Doctors Seek Pay-Hike from Obama

ACP Wants Steep Primary-Care Bonus from Medicare 

Staff Reporters

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American College of Physicians [ACP] President Jeffrey Harris recently sent a letter to HHS nominee Tom Daschle asking that the Obama administration’s economic stimulus package include a 10 percent pay bonus for all services provided by primary care docs under Medicare for a period of 18 months.

Targeting Primary Care

According to the Wall Street Journal, December 18, 2008, the letter requests that primary care medical practices, especially small ones, get a piece of the funding pie for health information technology; Obama has pledged to spend billions of dollars on that endeavor.

Bonus for Grass-Roots Doctors

The 18 months when the bonus would be in effect would stabilize funding for primary care practices, especially smaller ones, which are an essential part of the safety net that people rely on for their care, especially in tough economic times. Primary care physicians who own small practices are struggling to survive because of inadequate access to credit, losses in their own investments, slower collections and more “bad-debt” and uncompensated care as their patients are unable to pay their bills and the numbers of uninsured increase.

Assessment

Without funding to stabilize primary care practices, the letter said, many will go under and have to close.

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated.

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Independent Contractors versus Doctor Employees

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Some Tax Basics for Medical Professionals

[By Edwin P. Morrow; III, JD, LLM]

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Medical professional should be careful overusing this technique, in the office or other business.

IRS Attacks

Why? The IRS has successfully attacked many companies that tried to classify their workers as independent contractors rather than employees. The back taxes and penalties can be fierce. 

Delegation not Employment

However, many tasks may be successfully delegated to independent contractors or consultants without fear of such characterization. For example, a company does not have to withhold payroll taxes for an independent contractor, but must file a 1099-MISC whenever payments exceed $600 a year. To distinguish between the two, there are several factors to consider.  In general, the more you have control over a worker, the more the worker looks like an employee. Two brief tables below note a few of the differences:

Employee:                                                        

  • Works at site of employer                                              
  • Uses company tools or equipment                                  
  • Cannot delegate or hire others for job                              
  • Method/timing of job specified/controlled             
  • Expenses reimbursed                                                    
  • Little invested by worker                                    
  • Payment weekly, bi-weekly or monthly               
  • Only works for one employer                                          
  • No risk of non-payment if poor job                                   
  • Profit/bonus limited                                                       
  • No advertising                                                               
  • Contract states employee relationship                
  • Position seems permanent                                            
  • Work done is essential to business                                

Independent Contractor:

  • Works off-site
  • Uses own tools and equipment
  • Can hire others or delegate
  • Method/timing of job uncontrolled
  • Expenses borne by worker
  • More invested by worker
  • Payment by the job or flat fee
  • Works for several clients
  • Opportunity for profit
  • Advertising to general public
  • Contract says independent contractor
  • Position temporary
  • Work done is non-core function

Multi-Factorial Analysis Needed

No single one of these factors determines status. The IRS has a 20-factor test outlined in Revenue Ruling 87-41 and discussed in Publication 1976, “Independent Contractor or Employee”.  When you have a relationship that is unclear, you should consult with the IRS guidelines and publications. If your intent is to hire an independent contractor, try to make sure the relationship has more of the factors indicative of that status, checking the latest IRS publication for all relevant factors. Because of the large amounts at stake, you should err on the side of employee status if uncertain. You may wish consult a tax attorney or accountant as well, especially if you have multiple workers in a gray area. In addition, you can request that the IRS make a determination of worker classification by submitting Form SS-8, “Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding.

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Assessment

The IRS guidelines on this topic are rather lengthy. And, $600 is still the threshold amount this year unless it is royalties ($10).  Non-employee compensation, rent, royalties, prizes or awards, and services are only a few of the situations giving rise to a 1099-MISC. Doctors may also find this link of additional benefit:

http://www.ehow.com/how_13664_know-issue-1099.html

Conclusion

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