Thank You to Our Platinum and Presidential Sponsors

2005 Issue 1

2005/2006 ISSUE ONE
Chapter Sponsors

Platinum Club
Ernst & Young, LLP
First Credit (FCI) International Corporation
Healthcare Resolution Services, Inc.
Human Arc
Long-O'Shea & Co., LLC
NatCity Investments, Inc.

Gold Club
Gustafson + Associates
Squire, Sanders & Dempsey LLP
Wise Management Services, Inc.

Silver Club
JP Recovery Services, Inc.
Masters Associates Receivables Management, Inc.
Mutual Hospital Services
Quadax, Inc.

Bronze Club
Bruner-Cox LLP
Calfee, Halter & Griswold LLP
Engelhardt & Emrhein
Fenner Consulting
HMC Group
Howard, Wershbale & Co.
Microsys Computing, Inc.
NCO Financial Systems Inc.
OSI Healthcare Services
Professional Receivables Control, Inc.
UCB - A Receivables Management Co.
Vorys, Sater, Seymour & Pease LLP

HFMA Northeast Ohio
Chapter Officers 2005-2006

Maureen A. Wood

Christopher Milligan

Vice President
Karen J. Joyce

Suzanne M. Tschetter

Brian K. Quinn

Chapter Coordinator
Kathleen A. Much

Board of Directors

Barry L. Franklin
Neil Freer
Brian C. Nestor
James F. O'Donnell
Laurie A. Rauser
Anna Sulewski
Allen R. Tracy

Visit HFMA National at:

Visit HFMA Northeast Ohio at:

Click here for Past Newsletters

HFMA Northeast Ohio

Maureen Campbell

Bottom Line Systems, Inc.

Jorie Novacek

Parma Community General Hospital

Jennifer Hahn
Robinson Memorial Hospital

Laurie A. Rauser
The MetroHealth System

Mary Jayne Reedy
Human Arc

Steve Rybka
United Collections Bureau

Anna Sulewski
The MetroHealth System

Steve Thome
Ernst & Young, LLP

Email the Committee

Dave Kilmer

President's Message

Dear Fellow HFMA Members:

Welcome to the 2005/2006 HFMA Program Year. I am very excited to be this year's President of the NEO Chapter and look forward to working with the members throughout the year in continuing to make our Chapter the best it can be.
The Board of Directors and Committee Chairs of the NEO HFMA Chapter worked very hard in developing the 2005/6 program year. Our Chapters vision is to be an indispensable professional resource for Healthcare Financial Managers in Northeast Ohio. In order to meet this mission and ensure the continued success of our Chapter, we have set the following goals:
  • Offer quality educational programs while increasing overall attendance
  • Increase member communication
  • Develop a formal new member program that promotes Chapter involvement
  • Increase number of sponsors and sponsor involvement in Chapter
  • Develop a formal program to contact inactive HFMA members to increase Chapter participation
Throughout the next year we will continue to update Chapter members on our success in meeting these goals. We welcome your suggestions and assistance in making the Northeast Ohio Chapter one that we are all proud to be a part of.

The backbone of HFMA is its educational activities.
In This Issue?
click or scroll to see as article

From the Annual National Institute to the regional conferences and local programs offered by our own Chapter, the Program Committee has outlined a very exciting and informative series offering a full range of educational and training opportunities for all our members. Additionally, the Gerry Haggerty Annual Leadership Institute Committee has already laid the foundation for the annual comprehensive two-day conference to be held in the spring of 2006. I hope you will be able to take advantage of some of these offerings this year.

This month's newsletter is full of information about past and future Chapter events as well as educational articles and a new series highlighting HFMA member benefits.

I look forwarding to working with you over the next year in meeting your personal goals for HFMA as well as HFMA's Chapter goals.

Best wishes to all of you for a successful year. I hope to see you at an upcoming HFMA event.


Maureen A. Wood, C.P.A.

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New Members - Welcome to NEOHFMA!

By Maureen Campbell

New members are the lifeblood of our organization. In the spirit of "making it personal", please welcome our newest members to HFMA. Look for them at our next meeting and welcome them to our organization.

Sara Aparicio
Lake Hospital System
Christine E. Aucreman
Forum Health
David S. Azzolina
Memberhealth, Inc.
Jill M. Barber
Community Health Partners
Tiffany Beaumont
Ernst & Young
Alan B. Blumenthal
JPMorgan Chase Bank, N.A.
Phillip Brooks
Summa Health System
Jeffrey J. Carlson
University Hospitals Health System
Susan Coffin
Rae Wyatt
Kimberly M. Corrigan
Wickliffe Country Place
David F. Cox
Chart One Inc.
Travis L. Crum
Diane Daub
Community Health Partners
Kathleen Derooy
Lake East Hospital
James S. Earich
The Wellington Group, LLC
Carla T. Frank
Bruner-Cox, LLP
Ryan D. Gardner
Summa Health System
Roy F. Grubaugh
Kevin C. Hoffman
CDR Associates, LLC
Cheryl Jacobs
Samaritan Regional Health System
Pooja Kamdar
Parma Community General Hospital
Dan Kell
Aultman Health Foundation
Sandy Kelling
EMH Regional Healthcare System
Deborah Knight-Lauricia
Comprehensive Health Network
Kathleen M. Kostelnick
Pioneer Physicians Network
Carol J. Long
MetroHealth Medical Center
Dorothy A. Long
University Hospital Health System
Matthew J. Lower
Leslie Luciano
University Hospitals Health Systems
Steve Matas
Robinson Memorial Hospital
Michael S. Moss
American Medical Response
Sarah A. Moze
Amy L. Nobel
Cleveland Clinic Foundation
Erika Oliger
Bailey Rehabilitation Services
Christine Paciorec
Cleveland Clinic Foundation
Terrance M. Paradie
Jan E. Petrik
JPMorgan Chase Bank, N.A.
Susan Reigle
Doctors Hospital Stark County
D. Thomas Rimbey
Forum Health - Hillside Hospital
Roseanne Schott
Cleveland Clinic Foundation
Charleen A. Scott
Watermark Audit Group, Inc.
Kelly J. Sorensen
Howard, Wershbale & Co.
Kathy Sowa-Beach
SRC Software
Jo Ann Ude
Vision Financial Corp.
Chitra M. Walker
Summacare Health Plan
Joe Williford
Wood County Hospital

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New Sponsors

By Maureen Campbell

On behalf of NEOHFMA, we would like to welcome our newest sponsors for the 2005-2006 year. Welcome and thank you for your sponsorship!

Gustafson + Associates
Gold Sponsor

Microsys Computing, Inc.
Bronze Sponsor

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Committee Corner 2005

By Steve Rybka

Networking Committee
The Network Committee is pleased to announce that this years Holiday Party is booked for December 14th, 2005 at the House of Blues in downtown Cleveland. Right in the heart of the city, you'll be blown away by this first class entertainment establishment. From a great open bar to a spectacular American cuisine menu with a distinct Southern flavor, you'll spend an evening with your chapter that you soon won't forget. Of course, there is always a surprise or two in the works so watch for more details in your next e-mail from the Network Committee.

GHALI Committee
Problem: The GHALI has outgrown the Glenmoor Country Club. Solution: A bigger, but still luxurious location in Northeast Ohio. What a great problem to have and what a fantastic solution! Thanks to some "new blood" on the GHALI Committee, the search ended on the North Coast at Quail Hollow Resort in Concord, Ohio. Not only was the Committee very pleased with the size of the meeting rooms, but all attendees will be able to stay on site at one location. Add to this a delightful menu, highly rated speakers, a first class sauna and a very demanding golf course and you end up with a regional event that you can't miss! Be sure to mark the dates today: May 24-26, 2006.

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Local HFMA Leaders attend LTC

By Jorie Novacek

Fresh ideas and networking were on the agenda at this year's HFMA Leadership Training Conference which was held in New Orleans, Louisiana on April 17-19 2005. Local attendees included the incoming President and Vice President, Maureen Wood and Chris Milligan as well as committee chairs Karen Joyce, Jorie Novacek, Lisa Medovich, and Chapter Coordinator, Kathy Much.

Karen Joyce, Lisa Medovich, Jorie Novacek, Chris Milligan, Maureen Wood, and Kathy Much enjoy dinner at the LTC
Karen Joyce, Lisa Medovich, Jorie Novacek, Chris Milligan,
Maureen Wood, and Kathy Much enjoy dinner at the LTC

Chapter leaders from all across the country as well as representatives for the national HFMA office came together to share ideas on topics including leadership responsibilities, chapter programs, member events, sponsorship, and newsletter communications. While at the conference, the NEO attendees met to brainstorm about ways to bring the most benefits to NEO HFMA members as well as identify key goals and objectives for the coming year.

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NEOHFMA Chapter Gives Thanks at Volunteer Recognition Program

By Barry Franklin

The Chapter concluded its 2004-2005 program year with its annual Volunteer Recognition Program on September 15 at Blue Heron Golf Club. The Volunteer Recognition Program is the Chapter's opportunity to thank its volunteers for their contributions over the past year. The educational program was a most enjoyable session on two widely divergent topics. Cheryl Lippert from KPMG outlined the key provisions of the recent Sarbanes-Oxley legislation and how not-for-profit hospitals and health systems are incorporating its provisions into their own audit, compliance, and corporate responsibility programs. Kathleen Razi, Ph.D., followed with a lively, fun presentation which gave us a chance to look at ourselves and others from a behavioral perspective, providing insights into identifying and responding to behavioral styles in a manner which works for everyone. Our thanks to both Cheryl and Kathleen for an enjoyable morning.

The program concluded with a great lunch at Blue Heron followed by the opportunity to play one of the area's newest, challenging golf courses. For those of us who played, the golf course unfortunately came out the winner more often than not.

As the Chapter's President last year, I would like to add my personal thanks to the Chapter Directors, Officers, Committee Chairs and members for their contributions to our continued success last year. That success was recognized by receipt of two National HFMA awards: the Bronze Award for Excellence for new member retention and the Hottum Award for educational performance improvement. Finally, special thanks to Kathy Much, our Chapter Coordinator, for her tireless efforts to keep us on track.

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Kudos to You!

By Laurie Rauser

The Northeast Ohio Chapter of HFMA would like to express "kudos" to the following Chapter members:

Matthew Rish - Matthew was promoted to Director of Finance for St. Vincent Charity Hospital as of 9-15-05. Previously, Matthew was Sr. Revenue analyst for UHHS/CSAHS - Cuyahoga, Inc.

Traci L. Fabrizi - Traci has joined KPMG LLP in Cleveland as a Senior Manager.

Edgar Silalahi - Edgar was hired as the new Director of Planning and Business Development for The Sisters of Charity of St. Augustine Health System as of September 2005.

Anthea Daniels - Anthea has joined LifeBanc, the organ procurement organization for Northeast Ohio. Anthea is on the executive committee and the board secretary.

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Upcoming Events

Listed below are the remaining events planned for the 2005/2006 program year. Details and dates are announced as soon as they are available.

December 14, 2005 Holiday Party & Awards DinnerHouse of Blues
January, 2006 No MeetingN/A
February 23, 2006Patient Financial ServicesDouble Tree South
March 16, 2006To Be AnnouncedDouble Tree South
April 27, 2006Post Acute CareDouble Tree South
May 24-26, 2006Gerry Haggerty Annual Leadership InstituteQuail Hollow
June, 2006Managed CareTo be Announced
July 28, 2006To Be Announced To be Announced

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2005 Holiday Party to Be Held at House of Blues

The Networking Committee is pleased to announce that the 2005 Holiday Party will be held at the House of Blues in beautiful downtown Cleveland on December 14! Please mark your calendars as the festivities begin promptly at 6pm. The party will run from 6pm to 10pm, and will give you and your fellow HFMA cohorts an opportunity to socialize and discuss this past year's events along with topical issues. Please plan to attend and be dazzled by the vast array of southern-inspired cuisine! The Networking Committee is pleased to announce that the cost has $0 variance over 2004, which means the cost is once again at the low, low bargain rate of $40 for all attendees. This is a wonderful opportunity to introduce non-HFMA members to the world of HFMA in a cozy and relaxed atmosphere.

Karen Joyce, Lisa Medovich, Jorie Novacek, Chris Milligan, Maureen Wood, and Kathy Much enjoy dinner at the LTC

Invitations will be sent in November, so please watch for it in the slew of holiday communications.

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HFMA Member Benefits - Certification

By Jorie Novacek

Note: The following is the first of a recurring series of articles describing the benefits of HFMA membership.

On way to enhance your career potential is by becoming a Certified Healthcare Financial Professional (CHFP). HFMA's certification program provides you an opportunity to earn this designation when you meet the following requirements:
  • Be an HFMA member for a total of two years and be a current active member
  • Have two years of professional experience in the healthcare finance industry
  • Successfully complete the HFMA Core certification exam and one of the specialty exams - Accounting and Finance, Patient Financial Services, Financial Management of Physician Practices, or Managed Care
  • Obtain a reference from an elected HFMA chapter officer and your CEO or supervisor
All active members are eligible to take the certification exams. The proctored on-line exams are available 24/7.

The Certification Review Committee of the Northeast Ohio Chapter will hold an Overview Review Session for the Accounting and Finance Specialty Exam,(these topics are also in the CORE Exam) presented by Robert S. Matitia, CPA, MBA, MAFIS. The topics covered will be Capital Planning and Financing, Cost Analysis and Management, Strategic Financial Planning and Budgeting, Investments and Cash Management, Employee Benefits, Insurance and Risk Management, Internal Control, Financial Reporting, Accounting Principles and Auditing, and Corporate Compliance. If interested, please email . A mutually convenient date and time will be set for the Review Session for interested parties.

Once you meet the requirements for becoming a CHFP, submit a CHFP application to HFMA National with a one-time fee. You will then receive a certificate through your chapter that you can proudly display and will be entitled to used the CHFP designation after your name.

As a CHFP, you are on your way to becoming a Fellow of HFMA (FHFMA). Fellowship is available upon meeting the following requirements: 5 years of total HFMA membership, a Bachelor's degree or 120 semester hours of college credit required references, and demonstrated volunteer activity in the healthcare finance field.

You will retain your CHFP or FHFMA designation as long as you remain an active member of HFMA and show proof of earning 90 professional education hours every three years. This maintenance requirement helps you remain current in your field and will also be an asset to your career. You can meet this requirement through participating in structured learning activities offered though HFMA National, the NEO HFMA chapter, your employer, or other professional organizations. More information about the maintenance requirement is available on the HFMA website.

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Sustainable Compliance: Business Reality or Financial Bust?

By Lance S. Loria, CPA, FACHE, FAAMA

Corporate compliance. Ethical behavior. Corporate responsibility. Regulatory compliance. Around every corner there's a recurring theme. Sarbanes-Oxley (SOX) made it the law and companies across the nation are spending billions of dollars complying with Section 404. Although not-for-profit organizations were excluded from SOX, the health care industry is subjected to regulatory scrutiny by agencies such as the OIG, CMS, AGs and DoJ which have eliminated any doubt of the seriousness of non-compliance. The resulting question is: How can an organization sustain compliance in light of limited resources?

Organized and Evidence-Based Approach
Implementing an organized and systematic approach is most efficient and effective. An organization should perform a risk assessment of the control environment to identify where compliance risk is the greatest. Based on the recent amendments to the Federal Sentencing Guidelines as well as the Supplementary Hospital Compliance Plan Guidelines, the compliance plan must focus on the prevention and detection of compliance violations.

It's not good enough to have a shiny binder on the shelf with a pretty cover that represents the compliance plan. Likewise, lengthy compliance plans posted on the Internet don't add value towards demonstrating the effectiveness of the compliance program.

What's needed is an evidence-based approach. Identify specific risk areas based on the unique operations and services provided by your organization. Relate those risk areas to the underlying regulation or other compliance requirements. Identify existing controls and if none are present, design and implement appropriate new controls.

Conduct an efficient monitoring program to test whether or not the controls are working?don't focus on auditing and validating the transaction value. Document the existence of controls with written policies and procedures, supplemented by templates and tools to be used by responsible personnel.

Develop a communications and training program for responsible individuals to become fully aware of the risk issues and appropriate policies and procedures for minimizing such risks. Finally, document the evaluation of controls to evidence the effectiveness of such controls.

Realize the Tangible and Intangible Benefits
As a financial manager, adopting a cost-benefit approach to implementing an evidence-based compliance program should be considered. While the cost of implementation should not preclude establishment of controls in high risk areas, a cost efficient process may reduce the overall cost. Equally important is the measurement of tangible and intangible benefits to be realized.

Clearly one tangible benefit from an effective system of controls is the avoidance of legal and regulatory problems which are generally accompanied by significant investigation costs, fines and penalties. On the intangible side, maintaining and improving the organization's reputation among patients, physicians, payors, employees and the investment community can lead to tangible benefits.

Establishing a control environment requires documenting existing controls as well as designing and implementing new controls. Part of the approach involves mapping processes throughout the organization. This traditional process improvement methodology should create more efficient processes that can result in tangible benefits such as:
  • Improve coding and documentation to yield higher payments;
  • Eliminate redundancy;
  • Reduce re-work;
  • Lower transaction cost; and
  • Improve controls over safeguarding assets.
Process improvements will also result in a number of intangible benefits such as:
  • Avoid disruption due to employee turnover;
  • Improve organizational clarity and employee morale; and
  • Standardize process and controls to drive operational value.
Don't Wait to Get Started
Whether an organization uses internal resources, computer-based tools, external assistance, or some combination, the goal is the same and the methods are equally valid. Working to reduce risk is an on-going effort.

Over time, many compliance activities should shift away from compliance and finance towards the operational departments. This shift will free-up resources for monitoring and additional process improvements. As a result of implementing an organized evidence-based approach the tangible and intangible benefits realized should help fund future compliance activities.


Lance S. Loria, CPA, FACHE, FAAMA, is President of LORIA ASSOCIATES, LLC, in Houston and provides regulatory compliance services to hospitals and other providers nationally. He has 33 years of health care industry experience. Lance is an advanced member of HFMA and recipient of the Founders Medal of Honor Award. He is a Fellow of the American College of Healthcare Executives and Fellow of the American Academy of Medical Administrators. He is a frequent author and speaker on health care industry topics. Lance can be contacted for questions regarding this article at

Reprinted with permission from the Texas Gulf Coast Chapter of HFMA.

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Do you have a formal compliance program to monitor Private Activity use in your bond-financed facilities?

Margaret Purcell, Principal Ernst & Young Jacksonville, Florida

Monitoring the actual and potential private use of a tax-exempt facility is critical to maintaining the tax-exempt status of each related bond issue.

Do you know that?.
Private Use must be monitored for the life of the bond issue. 501(c)(3) facilities have a limitation for each bond issue equal to no more than 5% of net proceeds. The original costs of issuance constitute private use, leaving a very narrow window. Private use of the facility is measured as an average over the life of the bond issue.

Private use is also defined as "real or implied" and must be measured at a market rate whether through contracts or other formal arrangements.

Private use of tax-exempt bond proceeds is not limited to activities that generate unrelated business income tax (UBIT). The definitions for private use are more restrictive and could include, in a hospital setting, a doctor's practice and similar sources that might not be included in 990-T filings.

Hospitals and universities must coordinate the private use analysis with all arbitrage rebate calculations and Form 990T filings.

Leases, management contracts, research facilities, parking facilities, partnerships or joint ventures can all trigger private use implications that could jeopardize the tax-exempt status of a bond issue.

Changes in the use of a facility originally financed with tax-exempt bond proceeds can trigger compliance requirements for the original issue, as well as any bond issue that had refinanced or made additions to the facility.

Facilities funded with both bond proceeds and equity pose particularly challenging compliance requirements as discrete portions of a facility must be traced to the corresponding funding source (bond proceeds or equity). Actual use of the discrete portions must also be monitored to be certain that the limitation is not exceeded.

Refinancing existing bond issues, and subsequent remodeling or enhancing of existing facilities, can create unanticipated challenges as limitations carry forward to portions of the new bond issue.

A formal allocation of funding source is required, and the filing of a Form 8038-T with a rebate payment, is considered by the U.S. Treasury Department to be a formal allocation. Absent a monitoring system, the Treasury Regulations require specific tracing of all investments and expenditures of a construction or remodeling project.

Each 501(c)(3) organization must include a summary of the private activity status for every tax-exempt bond issue when they file their annual Form Corporate 990. Use of a comprehensive monitoring system facilitates the filing with the Internal Revenue Service as the information is collected on a timely basis. The monitoring system also facilitates planning and competitive market place alternatives.

IRS Enforcement
The U.S. Treasury has announced that it has hired and trained ten IRS Auditors to specifically focus on compliance with private activity regulations starting in the coming quarter. They have further announced intentions to focus on 501(c)(3) organizations, with special emphasis on the college/university and hospital markets. They are familiar with the typical behavior of the life cycle of bond issues, so they plan to start the audits with issues that have a higher probability of changes to facilities, and use of space, or bond issues that were issued eight or nine years ago. Record retention rules, bank trust department mergers, changes in personnel and administrative policies, and institutional changing needs for use of space each contribute to the complexity of the compliance challenge and point clearly to the need for the establishment of a formal compliance solution for each institution.

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By Jennifer Hahn

Bag of Beads
I have a bag containing 24 colored beads. The colors are red, green and blue. There are twice as many red beads as green beads, and one more red bead than blue beads. How many of each color are there?

E-mail your answer to Jennifer Hahn at All correct entries will be included in a drawing and one lucky entrant will receive a $25 gift certificate to Starbucks.

Previous puzzle: How Old is the House?
Answer: 7 years old
Winner: Bob Kaliszewski of UHHS/CSAHS - Cuyahoga, Inc. won a $25 gift certificate to Target.

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