SAC Review #18- Winter 2015-16 Edition

FACING SECTION 501(R)- CONT’D

Non-profit hospitals will argue that the United States Federal Government was extremely slow in rolling out the 501(r) regulations. These hospitals would state it was better for business to stand on the sideline until more clarity was provided by the Feds. However, the charity care rules are fairly flexible. The rules allow non-profit hospitals a bit of latitude in compliance had they decided to get started. For the CHNAs, the requirements are flexible and hardly difficult The federal health insurance mechanics seem to have been a little lackluster in calling out the nonprofit hospitals for their inadequate preparation for and implementation of the 501(r) rules. To this point, there hasn’t been IRS enforcement with respect to Section 501(r). However, the IRS has released guidance on what kinds of enforcement actions are likely under specific circumstances. How the IRS will police hospital compliance is still a mystery.

For the hospitals, who knows what will happen in 2016? However, behaving like Sgt. Schultz in Hogan’s Heroes is not the solution for dealing with 501(r). Since 2016 is an election year, either the media will be too distracted to make this an issue or the election creates a back-draft that flames 501(r) non-compliance to the forefront. So the best advice might be for nonprofits to take a page from the Boy Scouts and be prepared in 2016.

So here is the nonprofit hospital to-do list: establish a Community Health Needs Assessment (CSNA), draft well written financial assistance and emergency care policies, limit the amounts charged to individuals eligible for assistance under these policies, and make reasonable efforts to determine eligibility for assistance prior to engaging in extraordinary collections action.

BIG ANNOUNCEMENT! The Law Offices of SAC will be officially opening its San Diego branch in March 2016!

When Will the Modern Hospital Building Model Finally Takeoff?

By Chuck Acquisto, Esq. When you think about it, airports and hospitals have a lot in common. People are at a hospital and airports not by choice, but out of necessity. Many are coming, others are going. Others are just dropping off or picking up.

But the modern comparison often stops right there. Many hospitals still look exactly like they did 10, 20, 30 or even 50 years ago. Sterile and cold. Bland. Little to offer the non-patient either working or visiting the provider. Sure the TV in the ER waiting room might have gotten flatter and perhaps bigger, but other than the fish in the aquarium there is little difference.

I foolishly predicted 15 years ago that this country’s hospitals would follow the nation’s airport lead and transform into functioning buildings offering far more than standard service for its customers/ patients. At the turn of the century, the vast majority of airports in the U.S. suddenly looked very different. In fact, the airports looked more like shopping malls.

I am not sure if the airport agencies listened to customers or saw a hole and filled it. Realizing they had a natural pool of people often mandated to stay put for a minimum of a hour, if not longer, the modern airport transformed into a bevy of wine bars, restaurants, brand name stores and lounges. The airport realized there was more revenue to be generated from the vast terminal space other than airline gate leases.

When my family landed in Orlando eight years ago, I laughed when I looked around the airport. There in front of me was a Hyatt Regency that was physically inside the airport. There was a Disney store. And a store for Sea World. There was even a store for Cape Canaveral celebrating NASA. “That’s it family…we are just staying here. It has everything… including air conditioning so we are avoiding the forsaken Florida humidity all together. Heck, the kids just want to shop for souvenirs, there are quality chain restaurants and the hotel has a pool. Who needs a rental car?”

Don’t believe me? Then you have not travelled by air. I looked up the Orlando Airport on the Internet and here is a small sample of just stores you can shop at while waiting for a flight: Brookstone, Tommy Bahama, Harley Davidson, Finish Line, Johnston & Murphy, Skechers, Sunglass Hut, Oakley and Ron Jon’s Surf Shop.

Being stranded in a 21st Century airport is no longer the end of the world. Not when you can grab a cold one at a Harry Carey’s Tavern in Chicago’s Midway Airport or window shop in the endless stores at JFK in New York. The same cannot be said for a majority of our country’s hospitals. Without the modern smartphone for entertainment, the non-patient entering a hospital would be prepared for having the life completely sucked out of them.

Ironically, a few hospitals across the country are taking advantage of being a victim of the Internet Shopping Era: the dying suburban mall. Instead of bringing the airport mall model to their existing structure, the hospital is taking the hospital to the mall.

In Jackson, Mississippi, a failing mall is now a medical complex that serves lowincome residents. The Jackson Medical Mall also has specialty clinics, a college of public service, a restaurant and smoothie bar, and meeting spaces for community events. Vanderbilt University Medical Center did something similar when the hospital took over the entire second floor of the struggling 100 Oaks Mall in Nashville. Parking is easier for patients, and they are sometimes allowed to wander around the still-open parts of the mall with a beeper as they wait for the doctor to see them, according to the Nashville Business Journal.

So take a look around your community, one day that Macy’s or J.C. Penny’s box store just might be a hospital or urgent care center. Or maybe your local hospital will take a look around at all its nonrevenue generating space and have a light bulb go off in their budget-crunching mind.

Suddenly seeking medical services may be even more enticing with a food court and an Apple Store foot steps away.

you’d like to tell us about?

Jennifer Jiao This quarter’s Spotlight is on attorney Jennifer Jiao.

Spotlight Q&A What is your area of expertise within SAC? I joined SAC in 2015 as a litigation associate, handling both arbitrations and court trials. I am involved in every step of the litigation process. All of my cases begin with an evaluation of the strength and weaknesses of each claim at issue.

Once the client authorizes pursuit, the case is filed and discovery begins. In discovery, I obtain as much information as I can for each claim at issue. This is usually done through document exchanges, written interrogatories, and depositions. Once discovery is complete, I reevaluate each claim at issue and begin the process of negotiating the best possible resolution for each case.

What one piece of sage advice can you offer to our clients that can help them in the future?

I would advise our clients to be be aware of the hidden pitfalls in their hospital services contracts. Even though a favorable rate may be obtained, the time deadlines and other road blocks set up by the contracts to allow denials will decrease the amount actually reimbursed. The contracts not only establish rates, but also important timeframes which affect the appeals process, arbitration, and litigation. For example, even the strongest claims can be denied if the provider does not follow the contractual timelines for initial claim submission and each subsequent level of appeal. Therefore, when negotiating new contracts or amendments to existing contracts, providers should fight for timeframes which provide enough time for claims to be reviewed, submitted, and appealed.

I would also advise our clients to diligently follow-up and to document their followups with insurance payors on the status of submitted and/or appealed claims.

Many times, a claim is timely submitted but insurance payors fail to issue a timely payment or denial. Without timely follow-up and proper documentation, a resubmitted

claim may be denied for untimely filing.

Can you talk about a recent success story of yours? What was the challenge and how were you able to overcome it?

In one of my cases, I was able to successfully defend a demurrer on the basis of estoppel. In this case, defendant argued that the case should be dismissed because the claims did not meet the requirements of the Government Claims Act. Specifically, defendant argued that the claims were not submitted to the defendant’s principal place of business.

However, I successfully argued that defendant should not be allowed to argue noncompliance with the Government Claims Act because the claims were submitted to the address that was provided on defendant’s own letterhead.

In other words, the claims were submitted to the wrong address because plaintiff reasonably relied on information that came directly from the defendant.

Do you have any hobbies or interests outside of work?

On the weekends I like to go on hikes around Los Angeles or Orange County.

There are many trails in Malibu, Palos Verdes and Laguna Beach which offer beautiful views of the Pacific Ocean. I also enjoy traveling. In 2015 was able to visit Austin, Texas; Portland, Oregon; Seattle, Washington; Yosemite National Park; and Big Sur, California. In 2016, my goal is to plan a trip to visit my extended family in China.

I come from a big family but most of my extended family live in Beijing, China. I was born in Beijing, China and lived there until I was about four years old. As a kid, I used to spend every summer in China but with college, law school, and now work, it has been harder and harder to find time to visit. My parents and my younger brother live in Orange County. I usually spend the weekends watching sports and cooking with my younger brother.

I also have two cats, Libby and Olivia.

Libby is nine years old and Olivia is eight years old. Both are American shorthairs but they have very different personalities.

Libby is a huge diva who does what she wants, when she wants. Olivia is very shy and timid, leaving most of the exploring for Libby to do on her own.

Do you have any guilty pleasure television shows, movies or other activities to tell us about?

One of my favorite guilty pleasure movies is Hocus Pocus, starring Bette Midler, Sarah Jessica Parker, and Kathy Najimy. It was released when I was in the third grade and there was an unspoken competition between all the kids in the neighborhood to watch it as many times as possible in the theaters. Re-watching it as an adult is a very nostalgic experience for me and I still find it just as entertaining as I did when I was eight years old.

What are your favorite Colors? Other favorites?

foods?

I am a huge foodie. I love trying new restaurants but some of my favorite go-tos in the Los Angeles area are Republique, the Bazaar, Sushi Zo, and Mastro’s.

Providing Meals to Local Homeless in San Bernardino

Do you have any charitable causes that interest you and events you have participated in recently?

Both of my cats were rescue cats so I’m very passionate about donating time and resources to the ASPCA. Local shelters are always in need of extra volunteers for tasks ranging from adoption days to just playing with the animals. I am also thinking about fostering kittens but my only concern is that I may end up wanting to keep them all!

Do you have family and/or pets

On Sunday, November 8, under the coordination of HFMA Southern California chapter board member and Stephenson, Acquisto & Colman’s very own Denise Ransdell, 25 chapter members and their families including SAC attorney Christopher Hapak assisted in the preparation of meals for 74 individuals. The chapter also coordinated the collection of toiletries, socks, and other hygiene products that were placed into more than 100 giveaway bags for those at the shelter.