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Week of Oct 7, 2016

Key Performance Drivers: KPIs Evolved

( CFO ) By Michael S. Blake, October 3, 2016 – Key performance indicators have long been a fundamental tool for a company’s management to measure performance. KPIs focus management’s attention on a finite array of statistics that are indicative of a company’s performance, and are believed to have explanatory power over the company’s desired financial results, such as profitability. KPIs have a significant weakness, however. KPIs are backward-looking. When your KPIs are where you want them to be, everything is great. When the KPIs fall short of expectations or goals, there are problems to be addressed. There is, necessarily, an information lag between firm activities and most KPI reports. KPIs are powerful in that they help to address information overload. Any manager has more information available, or even thrown at them, then they can possibly process in a timely and coherent manner. KPIs allow us to wrestle the fire hose to the ground and point it to where the fire is — or at least in its general direction.

Now It's Personal: Top Execs Made to Pay for Companies' False Claims

( Modern HealthCare ) October 1, 2016 – Last year, U.S. Deputy Attorney General Sally Quillian Yates warned top healthcare executives they would be held personally accountable for false Medicare and Medicaid claims and illegal physician relationships. She was serious. The agency in recent weeks has reached a pair of million-dollar settlements that makes it clear executives may have to dip into their own wallets if they're involved in their company's alleged wrongdoing. In one agreement, Ralph "Jay"Cox III, former CEO of Tuomey Healthcare System, personally paid $1 million to settle allegations over his involvement in the Sumter, S.C., health system's illegal compensation arrangements with physicians.

Groups Push FASB to Require Multinational Companies to Disclose More Tax Information

( Accounting Today ) September 30, 2016 – A group of advocacy organizations is urging the Financial Accounting Standards Board (FASB) to require multinational companies to disclose more information about their taxes. The groups, which include the AFL-CIO, Citizens for Tax Justice, the Economic Policy Institute, the FACT Coalition, Global Financial Integrity, and the Patriotic Millionaires, want FASB to require multinational companies to publicly disclose their revenues, profits and taxes on a country-by-country basis.

Outsourced 401(k) Fiduciary Services Emerge After DOL Rule

( Investment News ) October 3, 2016 – With the Labor Department's fiduciary rule upping the ante for many 401(k) advisers and their broker-dealers, providers from around the retirement market are looking at ways to defray fiduciary responsibility, and in some cases, possibly replace the adviser altogether. Many industry observers expect that the Department of Labor rule, which raises standards for providing investment advice in retirement accounts, will cause broker-dealers to choose one of three options: severely restrict the number of advisers who can service 401(k) plans, exit the 401(k) market entirely, or seek out ways to mitigate risk by outsourcing.

Majority of Millennials Would Sacrifice Some Pay for Better Health Benefits

( CPA Practice Advisor ) October 3, 2016 – Faced with mounting worries over their finances and retirement outlook, six in 10 millennials say they are willing to sacrifice pay for more secure retirement benefits. At the same time, however, their appetite for forgoing some of their pay for reduced or more predictable health benefit costs has decreased over the last few years, according to research by Willis Towers Watson, a leading global advisory, broking and solutions company.

States and Metro Areas With the Most Unbanked Households

( Nerd Wallet ) By Sreekar Jasthi & Laura McMullen, September 28, 2016 – The perks at your local bank go beyond free coffee and candy — they include things you might take for granted, such as free check cashing and loans with reasonable interest rates. However, for the more than 9.5 million unbanked households in the U.S., these services come with a hefty price, one that NerdWallet found adds up to hundreds of dollars a year. In the U.S., 7.7% of households had no members with a bank account, according to the 2013 FDIC National Survey of Unbanked and Underbanked Households, the most recent full set of data available. That was down from the 2011 version of the Federal Deposit Insurance Corp.’s biannual survey, and the number dropped to 7% in 2015, according to a preview of the latest edition, which will be released in October.

Lawmakers to CMS: Stop Making New Payment Models Mandatory

( McKnight’s ) October 3, 2016 – The Centers for Medicare & Medicaid Services' mandatory payment models exceed the agency's authority and pose potential risks to older beneficiaries, House lawmakers say in a letter to federal health officials. Initiatives rolled out by the agency's Center for Medicare & Medicaid Innovation were implemented "on a voluntary, limited-scale basis,"up until the finalization of the Comprehensive Care for Joint Replacement last November, the letter to CMS Acting Administrator Andy Slavitt and Deputy Administrator Patrick Conway, M.D. reads.

IRS Advises Taxpayers to Prepare for Hurricanes, Floods and Other Natural Disasters

( IRS ) October 5, 2016 – The Internal Revenue Service is offering advice to taxpayers who may be affected by storms or other natural disasters. The IRS also reminded taxpayers that the agency is here to help including offering a special toll-free number to taxpayers in federally-declared disaster areas, staffed with IRS specialists trained to handle disaster-related issues.

Gone Phishin': Mayo Clinic Shares Tips for Fending Off Attacks

( Healthcare IT News ) October 5, 2016 – Staff members in the office of information security at the Mayo Clinic do a lot of phishing. Which is not to say that they are loafing out of the office on a boat somewhere. They actually are trying as hard as they can to trick their colleagues throughout the prestigious provider organization into clicking on malicious e-mails – fake malicious e-mails of their own creation. And leaders at the clinic say these educational anti-phishing campaigns are a key to successful cybersecurity. Anti-phishing cybersecurity efforts must be routine, relevant and consistent, said JoEllen Frain, senior manager in the office of information security at the Mayo Clinic.

California Governor Signs Bill to Create State-Sponsored Retirement Plan

( Wall Street Journal ) September 29, 2016 – California Gov. Jerry Brown has approved a bill creating state-sponsored retirement plans for some 6.8 million Californians who don’t have them through their private employers. The nation’s most populous state becomes the eighth state to establish such a program. The AARP estimates some 55 million full- and part-time private-sector workers in the U.S. lack access to retirement-plan coverage through work. States have been filling in that gap by creating such plans.

Key Performance Drivers: KPIs Evolved

( CFO ) By Michael S. Blake, October 3, 2016 –Key performance indicators (KPIs) have long been a fundamental tool for a company’s management to measure performance. KPIs focus management’s attention on a finite array of statistics that are indicative of a company’s performance, and are believed to have explanatory power over the company’s desired financial results, such as profitability.

KPIs have a significant weakness, however. KPIs are backward-looking. When your KPIs are where you want them to be, everything is great. When the KPIs fall short of expectations or goals, there are problems to be addressed. There is, necessarily, an information lag between firm activities and most KPI reports.

KPIs are powerful in that they help to address information overload. Any manager has more information available, or even thrown at them, then they can possibly process in a timely and coherent manner. KPIs allow us to wrestle the fire hose to the ground and point it to where the fire is — or at least in its general direction.

Because KPIs are generally quantified (or at least quantifiable), they provide an objective tool for measuring performance of a business at all levels, from the enterprise level, to the business unit, team, department, and individual employee. KPIs serve as the basis for reporting performance, providing feedback on performance, prompting discussion over what changes, if any, need to be made to the relevant business processes or assets devoted to them, and then implementing those changes. KPIs are often used for goal setting and compensation is frequently connected to them as well.

However, if you are interested in managing proactively, rather than reactively, consider monitoring key performance drivers. Key performance drivers (KPDs) are the day-to-day activities that are required in order to produce the desired KPI results. If the KPDs are correctly identified, then, for the most part, positive results in KPDs should lead to positive KPIs.

Managing KPDs offers two great sources of value. First, you can monitor, pretty much in real time with the right tracking systems, whether employees are doing the things required for the company’s success on a daily basis. When KPDs fall short, you can intervene quickly — before the KPIs are significantly impacted. Second, KPIs can be influenced by luck (good or bad) or factors outside of the company’s realistic control, whereas KPDs are much less likely to impacted by luck.

For example, let’s say you meet your KPI on sales, but 30% of the sales for the quarter is accounted for by the largest order in the company’s history. At the same time, your number of sales calls fell short by 15% of the target. Should you be celebrating, or wiping your brow that you had a big order that covered up the lackluster performance of the sales team?

From a managerial perspective, addressing the slowdown in sales calls is much more vital to the company’s sustainable success. It’s great to get a windfall, but companies that rely on windfalls as a business model don’t last very long. While human nature tends to lead us to value the dollar opportunity lost less than the dollar actually lost, the astute executive knows that they are equal. Had the number of sales calls made hit their target, the KPIs might have been even better.

Below are some very simple examples of KPIs that might be better managed and monitored as the corresponding KPDs:

By monitoring KPDs, you are ensuring that the daily activities necessary to support your company’s goals and ultimate success are being carried out. You may, of course, discover that there is a weak correlation between your company’s KPDs and KPIs. That can actually be a good thing, as it will prompt you to identify different KPDs, and it could prompt your firm to change the activities it emphasizes.

For example, if publishing white papers has no impact on your company’s web traffic, then you may need to re-think the tactic of producing white papers, which means your resources can be more effectively deployed elsewhere.

Monitoring KPDs offers a more proactive path to management and can result in consistently improved KPIs as you are ensuring that the day-to-day activities of your company are aligned with the firm’s goals, and you can ensure that those activities are being pursued vigorously and consistently, which is the path to success.

Now It's Personal: Top Execs Made to Pay for Companies' False Claims

( Modern HealthCare ) October 1, 2016 –Last year, U.S. Deputy Attorney General Sally Quillian Yates warned top healthcare executives they would be held personally accountable for false Medicare and Medicaid claims and illegal physician relationships. She was serious.

The agency in recent weeks has reached a pair of million-dollar settlements that makes it clear executives may have to dip into their own wallets if they're involved in their company's alleged wrongdoing. In one agreement, Ralph "Jay" Cox III, former CEO of Tuomey Healthcare System, personally paid $1 million to settle allegations over his involvement in the Sumter, S.C., health system's illegal compensation arrangements with physicians.

In another case, John Sorenson, board chairman of skilled-nursing facility company North American Health Care, shelled out $1 million for billing Medicare and Medicaid for medically unnecessary rehabilitation therapy services. North American's senior vice president of reimbursement analysis, Margaret Gelvezon, paid an additional $500,000 in the settlement for her alleged involvement.

The series of seven-figure personal settlements paired with Cox's exclusion from the healthcare industry for four years shows that the U.S. Justice Department plans to use every tool in its enforcement arsenal to curb False Claims Act, Stark law and anti-kickback statute violations. Government lawyers are increasingly focusing on personal accountability for bad conduct.

"I think it's a new day for C-suite executives and boards and for people down the line too,"said Kathleen McDermott, a partner at Morgan, Lewis & Bockius and former Justice Department healthcare fraud coordinator.

Yates issued the controversial memo a year ago. She pledged to hold individuals accountable for corporate misconduct, even if those people could not afford to pay for their actions.

The so-called Yates memo also warned companies that they would be able to lower their fines for fraudulent activity only if they fully cooperated with Justice Department investigations and turned over information on the responsible parties.

The government wanted a stronger deterrent than merely making shareholders bear the financial burden for false claim misconduct. "There have been cases where the government has pursued individuals, but it's been more the exception than the rule,"said Reed Smith partner Karl Thallner.

The Justice Department initially stumbled as it tried to put the memo's teachings into practice. Separate federal juries acquitted executives from Acclarent and Warner Chilcott of felony fraud charges in False Claims Act cases.

But the government attorneys were undeterred. "We've seen the DOJ continue to be more aggressive in (the Stark law) area and take aggressive positions in their briefs,"said Troy Barsky, a partner at Crowell & Moring. "They, out of any agency, have been the ones most out in front setting Stark law policy by their prosecutions.”

The trend has also heightened concerns that executives could face fines over shared-savings arrangements between providers and physicians as they heed the CMS' call to shift toward value-based care. This summer, the Senate Finance Committee held hearings to probe the growing gray area of Stark law liability. It's unclear if or when the statute may get a long-overdue makeover.

It's not just top executives who could find themselves facing prosecutors' wrath. Physicians could also find themselves under Justice Department scrutiny for questionable arrangements.

"These very large settlements against institutions involving relationships with physicians where the physicians aren't pursued might leave the physicians thinking they're immune from the effect of these laws,"said Venson Wallin, consulting managing director at the consulting firm BDO. "There's been some effort to begin to signal to these physicians who are often counterparties in these arrangements that they might have some culpability.”

It's difficult to know the boundaries of individual liability, though. In many cases, high-level executives may not have detailed knowledge of the schemes, and physicians may be unaware that their arrangements have illegal provisions.

But the Yates memo's focus on gathering more information on individual wrongdoers in Justice Department investigations could make massive executive fines more prevalent. "Even though you may not personally reap any benefits whatsoever, if you're considered to be a driving force behind whatever is alleged to have occurred, you're going to be held responsible,"McDermott said.

Groups Push FASB to Require Multinational Companies to Disclose More Tax Information

( Accounting Today ) September 30, 2016 – A group of advocacy organizations is urging the Financial Accounting Standards Board (FASB) to require multinational companies to disclose more information about their taxes.

The groups, which include the AFL-CIO, Citizens for Tax Justice, the Economic Policy Institute, the FACT Coalition, Global Financial Integrity, and the Patriotic Millionaires, want FASB to require multinational companies to publicly disclose their revenues, profits and taxes on a country-by-country basis.

In June, the Treasury Department issued rules requiring large companies with $850 million or more in annual revenue to provide the Internal Revenue Service with financial data, including income and taxes paid, categorized by each country where they operate, reflecting rules from the Organization for Economic Cooperation and Development. Last week, a group of House Democrats, led by Rep. Mark Pocan, D-Wis., introduced legislation to require all companies to provide such information in their filings with the Securities and Exchange Commission (SEC).

The advocacy groups submitted a comment letter Friday to FASB in response to a FASB proposal for increasing the disclosure of foreign tax and income information by companies in their public filings. The groups said they welcomed FASB’s move toward requiring more disclosure, but want FASB to go much further. A FASB spokesperson declined to comment on the letter.

"The most comprehensive and cost effective way to provide the needed clarity on U.S. companies’ international operations would be to require them to publicly disclose the same country-by-country financial data that many companies will already be required to report to the Internal Revenue Service (IRS) as per recently issued rules by the Treasury Department," said the letter. "In other words, companies should be required to publicly disclose their revenue, profit before income tax, total income tax paid on a cash basis, total accrued income tax expense, total employees, book value of tangible assets, and additional important financial data already required by the IRS, on a country-by-country basis.”

The groups argue that since companies must already provide such information to the IRS, so there is little extra cost to them.

"At the same time, making this information public will provide investors and the public with information necessary to make informed decisions about individual companies’ potential financial exposure due to their tax avoidance,"said the letter. "In addition, this level of disclosure would provide lawmakers with a significantly greater amount of information from which to better, and perhaps more narrowly, tailor international tax reform proposals.”

Outsourced 401(k) Fiduciary Services Emerge After DOL Rule

( Investment News ) October 3, 2016 – With the Labor Department's fiduciary rule upping the ante for many 401(k) advisers and their broker-dealers, providers from around the retirement market are looking at ways to defray fiduciary responsibility, and in some cases, possibly replace the adviser altogether.

Many industry observers expect that the Department of Labor rule, which raises standards for providing investment advice in retirement accounts, will cause broker-dealers to choose one of three options: severely restrict the number of advisers who can service 401(k) plans, exit the 401(k) market entirely, or seek out ways to mitigate risk by outsourcing.

These actions would largely affect small 401(k) plans, many of which are serviced today by brokers working in a non-fiduciary capacity.

Within the past few weeks, Massachusetts Mutual Life Insurance Co., a record keeper of defined contribution plans, and Mercer, a consulting firm, have launched programs that seek to provide relief for both investment and administrative responsibility in 401(k) plans.

In August, Morningstar Inc. announced a new service, Morningstar Plan Advantage, geared toward broker-dealers that would help them retain current retirement-plan business, but mitigate much of the risk created by the fiduciary rule.

LPL Financial, the nation's largest independent broker-dealer, has a service similar to the MassMutual and Mercer programs, which would mitigate its advisers' risk on the investment side of 401(k) plans. Announced in late 2015, the service has been adopted by record keepers such as Nationwide, Ascensus and Paychex, Inc., within the past few months.

"Everyone's looking at this opportunity. Where there's a vacuum, something comes in to fill that vacuum,"Fred Barstein, founder and chief executive of The Retirement Advisor University, said. "And there is going to be a void, no question. How big it is, it won't happen all at once. But it will happen.”

In its new service, called Fiduciary Assure, MassMutual is partnering with Envestnet Retirement Solutions to offer a 3(38) investment fiduciary service, as defined by the Employee Retirement Income Security Act of 1974. These types of programs are discretionary, in which registered investment advisers take control of a plan's investment menu, choosing funds and making changes as they see fit.

MassMutual is also offering a 3(21) service, a co-fiduciary role in which an adviser recommends funds and the plan sponsor ultimately decides whether to implement the advice.

Mercer's new service, Mercer Wise 401(k), packages together a 3(38) investment service with a fiduciary service covering a plan's administrative functions, known as a 3(16) fiduciary. In that role, Mercer will select and monitor a plan record keeper, and file required documentation such as the annual Form 5500.

Mercer was once a player in the U.S. DC record-keeping market, but sold its business to Aegon, the parent company of Transamerica Retirement Solutions, last year.

Part of LPL's offering also includes a 3(38) service.

Industry observers anticipated these outsourced services would become more popular with advisers as well as plan sponsors, some of which may lose their adviser if that adviser quits the business due to the fiduciary rule.

The services also come at a time when 401(k) litigation is becoming more prominent, with plaintiffs alleging plan sponsors breached their fiduciary obligations to the plan.

While the nature of the services aren't new to the industry, it seems providers are now adding or re-focusing such capabilities as a way to capitalize on the perceived demand.

"Part of the thinking is the landscape is going to change, and it will change in many ways,"Tom Murphy, senior partner at Mercer, said, acknowledging one effect is that some advisers may exit the fiduciary market because of the DOL rule. "If that's the case, we're happy to step in and manage the plans in a fiduciary way.”

Some retirement plan specialist advisers, the majority of whose business comes from DC plans and who are accustomed to serving as fiduciaries, see the shake-up as an opportunity.

Aaron Pottichen, principal and retirement services practice leader at CLS Partners, said there may be increased opportunity for advisers to serve as a 3(38) fiduciary in the small-plan and start-up markets, for example.

As opposed to advising on the whole 401(k) plan, which typically doesn't pay a fee commensurate to the amount of work necessary for a start-up plan, advisers can more easily forecast the amount of time that will be spent on any one client when providing a 3(38) service and can add value for a worthwhile pay day, he said.

"I think our biggest competitor in that space won't be other advisers, it'll be record keepers,"Mr. Pottichen said, explaining that their economies of scale may allow providers to come to market with a very low price.

As an example, MassMutual's 3(38) and 3(21) is free-of-charge for the firm's record-keeping clients with less than $5 million in plan assets, and 2 basis points for those with more than $5 million.

Majority of Millennials Would Sacrifice Some Pay for Better Health Benefits

( CPA Practice Advisor ) October 3, 2016 – Faced with mounting worries over their finances and retirement outlook, six in 10 millennials say they are willing to sacrifice pay for more secure retirement benefits. At the same time, however, their appetite for forgoing some of their pay for reduced or more predictable health benefit costs has decreased over the last few years, according to research by Willis Towers Watson, a leading global advisory, broking and solutions company.

The Global Benefits Attitudes Survey found the number of millennials willing to pay a higher amount for a guaranteed retirement benefit has increased from 42% in 2009 to 59% this year. Two-thirds of boomers (66%) would also be willing to sacrifice pay for more secure retirement benefits, versus half in 2009. However, only a third of millennials (32%) and boomers (34%) said they are willing to pay a higher amount for lower or more predictable health costs, a decline from 43% and 45%, respectively, in 2009.

"Employees of all generations, including millennials, are feeling vulnerable about their long-term security,"said Steve Nyce, senior economist at Willis Towers Watson. "Employees young and old actually have a strong desire for more retirement security and are willing to give up pay to get more guarantees or a larger retirement benefit. Interestingly, employees seem to be saying they have enough health coverage now and are reluctant to pay more.”

The survey also highlights the importance of core health care and retirement benefits to millennials. When asked how they would spend money if their employer provided them with an allowance to spend on a variety of benefits, millennials said they would allocate more than half to health care and retirement plan benefits (27% each). Additionally, almost half of millennials (48%) ranked pay and bonus over all other benefits if given a choice, a clear indication of their financial issues and need for more financial flexibility today.

Millennials are also much more likely to embrace nontraditional benefits and work/life balance than boomers. Nearly one-third of millennials (32%) ranked more paid time off, greater opportunities for flexible work arrangements and career advancement, and options to purchase a wider variety of benefits as a top priority. That’s more than double the percentage of boomers who want these benefits.

"Millennials, because of their financial situation, are concerned over how to help make ends meet,"said Shane Bartling, a senior consultant at Willis Towers Watson. "But millennials also recognize they have long-term financial risks as well, and many agree with having their employer play an active role in encouraging them to better manage their finances. For employers, this is a good opportunity to help their employees make smart financial decisions at pivotal moments through the use of unbiased and personalized budgeting and projection tools.”

States and Metro Areas With the Most Unbanked Households

( Nerd Wallet ) By Sreekar Jasthi & Laura McMullen, September 28, 2016 – The perks at your local bank go beyond free coffee and candy — they include things you might take for granted, such as free check cashing and loans with reasonable interest rates. However, for the more than 9.5 million unbanked households in the U.S., these services come with a hefty price, one that NerdWallet found adds up to hundreds of dollars a year.

In the U.S., 7.7% of households had no members with a bank account, according to the 2013 FDIC National Survey of Unbanked and Underbanked Households, the most recent full set of data available. That was down from the 2011 version of the Federal Deposit Insurance Corp.’s biannual survey, and the number dropped to 7% in 2015, according to a preview of the latest edition, which will be released in October.

Missed benefits, added fees

Although fewer families are forgoing financial institutions, those who are miss out on savings accounts, in which they can build emergency funds, and secured credit cards that can help build credit. They don’t benefit from the full range of fraud protections that federally insured banks and credit unions offer, and they can’t access online and mobile banking tools that can save them time and money.

Households that don’t have a bank account also pay loads of fees to expensive alternative financial-service providers. NerdWallet tallied the costs of money orders, check cashing and prepaid debit cards. Unbanked households that use a prepaid debit card that allows direct deposit pay an annual average of $196.50 in fees, while unbanked households that use a prepaid debit card without direct deposit pay an annual average of $488.89 in fees. (See our full methodology for more details.)

Unbanked households by state and metro area

We looked at the $196.50 and $488.89 figures as percentages of each state’s 2013 average income for households that don’t have a bank account, based on FDIC data. Explore the map below to see the states where unbanked households are hit the hardest by fees, using both the higher ($488.89) and lower ($196.50) estimates. You can also see which states have the highest percentage of households without a bank account.

The tables below show the percentage of unbanked households in 22 large metro areas and in all states plus Washington, D.C. We calculated the cost of not having a bank account as a percentage of the average unbanked household income in that metro area, as provided by the FDIC. We excluded three major metro areas for which some data were unavailable: San Diego-Carlsbad-San Marcos, California; Sacramento-Arden-Arcade-Roseville, California; and San Antonio, Texas.

Key takeaways

• The rate of unbanked households is disproportionately high among low-income households: Nationally, 7.7% of households didn’t have a bank account in 2013, but that rate was noticeably higher among low-income households. Nearly 20% of households with incomes less than $30,000 were unbanked and 24% were underbanked, meaning they had at least one savings or checking account but had used at least one alternative financial service in the past year. These types of services include check cashing, money orders and payday loans. More than a third (35.6%) of unbanked households surveyed for the FDIC report said the main reason they didn’t have an account is that they don’t have enough money to keep in an account or to meet a minimum balance. (Note that many free checking accounts don’t require minimum balances.) Other common reasons included dislike or distrust of banks and high or unpredictable account fees.

The national correlation between unbanked and low-income households translates to the state level. Seven of the 10 states with the highest percentages of unbanked people are among the 10 states with the lowest median household incomes, according to the 2013 U.S. Census American Community Survey. In fact, excepting Washington, D.C., the nine states with the highest concentration of unbanked households had household incomes below the 2013 U.S. median of $52,250.

• The costs of being unbanked hit low-income households the hardest: Income among households that don’t have a bank account is particularly low. The 2013 average post-tax income of unbanked households in the U.S. was $17,359, and was lowest in Montana at $11,963.

Remember that unbanked households that use a prepaid debit card without direct deposit pay an average of $488.89 in fees annually. In Montana, that would consume upward of 4% of the average unbanked household’s income. For context, the average U.S. household spent about 3.5% of its post-tax income on gas and motor oil in 2015, according to the U.S. Bureau of Labor Statistics. In Washington, D.C., the difference in earnings between banked and unbanked households is vast. The average 2013 income for fully banked households in D.C. was $55,032, but it was just $14,588 for households without a bank account. That latter number can’t go far in a place where low-income housing opportunities are diminishing. According to a D.C. Fiscal Policy report, in 2013, there were roughly half as many Washington apartments renting for less than $800 per month than there were in 2002. The report suggests "subsidized housing is now virtually the only source of inexpensive apartments.”

• Local unbanked demographics reflect national trends: According to the FDIC, one-fifth of black households (20.5%) in the U.S. in 2013 were unbanked, followed by Hispanic (17.9%) and American Indian/Alaskan households (16.9%). Only 2.2% of Asian households were unbanked, which was a lower concentration than for white (3.6%) and Hawaiian/Pacific Islander (6.1%) households.

Many of the places with the highest concentration of unbanked households mirror these national demographics. In No. 12 Tennessee and No. 2 Louisiana, each state’s biggest city has a majority of black households, with Memphis at 63% and New Orleans at 59.8%. Phoenix, which tops our list of unbanked metros, has a large Hispanic community, as does Albuquerque, the largest city in New Mexico, which tied for seventh among the states. Two states with the highest percentages of unbanked populations, New Mexico and Oklahoma, have American Indian populations nearly 10 times that of the U.S. as a whole.

• Limited access to in-person and online banking hurts: It’s hard to open a bank account when there are no branches where you live. More than half the ZIP codes in the mid-South are "bank deserts,"meaning they have just one or zero bank branches, according to the Mississippi-based Hope Policy Institute, which analyzes financial inclusion. In the institute’s analysis, the mid-South includes Mississippi, Louisiana and Arkansas, which have some of the highest rates of unbanked households. The region also includes western Tennessee, home to Memphis, where nearly one-fifth (19.5%) of households don’t have a bank account.

Brick-and-mortar branches are even more important for consumers who can’t connect to financial institutions online. Some Memphis residents face hurdles to both methods. According to the U.S. Census Bureau’s 2013 American Community Survey, 27.7% of Memphis households didn’t have an internet connection, compared with 21.4% nationwide. Lack of internet access is high in New Orleans, too, at 27.4%.

Lawmakers to CMS: Stop Making New Payment Models Mandatory

( McKnight’s ) October 3, 2016 – The Centers for Medicare & Medicaid Services' mandatory payment models exceed the agency's authority and pose potential risks to older beneficiaries, House lawmakers say in a letter to federal health officials.

Initiatives rolled out by the agency's Center for Medicare & Medicaid Innovation were implemented "on a voluntary, limited-scale basis,"up until the finalization of the Comprehensive Care for Joint Replacement last November, the letter to CMS Acting Administrator Andy Slavitt and Deputy Administrator Patrick Conway, M.D. reads.

The lawmakers claim the CJR, along with the recently announced Cardiac Bundled Payment Model and Part B Drug Payment Model, "dramatically"overhauls existing payment and care delivery systems and takes control of clinical decision making without the results to back them up.

"[The] statute authorized the Secretary to ‘test innovative payment and service delivery models,' — not mandate them for all providers,"the letter reads. "CMMI's mandatory models ‘experiment' with thousands of patient lives without prior testing on a smaller scale or even a basic indication that they will actually achieve improved quality or, at the very least, maintain present quality.”

The letter, which was sent last week, also raises concerns about mandatory payment models' impact on stakeholders, lack of safeguards, and the "disconcerting" effect the models may have on older adults.

"Policies that have the potential to create access issues for beneficiaries, further provider consolidation, and reduce provider participation in Medicare can drastically deteriorate quality of care our seniors rely on,"the lawmakers said. "This would be a step backwards in our unified effort to move to higher quality, more valued-based care for our nation's seniors.”

The letter's 179 signers — all Republican with the exception of Rep. Brad Ashford (D-NE) — urged CMS to stop all current and planned mandatory payment models, and ensure that future models are limited in size and scope.

IRS Advises Taxpayers to Prepare for Hurricanes, Floods and Other Natural Disasters

( IRS ) October 5, 2016 –The Internal Revenue Service is offering advice to taxpayers who may be affected by storms or other natural disasters. The IRS also reminded taxpayers that the agency is here to help including offering a special toll-free number to taxpayers in federally-declared disaster areas, staffed with IRS specialists trained to handle disaster-related issues.

Don’t Forget to Update Emergency Plans
Because a disaster can strike any time, be sure to review emergency plans annually. Personal and business situations change over time as do preparedness needs. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes. Make plans ahead of time and be sure to practice them.

Create Electronic Copies of Key Documents
Taxpayers can help themselves by keeping a duplicate set of key documents including bank statements, tax returns, identifications and insurance policies in a safe place such as a waterproof container and away from the original set.

Doing so is easier now that many financial institutions provide statements and documents electronically, and much financial information is available on the Internet. Even if the original documents are only provided on paper, these can be scanned into an electronic format. This way, taxpayers can download them to a storage device such as an external hard drive or USB flash drive, or burn them to a CD or DVD.

Document Valuables
It’s a good idea to photograph or videotape the contents of any home, especially items of higher value. Documenting these items ahead of time will make it easier to quickly claim any available insurance and tax benefits after the disaster strikes. The IRS has a disaster loss workbook, Publication 584, which can help taxpayers compile a room-by-room list of belongings.
Photographs can help an individual prove the fair market value of items for insurance and casualty loss claims. Ideally, photos should be stored with a friend or family member who lives outside the area.

Check on Fiduciary Bonds
Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

IRS Ready to Help
In the case of a federally declared disaster, an affected taxpayer can call 1-866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

Back copies of previously-filed tax returns and all attachments, including Forms W-2, can be requested by filing Form 4506, Request for Copy of Tax Return. Alternatively, transcripts showing most line items on these returns can be ordered through the Get Transcript link on IRS.gov, by calling 1-800-908-9946 or by using Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript or Form 4506-T, Request for Transcript of Tax Return.

Gone Phishin': Mayo Clinic Shares Tips for Fending Off Attacks

( Healthcare IT News ) October 5, 2016 – Staff members in the office of information security at the Mayo Clinic do a lot of phishing. Which is not to say that they are loafing out of the office on a boat somewhere. They actually are trying as hard as they can to trick their colleagues throughout the prestigious provider organization into clicking on malicious e-mails – fake malicious e-mails of their own creation. And leaders at the clinic say these educational anti-phishing campaigns are a key to successful cybersecurity.

Anti-phishing cybersecurity efforts must be routine, relevant and consistent, said JoEllen Frain, senior manager in the office of information security at the Mayo Clinic.

"What we’ve learned is if we phish our folks, they will get good for a period of time, but if we do not keep those exercises in front of them, staff will quickly slide back into old behaviors,"Frain said. "Healthcare organizations must make sure these efforts are relevant, giving staff real-life situations that we all are faced with and keeping the efforts consistent over time.”

If a healthcare organization simply does an anti-phishing campaign over one fixed period of time, it will be unsuccessful, added Mark Parkulo, MD, associate dean of clinical practices at the Mayo Clinic.

"You can do that education but there is so much turnover in your staff and other security issues that arise, so if you do not consistently do the education and continually monitor what is happening, you will not be successful,"Parkulo said.

And it’s important not just for employees but for staff responsible for security to continually be working on the phishing scourge, Parkulo said.

"This is because you always are surprised at where security issues come up,"he explained. "Some area you think would have no issues with their e-mail or phishing, suddenly in testing that is where some issues happen. And in those instances, sometimes the people in that area are the ones who can help identify actual problems early on – if there is substantial education. It often is surprising where vulnerabilities are within an institution.”

Frain echoed Parkulo’s observations.

"The industry has to recognize this: Even though we have heard about all of this for years and people are familiar with the terms phishing and cybercrime, we have not done a good job of talking through what cybercrime looks like and means," Frain said. "And until the industry does that on a personal level, it will not be successful. When you break things down, people ask really good questions, such as what does cybercrime look like, what happens, what are the consequences? And that is when you see a huge shift in how people approach their e-mail, which happens after we conduct these internal phishing campaigns.”

Healthcare organization employees in particular want to do a good job at cybersecurity because they understand what they are defending – the well-being of patients, Frain said.

"Oftentimes end users think technology protects them from more than it really does," Parkulo added. "‘The institution wouldn’t let these things come through, right?’ When you tell them there is no way to block everything, they become more aware of the importance of monitoring it.”

When it comes to protecting against nefarious phishers overall, Frain said there are three overarching principles: technology, process and people.

"It’s important that you leverage the technology you have and recognize and use it to its fullest capacity,"she said. "There are lots of decisions that can be made in setting up filtering in what you let in or out. In healthcare, that gets much more complex because we are accustomed to working with all sorts of individuals and businesses that other industries do not have to deal with.”

The second principle is understanding business processes. Healthcare organizations must bring transparency to the different groups within the organization and the processes these groups use to exchange information, Frain said.

"We spend a lot of time with our patient care providers and supply chain folks, for example, talking them through what are pitfalls we can fall into when we go outside of our normal business processes,"she explained. "So, for example, providers, push patient communication to the patient portal to exchange that kind of information. And supply chain folks, go to the defined processes and avoid one-off exceptions.”

The second component segues into the third, which is people.

"There is no level of technology that can protect an organization from every motivated attacker,"Frain said. "We have to raise the collective awareness of employees so they take a momentary pause as they go through their e-mails.”

California Governor Signs Bill to Create State-Sponsored Retirement Plan

( Wall Street Journal ) September 29, 2016 – California Gov. Jerry Brown has approved a bill creating state-sponsored retirement plans for some 6.8 million Californians who don’t have them through their private employers.

The nation’s most populous state becomes the eighth state to establish such a program.

The AARP estimates some 55 million full- and part-time private-sector workers in the U.S. lack access to retirement-plan coverage through work. States have been filling in that gap by creating such plans.

Charlene Vankeuren, a private security guard in Sacramento, Calif., who spoke at a bill-signing ceremony in the state capitol, said the bill will give her the "ability to lay a solid foundation"for herself, her children and her grandchildren.

Mr. Brown, a Democrat, said the legislation was particularly important since it would allow more Americans to plan for their financial futures.

"In today’s age of spend now, worry about it later, this is save now, and prepare for later,"Mr. Brown said.

The California law requires private-sector companies with five or more employees that are lacking their own plans to deduct contributions from employee paychecks and put them into retirement accounts that are tax-deferred or tax-free.

Employers would automatically enroll employees at 3% of pay, though workers would be free to opt out.

The California Secure Choice program authorizes the state to invest that money in Treasurys and other similar investments until it chooses one or more professional money managers to offer investment options.

Republican State Sen. John M. W. Moorlach, called the bill an "onerous mandate,"adding that the law didn't have safeguards in place that would keep the program from "drifting from its intended purpose in the future.”

"I believe that encouraging people to save for their future is critical," Mr. Moorlach said in a statement. "But having a state bureaucracy intervene by requiring certain employers to withdraw funds from employee wages is not a core mission of government.”

Employees can contribute as much as $5,500 a year, and up to $6,500 a year for those employees who are 50 or older, according to the plan.

Maryland, Connecticut, Oregon and Illinois have passed laws requiring many small businesses to offer retirement savings plans. Lawmakers in New Jersey and Washington state have authorized state-run marketplaces to help small companies that want to set up plans.

Some two dozen other states and a few cities have either commissioned studies or are considering similar legislation, according to AARP, which says the first of the programs are likely to open for business in 2017.