which are fries served with special additions such as Vermont cheddar, bacon and ranch dressing, buffalo sauce and bleu cheese and white truffle oil and parmesan cheese – to name a few. Also interesting are tacos made with either marinated skirt steak, beer battered fried cod, grilled Mahi-Mahi or Cajun shrimp.

While we were momentarily tempted to sway from our goal of sampling the Verona Inn burger, we remained strong. We could choose a burger made from beef, turkey or a veggie. Of course we both went with beef. I ordered mine medium rare with lettuce, tomato, pickle, onion, cheddar cheese and the House sauce. Michael had his medium rare with caramelized onion and Vermont cheddar.

At Verona Inn they serve their burgers on a brioche bun. I do think this is one of my favorites, if not the favorite holder for my hamburger. It stands up to the burger, not falling apart but doesn’t detract. Also, they serve a tangy homemade cole slaw on the side, which I found to be delicious. The House sauce is a spicier version of Russian dressing. Most important – the burger arrived medium rare – as I had requested.

To accompany our burgers we ordered plain fries and onion rings to share. I must say, I don’t think I got my fair share of the onion rings. In fact, Michael enjoyed them so much he announced he was taking home any that might be leftover (as if there would be any).

The verdict is in! Verona Inn has a terrific hamburger and trimmings. If I had any criticism it would be the constant loud music, which made it difficult to talk. However, I am of a certain age and probably less tolerant than younger tavern goers might be. As far as the lack of conversation, Michael didn’t seem to mind. He was trying to read the lips of the sports commentator on the TV. Verona Inn is located at 624 Bloomfield Avenue, Verona NJ 07044 (973) 239-0544.

34 New Jersey Physician

Why are so many NJ ASCs switching to AmkaiSolutions?

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— Beverly Primeau, Administrator, Concord (N.H.) Ambulatory Surgery Center

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— Linda Newton, Facility Administrator, The Surgery Center at Cranberry in Cranberry Township, Pa.

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“AmkaiSolutions does a really great job of continuing to meet our needs.”

— Cassie Seiler, Quality Resource Director, Harmony Surgery Center in Fort Collins, Colo.

See all we can do for your ASC. Arrange a demo of AmkaiChartsTM, the #1 EMR for the ASC, and AmkaiOfficeTM, the most intuitive business software on the market.

Isn’t it time you switched?

TM

Talk to us! Call 855.462.6524 or visit www.amkai.com

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