Payers & Providers – Issue of November 11, 2010

8/8/2019 Payers & Providers Issue of November 11, 2010

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The chiefnancial ofcer of the MotionPicture Television Fund appeared to receive ahuge bump in compensation in 2008, even asits hospital and long-term care facility reported

multimillion dollar losses and are now in theprocess of shutting down.

Frank Guarrera received compensationtotaling $711,325 in 2008, according to theForm 990 tax return led by the WoodlandHills-based MPTF. Thats up 42% from his 2007compensation of $503,534.

However, it is not that straightfoward. TheInternal Revenue Service made changesregarding the reporting of retirement benets in2008. Prior to that year, such deferredcompensation was reported as the value of thebenet earned during the year. In 2008, it wasreported as the change in the present actuarial

value of the beneft, interest credited for theyear, and changes in market value due toprevailing interest rates.

As a result, some CFOs such as Guarrerasaw their reported overall compensation soar,according to a survey of more than 170healthcare CFOs and COOs by Payers &Providers. That report and the accompanyingsalary data is scheduled for release on Monday.It may be obtained here.

Payers & Providers surveyed thecompensation of more than 100 CFOsbetween 2007 and 2009. The change in IRSrules made for a dramatic shift. In 2008, the

average additional compensation for ahospital CFO averaged $127,639. Factor in2007 data, and it shrunk to $84,108, 34%lower.

The change in the tax rules catapultedGuerrara into the ranks of the highest-compensated hospital CFOs in the state,according to the survey. Guerrara was the fthhighest-compensated hospital CFO of morethan 100 surveyed, and the second highest-compensated CFO of a standalone facility.Only Edward Prunchunas, CFO ofCedars-Sinai Medical Center in Los Angeles, wascompensated more while working for an

individual hospital.Cedars-Sinais data is for 2007, and

therefore was not yet affected by the reportingchange.

However, if the 2008 rule changes arefactored out, Guarreras overall compensationrose just 6%, according to Mike Kuehl,MPTFs vice president ofnance.

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Payers & Providers Page 2

Top Placement...Bottomless Potential

Advertise Here

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In Brief

California HealthCareFoundation Earmarks$10M For Innovations

The California HealthCareFoundation has launched a $10-

million investment fund targetingnonprofit organizations and for-profit companies whose innovationsare able to improve the quality ofhealthcare delivery and reducecosts.

CHCFs Health InnovationsFund will operate somewhat like aventure capital firm. Although itwill focus on ventures in their earlydevelopment and offer seed roundsstarting at $50,000, although it mayinvest up to $3 million with a singleorganization, according to CHCFofficials.

We know there areentrepreneurs who seek to combine

their goal of succeeding in themarketplace with their drive tocontribute to society. Through thisinvestment fund we will supportthem to succeed in both arenas,said Margaret Laws, director of theprogram.

Potential criteria for fundingincludes projects that could cutcosts for a target population by asmuch as $25 million, or createsustainable access to care for atleast 100,000 Californians.

In addition to providingfunding, CHCF may also provideconsulting services to firms,including finance and regulatory

compliance strategies.Requirements for proposals andinstructions on how to apply areavailable at www.chcf.org/pri.

Huntington HospitalLaunches Community-

Oriented Website

Continued on Page 3

NEWS

Survey (Continued from Page One)

The 990 form was completelyrevamped, Kuehl said.

Guarrera is not alone. Cyrus Dah, CFO

ofDameron Hospital in Stockton, earnedadditional compensation of $295,085 in2008. In 2007, that amount was $166,783.

The changes also affected COOcompensation. Kenneth Meehan, executivevice president of operations at John MuirHealth in Walnut Creek, reported additionalcompensation of $470,434 in 2008. In 2007,his additional compensation was $34,101.Payers & Providers surveyed the salaries ofmore than 60 hospital COOs.

Rule change aside, Guarreras base salaryof $327,018 was more than 20% higher thanthe statewide average for hospital CFOs of

$272,192, according to the survey data. Hisadditional pay of $384,307 (of which$277,118 was listed as deferredcompensation) was the second highest inCalifornia, and by far the highest for the CFOof a standalone facility.

Absence the rule change, Kuehl notedthat Guarreras deferred compensation wouldhave been reported as $126,000.

In 2007, Guarrera received $411,153 incash compensation and $92,381 incontributions to his benet plan.

MPTFs hospital reported losses of $57.2million in 2008 on revenue of just under

$110 million, according to nancial data itled with the Ofce of Statewide HealthPlanning and Development.

In January 2009, MPTF announced itwould close its hospital and skilled nursingfacility due to ongoing losses, displacingabout 100 long-term patients and puttingnearly 300 employees out of work. Itsoutpatient clinics and retirement communitywere not affected.

With costs skyrocketing and governmentreimbursement declining, operating our ownacute-care hospital and long-term care facilityis draining our resources at an alarming rate,

said CEO David B. Tillman, M.D., at the timeof the announcement. MPTF had claimed

operating the facility cost $10 million a yearover payer reimbursements, primarily fromMedicare and Medi-Cal.

The decision to close the facility was metwith outrage by members of the entertainmencommunity and family members of patients,many of whom picketed the hospital not longafter the announcement. The membership ofthe Screen Actors Guild which has workedwith MPTF to provide healthcare insurance tostruggling actors narrowly voted in April2009 to oppose the closure.

Tillman himself resigned from MPTF inFebruary 2010. Reached at his Long Beachhome, he declined to comment on Guerrarascompensation.

The pension benet change helped boost

Tillmans own overall compensation morethan 23% in 2008, to $928,862, up from$753,342 in 2007. That made him the 25thhighest-paid hospital CEO in California, andone of a handful of CEOs whosecompensation exceeded the charity careprovided by his hospital.

Meanwhile, MPTF Chief OperatingOfcer Seth Ellis earned overall compensationin 2008 of $399,074, up 13% from 2008. Thais just below the statewide average for hospitaCOOs of $404,645, according to the surveydata.

Typically, COOs are higher on the

organizational chain than CFOs, and thusoutearn them. However, Ellis pay has laggedbehind Guerraras for several years, accordingto tax records.

MPTF Interim Chief Executive OfcerRobert Beitcher was traveling last week andunable to specically address pay issues.Beitcher, the former CEO of camera and opticmanufacturer Panavision, was appointed tohead MPTF last spring.

Along with the data on hospital CFO andCOO compensation, the Payers & Providerssurvey also explores the compensation ofhealth plan COOs CFOs whose organizations

are headquartered in California. That includesboth non-prot and publicly-traded plans.
http://www.healthwebsummit.com/calif120210.htm


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Page 3Payers & Providers

Longer ALOS!*

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*For our ads, not your hospital

NEWS

In Brief

Huntington Memorial Hospital inPasadena has teamed with theHealthy Communities Institute tolaunch a website providinghealthcare data in its serviceregion.

The Healthy Pasadenawebsite

(www.healthypasadena.org),includes data on local obesity,diabetes and cancer death rates.

Making healthcare accessibleto the community not only meansproviding great care within ourhospital, but also means reachingoutside our walls with efforts likeHealthy Pasadena to offer access toimportant health information, saidHuntington Senior Vice PresidentJane Haderlein. Healthy Pasadenaprovides essential information tothe community while giving us andother local healthcare providersthe kind of data and insightnecessary to remain continually

responsive to community needs.In addition to the healthcare

data, the site includes articlesregarding local healthcare news.

CDPH To Penalize 12Hospitals On Friday

The California Department ofPublic Health will issue 14administrative penalties to 12hospitals statewide on Friday.

The hospitals are located inLos Angeles, Orange, Riverside,San Diego, San Francisco and

Sonoma Counties, according to aCDPH advisory.

The CDPH issuesadministrative penalties for failureto comply with licensingrequirements that have caused orwas likely to cause serious injuryor death to patients.

The penalties to be announcedon Friday will range from $25,000to $75,000 per violation,according to the CDPH.

CDPH has penalized 37hospitals in 2010, not includingthose to be announced on Friday.

also set up strict deadlines for the claimsubmission.

The DMHC claimed those demandsviolated provisions of the California Healthand Safety Code and resulted in forfeiture ofthe often sizable stop-loss payment,according to the decree.

The DMHC took action against Anthemafter complaints by several hospitals, none ofthem named in the agreement.

The DMHC took into consideration thatAnthem made efforts to change its claimssubmissions policy for stop-loss paymentsafter the complaints were led.

We were pleased to resolve ourdisagreement with (DMHC) through aconsent agreement, rather than litigation,Anthem said in a statement that also praisedthe relationship it has with hospitals.

A Payers & Providers report last Maynoted that the DMHC had taken far moreenforcement actions against Anthem thanany other health plan in California.

Anthem To Pay Hospitals $1.6MSettles DMHC Charges on Stop-Loss Claims

Anthem Blue Cross of California has enteredinto an agreement with the Department ofManaged Health Care to compensatehospitals for allegedly denying them paymentsowed for inpatient care.

Underterms of the Oct. 27 agreement,Anthem Blue Cross agreed to pay $1.62million to an undisclosed number of hospitals.Of that, $1.077 million comprised paymentsowed hospitals, with another $543,497 forinterest and penalties. The payments must bemade by Nov. 25. Anthem did not admit anywrongdoing, according to the agreement.

The agreement stated that Anthem

typically paid hospitals in two ways: a perdiem payment for daily care provided for apatient, plus a stop-loss payment once perdiem payments reach a certain threshold.

However, the agreement noted thatsometime in 2004 Anthem set up a systemwherein requests for stop-loss payments had tobe directed to a different mailing address thanclaims for per diem payments. The health plan

Kaiser Reports Higher Earnings

Modest Year-to-Date Growth in Enrollees

Oakland-based Kaiser Permanente postedthird quarter earnings substantially higherthan a year ago, and also reported modestrises in enrollment and capital spending.

Net income was $634 million onrevenues of $11.1 billion for the quarterending Sept. 30. That compares to netincome of $569 million on revenue of $10.5billion for the third quarter of 2009.

Net income for the rst nine months of2010 has also edged past 2009. It stood at

$1.2 billion, compared to $1.1 billion in2009.Capital spending in the third quarter was

$672 million, up from $582 million for theyear-ago quarter.

We use our positive nancialperformance to make investments in caredelivery programs, facilities and technologysupporting our members, patients and thecommunities we serve, said Kaiser ChiefFinancial Ofcer Kathy Lancaster. Capitalspending now stands at $1.7 billion for 2010catching up to the year-to-date total for 2009

Meanwhile, Kaisers health plan

membership is up by 59,000 since the end o2009. It currently stands at 8.6 millionsystemwide, about 80% of which is inCalifornia.

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Payers & Providers Page

When I poke around the tax returns orother documents about the healthcareorganizations Payers & Providers covers, Ioften find something interesting. Todaysfront page story about CFO and COOcompensation is a case in point.

For the very first time, I foundsomething interesting that wasnt in the taxreturns.

It concerns Blue Shield of California,the states third-largest health plan, withmore than 2 million members statewide andannual revenue of $9 billion. For the sake

of full disclosure, I purchase my healthcarecoverage from Blue Shield.San Francisco-based Blue

Shield operates as a not-for-profit health plan, whichpresupposed it would have tofile a 990 tax return that wouldbe a matter of public record.However, I could only find a990 for its charitable arm, notfor the health plan itself.

When I contacted BlueShield about this seemingomission last month, I was initially

told it was a 501c(4) organization,and therefore wasnt required tofile a 990. This seemed tocontradict Internal Revenue Serviceregulations, which has very few narrowexceptions for 501c(4)s on filing 990s.

I was then told that Blue Shield wasnot tax exempt, which seemed a curiousstate of affairs for a not-for-profit.

I twice asked for a letter from BlueShields legal department explaining why itis not required to file a 990. I finally got ananswer this week: Blue Shield is aCalifornia nonprofit mutual benefit

corporation. As explained to me in a letter,there are many other California nonprofitmutual benefit corporations that are nottax-exempt and do not file a Form 990,including the Automobile Club of SouthernCalifornia...and any number ofhomeowners, professional, and tradeassociations. That means Blue Shieldenrollees are members of the corporationas well.

As far as I can tell, Blue Shield is theonly health plan in California incorporatedin this manner. Conveniently, Section 8322

of the California Corporations Codespecifically bars members of a mutual bencorporation from receiving information oncompensation of the corporations executi

By contrast, the compensation of topexecutives of non-profit health plans suchKaiser, SCAN and Delta Dental of Califorare a matter of public record, as are thosepublicly-traded health plans such as HealNet and Molina Health Care. All of them available in the report Payers & Providers publishing next week.

Blue Shields manner of incorporation

would be more tenable if the biggest gripeamong its members is that they direceive this months copy ofWestways. But as widely reportethe past few years, it exercisedrescissions on more than 600members who became seriously (state regulators eventually forceBlue Shield to reenroll thosemembers); uses a funky policy torevoke payment grace periods fopremiums; and like many health

plans, has routinely jacked up rateswithout providing adequate

explanations for doing so. If theres mutual benefit being conferred on imembers, there are times when it is

difficult to see what that is. Under suchcircumstances, the earnings of the peoplerunning the joint should be open for publview.

Interestingly, Section 7341 of theCorporations Code requires mutual beneficorporations to hold meetings of itsmembership at its corporate headquartershavent had the time to see whether BlueShields bylaws have eradicated thisrequirement. But if they havent, it would

beyond interesting to see even 1% of BlueShields members thronging its offices in theart of San Franciscos Financial Districtdoubt, I would not be the only member wsome questions to ask.

OPINION

Blue Shields Conspicuous AbsenceEven Though Non-Profit, Its Structure Shields Exec P

By Ron

Shinkman

Ron Shinkman is the publisher of Payers &

Providers.

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Op-ed submissions of up to 600 words are

welcomed. Please e-mail proposals to

[email protected],


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MARKETPLACE/EMPLOYMENTPayers & Providers Page 5

SENIOR MEDICARE COMPLIANCE ADVISOR - Along with the Compliance Ofcer and Privacy & Information Security Ofcerserves as the focal point for all Medicare Advantage compliance activities. Coordinates and communicates all assigned MedicareAdvantage compliance activities internally and with L.A. Care's contracted provider network. Along with the Compliance Ofcer, iL.A. Care's liaison with Centers for Medicare & Medicaid Services (CMS) and other federal agencies concerning L.A. Care'Medicare Advantage product(s). Ensures that L.A. Care and its subcontracted provider network is compliant with all CMS federaregulatory requirements. This is achieved by working with internal and external staff to correct performance deciencies, ensuringstaff are aware of CMS reporting requirements and reports are submitted to CMS identifying internal areas for improvementResponsible for performing internal audits, monitors implementation of corrective measures, and interpretation of CMS requirementsWorking knowledge of federal and state requirements is required, as well as highly developed analytical skills and excellent written

and verbal communication skills.

For complete job description, qualications/requirements, visit our website: www.lacare.org

To apply, email resume with salary history and requirement to: [email protected] referencing Payers & Providers Ad

ASSOCIATE MEDICAL DIRECTOR FOR CLINICAL INTEGRATED SOLUTIONS(Los Angeles, CA)

The Associate Medical Director for COPE Health Solutions Clinical Integration Solutions service line will serve as theDirector of the Camino de Salud Network and Product Leader for Provider Practice Redesign. The Associate Medical Directorwill play a key role in launching the Provider Practice Redesign product into other marketplaces outside of the Camino deSalud, Long Beach, and Westside/South Bay Networks.

Provider Practice Redesign (PPR) is one component of Clinical Integration Solutions, designed to expand access to specialtycare services within the community.

Camino de Salud Healthy Road Network is a public-private partnership between LAC+USC Healthcare Network, fourprivate hospitals, numerous community clinics and private physician ofces, Keck School of Medicine at USC, and the USCSchool of Pharmacy.

QUALIFICATIONS

M.D. with a non-restricted license and board certication

Minimum 2 years of full-time experience in practice (not including residency training) in one or more of the following:private physician practice, hospital-based practice and inpatient care.)

Masters degree is strongly preferred

Procient in Microsoft Ofce Programs (Outlook, Word, Excel, Access and PowerPoint) and experience with Internetresearch.

To apply and learn more visit: www.copehealthsolutions.org/careers


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Payers & Providers MARKETPLACE/EMPLOYMENT Page 6

SENIOR DIRECTOR, MANAGED CARE ANALYTICS

(San Francisco, CA)

Catholic Healthcare West, headquartered in San Francisco, CA, is a system of 41 hospitals and medical centers in California,Arizona, and Nevada. Founded in 1986, it is the eighth largest health system in the nation and the largest not-for-protprovider in California. CHW is committed to delivering compassionate, high-quality, affordable health care services withspecial attention to the poor and underserved. The CHW network of nearly 10,000 physicians and approximately 54,000employees provides health care services to more than ve million people annually.

We are currently seeking a dynamic leader for the position of Senior Director, Managed Care Analytics. This position isresponsible for the overall leadership and management of CHWs Analytics & Application Team (16 FTEs) to support over $3billion in managed care negotiations across CHWs 40+ acute care hospital, afliate physician groups, joint ventures andother business development projects throughout California, Arizona & Nevada. This position will innovate and developreimbursement rate structures to maximize CHWs reimbursement and operating margins. In addition, the Senior Directorwill provide leadership of the statewide development and implementation of accurate, timely analyses and proposals inpreparation for, during, and after payer negotiations.

QUALIFICATIONS

Bachelors degree. Masters degree preferred. Equivalent experience and record of accomplishments may be considered.Minimum of ten years progressive responsibility in the healthcare environment. A thorough senior practitioner'sunderstanding of the healthcare industry, managed care, fee-for-service reimbursement structures, nancial modeling,capitation, and knowledge of relevant federal and state regulations is mandatory.

SPECIFIC KNOWLEDGE AND SKILLS

Comprehensive, advanced knowledge of healthcare managed care principles High degree of advanced analytical and problem solving skills with specic application to hospital, medical and

actuarial data Advanced capitation and capitation management skills, including a working knowledge of actuarial analysis and

risk evaluation methodologies, calculating and evaluation reimbursement rates, and forecasting effect on revenuesand expenses

Must be able to effectively function in situations involving high-level negotiation activities and possess effectivenegotiating skills

Knowledge of legal principles and regulatory requirements relating to managed care risk and fee-for-servicecontracting

Comprehensive knowledge of healthcare market and hospital operations Advanced knowledge of hospital nance and accounting, including cost accounting principles and operations Knowledge of MSDRGs, APCs and other coding methodologies as they apply to managed care

Apply online: www.chwcareers.org or email your resume to Lori Burt:[email protected]


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Payers & Providers – Issue of November 11, 2010

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