Your Healthy Practice
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Inside: Year-end tax planning for you and your practice; Eligibility for Medicare bonuses has expanded; Accepting online payments can increase collections

Inside: Year-end tax planning for you and your practice; Eligibility for Medicare bonuses has expanded; Accepting online payments can increase collections

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Your Healthy Practice Document Transcript

  • 1. Year-end tax planning for you and your practiceSo your tax return for 2010 has been filed – or will be 1. Check your tax payments shortly. Now you don’t want to think about income Whether you pay your taxes through withholding or by making taxes. Understandable, but you would be wise not to quarterly estimates, you do not want to have too much or too little wait until late December to start your 2011 tax planning. paid in. Pay too much tax during the year, and the government has Where do you begin? Every good tax plan starts with a tax your cash to spend, when you could have invested it yourself. Payprojection. You – or your business manager or accountant – will too little, and you may be penalized – an outcome that is generallyhave to run the numbers. avoidable. What has already happened this year? And what does the Be especially careful that your withholding is set correctly ifsituation look like for the rest of the year? you have income from more than one employer. You may need to Run some “what if ” scenarios once you have a base case – the provide new W-4 forms to adjust your withholding.best guess as to what your year will look like. What if my incomeis 10 percent higher? What if I purchase that new diagnostic 2. Purchase a homeequipment for my medical practice? Home prices and mortgage interest rates remain low by historical Here are seven ideas you can use between now and the end of standards. Whether you are buying a new home or “moving onthe year to save taxes. All seven ideas aren’t for everyone. But it’s a up,” the tax law will assist you with itemized deductions for homegood bet that a few items on this list apply to you. mortgage interest and real estate taxes. The interest deduction is gener- ally available if you borrow money to remodel. And energy-efficient Inside home improvements may even qualify for a tax credit. Sept. / Oct. 2011 3. Buy business assets Your medical practice may ben- ➜ ligibility for Medicare E efit from generous tax write-offs for bonuses has expanded the cost of new medical equipment, W here do you furnishings and other assets. The ➜ ccepting online payments A key to the deduction is placing the can increase collections begin? Every assets into service by the end of the good tax plan starts year. Be sure to order them with with a tax projection. sufficient lead time. See Tax planning on page 2 Inside A financial and management bulletin to physicians and medical practices from: CERTIFIED PUBLIC ACCOUNTANTS 3330 W. Esplanade Avenue • Suite 100 • Metairie, Louisiana 70002 (504) 838-9991 • Fax: (504) 833-7971 • www.kl-cpa.com
  • 2. Eligibility for Medicare bonuses has expanded For providers new to Medicare, eligibility to receive 10 ▲ Claims must be reported under a qualifying National percent Primary Care Incentive Program bonuses on Provider Identifier. certain services is determined using only the prior year’s claims data with no minimum enrollment period. ▲ Providers must qualify each year. This rule became effective July 1, 2011, and will apply Eligibility determinations for those newly enrolled in for the duration of the bonus program to all providers Medicare will be completed after the third quarter. By during their first year in Medicare. Nov. 28, 2011, Medicare To receive a bonus on services provided on or after contractors will post Jan. 1, 2011, and before Jan. 1, 2016: on their websites a ▲ Providers must have a specialty designation of 08 list of newly eligible (family practice), 11 (internal medicine), 37 (pediat- providers. rics), 38 (geriatrics), 50 (nurse practitioner), 89 The first payment (certified clinical nurse specialist) or 97 (physician will be a lump sum assistant); based on services ▲ Providers must have billed Medicare for CPT codes furnished for the 99201 through 99215 and/or 99304 through 99350; year, and providers and will receive the ▲ Eligible codes must account for at least 60 percent of payment after the the allowed charges paid to the provider under Part fourth quarter. B (excluding hospital inpatient care and emergency Subsequent payments will be made quarterly based on department visits) for the prior two years, except for each quarter’s eligible claims as long as the provider continues providers new to Medicare. to meet eligibility requirements. – Irene E. Lombardo Tax Planning continued from page 1 4. Set up a qualified retirement plan 6. Manage your income If you have your own practice, you can benefit from tax You may be able to control the amount of income your deductions to fund your retirement. Many types of qualified medical practice earns in 2011 by deciding when to bill your retirement plans have to be set up before the end of the year, patients. If you use the cash receipts method of accounting, although you have until April 15, 2012, to establish an IRA or you generally pay tax on income when you receive the cash. a SEP (simplified employee pension). If you have employees, By billing out promptly and delaying your expense contributions you make on their behalf are also tax-deductible. payments, you may increase 2011 income. This strategy may be advantageous if you expect to be in a higher tax bracket in 2012. Conversely, by delaying your billing and paying yourP expenses quickly, you may defer income into 2012. lace new medical But be careful. You cannot unreasonably delay billing. equipment and Deferral of income generally means you do not pay tax on thatfurnishings into service income until next year.by the end of the year 7. Review your estate plan While not necessarily resulting in a direct tax savings,to deduct their costs. reviewing your estate plan is generally a good idea. Congress made major changes to the estate and gift tax rules beginning in 2011. It is a good idea to meet with your tax adviser and your estate attorney to decide whether your will should be 5. Convert to a Roth IRA revised. If you have retirement savings in a traditional IRA, you can You may also decide to make gifts to children or grandchildren convert to a Roth IRA, regardless of your income. The downside before the end of 2011. And the sooner they are made, the more is that you have to pay tax this year on the untaxed amounts in tax you may save if you gift income-producing assets. your IRA. The upside is that future earnings on those funds Most people spend more on taxes than any other expenditure. will never be taxed, once you have had a Roth IRA in place for It only makes sense to schedule time to work on plans to reduce five years. this burden as much as possible. – Michael Redemske, CPA 2 September / October 2011 Your Healthy Practice
  • 3. Accepting online payments can increase collections If your practice is finding it harder to collect patient balances to pay medical bills and communicate in various ways withdue, you’re not alone. But what can you do about it? their doctor’s office. The fastest-growing portion of bad debt, according to Between 2008 and 2010, online patientresearch conducted by the management consulting firm payments for medical bills tripled, increas-McKinsey & Company, stems from insured patients who fail to ing from 3 percent to 9 percent of grosspay balances due after their insurance has paid covered charges. dollar volume of all patient payments,The findings suggest lack of financing options, inefficiencies in according to InstaMed, a healthcare pay-billing practices and consumer confusion are major drivers of ments network. That number is expectednonpayment. to grow rapidly in coming years. Revenue cycle concerns are not new. But researchers predicteven greater pressure on physicians to deal with retail-revenue- Benefitscycle challenges due to rising copayments, higher deductibles For patients, a practice’s online presence enables them to:and a shift from hospital to physician- or clinic-based settings ▲ View, manage and pay their billsexpected under health reform. ▲ Get answers to frequently asked billing questions Collecting payment at point of sale is, of course, ideal but ▲ E-mail the office with specific queriesusually limited to copayments or estimates. Until real-time For a nominal cost, practices offering e-billing and onlineclaims adjudication is widespread, practices need to address the payment collection can:drivers of nonpayment and adopt new methods for receiving ▲ Reduce manual processingpayment. ▲ Reduce paper statement and postage costs One solution many practices are choosing is the option ofonline payments, which can provide flexibility and conve- ▲ Lower the number of accounts receivable daysnience for patients. Consumer bill-paying habits have changed ▲ Increase cash flowsignificantly during the past decade, with online bill payment ▲ Improve patient satisfactionnow mainstream. Fiserv’s 2010 annual Consumer Billing and Online payments accepted can include credit cards, debitPayment Trends survey found 45 percent of all households with cards and transfers from bank checking and savings accounts.Internet access pay bills online through either their financial Practices that do not have their own websites can still enjoyinstitutions or biller direct services. the benefits of online payment. Many electronic medical What’s more, Internet use has made consumers accustomed payment-processing companies can provide a payment siteto 24/7 access to their account information. Intuit Health’s customized for an individual practice. Patients are directed toHealth Care Check-Up Survey found 73 percent of Americans the site from their billing statements, and payments aresurveyed would use a secure online communication solution directed to the practice’s bank account. – Irene E. Lombardo Five more ways to speed payment, reduce receivables Try these five strategies to substantially increase the ▲ Offer automatic extended payment arrangements. When chance of collecting outstanding balances: large sums are due, either pre- or post-treatment, set up ▲ Turn paper checks into electronic transactions. A check reader an automatic monthly payment plan using the signature- enables your staff to process a check like a credit card. The on-file authorization discussed previously. This enables check is verified, the patient signs a printed authorization the patient to pay over a specific period, ensures the slip, and the amount is processed through the Federal practice has a regular revenue stream and reduces the Reserve’s Automated Clearing House (ACH) and cost of collections. deposited into the practice’s account. Electronic check ▲ Provide a line of credit through a healthcare credit card. These conversion speeds payment, ensures sufficient funds programs offer patients financing over a specified and saves time by eliminating trips to the bank. It can period. The lender pays the practice the amount bor- also prevent the return of checks for insufficient funds. rowed, and the accounts receivable responsibility is ▲ Obtain credit or debit card signatures-on-file at the point of service. removed. Because these are “no recourse” loans, the By providing a signature-on-file, the patient authorizes practice is not responsible should a patient default. Be automatic payment of any balance from the credit or debit aware, there is a monthly fee based on a percentage that card after the claim is adjudicated. The cardholder does can run from about 7 percent to 10 percent. not have to sign the sales draft authorizing the charge. Be ▲ Offer a discount. Some healthcare providers are offering sure to use software that encrypts card information in a prompt-pay discounts, as well as discounts to those secure database that complies with the payment card who are uninsured or who pay in cash. – Irene E. industry and all major credit card requirements. Lombardo September / October 2011 Your Healthy Practice 3
  • 4. GAO report recommends losing program overlap Two programs designed to increase healthcare quality and The GAO sees a couple of problems resulting from theseefficiency apparently don’t play well together. inconsistencies. Providers may have: Although the Electronic Prescribing and the Electronic ▲ To invest in systems without any assurance that they willHealth Records programs have similarities in technology meet the e-prescribing requirementsand reporting requirements, they are inconsistent, according ▲ To meet separate reporting requirements for the twoto a 2011 Government Accountability Office (GAO) report. programs to earn incentive payments from 2011 The GAO noted the following inconsistencies: through 2014 ▲ The e-prescribing program offers compliance incentives From the study, the GAO arrived at some recommenda- from 2009 to 2013, while the EHR program offers tions for the Centers for Medicare & Medicaid Services “to incentives from 2011 to 2016. help improve the effectiveness” of the e-prescribing and ▲ The e-prescribing program imposes penalties for EHR programs “to encourage the adoption of health infor- noncompliance from 2012 to 2014, when the program mation technologies among Medicare providers”: ends, and the EHR program specifies penalties beginning in 2015. ▲ Urge healthcare providers to select certified e-prescribing ▲ Both programs require healthcare providers to “adopt technology. and use technology that can perform similar electronic ▲ Try to standardize the reporting requirements “to prescribing-related activities,” but to meet the require- remove the overlap” for physicians who may qualify for ments of the EHR program, providers must use certified incentive payments or have penalties imposed on them systems that satisfy the Department of Health and under both programs. Human Services criteria. The e-prescribing program ▲ Identify factors that helped or hindered e-prescribing does not require certification. implementation that could help EHR implementation. ❚ Your Healthy PracticeThe technical information in this newsletter is necessarily brief. No final conclusion on these topics should be drawn withoutfurther review and consultation. Please be advised that, based on current IRS rules and standards, the information contained herein isnot intended to be used, nor can it be used, for the avoidance of any tax penalty assessed by the IRS. © 2011 CPAmerica International CERTIFIED PUBLIC ACCOUNTANTS 3330 W. Esplanade Avenue Suite 100 Metairie, Louisiana 70002