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8 posts from September 2012

September 28, 2012

Is your physician practice prepared for a surprise OSHA audit?

Of the OSHA inspections held last month, 75% were physician practice settings. While Region 4 did represent 43% of those audits, none were from the 4 targeted states in that Region! 25% of those surveyed were actually from Region 9 (CA, WY, AZ, HI). Physician practices, urgent care centers and ASC's should beware. Have you had OSHA training in the last 12 months? Have you reviewed your procedures with a compliance checklist? Have you prepared a policy for theft / violence in the workplace as required by OSHA and have you trained your staff on this policy?

Like HIPAA, almost all practices "think" they are in compliance when in fact they are not. This is not an issue you should ignore.

September 26, 2012

A few tax tips for physicians (and anybody else)

Consider Accelerating Income to 2012

It is often recommended that physician practices defer taxable income to the following year or postponing some deductible expenses (Unless youare a C corporation). But this approach is only useful if you expect to pay a lower tax rate next year, and with the Bush tax cuts scheduled to expire at year end, many businesses and individuals may find themselves paying higher rates in 2013. If this is the case, then it may be more beneficial to accelerate some taxable income into this year so that it can be taxed at the lower rate.

Take Advantage of the 0% Rate on Investment Income

The tax rate on qualified dividends and long-term capital gains is currently zero percent for those who fall within the 10 and 15 percent tax brackets. This generous tax rate could be history by the end of the year, and now may be time to take advantage of it. If your income is too high to qualify for this rate (available to married couples making less than $70,700 or single filers making less than $35,350), then consider giving some appreciated stock or mutual fund shares to loved ones who fall within the lower brackets. Just remember, giving securities to anyone under age 24 could result in them being taxed at their parents’ rates.

Time Investment Gains and Losses and Consider Being Bold about It

Consider selling appreciated securities this year while the maximum tax rate on long-term capital gains from 2012 sales is only 15 percent. This favorable rate applies to appreciated securities held for at least a year and a day before selling. Biting the bullet and selling some loser securities—those currently worth less than you paid for them—before year end can also be a good idea. The resulting capital losses will offset capital gains from other sales this year.

September 25, 2012

Massachusetts provider settles HIPAA case for $1.5 million

Massachusetts Eye and Ear Infirmary and Massachusetts Eye and Ear Associates, Inc. (collectively referred to as “MEEI”) has agreed to pay the U.S. Department of Health and Human Services (HHS) $1.5 million to settle potential violations of the HIPAA Privacy and Security Rules. MEEI has also agreed to take corrective action to improve policies and procedures to safeguard the privacy and security of their patients’ protected health information and retain an independent monitor to report on MEEI’s compliance efforts. OCR’s investigation followed a breach report submitted by MEEI, as required by the HIPAA Breach Notification Rule, reporting the theft of an unencrypted personal laptop containing the electronic protected health information (ePHI) of MEEI patients and research subjects. The information contained on the laptop included patient prescriptions and clinical information. OCR’s investigation indicated that while MEEI’s management was aware of the Security Rule, MEEI failed to take necessary steps to comply with the requirements of the Rule, such as such as conducting a thorough analysis of the risk to the confidentiality of ePHI maintained on portable devices, implementing security measures sufficient to ensure the confidentiality of ePHI that MEEI created, maintained, and transmitted using portable devices, adopting and implementing policies and procedures to restrict access to ePHI to authorized users of portable devices, and adopting and implementing policies and procedures to address security incident identification, reporting, and response.


September 20, 2012

Do your due diligence before signing that ACO agreement

One thing I've noticed with regard to ACO formation is that the ACO creates its "agreements" and then presents them to the physicians for participation and execution. The physicians, who are generally afraid to "lose out" on the ACO trend, just tend to just sign them. In other words, there is a total lack of review and due diligence by the physicians. Many of these agreements fail to address things like credentialing criteria, disciplinary procedures, financial provisions, and how the financial up side or down side can affect physician compensation.  Regardless of a doctor’s view of ACOs, no document ought to be signed unless all the questions raised by them are addressed, very clearly and in writing. Dear doctor: Don't be cheap - make sure you hire competent legal counsel to review these documents before you sign them!!!

September 17, 2012

Current Medical Loss Ratio (MLR) Rebates Have Varied Tax Consequences

The first round of medical loss ratio (MLR) rebates payable under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) have now been either recently received or are "in the mail." The first MLR rebates under the PPACA were required to be disbursed to health insurance policyholders by insurance companies on or before August 1, 2012.

In April 2012, the IRS posted frequently asked questions (FAQs) addressing the federal tax consequences of MLR rebates. These FAQs form the framework and extent of IRS guidance to date. The basic rule of thumb throughout the various scenarios addressed by the FAQs is fairly straightforward: if a tax benefit was previously gained on the premiums now being refunded, the rebate is taxable; otherwise, the premiums are usually tax free to the recipient.

The guidance confirmed that where employees make premium contributions with pre-tax dollars through a cafeteria plan, any MLR rebates that the employer passes through to those employees will be subject to federal income and employment taxes, and related employer wage withholding obligations, in the year that they are paid, Fenton told CCH. "This is true regardless of whether the rebates are distributed in the form of cash or future credits against premiums (for example, credits produce more taxable wages)."

Individually-purchased policies. An individual who purchased and paid premiums for health insurance for himself or herself in 2011, without receiving any reimbursement or subsidy for the premiums, will not be taxed on any rebate received in 2012, provided the individual did not receive a tax benefit from deducting the 2011 premiums on 2011 Form 1040, Schedule A or, if self-employed, on line 29 of 2011 Form 1040. The same result applies whether the rebate is received in cash or as a reduction in the amount of premiums due for 2012.

Group policies—after-tax premium payments by employee. As is the case for individually-purchased policies, employees who in 2011 paid their share of the premiums on group policies with after-tax wages (income already taxed and subject to employment taxes) generally will not recognize income on 2012 MLR rebates. For employees who participated in the plan during 2011 and 2012 paying after-tax premiums, the rebates—whether paid in cash or as a reduction in 2012 premiums—will be income tax free to them, except to the extent they benefited from deducting the premium on 2011 Form 1040.

One twist for group plans applies, however, that is dependent upon whether, under DOL rules, the employer shares the rebate from the insurance company with current employees regardless of whether they participated in the 2011 plan. If the employer pays out the rebate based on the employee’s after-tax share of 2012 premiums irrespective of whether the individual was an employee in 2011, the employee receives the rebate as a tax-free purchase price adjustment to 2012 premiums paid. This tax-free treatment applies both to 2012 employees who were employees in 2011 and those who were not and, therefore, irrespective of whether any 2011 premiums were deducted on Form 1040, Schedule A.

Group policies—pre-tax premium payments by employee. MLR rebates are generally taxable if distributed to 2012 participants who pay premiums on a pre-tax basis under the employer’s cafeteria plan. If a 2011-2012 employee who paid in pre-tax premiums receives a rebate check, it is considered a return of wages that have not yet been taxed or subject to employment tax. If that employee receives the rebate in the form of a 2012 premium reduction, the employee’s payment of premiums through a salary reduction contribution in 2012 is decreased by that amount and therefore taxable salary is increased by that amount.

If an employer pays out rebates in 2012 irrespective of whether an employee under the cafeteria plan had worked for the employer in 2011, the MLR rebate is likewise considered addition income and subject to employment taxes. If paid in cash, it is considered additional wage income. If paid as a premium reduction, it is considered a reduction in the pre-tax amount due by the employee under the cafeteria plan and, therefore, increases wage income.

Information reporting requirements

Cash rebates to individual policy holders generally are subject to Form 1099-MISC information reporting by the insurance company only if two conditions are met: (1) the total rebate payments made to that policyholder for the year total $600 or more; and (2) the insurance company "knows that the rebate payments constitutes taxable income to the individual policyholder or can determine how much of the payments constitute taxable income."

Rebates paid to a group policyholder as a premium reduction likewise are not subject to Form 1099-MISC information reporting under the same criteria as for cash rebates, above (the premium reduction is for $600 and the insurance company knows it will be taxable income to the group policyholder) and the group policyholder is not an exempt recipient for Form 1099 purposes. An exempt recipient includes corporations, tax exempt organizations, and federal/state governments.

Rebate payments passed along by employers to employees under a cafeteria plan, either as cash or premium reductions, will normally be reflected on each employee’s Form W-2 as increased wage income, subject to income tax withholding and employment taxes.

September 12, 2012

Is your entire physician office staff getting a flu shot?

Experts continue to worry that not enough health professionals and others who have contact with patients will get the flu vaccine. Data shows that approximae 64% of health care personnel were vaccinated against influenza during the 2011-12 season, according to a Centers for Disease Control and Prevention study - the vaccination rate for health care workers still falls below the Healthy People 2020 target rate of 90%.

Vaccinating health care workers against influenza has been shown to reduce transmission of the illness among employees and patients, some of whom are too young or sick to be immunized themselves.  To persuade staff to the shot, medical organizations have focused on educating health professionals about influenza and how to prevent its spread. They also have urged getting the seasonal influenza shot every year.
The American Medical Association says physicians have an obligation to be immunized against highly transmissible diseases that pose a significant medical risk for vulnerable patients or colleagues, or threaten the availability of the health care work force.
Individuals with a medical, religious or philosophical reason to not get the shot should be willing to wear face masks or refrain from direct patient care to prevent passing the illness, the AMA says.

September 10, 2012

Is your physician practice really in OSHA compliance?

Most recently available are annual statistics of OSHA medical facilities (non-hospital) which show a rate of 471 citations equaling $359,761.00 in fines. Could this happen to you? Is your physician practice really OSHA compliant?

Here are the most frequently cited OSHA failures:

• Failure to train staff annually (this has to be documented)

• An outdated or non-existent exposure plan (Do you have a written OSHA manual and is it up to date?)

• Failure to include job classifications

Most practice say they are in compliance when in fact they are not. There are numerous nuances to OSHA compliance and many can be overlooked. Remember that OSHA compliance has two components: Bloodborne Pathogen and Worker Safety.

September 05, 2012

Is your physician practice living its mission and values on a daily basis?

When I see and read mission-type statements by healthcare organizations, I often wonder if the organization really lives and breathes their vision, values, and/or mission on a daily basis. I also wonder if management knows the difference between real action and inaction. Well there’s a way to find out – simply survey your organization’s owners and employees.

Did you realize that most statements like the one above and other mission statements can be turned in to a simple questionnaire? For example, your mission statement says that your physician practice will provide considerate and respectful treatment to all of your patients - well do you?

Create your questionnaire, give it to your owners and employees, and see if their answers support whether or not you are in fact living, breathing, and achieving what you say you’re supposed to be doing in your mission statement – you just might be surprised by the answers.