Reed Tinsley, CPA

Looking for a little light reading this weekend?

I’ve got nothing to do, so let’s read the healthcare reform bill. Enjoy.

 

http://www.mediregs.com/files/1007-1/FINAL-PPACA-VOL1.pdf

 

http://www.mediregs.com/files/1007-1/FINAL-PPACA-VOL2.pdf

 

NEW in office ancillary alternate supplier notification rule

Section 6003 of the health reform act adds an additional sentence to the in-office ancillary services exception contained in the Stark Law. This new provision requires that a physician referring a Medicare, Medicaid, Tricare, or Medicare Advantage Plan (i.e. Federally funded program) patient for in-office ancillary services must provide the patient with a written notice that the patient may obtain such services from a health care provider other than the referring physician. Further, the notice must include other health care providers in the area who also provide such services. As it stands, this provision was made effective retroactively to January 1, 2010, making past compliance impossible. This effective date was not addressed in the reconciliation package to the health reform act. Therefore, this notice requirement is technically currently effective. Hopefully, further guidance from the Secretary regarding the enforcement of this provision will be forthcoming. However you might want to begin implementing the new law in your office.

 

The following is a sample letter you can put on your letterhead and give out to your Medicare, Medicaid, and Tricare patients and patients enrolled in Medicare Advantage Plans. Please insert the appropriate information where indicated.

 

 

Dear Patient:

 

[Practice Name] provides imaging services ( LIST SERVICES HERE) on site for your convenience. We are happy to provide these services for you, but for your convenience and as required by the recently enacted healthcare reform law, we are providing you with information on other suppliers that you may choose to provide these services to you. These are the local suppliers in our service area:

 

Local Hospital [INSERT]

Address

City, State, Zip

 

Local IMAGING CENTER [INSERT]

Address

City, State, Zip

 

Local Imaging Center [INSERT]

Address

City, State, Zip

 

Please let us know if you have any questions about this letter.

 

Sincerely,

 

[Practice Name]

Vehicle Expense Substantiation – How is Yours?

One of the issues in a recent Tax Court memo decision involved leased vehicle deductions on personally owned vehicles used by a dentist and his wife but claimed on the dental practice's S Corporation return. Taxpayer argued that the vehicles were driven solely for business purposes, even by his wife, because he had applied veneers (cosmetic dental applications) to her teeth and anytime she drove a vehicle she was "a walking, talking billboard for the dental office." In addition each vehicle had a license plate holder displaying the name of the dental practice, which taxpayer insisted provided a valuable advertising service. The Tax Court ruled against the lease deductions citing taxpayer's failure to maintain adequate records to substantiate the business use of the vehicles by only offering handwritten calendars of daily work schedules with no allocations for personal and commuting use of vehicles. C. Michael Willock , TC Memo 2010-75 (Tax Ct.).

p.s. Don’t forget to follow me on Twitter, my healthcare mini-blog at:

www.twitter.com/rtacpa

Stark in-office ancillary services – now must inform patients

Among its many provisions, the newly signed Patient Protection and Affordable Care Act has imposed a new requirement on physicians who rely on the Stark "In-Office Ancillary Services" exception.  Physicians who refer patients for CT, MRI or PET (or other Stark services as designated by the Secretary of HHS) that will be provided by the referring physician's practice under the Stark In-Office Ancillary Services exception must now inform the patient in writing at the time of the referral that the individual may obtain the services for which the individual is being referred from a person other than the referring physician's practice, and provide the patient with a written list of suppliers (who furnish such services in the area in which such individual resides.

The provision in the new law has an effective date of January 1, 2010, so absent clarification from Congress or HHS, the above requirement is effective immediately. 

Don't forget to follow me on Twitter! www.twitter.com/rtacpa.

 

Patient safety: Medical error disclosure

Although debate continues on the most effective methods of promoting medical error disclosure, there is a general consensus that disclosure of medical errors can help promote patient safety and reduce liability risk. The Institute of Medicine has recommended a reporting system for near misses and errors for this very reason. Barriers continue to exist, however. In light of this reality, healthcare practitioners need to ensure that they use a nonpunitive method of reporting and disclosing medical errors.

Such a solid reporting system should incorporate tracking and trending of medical errors and near misses data. Doing so can help you identify root causes and adopt procedures that prevent the same error or near miss from occurring again, which promotes patient safety through continuous quality improvement.

Therefore, create a medical error disclosure policy to guide staff and healthcare providers on the disclosure of medical errors and near misses. Having such a policy helps to create an environment that supports such disclosure of medical errors and outlines a method by which to do so. Before adopting any policy or procedure on medical error disclosure, have legal counsel review it for compliance with applicable state and federal laws, rules, and regulations, as well as medical society and accrediting standards particular to your practice.

 

Compensation concepts

Your group's compensation formula may be its most jealously guarded sacred cow. Whether sensible or not, it continues in place as long as members don't object. And your members will likely not object as long as the pot of available income keeps growing. Despite the possible upheaval, it's time to reconsider partner pay. These five basic principles form the foundation of any income division format you design:

• Group members must trust the income division process and the people implementing it
• The formula must be reasonably simple and clearly understood
• The formula must provide some equity, although each member may not necessarily be treated equally
• Include proper incentive to work for the growth of the group, and promote practice goals
• The members must offer fair evaluations of each other and the practice's needs

Do you have continued personnel "issues" in your medical practice?

Have you ever had any staffing or personnel problems in your medical practice?  If you’re like most, the answer is a resounding “yes.”  Who hasn’t had to deal with personnel issues in their practice?  Nobody.  And if you’re like many managers, you’d rather have a root canal than address personnel issues in your own office.

 

Well, I have good news and bad news for you.  First, the bad news.  Ignoring personnel issues won’t make them go away.  Sticking your fingers in your ears and saying, “Nah, nah, nah. I can’t hear you,” didn’t really work when you were a kid.  And its professional cousin, simply ignoring personnel problems in your office, makes them even worse.

 

Here’s the good news.  You can learn to lead your practice and build a truly championship team.  There are three simple steps. Caveat: Simple doesn’t mean easy.  1. Get very clear about what you expect from your people – both with respect to performance and values.  2. Evaluate people not only with respect to their performance; measure how well their values (i.e. how they behave) fit with your practice’s values. 3. Get rid of anyone on your team whose values are inconsistent with your practice's.

 

The hardest call to make is to let someone go who is a stellar performer, but who violates your firm’s values.  – Someone who churns out the work, but is consistently late. – Someone who is great with your patients, but rotten to other staff members.  – Someone who is “very experienced,” but who creates a miserable experience for everyone else in the office. 

 

Make a leap forward by removing the people who are good performers but violate your values and making it clear to the entire office why they were asked to leave - not for the usual “personal reasons” or to “pursue other opportunities” but for not sharing your values.  Until an organization develops the courage to do this people never have full confidence that the values established for your practice are for real.

 

For a great read on making the hard calls in your firm, check out Up Your Business, by Dave Anderson.

 

Additional management reports you should be looking at

Denial Management Reports Reported in two parts, one for adjusted line items by adjustment reason by$ amount, the second by rejection reason (really, these are "zero payments" that have to be further investigated or transferred to the next responsible party) by count of instances. (For example, the Adjustment Report would list Adjustment reasons such as "Bundled Service", "Two E&M Services same day", "Courtesy Adjustment"... and the total $ amount; the Rejection report shows rejection categories such as "corrected insurance", "corrected Diagnosis", "corrected modifier", "Deductible", "non-covered service"... and the number of times this rejection has occurred in the course of the month.
Use this report for education and training purposes for the providers as well as for your staff, as it shows issues on a systemic level and can be a great tool to determine productivity for collectors as well. You can decrease your denial rates if you publish these rates to the providers and educate them individually on how to prevent your most common denials.

Pre-submission error reports summary which show the accuracy of data entry as well as the diligence of the staff in performing insurance verification and obtaining authorizations. It impacts the cash flow significantly if claims get "hung up" for incorrect data entry so make this one of your performance measures.

Turnaround times from Date of service to completion of progress note to billing to payment  A great tool to inspire some competition among the providers to instill some urgency to complete outstanding visits if this is a problem for you.

Is an LLC Better than a Corporation for Asset Protection Purposes

This question always comes up when discussing and designing an asset protection program for a physician who has significant non-exempt assets that can be attached by current or potential creditors. In most cases, a limited liability company (LLC) will generally provide better asset protection to its owner than a corporation. However you must seek legal counsel to help you design an asset protection program that is right for you and your own particular business and financial situation. Like having a personal will in place, asset protection should be a priority to you.

A limited liability company (“LLC”) is a hybrid type of legal entity that has some characteristics of a corporation and some characteristics of a partnership. Owners of an LLC are called members; they can elect to receive pass through tax treatment like a partnership or an S corporation, or to have the LLC taxed like a C corporation; they have limited liability like in a corporation; and they have a great deal of flexibility in management structure. Thus, many business owners now prefer to form an LLC instead of a corporation when the need for an additional entity arises.

LLCs provide significant asset protection advantages. A creditor of an owner of a corporation (that is, a creditor of a stockholder) often can gain control of a corporation by getting control of the owner’s stock. Shares of stock in a corporation are assets that can be “attached” or otherwise taken by a creditor to satisfy a judgment against the owner of the shares. Once the creditor has control of the shares, it can generally vote the shares and possibly gain control of the business entity. Thus, if you own all the stock of ABC Corporation and one of your creditors is able to take that stock, the creditor will control (and own) ABC Corporation. A membership interest in an LLC, however, is treated differently. A creditor of the owner of an LLC, generally cannot gain control of the member’s interest, because LLCs have what is called “charging order protection." If and when the LLC makes a distribution to you, the creditor can take it. However, the creditor generally cannot force a distribution or gain voting control of the LLC. The bottom line is that a creditor of the owner of an LLC membership interest has much less leverage than a creditor of an owner of stock in a corporation. 

Can't pay your taxes by April 15th?

April 15^th is this week and there will be those of you who owe income tax but can't pay the full amount by the 4/15/10 deadline. One option is to file an Extension but you will be charged penalty and interest up to the date you file your tax return. Another option is to file your return on time and pay as much as you can to reduce penalties and interest. You can then (1) request more time to pay based on your particular circumstances; (2) request an installment agreement—those who owe $25,000 or less in tax, penalties, and interest can apply for an installment agreement by using the Online Payment Agreement (OPA) option at:

 

www.irs.gov/individuals/article/0,,id=149373,00.html

 

or (3) charge the taxes on a Visa, American Express, MasterCard, or Discover Credit Card, Visa Consumer Debit Card, or a NYCE, Pulse or Star Debit Card. The first option can be difficult to obtain, and only provides an additional 30 to 120 days to pay the tax in full.