MS&H Blog

Meeker Sharkey & Hurley Helps Nonprofits Move to Medicaid Fee-for-Service Model with Less Risk

CRANFORD, N.J., April 26, 2017 – Meeker Sharkey & Hurley announced a free program to help nonprofit and healthcare agencies transition to the fee-for-service model recently implemented by New Jersey’s Medicaid program.

The program includes a webinar, “Medicaid and the Risk to Providers,” featuring Medicaid expert Ivan Punchatz of Ingersoll & Rooney. In addition, MS&H published two special reports: “Insurance Questions for Non-Profits Transitioning to Fee-For-Service” and the “Cyber Liability Risk Reduction Checklist.” MS&H is also offering providers a free review of their cyber insurance coverage.

The webinar, reports and cyber analysis are available here:

Medicaid and the Risk to Providers Webinar:


“Nonprofits must start thinking more like businesses to protect themselves in ways they did not have to before,” said Richard Skorupksi, senior vice president, MS&H. “MS&H is helping nonprofits understand how the transition to the fee-for-service model can impact their liability and devastate their finances without the right insurance coverage.”

In the fee-for-service model, income is derived from actual services provided. Previously, nonprofit agencies relied on state and federal contracts that guaranteed an income stream.  Now in the fee-for-service model, it will be critically important to have proper business interruption coverage for the potential loss of income arising from a fire or similar loss to a program.

“I tell clients to think of this as ‘disability insurance’ for the agency, so they can generate revenue even if an adverse event prevents them from providing services,” said Skorupski.

Insurance to Protect Nonprofits

Skorupski outlined three areas where nonprofits are vulnerable: protecting their income stream, preparing for an increased focus on Medicaid audits, and determining if the agency has adequate cyber insurance coverage in the event of a breach.

As nonprofit agencies shift to fee-for-service, there will be increased billing to Medicare or Medicaid for services. To help enforce strict regulations from the federal government, private, commission-based audit companies are authorized to pursue potential overpayments and fraud. They often target smaller providers that don’t have the administrative resources of larger providers such as hospitals.

If a nonprofit agency is audited, it can face costly legal fees. Staff time is lost recovering records, answering audit questions, and preparing a defense. If the agency is at fault, it faces substantial fines and penalties. Most professional liability insurance policies do not cover audits and don’t provide coverage for fines and penalties.

The fee-for-service model is expected to generate more online transactions from transmitting healthcare records and billing Medicaid.

“If a nonprofit agency has a data breach, it can result in lawsuits from employees or customers. Unfavorable publicity can damage a nonprofit’s reputation,” says MS&H cyber insurance specialist Anthony DeGraw. “The nonprofit is also subject to cyber fraud reporting laws and regulations, which can also impact directors and officers, who may be held financially liable.”

Cyber insurance coverage insures financial damage, provide fraud prevention training, access to a crisis management team, forensic IT analysis, and call center services for inquiries.

“Many nonprofit agencies don’t have proper cyber coverage, which means they would have to absorb all these costs. That’s why we are offering a free cyber insurance analysis,” said DeGraw.

About Meeker Sharkey & Hurley

Meeker Sharkey & Hurley provides both personal and commercial insurance, employee benefits and risk management services.  The firm specializes in providing insurance for nonprofit and healthcare agencies as well as for mid-market businesses in Tri-State region. For more information, visit


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