June 2001

Healthcare Conference to Focus on ‘HIPAA Hype,’ Other Hot Issues

Accounting, finance, and legal professionals serving the healthcare industry as well as others who work or consult in the healthcare sector are looking forward to the Healthcare Conference to be held Aug. 7 at the New York Helmsley Hotel in Manhattan.

Morris Shoretz, Healthcare Committee chair and conference co-chair, said this year’s conference is an unsurpassed opportunity for people to learn first hand about major issues in the healthcare sector, including compliance, e-health, e-commerce, technology, the Internal Revenue Service’s recently issued intermediate sanction rules, and the Health Insurance Portability and Accountability Act (HIPAA). “HIPAA is such a major issue because the potential implementation costs can’t be quantified and in the worst-case scenario are prohibitively expensive,” Shoretz said.

Conference Co-Chair Florie Welch-Munroe concured: “HIPAA will affect hospitals, physician practices, third-party administrators, insurance companies– every healthcare-related client of our New York state CPAs. Failure to be in compliance with the new regulation can result in civil and criminal penalties. The cost to the healthcare sector of complying with the standards has been estimated at more than $3.5 billion. Last November, Healthcare Financial Management Association (HFMA) President Richard Clarke estimated that the actual cost will be twice that spent on Y2K issues.”

Welch-Munroe said some people in the healthcare industry call it “HIPAA Hype.” “But the hype is real when you consider the financial impact of achieving compliance, or failing to achieve compliance,” she explained. “The cost for updating information services (IS) systems and changing operational procedures will be significant. Our conference panel includes a representative of Health Care Financing Administration (HCFA) and other consultants who have been doing ‘gap’ analyses for healthcare entities and costing out the changes that organizations need to make to effect compliance. These changes include things like setting up internal audit programs and adjusting systems they use to prepare or process medical claims.”

Another important conference segment will focus on intermediate sanctions. The IRS’s recently finalized intermediate sanction regulations detail how the IRS will enforce the 1996 law designed to regulate excessive benefits to officials at nonprofits including healthcare organizations, according to speaker David Samuels. The law and regulations describe steps that charities can take to establish a presumption that the compensation and benefits they are paying are reasonable. Samuels, a former deputy chief of the New York State Charities Bureau and partner of Perlman & Perlman, a law firm specializing in the law of charitable organizations, said his session will focus on the exact steps charities can take to protect themselves. The session will also include a description of a 15-part rebuttable-presumption checklist recently issued by the IRS’s chief regulator of charities, he said.