In Case of ME-P Technical Emergency

Posted on September 22, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Medical Executive-Post Disaster Preparedness Instructions

By Ann Miller RN MHA [Executive-Director]

It occurrs to us that if this ME-P blog’s RSS feed fails (due to Feedburner troubles) those who subscribe that way won’t know it.

So, here’s a big hint: we rarely go a day without a post. It’s probably been years since we’ve gone two days without one. So, if you don’t see the ME-P in your reader for a day or two, check the site. We will have posted instructions for how to regain the RSS feed, or otherwise communicate what we’re doing to resolve the interruption.

By the way, another way to find out what is going on in an ME-P technical emergency is to contact me:

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Conclusion

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Is There a Six Month Deferral for the Fiscal Cliff?

Posted on September 22, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

The Budget Control Act of 2011

By Children’s Home Society of Florida Foundation

Speaking in Chicago last week, Senate Whip Richard Durbin (D-IL) proposed a change in the plan to reduce spending starting January 1, 2013. Under the Budget Control Act of 2011, substantial spending cuts in both defense and Medicare providers will commence on that date. These cuts together with potential tax increases have been described as a “fiscal cliff” that could send the nation back into recession.

Spending Cuts

The spending cuts are required because the Joint Congressional Committee in 2011 was unable to agree on a budget and tax plan. The anticipated spending cuts are designed to reduce costs by $1.2 trillion over the next decade.

Sen. Durbin proposes delaying the spending cuts for a term of six months. The Budget Control Act would be modified to allow the Senate Finance Committee and the House Ways and Means Committee an opportunity to develop a new plan.

Under Durbin’s proposal, the two committees must submit bills by June of 2013. The plans must total $4 trillion in budget savings. There would be $1.33 trillion in increased taxes and $2.67 trillion in budget reductions.

Assessment

Following hearings by both committees, the bill would need to be submitted to a conference committee. After passage by both the House and the Senate, the $4 trillion plan could be signed by the President. If all of those steps were completed by June 30, 2013, the mandatory budget cuts would not take place. They would be replaced by the agreements for tax increases and budget cuts in the new law.

Editor’s Note: The mandatory budget reductions in defense and Medicare take effect in 2013 because the Joint Congressional Committee was unable to agree on the balance of tax increases and budget reductions. There will be an opportunity for enacting new tax and budget provisions in the November session following the elections. Because the time is quite short for writing major legislation, many Senators and Representatives would like to defer action to 2013. However, there is a general reluctance to agree on the level of tax increases and budget reductions necessary for a compromise bill.

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Filed under: Health Law & Policy, Taxation | Tagged: Budget Control Act of 2011, Children's Home Society of Florida Foundation, Is There a Six Month Deferral for the Fiscal Cliff?, Richard Durbin | 4 Comments »

Some More on Hospital Hazards

Posted on September 21, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Not as Safe as We Think?

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Filed under: Quality Initiatives | Tagged: healthcare quality, Hospital Hazards, medical quality assurance | 1 Comment »

Is a Captive Insurance Company (CIC) Right for Your Medical Practice?

Posted on September 19, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

A Medical Practice Risk Management Strategy

By Guy P. Jones CFP®

Successful practices face multiple risks in their daily operations including loss of a medical license or professional certification, legal defense reimbursement, medical/Medicare collections risk, HIPAA violations, and reputational risk. Small- to medium-sized practices can benefit from risk-management tools that can help them handle such risks more effectively and reduce their overall insurance costs. To that end, the practice may want to consider the establishment of a Captive Insurance Company (CIC) to protect themselves from risks not typically covered by traditional insurance companies.

Captive Insurance Planning

Captive insurance planning is a strategy for physicians to manage risk through the purchase of a property-casualty insurance policy. Premiums paid by the practice to a properly structured CIC should be tax-deductible to the practice under section 162(a) of the IRS code just like their workers’ compensation or malpractice coverage.

When the practice forms a CIC, it receives premium income tax-free up to $1,200,000 per year, per captive. Profits that come out of the CIC come out as a distribution from a C-corp. as qualifying dividends or long-term capital gains, which are currently 15%. Furthermore, the CIC may retain surplus from underwriting profits within reserve accounts, free from income tax. Profits that accumulate within the CIC can be used as a tax-deductible sinking fund in order to save money on malpractice premiums by shifting to a high deductible policy and/or insuring that deductible through the CIC.

No Rules – Just Right

There are no hard-and-fast rules regarding the minimum amount of gross revenue from a practice or the minimum amount of insurance premiums paid by a practice before considering the establishment of a CIC.

Planning Opportunities

The establishment of a CIC creates immense planning opportunities for physicians because of the flexible ownership of the CIC. The CIC is set up as a C-Corp and someone or some entity owns the shares of the C-Corp While it’s important to keep in mind the primary business purpose of the CIC is for risk management, some potential planning opportunities include the following:

Wealth Accumulation/Surplus Retirement Income: Physicians own the CIC outside the practice for surplus dollars in retirement.
Asset Protection Planning: Most physicians have the CIC owned inside an asset protection trust to potentially shield pre-tax dollars and assets from judgment creditors or litigation.
Estate Planning/Wealth Transfer: Physicians who don’t need access to this money may be interested in having the CIC owned outside of their estate to also bypass gift and estate taxes with each premium payment.
Practice-Owner Benefits: By the CIC not being an employee benefit plan, it is not subject to the non-discrimination rules of ERISA, and therefore only benefits the owners of the practice.
Non-Mandatory Participation for Practice Doctors: Doctors at smaller levels can join together to create a CIC for economies of scale.

Enter the Experts

Physicians would be encouraged to discuss the various CIC planning strategies with their tax, estate planning, and other legal professionals to ensure that the most appropriate structure is utilized to fit their unique planning objectives. As part of our services to the practice, we would be happy to meet with the practice management and advisors to answer any questions and start the process of the feasibility of a CIC for the practice. As reassurance, this is already IRS-tested, and we strictly adhere to each IRS Safe Harbor Revenue Ruling for a conservative model offering very predictable risk management and tax planning results.

Assessment

While this is not intended to be a thorough discussion of CICs, it is meant to initiate a conversation with practices or conduct due diligence with their key advisors as to the many potential benefits of establishing a Captive Insurance Company.

About the Author

Mr. Guy P. Jones is a Certified Financial Planner in Houston, TX who has specialized in serving the financial planning needs of medical professionals and their families since 1990. He can be reached at 832.677.1692, email: guypjones@guypjones.com, or by visiting his website: www.guypjones.com

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Filed under: Insurance Matters, Professional Liability, Risk Management | Tagged: Captive Insurance Company, Guy P. Jones CFP, IRS Safe Harbor Revenue Ruling, medical malpractice, professional medical liability | 2 Comments »

Update on Health Information Exchanges [HIEs]

Posted on September 18, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

A Snapshot as Deadlines Approach

http://www.MCOL.com

The federal health law [PP-ACA] gives states the option of creating health insurance exchanges [HIEs] through which residents can purchase coverage.

Now, with a November 16 deadline for states to declare their readiness to build an exchange, most states are expected to let the feds take over by default–only 15 states, and the District of Columbia, have created a health insurance exchange thus far.

Conclusion

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Where the Presidential Candidates Stand on Medicare and Medicaid

Posted on September 16, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

The Big Picture View

By Suevon Lee ProPublica, Sept. 14, 2012, 2:26 p.m.

Medicare and Medicaid, which provide medical coverage for seniors, the poor and the disabled, together [1]make up nearly a quarter [1] of all federal spending. With total Medicare spending projected to cost [2] $7.7 trillion over the next 10 years, there is consensus that changes are in order. But what those changes should entail has, of course, been one of the hot-button issues [3] of the campaign.

With the candidates slinging charges [4], we thought we’d lay out the facts. Here’s a rundown of where the two candidates stand on Medicare and Medicaid:

THE CANDIDATES ON MEDICARE

Big Picture

Earlier this year, the Medicare Board of Trustees estimated [5] that the Medicare hospital trust fund would remain fully funded only until 2024. Medicare would not go bankrupt or disappear, but it wouldn’t have enough money to cover all hospital costs.

Under traditional government-run Medicare, seniors 65 and over and people with disabilities are given health insurance for a fixed set of benefits, in what’s known as fee-for-service [6] coverage. Medicare also offers a subset of private health plans known as Medicare Advantage, in which roughly one-quarter [7] of Medicare beneficiaries are currently enrolled. Obama retains this structure.

The Obama administration has also made moves that it says would keep Medicare afloat. It says the Affordable Care Act would extend solvency [8] by eight years, mainly by imposing tighter spending controls on Medicare payments to private insurers and hospitals.

In contrast, Rep. Paul Ryan, Mitt Romney’s running mate, has proposed a more fundamental overhaul of Medicare, which he says [9] is on an “unsustainable path.” On his campaign website [10], Romney says that Ryan’s proposals “almost precisely mirrors” his ideas on Medicare. But he’s been fuzzy on other aspects of the plan.

A Romney-Ryan administration would replace a defined benefits system with a defined contribution system [11] in which seniors are given federal vouchers to purchase health insurance in a newly created private marketplace known as Medicare Exchange. In this marketplace, private health plans, along with traditional Medicare, would compete for enrollees’ business. These changes wouldn’t start until 2023, meaning current beneficiaries aren’t affected – just those under 55.

Under the Romney-Ryan, the vouchers would be valued [12] at the second-cheapest private plan or traditional Medicare, whichever costs less. Seniors who opt for a more expensive plan would pay the difference. If they choose a cheaper plan, they keep the savings.

Who’s Covered

In the current system, people 65 and over are eligible for Medicare, which Obama has said he would keep [13] for now.

Romney has proposed [14]raising the eligibility age for Medicare beneficiaries from 65 to 67 in 2022, then increasing it by a month each year after that. In the long run, he would index [15] eligibility levels to “longevity.” Ryan’s budget plan proposes [16] raising Medicare eligibility age by two months a year starting in 2023, until it reaches 67 by 2034.

Many others looking to keep Medicare solvent have also proposed [17]raising the age of eligibility.

The Congressional Budget Office estimates [18]that raising the minimum age from 65 to 67 would reduce annual federal spending by 5 percent.But it would also result in higher premiums and out-of-pocket costs for seniors who would lose access to Medicare.

Obama’s health care law also adds [19] some benefits for seniors, such as annual wellness visits without co-pays, preventive services like free cancer screenings and prescription drug savings.

Proposed Savings

The Affordable Care Act is projected to reduce Medicare spending by $716 billion over the next 10 years. These reductions, as detailed [20] by Washington Post’s Wonkblog, will come mostly from reducing payments to hospitals, nursing homes and private health care providers.

While Ryan criticized [21] such spending cuts in his speech at the Republican National Convention, his own budget proposed [22] keeping these reductions.

“The ACA grows the trust fund by giving more general revenue to the Treasury, which then gives the trust fund bonds. But it then uses the money from those bonds to expand coverage for low- and middle-income people,” explains [23] Dylan Matthews on Washington Post’s Wonkblog.

Romney hasn’t really come up with a solid answer: he previously said he would restore [24] the $716 billion savings that the health care law imposes. Per this New York Times story [24], the American Institutes for Research calculates this would increase premiums and co-payments for Medicare beneficiaries by $342 a year on average over the next 10 years.

For more on where the candidates stand on the $716 billion, the private health policy Commonwealth Fund offers this helpful explanation [25].

Caps on Spending

Both Obama and Ryan have set an identical target rate [26] that would cap Medicare spending at one-half a percentage point above the nation’s gross domestic product.

But they have different ideas on mechanisms to achieve it.

The Affordable Care Act establishes a 15-member Independent Payment Advisory Board [27] that, starting in 2015, would make binding recommendations to reduce spending rates. As Jonathan Cohn points out [28] in the New Republic, the commission is prohibited from making any changes that would affect beneficiaries.

Ryan has proposed hard caps on spending and derided [29]this panel of appointed members as “unelected, unaccountable bureaucrats.” When laying out his plan in a 2011 memo [30], Ryan wrote that to control spending, “Congress would be required to intervene and could implement policies that change provider reimbursements, program overhead, and means-tested premiums.”

Romney hasn’t stated [31] clear proposals for imposing a cap on spending.

THE CANDIDATES ON MEDICAID

Big Picture

Though, it’s far less discussed [32] on the campaign trail, Medicaid actually covers more people than Medicare. The joint federal-state insurance program for the poor, the disabled, and elderly individuals in long-term nursing home care currently covers about 60 million Americans. The Affordable Care Act hasexpanded [33] Medicaid coverage further. Beginning 2014, Medicaid will include [34]people under 65 with income below 133 percent of the federal poverty level (roughly $15,000 for an individual, $30,000 for a family of four). This was estimated [35] to cover an additional 17 million Americans as eligible beneficiaries.

In June, however, the U.S. Supreme Court ruled [36] that states could opt out of the Medicaid expansion. A ProPublica analysis estimated [37] that the 26 states that challenged the health care law, and thus may possibly opt out, would account for up to 8.5 million of those new beneficiaries.

Romney and Ryan would overhaul this current system by turning Medicaid into a system of block grants [38]: the federal government would issue lump sum payments to the states, who would determine eligibility criteria and benefits for enrollees. These grants would begin in 2013.

Effects on spending

The Congressional Budget Office estimates [39] that Medicaid expansion under the new health care law would cost an additional $642 billion over the next 10 years.

Under the Ryan plan, federal Medicaid grants would be adjusted only for inflation, but not health care costs, which grow at a much higher rate. The CBO estimates [40] Ryan’s plan would save the federal government $800 billion over the next 10 years. Another study conducted by Bloomberg News shows that the block-grants could decrease Medicaid funding by as much as $1.26 trillion [41] over the next nine years.

Actual Impact

The New York Times points out [42] that more than half of Medicaid spending goes toward the elderly and disabled. An Urban Institute analysis estimates [43] the Ryan plan would result in 14 million to 27 million fewer people receiving Medicaid coverage by 2021.

Assessment

Though rarely mentioned by any of the candidates, Medicaid costs are soaring to cover the elderly who require long-term nursing care. As the Times’ details [44] how, states saddled by high Medicaid costs have begun turning to private managed care plans to blunt the cost.

Conclusion

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Filed under: Health Law & Policy | Tagged: ACA, Affordable Care Act., Dylan Matthews, Medicaid, medicare, obama, Paul Ryan, Presidential Candidates Stand on Medicare and Medicaid, ProPublica, romney, Suevon Lee | 7 Comments »

About the Certified Medical Planner™ Program

Posted on September 15, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

The Virtual Certified Medical Planner™ Program, from iMBA Inc.

Our flagship 500 hour Certified Medical Planner™ professional designation program is designed for fiduciary focused FAs, CFPs®, CPAs, RIAs and other financial services professionals and/or doctors, nurses, health entity CXOs, managers and administrators [medical management consultants] and those in career transition looking to enhance their theoretical knowledge and practical experience in the integrated and expanding fields of medical practice management and personal financial planning.

In all our courses, we cover the full spectrum for any given topic. Best of all, we utilize real-life case studies from the marketplace, either as a financial advisor or medical management consultant, so students can actively participate in a mock “working financial advisory group” or “medical managerial team”.

And, our unique CMP™ teaching methodology uses “live” dedicated instructors to help [adult-learners] students understand how to fully integrate quantitative and qualitative analysis when advising clients.

We offer 24/7/365 classes designed for working professionals with a heavy workload or travel schedule. In addition, our courses can be taken without ever having to leave your desk, home, office, practice, or even your hotel room.

Our training program is internet based so most of our students take the course virtually. Nevertheless, while our service delivery model is virtual – the educational benefits and notoriety you receive are REAL!

More info:

Ann Miller RN MHA

[Executive-Director]

www.CertifiedMedicalPlanner.org

###

Filed under: Career Development, CMP Program, Financial Planning, iMBA, Inc., Practice Management | Tagged: About the Certified Medical Planner™ Program, certified medical planner, CMP, financial planning doctors, medical practice management, www.certifiedmedicalplanner.com, www.MedicalExecutivePost.com | 6 Comments »

The Tax Foundation Reviews the Presidential Candidates’ Tax Proposals

Posted on September 13, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Goals for Sound Tax Policy

By Children’s Home Society of Florida Foundation

The nonpartisan Tax Foundation states that its goals for sound tax policy include, “simplicity, neutrality, transparency and stability.”

The Review

It published a review on September 6, 2012 of three different major tax proposals. The review discussed the tax proposals of the National Commission on Fiscal Responsibility and Reform, co-chaired by Alan Simpson and Erskine Bowles, the proposals of President Obama and the proposals of Presidential Candidate Mitt Romney. The nonpartisan Tax Commission attempted to provide an objective comparison of the three proposals. It discussed proposals for income tax, capital gains tax, corporate tax and gas tax for each plan.

The National Commission on Fiscal Responsibility and Reform produced a plan in December of 2010. With nine Democrats and nine Republicans on the committee, the plan received 11 of 18 votes. However, it did not receive a sufficiently large majority to be submitted for a vote by the House and Senate.

The plan is commonly described as the “Simpson-Bowles” plan after the Republican and Democratic Co-Chairs of the Commission.

The “Simpson-Bowles” Plan

Simpson-Bowles proposes a 28% top rate on personal income taxes. Capital gains and corporations would also be taxed at 28%. Corporations would not pay tax on earnings overseas. The alternative minimum tax would be repealed. Taxes on gasoline would be increased from 18 cents to 23 cents per gallon.

With the reduction in the top income tax rate, most credits and deductions would be greatly limited. There would be a child credit, an earned income tax credit, a limited deduction for mortgage interest and deductions for health and retirement plans.

The principal goal of Simpson-Bowles is to reduce spending to 21% of gross domestic product (GDP) and to raise taxes to that same level. Simpson-Bowles is projected to balance the budget by 2037.

The Tax Foundation

The Tax Foundation study of proposals by President Obama covered many of the same areas. The top income tax rate would be set at 39.6%. Long-term capital gains are taxed at 30% under the “Buffett Rule.” Dividends are potentially taxed at the top rate of 39.6% plus the 3.8% additional tax under the Affordable Care Act. Corporate taxes for both U.S. and foreign profits are 28%. The alternative minimum tax is retained with the “Buffett Rule” level of 30%.

President Obama proposes retaining most credits and deductions with some technical changes. The benefit of deductions for the upper income brackets of 39.6% and 36% would be limited to the tax savings in the 28% bracket.

Presidential Candidate Mitt Romney proposes a top income tax rate of 28%. Capital gains would continue to be taxed at 15% and dividends at 15%. Corporate tax rates would be reduced to 25%, and foreign income would not be taxed. There would be substantial limits on credits and deductions. There would be limited deductions for home mortgage, charitable gifts, retirement plans and health plans. The alternative minimum tax would be repealed. Candidate Romney’s plans are projected to balance the budget by 2020.

Editor’s Note: This nonpartisan review by Dr. McBride and the Tax Foundation is offered as an educational service to our readers. Your editor and this organization take no position on the specific provisions that are involved. Our readers should recognize that with the complexity of our tax system, the comparison by Dr. McBride involves review of extensive information and a number of judgments on the various proposals.

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Filed under: Health Law & Policy, Taxation | Tagged: Children's Home Society of Florida Foundation, National Commission on Fiscal Responsibility and Reform, Simpson-Bowles, Tax Foundation Reviews the Presidential Candidates' Tax Proposals | 1 Comment »

More on “Meaningful Use” Requirements

Posted on September 12, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

And … Its’ Impact on eHRs

Carol Miller RN MBA millerconsultgroup@gmail.com

The American Recovery and Reinvestment Act of 2009introduced the “Meaningful Use” requirement for EHR systems with three main components:

The Components

1) The use of a certified EHR in a meaningful manner, such as e-prescribing, 2) The use of a certified EHR technology for electronic exchange of health information to improve quality of health care, and 3) The use of a certified EHR technology to submit clinical quality and other measures.

Meaningful Use refers to a set of 15 criteria that medical providers must meet in order to prove that they are using their EHRs as an effective tool in their practice. There are also 10 additional criteria that are considered a la carte from which only 5 need to be demonstrated by the medical provider.

In total, 20 Meaningful Use criteria must be used within the EHR to qualify for stimulus payments during Stage One of the EHR incentive program. Each of the criteria were developed and further reviewed by the Office of the National Coordinator [ONC] with public input.

A Five Year TimeLine

Meaningful use will be measured in stages over five years. Each stage represents a level of adoption. Many certified EHRS will allow providers to complete all Meaningful Use criteria, whereas others will only certify what is required in the early stages and modify at a later date with any new criteria.

The three stages are:

Stage One: Essentially, Stage One is using the major functionality of a certified EHR. This includes documenting set percentages of your visits, diagnoses, prescriptions, immunizations and other relevant health information electronically; using the clinical support tools (warnings and reminders that will be included in a certified EHR); and sharing patient information. Providers and hospitals must report quality measures and public health information. For providers they must report on 6 clinical quality measures – 3 required core measures and 3 additional measures selected from a set of 38 clinical quality measures. Eligible hospitals and Critical Care Hospitals (CAHs) must report on all 15 of the clinical quality measures. Stage One is required in years 2011 and 2012.

Stage Two: In addition to continuing to use all functionality from Stage One, physicians will be required to use EHRs to send and receive information such as lab orders and results. Other criteria may be added. Stage Two is expected to be implemented in 2013.

Stage Three: This stage will continue fulfilling the criteria from Stages One and Two and will include clinical decisions support for national high priority conditions; emailing patients in a Personal Health Record (PHR); accessing comprehensive patient data; and improving population health. Stage Three criteria have not been developed to date and the implementation is not expected until 2015.

Assessment

CMS payment penalties for non-compliance to the meaningful use regulations will begin in 2016 with an initial 1% penalty which could escalate to 5% five years later. Therefore, with these criteria in place, we are likely to see virtually all hospitals attempt to meet the meaningful use criteria to avoid penalty cost.

Conclusion

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Filed under: Information Technology | Tagged: American Recovery and Reinvestment Act, Carol Miller RN, CMS, EHRs, meaningful use, Office of the National Coordinator, ONC, PHRs | 8 Comments »

Financial Update on Non-Profit Healthcare Organizations

Posted on September 11, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

COMMONFUND: NONPROFIT HEALTHCARE ORGANIZATIONS REPORT FLAT INVESTMENT RETURNS

For Fiscal Year 2011

By Ron Chernus

Press Release

Link: 2012 CBS Healthcare release final

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What is Patient Satisfaction Data – Really?

Posted on September 10, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Is it all about Subjectivity?

By Brent Mefesel MD

Patient Satisfaction data [PSD] is a subjective measure of what the patient perceives in terms of the level of service quality and care provided by the clinician.

Many health plans consider patient satisfaction an important measure of physician quality. Although not a direct measure of clinical quality, many researchers link patient satisfaction to clinical outcomes.

Resource Intense

This PSD however, is also resource-intensive to collect and requires commitment on the part of the patient to fill out the forms and return them in the mail or on-line. Selection bias may also occur in terms of patient satisfaction data, in that patients who choose to fill out and return the forms may in some cases not be representative of the overall patient population for a physician.

Recent Evolution

More recently, the field has been moving from measuring “satisfaction” to elucidating a more validated and specific “patient experience of care”. The Consumer Assessment of Healthcare Providers and Systems (CAHPS®), funded and administered by the Agency for Healthcare Quality (AHRQ), is a part of a national initiative to measure, report on, and improve health care quality from the viewpoint of patients and other consumers. Separate surveys are used for evaluating ambulatory care and facility or hospital care.

More CAHPS®

In addition, the National CAHPS Benchmarking Database contains over 10 years of CAHPS survey data from commercial and Medicaid plans and is designed to facilitate comparative analysis of individual CAHPS survey results with benchmarks, including national or regional averages.

Assessment

The CAHPS program works closely with other public and private research agencies, known collectively as the CAHPS Consortium, for continued review and enhancement of the survey tools.

Conclusion

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Filed under: Book Reviews, Quality Initiatives | Tagged: Agency for Healthcare Quality, AHRQ, By Brent Mefesel MD, CAHPS®), Consumer Assessment of Healthcare Providers and Systems, Patient Satisfaction Data | 3 Comments »

Physicians and Discount or On-Line Brokerages

Posted on September 9, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Why are Doctors and Investors Eschewing Full Service Brokers?

By Dr. David Edward Marcinko MBA CMP™

[Founder and CEO] www.CertifiedMedicalPlanner.org

There are many studies that show that active trading garners inferior results to a longer term buy and hold type of strategy.

The UC-Davis Study

One of the most publicized recently was conducted by a UC-Davis team led by Dr. Terrance Odean. The study examined the actual tracing activity of thousands of self-directed accounts at a major discount brokerage over a six-year period. The results were clear. Regardless of trading level, most of the accounts underperformed the market and showed that the higher the number of trades, the worse the result.

Link: http://faculty.haas.berkeley.edu/odean/

Ego Driven

In addition to cost savings, discounters appeal to one’s ego for business. Everyone wants to feel like a smart investor. There is also a strong appeal to one’s sense of control. Hiring a professional advisor should not result in losing these feelings, but should solidify them. And, advice to sell has a far greater impact on investment results than the cost of a purchase trade as long as the level of trading is kept at a prudent level.

Avoidance of Sales Pressure

The final reason people turn to discount and on-line brokerages is to avoid sales pressure. Unlike the stereotypical stockbroker or financial advisor [FA], no one calls to push a particular stock. Instead, sales pressure is created within the mind of the investor.

Assessment

By maintaining a steady flow of information about stocks and the markets to the account holders, brokerages keep these issues in the forefront of the investor’s minds. This increases the probability that the investor will act on the information and execute a trade. Ironically, this focus on trading is one of the very conflicts investors are trying to avoid by fleeing a traditional full service broker.

Conclusion

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INSURANCE:Risk Management and Insurance Strategies for Physicians and Advisors

Filed under: CMP Program, Investing | Tagged: BDs, behavioral finance, brokerages, certified medical planner, Discount and On-Line Brokerages, Dr. David Edward Marcinko MBA, Terrance Odean, UC-Davis | 1 Comment »

Case Model Illustration of a Six Sigma Healthcare Pioneer

Posted on September 7, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

The Mount Carmel Health System

By Mark Matthews MD

A “Scrubbed” True Illustration

One of the earliest healthcare adopters of Six Sigma was the Mount Carmel Health System in Columbus, Ohio.

The organization was barely breaking even in the summer of 2000 when competition from surrounding providers made things worse. Employee layoffs added fuel to an already all-time low employee morale.

The CEO

Chief Executive Officer Joe Calvaruso was determined to stem the bleeding, break the cycle of poor financial performance and return the hospital system to profitability. He sought the potential benefits of Six Sigma and began a full deployment of its methodology. The plan was a bold move, as the organization ensured that no one would be terminated as a result of a Six Sigma project having eliminated his or her previous duties. These employees would be offered an alternative position in a different department. Moreover, top personnel were asked to leave their current positions to be trained and work full time as Six Sigma expert practitioners who would oversee project deployment while their positions were backfilled.

Assessment

The Six Sigma deployment was the right decision. More than 50 projects were initiated with significant success. An example of an early Mount Carmel success story is the dramatic improvement in their Medicare + Choice product reimbursements, previously written off as uncollectible accounts. These accounts were often denied by HCFA due to coding of those patients as “working aged.”

Since the treatment process status often changed in these patients, HCFA often rejected claims or lessened reimbursement amounts, effectively making coding a difficult and elusive problem. The employment of the Six Sigma process fixed the problem, resulting in a real gain of $857,000 to the organization. The spillover of this methodology to other coding parameters also has dramatically boosted revenue collection.

A Glimpse of Lean Medical Management Tools and Techniques

Conclusion

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2012 Year End Tax Planning for Medical Professionals

Posted on September 6, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

How to Reduce Exposure to Higher post-2012 Taxes on Investment Income and Gains

By Perry Dalesandro CPA perry@dalecpa.com

Doctors and most all individuals face the prospect of a darker tax climate in 2013 for investment income and gains. Under current law, higher-income taxpayers will face a 3.8% surtax on their investment income and gains under changes made by the Affordable Care Act. Additionally, if current tax-reduction provisions sunset, all taxpayers will face higher taxes on investment income and gains, and the vast majority of taxpayers also will face higher rates on their ordinary income. This Alert explores year-end planning moves that can help reduce exposure to higher post-2012 taxes on investment income and gains. This first part explains who has to worry about the 3.8% surtax and what it covers. It also briefly discusses key sunset rules, and begins examining some essential year-end moves.

Future parts will describe other planning moves in detail.

Who has to worry about the 3.8% Surtax and what it covers

For tax years beginning after Dec. 31, 2012, a 3.8% surtax applies to the lesser of (1) net investment income or (2) the excess of modified adjusted gross income (MAGI) over the threshold amount ($250,000 for joint filers or surviving spouses, $125,000 for a married individual filing a separate return, and $200,000 in any other case). MAGI is adjusted gross income (AGI) increased by the amount excluded from income as foreign earned income (net of the deductions and exclusions disallowed with respect to the foreign earned income).

Illustration 1: For 2013, a single taxpayer has net investment income of $50,000 and MAGI of $180,000. He won’t be liable for the tax, because his MAGI ($180,000) doesn’t exceed his threshold amount ($200,000).

Illustration 2: For 2013, a single taxpayer has net investment income of $100,000 and MAGI of $220,000. He would pay the tax only on the $20,000 amount by which his MAGI exceeds his threshold amount of $200,000, because that is less than his net investment income of $100,000. Thus, the surtax would be $760 ($20,000 × 3.8%).

Observation: An individual will pay the 3.8% tax on the full amount of his net investment income only if his MAGI exceeds his threshold amount by at least the amount of the net investment income.

Ilustration 3: For 2013, a single taxpayer has net investment income of $100,000 and MAGI of $300,000. Because his MAGI exceeds his threshold amount by $100,000, he would pay the tax on his full $100,000 of net investment income. Thus, the tax would be $3,800 ($100,000 × .038).

The tax is taken into account in determining the amount of estimated tax that an individual must pay, and is not deductible in computing an individual’s income tax.

What is net investment income? For purposes of the Medicare contribution tax, “net investment income” means the excess, if any, of:

(1) the sum of:

… gross income from interest, dividends, annuities, royalties, and rents, unless those items are derived in the ordinary course of a trade or business to which the Medicare contribution tax doesn’t apply (see below),

… other gross income derived from a trade or business to which the Medicare contribution tax does apply (below),

… net gain (to the extent taken into account in computing taxable income) attributable to the disposition of property other than property held in a trade or business to which the Medicare contribution tax doesn’t apply, over

(2) the allowable deductions that are properly allocable to that gross income or net gain.

Trades and businesses to which tax applies. The 3.8% surtax applies to a trade or business if it is a passive activity of the taxpayer, or a trade or business of trading in financial instruments or commodities.

Investment income won’t include amounts subject to self-employment tax. Specifically, net investment income won’t include any item taken into account in determining self-employment income and subject to the self-employment Medicare tax

Observation: Thus, the same item of income can’t be subject to both self-employment tax and the Medicare contribution tax. If self-employment tax applies, the Medicare contribution tax won’t apply.

The tax doesn’t apply to trades or businesses conducted by a sole proprietor, partnership, or S corporation. But income, gain, or loss on working capital isn’t treated as derived from a trade or business and thus is subject to the tax.

Exception for certain active interests in partnerships and S corporations. Gain or loss from a disposition of an interest in a partnership or S corporation is taken into account by the partner or shareholder as net investment income only to the extent of the net gain or loss that the transferor would take into account if the entity had sold all its property for fair market value immediately before the disposition.

Retirement plan distributions. Investment income doesn’t include distributions from tax-favored retirement plans, such as qualified employer plans and IRAs.

Looming Sunsets Would Affect Almost all Taxpayers

Unless Congress acts, the Bush-era tax breaks-those in the EGTRRA and JGTRRA legislation of 2001 and 2003-will come to an end (i.e., they will sunset) at the end of 2012. Depending on how the November elections play out, the sunsets may be: (1) abolished for everyone, (2) deferred for everyone (as they were in December of 2010, when they originally were to sunset), or (3) deferred for all taxpayers other than those with higher incomes. Still a fourth, albeit unlikely, possibility is that the parties will not be able to agree on remedial legislation and the Bush-era tax breaks actually will sunset at the end of 2012 for everyone.

There are scores of income tax rules that would be altered if the Bush-era tax breaks sunset at the end of 2012, but arguably the most important ones are as follows:

… Tax brackets. The 10% bracket will disappear (lowest bracket will be 15%); the 15% tax bracket for joint filers & qualified surviving spouses will be 167% (rather than 200%) of the 15% tax bracket for individual filers; and the top four tax brackets will rise from 25%, 28%, 33% and 35% to 28%, 31%, 36% and 39.6%.

… Taxation of capital gains and qualified dividends. Currently, most long-term capital gains are taxed at a maximum rate of 15%, and qualified dividend income is taxed at the same rates that apply to long-term capital gains. Under the sunset, most long-term capital gains will be taxed at a maximum rate of 20% (18% for certain assets held more than five years). And, dividends paid to individuals will be taxed at the same rates that apply to ordinary income.

If the EGTRRA/JGTRRA sunset rules go into effect at the end of 2012 and dividends and interest are taxed at ordinary income rates up to 39.6% in 2013, it seems highly unlikely that dividends and interest also would be subjected to a 3.8% surtax on net investment income (i.e., Congress would at least repeal the surtax).

Year-end Planning for Investments

Beginning below, and to be continued in future articles, are specific steps that taxpayers can take now in order to reduce or avoid exposure to the 3.8% surtax as well as possibly higher tax rates on capital gains and dividend income.

Accelerate Home Sales

The sale of a residence after 2012 can trigger the 3.8% surtax in one of two ways. It also can expose taxpayers to a higher capital gain tax rate if the sunset rules affect them next year.

Under Code Sec. 121, when taxpayers sell their principal residences, they may exclude up to $250,000 in capital gain if single, and $500,000 in capital gain if married. Gain on a post-2012 sale in excess of the excluded amount will increase net investment income for purposes of the 3.8% surtax and net capital gain under the general tax rules. And if taxpayers sell a second home (vacation home, rental property, etc.) after 2012, they pay taxes on the entire capital gain and all of it will be subject to the 3.8% surtax.

Recommendation: A taxpayer expecting to realize a gain on a principal residence substantially in excess of the applicable $250,000/$500,000 limit who is planning to sell either this year or the next should try to complete the sale before 2013. Doing so rather than selling after 2012 will remove the portion of the gain that doesn’t qualify for the Code Sec. 121 exclusion from the reach of the 3.8% tax. It also will reduce the taxpayer’s exposure to possibly higher rates of tax on capital gains under the sunset rules.

Illustration 4: A married couple earn a combined salary of $260,000. They plan to sell their principal residence for $1.2 million, and should net a gain of about $700,000, of which $500,000 will be excluded under Code Sec. 121. If they sell this year they will pay a tax of $30,000 (15%) on their $200,000 of taxable residence gain. If they wait till next year to sell, their gain will be fully exposed to the surtax, which in their case equals 3.8% multiplied by the lesser of: (1) $200,000 of net investment income; or (2) $210,000 ($460,000 of MAGI [$260,000 salary + $200,000 of taxable home sale gain] − the $250,000 threshold). Thus, the tax on their gain will be at least $37,600 ([.15 + .038] × $200,000). The tax could be even more if they are subject to a higher capital gains tax next year under the sunset rule (or a modified sunset rule).

Illustration 5: A single taxpayer earns a salary of $170,000 and also has $30,000 of investment income (interest and dividends). He plans to sell his vacation home for $500,000 and will net a gain of approximately $400,000. If he sells this year, he’ll pay a $60,000 tax on his gain (.15 × $400,000). If he waits till next year, his MAGI will swell to $600,000 ($170,000 salary + $30,000 investment income + $400,000 gain). He will pay an additional $15,200 of tax on his vacation home gain (3.8% of $400,000), on top of the regular capital gain tax. Additionally, sale of the vacation home in 2013 will expose his $30,000 of investment income to an additional $1,140 of tax (3.8% of $30,000).

Conclusion

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Filed under: Taxation | Tagged: ACA surtax, AGI, EGTRRA, IRS, JGTRRA, MAGI, medicare surtax, Obamacare tax, Perry Dalesandro, Year end tax planning | Leave a comment »

Making Medical Content Actionable

Posted on September 5, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

The Importance of Rules

(http://ow.ly/d3D2D)

By Jacqueline Mitus, MD, Senior Vice President, Product Strategy; Steve Silverstein, MD, FACEP, Vice President, Chief Clinical Architect; and Matthew Zubiller, Vice President, Decision Management, McKesson Health Solutions

Clear, consistent and reproducible rules logic is at the core of translating information into actionable content. In other words, rules make content more intelligent by tying disparate pieces of information together — for example, heart failure codes and care guidelines — so that a conclusion can be drawn, a recommendation can be made or an action can occur. In so doing, the content becomes meaningful and can drive the right, timely intervention or behavior.

Value Driven

Rules do not have to be complex to drive value. A very simple rule can be very actionable: for example, an automated reminder to both member and physician about annual mammograms.

Simple or complex, transforming clinical content into reproducible, actionable rules is a highly precise endeavor. Consider how nuance and meaning can be lost in any translation and the time and effort that can be spent debating an author’s original intent. In healthcare, the stakes are significantly higher in “getting it right,” and shades of gray in meaning can affect the intended outcome.

For example, concepts such as “worsening,” “severe” and “over time” are common parameters that need specific definition to become actionable and measurable.

“Rules” for a good rule:

Is complete, meaning that it has fully considered all the cases relevant to that circumstance
Similarly understands all the exceptions that can still allow a case to meet the rule
Considers elements such as timing and time spans, number of activities required before the rule comes into action, inclusions and exclusions
Is as transparent as possible to support a clear relationship between the input of data and the generation of recommendations
Is specific and unambiguous

Assessment

To learn more, download the full white paper on Actionable Content: A Framework for Better Decision-Making.

###

Learn more about McKesson Health Solutions at:http://www.mckesson.com/en_us/McKesson.com/Our+Businesses/McKesson+Health+Solutions/McKesson+Health+Solutions.html.

Conclusion

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A Simple Formula For Financial Sobriety

Posted on September 4, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

On Changing Financial Behaviors

By Rick Kahler MS CFP® ChFC CCIM www.KahlerFinancial.com

From time to time I offer financial courses through Community Education of the Black Hills. Classes on the fundamentals of making good investments and how to do your own financial planning usually fill quickly.

But, a class on “financial sobriety”—how to change your psychological behaviors around money and begin making wiser money decisions—had only one person sign up. Based on my 30 years of financial advising, this wasn’t a big surprise.

The Research

Research tells us 70% of US citizens have no savings and live month to month or are insolvent. Only 9% have saved over $100,000 and just 3% over $500,000. The stats for medical professionals are not so transparent.

Why is this? The simple answer is Americans have a significant resistance to saving, including some doctors, according to ME-P Editor-in-Chief, Dr. David Edward Marcinko FACFAS MBA CMP® www.CertifiedMedicalPlanner.org

Mathematically, the solution to this is very simple. Out of every dollar earned, do this: First, pay taxes. Second, save and invest 20% or more. Third, live on the rest. This formula has a high probability of successfully creating financial independence.

So, why are fewer than one in 10 Americans able to follow this simple formula? The answer to that isn’t so simple.

Psychological Responses

The first response to these options is often, “I can’t.” Non-savers tell themselves there is nowhere to cut. When put in context of maintaining their current lifestyle, this is true—and therein lies the problem. When you’re living month to month, becoming a saver inherently means either reducing your lifestyle or increasing your income.

Unfortunately, too many people vaguely intend to start saving when their income goes up. This is backwards. Focusing instead on reducing your lifestyle is what creates the habit of saving.

For some people, downsizing a lifestyle can mean switching kids from private to public schools or selling expensive cars and homes.
For others, downsizing can mean getting rid of cable TV, buying generic brands, and shopping at garage sales instead of Walmart. Most budgets have room for at least a few small cuts. We just can’t see the options, because our brains tell us that reducing our lifestyle will be a fate worse than death.

It may seem that a lifestyle reduction would be a lot easier for high income earner. Yet I’ve seen those earning $750,000 have as much trouble saving $10,000 a year as those earning $50,000. The self-talk and reasons why it’s impossible to cut spending are exactly the same.

Not about Money

It’s not about the money. It’s never about the money. It’s not that most non-savers don’t know the solution to saving more; it’s that they don’t like the solution. We cannot change what we refuse to confront.

It takes a lot of courage to admit you have to change and then take action to actually put a plan into motion. It can feel overwhelming, embarrassing, and fearful. It’s hard saying goodbye to the old lifestyle and the trappings we come to enjoy.

Adaptable Humans

Fortunately, the difficult times are temporary. Humans are very adaptable. Before long you will settle into the new “normal.” You will discover you can be just as happy with your new lifestyle as you were in the old. The anxiety of losing that lifestyle will be replaced with the satisfaction of watching your savings and investments grow, knowing you will someday be able to support yourself without working.

Assessment

Eventually, you will experience much less anxiety than you did when you were living in denial. Knowing you have enough savings to see you through a job loss or other financial calamity is a real anxiety buster.

You may even choose not to increase your lifestyle as your income increases. You’ll be too busy enjoying the financial serenity, satisfaction, and joy that comes with living on less than you earn and building financial independence.

Conclusion

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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
Dictionary of Health Economics and Finance
Dictionary of Health Information Technology and Security
Dictionary of Health Insurance and Managed Care

Filed under: CMP Program, Events-Planner, Financial Planning | Tagged: behavioral finance, budgeting, CMP, Financial Planning, Financial Sobriety, Rick Kahler CFP®, www.certifiedmedicalplanner.com | 2 Comments »

Events Planner: September 2012

Posted on September 1, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

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Events-Planner: SEPTEMBER 2012

By Staff Writers

“Keeping track of important health economics and financial industry meetings, conferences and summits”

Welcome to this issue of the Medical Executive-Post and our Events-Planner. It contains the latest information on conferences, news, and relevant resources in healthcare finance, economics, research and development, business management, pharmaceutical pricing, and physician/entity reimbursement! Watch for a new Events-Planner each month.

First, a little about us!　The Medical Executive-Post is still a relative newcomer. But today, we have almost 175,000 visitors and readers each month from all over the country, in addition to our growing subscriber base. We have been a successful collaborative effort, thanks to your contributions. As a result, we are adding new resources daily. And, we hope the website continues to provide the best place to go for journals, books, conferences, educational resources, tools, and other things you need to establish the value your healthcare consulting and financial advisory intervention.

So, enjoy the Medical Executive-Post and this monthly Events-Planner with our compliments.

A Look Ahead this Month – And now, the important dates:

September 14-16: Physicians in Management Seminar, Atlanta, GA
September 16-19: Association Healthcare Environment, Phoenix, AZ
September 19-22: SHSMD Meeting, Philadelphia, PA
September 22-25: ASHHRA Meeting, Denver, CO

MarcinkoAdvisors@msn.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com　

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Medical Office Fee Strategies for Disgruntled Patients

Posted on August 31, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Adroitly Handling a Tough but Common Office Situation

[By Dr. Gary L. Bode MSA CPA]

A common scenario, in medical practice, is patient disgruntlement over professional fees.

The Scenario

This scenario should not occur in front of other patients. Many receptionists find that genuine, cute little quips like, “I know it seems high, but (wink), I’m expensive to maintain,” defuse the situation by gentling pointing out the overhead factor.

The Balk

When a patient balks at fees, gently and politely imply that we could inquire if the local plumber was available to do the exam, procedure or surgery.

Assessment

This brings training and relative cost issues into play while making them smile. Costs are high, but justifiable.

More:

Physicians Buying Securities On Margin

Conclusion

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Is Retirement Today a Game Changer for Mature Physicians?

Posted on August 30, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Understanding Succession and Exit Planning for Physicians

By Michael J. Searcy, ChFC, CFP®, AIFA®

www.SearcyFinancial.com

Doctors who once planned to rely on the sale of their practice to fund their retirement are now finding it more difficult to recruit younger physicians for their succession plan. If you are a mature doctor today who owns a smaller medical / dental practice (one or two doctor groups), you may be finding that both the economy and desires of younger doctors are changing the game for developing an exit strategy.

The Plan

In preparing a succession plan, a major key to success is starting the process early. Waiting until you near retirement to begin thinking about selling your practice may leave you with limited (often unfavorable) options. While some doctors choose to fund a buy-out vehicle during the early stages of their practice with the end goal of selling and retiring in mind, the majority are not in a position where they have a longstanding plan in place. For doctors who are more than 5-7 years out from retirement, making time to consult with professionals and come up with an enticing purchase proposition for a younger doctor can lead to receiving maximum value for the practice.

Understand the Obstacles

Several factors lead to younger doctors not purchasing existing practices. These include the heavy competition from hospitals that are competing for more doctors, their desire to set up their own practice, or their aversion to the responsibilities of running a business. By understanding the obstacles you may face in finding a successor, you can plan ahead to overcome them and get your practice in optimal operating order to increase its attractiveness to potential successors.

The Questions

Questions to consider during the process include:

Do I know my practice’s worth? Getting an accurate valuation is important for you and your successor. Valuation companies that specialize in medical and dental practice valuations will consider your tangible assets, accounts receivable and the goodwill/brand of your practice to give you an accurate picture of your worth. By overvaluing your practice, you may repel potential buyers.
Are all operations running smoothly? There may be areas of your practice that need strengthened before a sale. This can make things smoother as you prepare for a sale, and also make the practice more attractive.
Can I/we sustain another doctor’s salary while they are being groomed to take over?
If not, is there a hospital affiliate who can hire the doctor to work in my practice until we build the financial base to sustain another salary?
Am I protecting my patients? Aside from adhering to any patient notification laws of your state, you want your patients to understand any upcoming transitions. Creating a plan to protect your clients may help retain them after the transition.

Build an Alternative Nest Egg

While the sale of your practice may be a wonderful addition to your retirement fund, it is important to build a nest egg as you work and not rely on that big chunk from a sale at the end of your career. No sale or purchase price is guaranteed and economic changes or new regulations could make your practice unsellable. By building a nest egg for retirement throughout the course of your career, you can have greater peace of mind that you can experience financial freedom in retirement.

Assessment

Developing your exit strategy will take time, organization and careful planning. Avoid adding additional stress by viewing the sale of your practice as your financial freedom for retirement. When it comes time to transfer your ownership out of your practice, make sure you are able to focus solely on a successful outcome!

The Author

Michael J. Searcy, ChFC, CFP, AIFA, is President of Searcy Financial Services, Inc., a registered investment advisory firm in Overland Park, KS, offering integrated wealth management solutions to doctors. Searcy has been listed by Medical Economics as one of the “Top 150 Financial Advisors for Doctors” in 2002-2006 and 2011. For additional information, visit www.SearcyFinancial.com

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Filed under: Career Development, Retirement and Benefits | Tagged: A Retirement Game Changer for Mature Physicians?, Michael J. Searcy | 4 Comments »

Death Takes a [Variable Annuity] Insurance Policy

Posted on August 28, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

How a Lawyer Exploited the Fine Print and Found Himself Facing Federal Charges

By Jake Bernstein / @Jake_Bernstein / ProPublica

The Industry

The life insurance industry tried to make variable annuities irresistible to investors and was enraged when a Rhode Island lawyer exploited the fine print for his own profit.

The Story

This story was co-reported with This American Life from WBEZ Chicago and NPR’s Planet Money.

Video: Excerpts of Video Depositions in the Case Against Joseph Caramadre

Link: http://www.propublica.org/article/death-takes-a-policy-how-a-lawyer-exploited-the-fine-print

Conclusion

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ADVISORS: www.CertifiedMedicalPlanner.org
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
Dictionary of Health Economics and Finance
Dictionary of Health Information Technology and Security
Dictionary of Health Insurance and Managed Care

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On Hospital Tax-Exempt Debt

Posted on August 27, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

An important means of external financing for hospitals

By Calvin W. Wiese CPA CMA

By Dr. David Edward Marcinko MBA

www.CertifiedMedicalPlanner.org

Tax-exempt debt has become an important means of external financing for hospitals, primarily because its cost is very attractive. Interest rates on tax-exempt financing are lower than interest rates on financing that is not tax-exempt because the interest income earned by the holders is exempt from federal income tax. In some states, it is also exempt from state income tax and in some cities; it is also exempt from city income tax. Thus, the holders of these debt instruments (usually bonds) are willing to accept lower rates of interest.

State and Local Governments Only

Hospitals themselves are not capable of issuing tax-exempt debt. Only state and local governments are. A state or local government issues tax-exempt debt for hospitals and then loans the proceeds to hospitals. This is called “conduit” financing: the state or local government acts as a conduit through which hospitals can access tax-exempt debt markets. State and local governments are authorized to loan proceeds of their bond issues to hospitals through state statutes, and each state statute is different. Some states authorize any state or local government to issue bonds to loan to hospitals. Other states restrict such power to special purpose governmental entities only. And some states restrict this power to a single governmental entity that is specially formed for the sole purpose of issuing tax-exempt bonds on behalf of hospitals.

The IRS

The Internal Revenue Service (IRS) regulates the issuance of tax-exempt financing. While the IRS code nominally provides that debt instruments issued by state and local governments are exempt from federal income tax, it imposes special rules on conduit issues. Thus, tax-exempt issues whose proceeds are loaned to hospitals must comply with special IRS rules. Although very complex, these rules primarily regulate the use of proceeds, restricting the use of tax-exempt proceeds to the acquisition of property, plant components and equipment.

Given state statutes, IRS code and applicable security laws (both state and federal), issuing tax-exempt bonds is legally complex. Many lawyers get paid handsome fees every time tax-exempt debt is issued. The quarterback of the legal team is the bond counsel who represents the interests of the bondholders; the bond counsel issues the critical tax opinion that investors rely upon to claim tax-exemption on the interest from these instruments. Everything revolves around getting this opinion.

The Underwriter’s

Given its critical nature, only highly qualified lawyers are accepted by the market to provide this opinion. Underwriter’s counsel represents the interests of the investment bankers; their primary concern is compliance with security laws. Issuer’s counsel represents the interests of the state or local government, and hospital counsel represents the interests of the hospital; both have relatively minor roles. In the event credit enhancement is involved, credit enhancement counsel represents their interests and has significant influence on the process.

The Trustees

Another unique party to most tax-exempt bond issues is the bond trustee. The bond trustee is usually a bank who performs a fiduciary duty on behalf of the bond holders throughout the life of the bonds. The face of the faceless bond holders, they act on their behalf. And they, too, are represented by counsel in the bond issuance process.

State or local government typically appoints bond counsel. In many cases, they work with only a single firm. Not unusually, these relationships are quite cozy, and often result in fees being paid that are well in excess of what otherwise would be paid.

The Documents

An excess of documents is involved in most tax-exempt financings. The heart of the documents is the indenture, which is the agreement between the bond trustee (on behalf of the bond holders) and the state or local government issuer. It contains the promises made to the bond holders, and it describes the work of the bond trustee. The bond trustee will only perform actions on behalf of bond holders that are explicitly set forth in the bond indenture. The bond indenture is the security given to the bond holders, describing all their recourses.

Assessment

The bond indenture is typically supported by the loan agreement between the state or local government that issues the bonds and the hospital to which the proceeds are loaned. Its terms complement the terms of the bond indenture, which together, form the conduit.

Conclusion

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From Our Newest Textbook Release

Learn How to Profit and Thrive in the PP-ACA Era

BOOK FOREWORD / TESTIMONIAL

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IRS Tips for Charity Minded Medical Professionals

Posted on August 26, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

IRS Help for Charitable Taxpayers

[By Children’s Home Society of Florida Foundation]

The IRS has published a series of six tips that are designed to help charitable taxpayers. Both the Department of the Treasury and the IRS hope to enable donors to support various charities. The six recommendations will help donors to be certain that their gifts are deductible.

1. Tax Exempt Status

A charity must be qualified under the IRS guidelines for a gift to be deductible. At www.irs.gov there is an “Exempt Organization Select Check” that allows donors to be certain the charity is qualified to receive deductible gifts.

2. Itemizing

Your charitable gifts are deductible only if you itemize deductions on IRS Form 1040, Schedule A.

3. Fair Market Value

Gifts of cash are deductible at face value. Gifts of appreciated stock, land and many other types of property are often deductible at fair market value. There are special rules for cars, boats, clothing and household items. If the charity gives value in return, such as goods, services, admission to a charity banquet or sporting event, that amount will reduce the value of your charitable deduction.

4. Good Records

You need to maintain records of all donations. All cash gifts must be documented even if they are quite small. You should keep cancelled checks, bank or credit card statements, payroll deductions or a statement from the charity with its name, contribution, date and amount for your gifts.

5. Larger Gifts

If your gift is $250 and above, you must receive a receipt or written acknowledgement from the charity. The acknowledgement should state the amount of the gift and may include a description and fair market value for property gifts. It must state whether the charity provided goods or services for your gift. Non-cash gifts over $500 require you to file IRS Form 8283, Non-Cash Charitable Contributions, with your Form 1040. If the non-cash property is over $5,000 and is not a public stock, bond or mutual fund, you usually must obtain a property appraisal from a qualified appraiser who holds himself or herself out to the public for that purpose. In some cases, the appraisal must be attached to the return with a signed Form 8283.

6. Timing

If you make a pledge, the gift will be deductible only when it actually is made. For example, a donor may make a pledge in November and then make the gift the following March. The gift is deductible in the year it is made. End-of-year donations by check or credit card are generally deductible in the year that they are made or placed in the U.S. mail.

Editor’s Note: In nearly all cases, your charitable gifts will qualify for a substantial reduction in your taxes. For specific information, go to www.irs.gov and search for IRS Publication 526, Charitable Contributions. Valuation rules are available in IRS Publication 561, Determining the Value of Donated Property.

Conclusion

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FINANCE: Financial Planning for Physicians and Advisors
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Filed under: Estate Planning, Taxation | Tagged: 8283, gifts, IRS, IRS Form 8283, IRS Tips for Charity Minded Medical Professionals, Non-Cash Charitable Contributions, Schedule A | 5 Comments »

On Vacation Cruises for Doctors

Posted on August 24, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Something for Everyone

By Rick Kahler MS CFP® ChFC CCIM

www.KahlerFinancial.com

My family and I recently took our 20th cruise-ship vacation. Obviously, we’ve found that cruising offers something for each of us. Perhaps more medical professionals can too?

First Time

I was reluctant to go on my first cruise, both because I’m prone to motion sickness and because I couldn’t see why anyone would want to spend a vacation cooped up on a boat. I quickly learned two things that changed my mind. First, a number of drugs, patches, and shots are available to prevent or cure seasickness. Second, if you get bored on a cruise ship, it’s only because you choose to.

Benefits

A major asset of cruising is the 18 hours a day of tailor-made, supervised activities available for kids of various ages, even when the ship is in port. This allows parents plenty of time to tour ports of call unencumbered by cranky kids who couldn’t care less about museums or ancient ruins. Our kids are now old enough that they enjoy most of the shore excursions, but this still leaves them the option to opt out of any port that doesn’t call to them.

Bargains

Most people assume cruising with a family must be prohibitively expensive. We’ve found it to be a highly affordable way to vacation if you follow a few rules.

You can get some incredible cruising bargains, but it does take a little legwork. You will want to get on the email lists of the major cruise lines; my top picks are Cunard, Celebrity, Holland America, and Princess. They send out sales and last-minute offers continuously.

One of the best places to shop and compare deals is Cruise.com. However, when I’ve run into issues like an incorrect booking or an issue with the cruise company, Cruise.com wasn’t much help. I was left pretty much on my own to resolve the problems. I’ve found it’s better to shop the deals online with sites like Cruise.com or Cruisecritic.com, but to place the order with my local travel agent or directly with the cruise company.

Food

It will come as no surprise that one of the main features I look for in a ship is really good food. Many of the newer ships offer alternative dining rooms, where for an additional $25 to $40 per person, you can dine in true gourmet fashion. Some of the best specialty dining is found on Cunard and Celebrity.

Cost Balance

To balance the cost of my specialty dining habit, I select the least expensive stateroom, typically an inside cabin. It’s the same size as 80% of the cabins on the ship; it just doesn’t have a window. You can enjoy the same view—water and sky—from a lounge on deck while you relax with a cool drink. And the cheaper cabin leaves several hundred extra dollars to spend on food and shore excursions. For our latest 12-day cruise, our inside cabin cost $800 per person.

Rates

You typically get the best rates by booking the cruise as far in advance as possible. A small deposit is due upon booking but is totally refundable until about 60 days prior to the cruise date. Often, the prices rise the closer you get to that 60-day deadline, when the cruise must be paid in full and your deposit becomes non-refundable. If you are flexible, another great time to shop for cruises is about 30 to 60 days prior to sailing.

Assessment

A cruise isn’t what we typically think of as a middle-class family vacation. Yet when you figure in lodging, food, and admission fees for visiting major US vacation destinations, cruising can be just as affordable and just as much fun.

Conclusion

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Filed under: iMBA, Inc., LifeStyle | Tagged: Cruses for Doctors, rick kahler, vacations, www.KahlerFinancial.com | 1 Comment »

Primary Care Practices to Participate in Historic Public-Private Partnership to Strengthen Primary Care

Posted on August 23, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

DATELINE – CMS NEWS PRESS RELEASE – Aug 22, 2012

LINK: CMS

Conclusion

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Healthcare Job Expenses Can be Tax Deductible

Posted on August 21, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Appreciating the Medical Academic Calendar

By Andrew D. Schwartz, CPA

Many healthcare professionals work based on the Academic Calendar. That means that a lot of Doctors switch jobs over the summer. According to our friends at the IRS in their IRS Summertime Tax Tip 2012-06:

Summertime is the season that often leads to major life decisions, such as buying a home, moving or a job change. If you are looking for a new job that is in the same line of work, you may be able to deduct some of your job hunting expenses on your federal income tax return.

The Seven Tips

Here are seven things the IRS wants you to know about deducting costs related to your job search:

To qualify for a deduction, your expenses must be spent on a job search in your current occupation. You may not deduct expenses you incur while looking for a job in a new occupation.
You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you must include the amount you received in your gross income, up to the amount of your tax benefit in the earlier year.
You can deduct amounts you spend for preparing and mailing copies of your résumé to prospective employers as long as you are looking for a new job in your present occupation.
If you travel to look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area to which you travelled. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity unrelated to your job search compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.
You cannot deduct your job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.
You cannot deduct job search expenses if you are looking for a job for the first time.
In order to be deductible, the amount that you spend for job search expenses, combined with other miscellaneous expenses, must exceed a certain threshold. To determine your deduction, use Schedule A, Itemized Deductions. Job search expenses are claimed as a miscellaneous itemized deduction. The amount of your miscellaneous deduction that exceeds two percent of your adjusted gross income is deductible.

Assessment

For more information about job search expenses, see IRS Publication 529, Miscellaneous Deductions. This publication is available on www.IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Links:

Schedule A, Itemized Deductions ( PDF)
Publication 529, Miscellaneous Deductions ( PDF)

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Wind Energy Alternate Investments

Posted on August 20, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Calm or Gusty?

By Children’s Home Society of Florida Foundation

The Energy Department released the “2011 Wind Technologies Market Report” this week. It noted that there was substantial growth for wind energy, but significant uncertainty about its future.

Federal Aviation Administration

In a parallel development this week, the Federal Aviation Administration issued tentative approval of Cape Wind, a planned wind farm off the shore of Cape Cod and Nantucket Island. The 130 wind turbines of Cape Wind will stand 440 feet tall. The wind farm is opposed by the Alliance to Protect Nantucket Sound.

However, the FAA approved the wind farm and noted that the towers would be required to include appropriate lights and be painted in colors that made them more visible to aircrafts. With the FAA approval, the Cape Wind developers may now seek final financing and could receive a 25 year lease from the federal government.

2011 Growth

The energy report on wind technology showed significant growth in 2011. Approximately 6.8 GW (gigawatts) of new wind energy capacity were added in the United States.

Of all the new energy facilities created, wind represented 32% of the total in 2011. However, total wind capacity is now just 3.3% of America’s electricity demand. Cape Wind will be the first major offshore U.S. wind project.

China Rising

The world leader in wind energy is China. The U.S. is now in second place with about 20% of global wind capacity. The states with major commitments to wind energy are Texas, California, Iowa, Minnesota, North Dakota and South Dakota.

Assessment

The major concern affecting wind energy in 2013 is the potential loss of federal and state wind tax benefits.

In addition, wind faces substantial competition from natural gas. With the development of “fracking,” natural gas production has substantially increased. With a large new supply of natural gas, there are now sufficient reserves to support the U.S. needs for 100 years. This increased supply reduces the cost of natural gas and makes it more attractive than wind energy.

Conclusion

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Selling into a House Poor Market

Posted on August 19, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

When the Local Real-Estate Market is Challenging

By Rick Kahler MS CFP® ChFC CCIM www.KahlerFinancial.com

An exciting new medical practice opportunity in another state …. Health problems that make one-level living an urgent necessity …. The need to downsize quickly because of a hospitalist job loss ….

These are just a few of the reasons medical professionals might need to sell a home sooner rather than later. The real problem arises when the local real estate market is a challenging one. Here are a few suggestions for anyone looking to sell a house under difficult conditions.

1. Evaluate the urgency of your situation. If you can wait a few months without harming your career, your finances, or your health, that may be the wiser choice. If you can’t make payments, or you need to relocate right away and can’t buy a new house until you sell the current one, waiting to sell is usually a losing proposition.

2. Take a hard look at the costs of waiting. You often can cut your overall housing costs significantly by biting the bullet and selling, rather than paying for two homes until you get the price you want. In addition to mortgage payments, add up expenses like property taxes, maintenance, utilities, and commuting costs.

Example:

For example, suppose you paid $400,000 for a house that’s worth $300,000 in the current market. Selling it now would mean a loss of $100,000, but holding onto it costs $3000 a month. Suppose the market improves by 33% in three years, which of course is not something you can count on. You sell the house then for $400,000. In the meantime, keeping it has cost you $108,000. If you keep the house on the market for a year, then give up and sell at $300,000, you’ve added $10,800 to the original $100,000 loss. You’re often better off to cut your losses and sell.

3. Grit your teeth, hold your nose, and be realistic about the market value of the home you are selling. Your original purchase price has NOTHING to do with current reality. The market is the market, and buyers couldn’t care less about what you paid for the home. They only care about the competition and getting the most home for their money, just as you did when you bought the property.

You need to research the housing market in your area or hire competent help (like an appraiser) to help you determine the market value of your property. Real estate agents can help with pricing, but you must proceed carefully. Some agents practice a technique of “tell them what they want to hear, get the house listed, and then work on getting them to reduce the price.”

4. Think like a buyer as well as a seller. Many sellers forget that the pain of selling at a loss is eased if the replacement home they buy is also valued less than it was several years ago. The loss in the home being sold can often be offset by the bargain price of the home being purchased.

5. Do your best to negotiate with your lender. If your mortgage is more than the sale price of the house, you’ll owe money to the lender at closing. Depending on the circumstances, it may be possible to get the lender to accept a lower payoff. Before the closing date, find out exactly how much you’ll need to pay and know where you’re going to get it.

Assessment

Our reluctance to sell a property for less than the amount we’ve put into it is described as “sunk cost fallacy.” Holding on until we get our money back sometimes works. More often, though, all it does is sink us deeper into a financial hole.

Conclusion

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Physician Advisors: www.CertifiedMedicalPlanner.org

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Medical Career Trends & Advancements

Posted on August 17, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

100 Recognizable Jobs in Healthcare

By David Wallace [Search and social media marketer from Anthem, Arizona]

The medical career field has come a long way.

While medicine was once represented by a one-size-fits-all career, today there are over 100 recognizable jobs in the healthcare field. Just as the size of the medical field has increased, there have been medical advancements – and in equality. In fact, 2003 was the first time ever the number of women enrolling in medical school outnumbered men.

Assessment

All of these changes haven’t come cheap, however. The U.S. national health spending was just under $2 trillion in 2006. The above infographic delves into the historical medical advancement milestones, spells out every recognized medical career, provides compelling facts about former and current medical positions, and displays job and salary information for a select few.

Conclusion

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Supreme Court Upholds the PP-ACA Tax

Posted on August 15, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

More Tax Increases In Store for 2013

By Andrew D. Schwartz, CPA

On June 28 2012, the Supreme Court upheld most of the provisions of The Patient Protection and Affordable Care Act. Here are some of the tax increases that might affect you starting in 2013:

Increased and Expanded Medicare Taxes

High-income taxpayers will be paying higher Medicare taxes. Under the current rules, individuals have Medicare taxes withheld from their salaries at a rate of 1.45% on each dollar earned at work. Since employers match the amount withheld, Medicare receives a total of 2.9% for each payroll dollar paid out. And, unlike Social Security taxes which max out at $110,100 (in 2012), there is no cap for Medicare taxes. Self-employed individuals also pay Medicare taxes at a rate of 2.9% on all of their net earnings.

Starting in 2013, the employee portion of the Medicare tax jumps by a whopping 62% – from the current rate of 1.45% to 2.35% – on earned income in excess of $200k for single individuals and $250k for married couples filing a joint tax return. As of now, the employer match is slated to remain at 1.45%, which means the total Medicare tax will be 3.8% for high-income taxpayers.

Example:

For example, if you’re single, and earn $500k from your job, expect to pay $2,700 in additional Medicare taxes (($500k – $200k) * .9%) for 2013.

For more information, check out the IRS’s Questions and Answers for the Additional Medicare Tax, which explains:

The statute requires an employer to withhold Additional Medicare Tax on wages or compensation it pays to an employee in excess of $200,000 in a calendar year. An employer has this withholding obligation even though an employee may not be liable for the Additional Medicare Tax because, for example, the employee’s wages or other compensation together with that of his or her spouse (when filing a joint return) does not exceed the $250,000 liability threshold. Any withheld Additional Medicare Tax will be credited against the total tax liability shown on the individual’s income tax return (Form 1040).

To increase taxes for high-income individuals even more, the Medicare tax will also apply to unearned income for the first time since this tax was enacted. People over the $200k or $250k threshold should expect to pay Medicare taxes at a rate of 3.8% on interest, dividends, capital gains, and net rental income beginning in 2013. You will pay this tax in addition to any federal and state income taxes due on this income. We’ll provide you a link to this form when it becomes available.

Reduced Tax Breaks for Medical Expenses

Many employers offer their staff the ability to pay for their family’s healthcare costs with pre-tax dollars through a Flexible Savings Accounts (FSA) included as part of their benefits package. Starting in 2013, the maximum amount of money that you can set aside in an FSA will be cut in half to $2,500 per year. Plus, medical expenses you can pay through the FSA will exclude certain items currently allowed, including OTC medications. Please note, if you are married, both you and your spouse can put away the full $2,500 through your respective employer’s FSA.

The Patient Protection Act also makes it even tougher for individuals to deduct their medical expenses. Starting in 2013, you can only deduct your family’s medical expenses to the extent the allowable expenses exceed 10% of your adjusted gross income. That’s an increase of one-third over today’s threshold of 7.5% of AGI.

This new rule may not impact your taxes, however, thanks to the dreaded AMT. Since the current threshold for deducting medical expenses under the AMT is already 10% of AGI, many people who are hit by this tax every year might not see any tax increase due to this change.

Steps to Consider to Minimize These Taxes:

As with most other tax rules, there are ways to minimize the tax bite that will be caused by soon to be implemented changes to the Tax Code:

Take a look at a Health Savings Account for your family. Money contributed into an HSA is tax-deductible, and money withdrawn for your family’s medical expenses is tax-free. We wrote about HSAs in our May 2012 Newsletter.
Consider selling appreciated investments in 2012 if you would otherwise sell them in 2013. No one knows whether the tax rate on long-term capital gains will be higher than 15% in 2013. Add to this the 3.8% Medicare tax you’ll pay once your income exceeds $200k if single or $250k if married, and you could save a decent amount of taxes by selling by December 31st.
Consider accelerating income into 2012 to reduce your 2013 income. This strategy includes one-time income generators, such as Roth Conversions.

Channel Surfing the ME-P

Have you visited our other topic channels? Established to facilitate idea exchange and link our community together, the value of these topics is dependent upon your input. Please take a minute to visit. And, to prevent that annoying spam, we ask that you register. It is fast, free and secure.

Conclusion

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
ADVISORS: www.CertifiedMedicalPlanner.org
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
Dictionary of Health Economics and Finance
Dictionary of Health Information Technology and Security
Dictionary of Health Insurance and Managed Care

Filed under: Health Law & Policy, Taxation | Tagged: ACA, Andrew D. Schwartz, CPA, Flexible Savings Accounts, health savings account, Medicare Taxes, Patient Protection and Affordable Care Act, Supreme Court Upholds the PP-ACA Tax | 3 Comments »

Do Foreclosures Promote Clandestine Pot Houses?

Posted on August 14, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

About Indoor Marijuana Grow Farms and Labs

[By DEA Agent]

Marijuana growers are shifting to the suburbs from rural and commercial areas, helped by a housing crisis that created a glut of affordable home and basement farms like the images below.

BASEMENT POT HOUSE

CLOSE-UP VIEW

Assesment

Unlike traditional earthen farming methods in the photos above, hydroponic grow boxes may be large stealth cabinets that produce fresh marijuana, or other herbs and vegetables, in an indoor garden and grow on water, nutrients and grow-lights alone.

Conclusion

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

DICTIONARIES: http://www.springerpub.com/Search/marcinko
PHYSICIANS: www.MedicalBusinessAdvisors.com
PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
ADVISORS: www.CertifiedMedicalPlanner.org
BLOG: www.MedicalExecutivePost.com
FINANCE:Financial Planning for Physicians and Advisors
INSURANCE:Risk Management and Insurance Strategies for Physicians and Advisors

Filed under: Drugs and Pharma | Tagged: Clandestine Pot House, DEA, home foreclosures, housing crisis, hydroponics, marijuana, marijuana farms, pot, upside down home loans | 5 Comments »

Should Olympic Medal Winners Pay Tax?

Posted on August 12, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

A Taxing Question

By Children’s Home Society of Florida Foundation

At press time this evening, the United States was embarked on a successful 2012 Olympics. The U.S. had received 90 medals — 39 gold, 25 silver and 26 bronze. Our Olympic team was on a path to receive well over 100 medals.

While each medal has very high personal value, there also is value to the tangible materials. The gold medals contain approximately $675 in materials, the silver $385 and the bronze medal value is $5. However, the U.S. Olympic Committee (USOC) also provides a cash gift for medal winners. The gift values are $25,000 for a gold medal, $15,000 for a silver medal and $10,000 for a bronze medal.

Should the Olympic winners pay tax?

The general income tax rule is that all prizes are taxable unless specifically excluded. Several Senators and Representatives have proposed that the value of the medal and USOC cash award should be excluded from taxable income.

Senator Marco Rubio (R-FL) introduced the Olympic Tax Elimination Act. It would exempt medal winners from paying tax. Rubio stated, “Athletes representing our nation overseas in the Olympics shouldn’t have to worry about an extra tax bill waiting for them back home.”

Similar bills were introduced in the House by Rep. Blake Farenthold (R-TX), Rep. Mary Bono Mack (R-CA) and Rep. Aaron Schock (R-IL).

Expenses to Offset Income

All of the bills would exempt the medal and cash award from taxation. CPAs who have commented on the proposal note that the athletes would need to report the cash awards as income, but also could offset this income with “ordinary and necessary” expenses related to the awards. For example, the five women gymnasts who won the gold medal could take deductions for their classes, costs of coaches and their travel expenses.

Assessment

House Ways and Means Committee Chairman Dave Camp (R-MI) joined the group that favors excluding the Olympic medals from taxation. He stated, “These athletes deserve every bit of our support and appreciation for representing the United States on the world stage. Allowing our Olympians to receive and enjoy their medals and awards without having to worry about whether they can pay the taxes on their accomplishment is just one small way we can show that support.”

Conclusion

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Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Hospitals: http://www.crcpress.com/product/isbn/9781439879900

Physician Advisors: www.CertifiedMedicalPlanner.org

Filed under: "Ask-an-Advisor", Taxation | Tagged: income tax, olympics 2012, Should Olympic Medal Winners Pay Tax? | Leave a comment »

As With Medical Decisions – Human Emotions Play a Role in Investment Advice

Posted on August 9, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Appreciating Transferrable Applications in Behavioral Finance

By Sidney A. Blum CFP® CPA/PFS ChFC

By Dr. David E. Marcinko MBA

Whether making medical decisions or financial decisions, both are influenced by emotions. The role of emotions, when making financial decisions, has transferable application in the world of medical decisions.

What Role Should Emotion Play in Financial Advice?

Financial advisors know that one of the most important components of providing financial advice is discussing client goals. Inherently your goals are tied to how you see yourself and in what ways you see your money and net worth as a reflection of yourself. This aspect of your financial life is usually tied to emotions based on perceived positive or negative experiences in your life.

Financial advisors find that they expend considerable time and energy addressing emotions and negative reactions to events in clients’ lives. The goal is to move the focus toward positive steps for reaching client goals. As with other aspects in your life, emotional reactions can distract you from well reasoned actions that benefit in the long run. This is the reason it is beneficial to engage a financial professional to guide you through your financial life circumstances with advice driven by goals rather than emotional negative reactions.

Emotional Intelligence

The use of Emotional Intelligence is a learned skill set. Financial Advisors who are skilled in understanding the four basic emotions that guide them and their clients will find they are more successful in their chosen work!

The Four Basic Emotions

The four emotions are: Glad, Sad, Mad and Scared. These four basic emotions are neither good nor bad – they just “are”!

It is one or more of these emotions that help determine just how “risk adverse” a client will be. It is absolutely necessary for a financial advisor to be aware of the client’s emotional state, whether the client is aware or not. People react emotionally to market downturns. They are probably scared first, but also mad and sad as the market changes. They may get caught up in the market’s emotional swings and lose sight of their own goals and strategy. They think it will always stay that way. Or in an upturn, they believe the market will always stay up. They get caught up in the euphoria of “glad” and again lose sight of their goals and strategy. Many people get caught up in the high market frenzy and end up buying shares that are overpriced; even doctors.

Examples:

Pulling out of the market to protect temporary downside losses in value also means not participating in the upside, which eventually occurs. From the major downturn in the spring of 2009 to the fall of 2009, the market recovered better than 35%. Those who pulled out of the market and stayed out missed out on that portion of their own portfolio’s recovery. Due to reacting emotionally, people buy in up market and sell in a down market – the opposite of what garners them a good return.

Another difficulty is that people lose sight of the fact that a fund investment is in actual companies – some of which survive and some don’t. The nature of the investment market is that there are no guarantees on return of investment. A certain amount of volatility is normal. It is the price you pay for the opportunity of garnering a higher return than with “safe” investments.

And, how safe are “safe” investments? If your “safe” investments are earning 1% while inflation is running at 3% as is the case in 2012, you are losing purchasing power. If the bucket is leaking slowly, it can still end up empty!

So when you feel “glad” about a safe investment, what may be a good feeling may turn out to be a bad investment.

How Advisors Help Clients

How does an advisor help to keep their clients’ focus on the positive steps that can be taken to meet goals instead of reacting solely to current market conditions? How does advisor keep from getting involved in the client’s negative and unproductive emotional reactions?

Financial advisors have seen these situations before, but clients may not be aware that financial markets tend to return to the norm and provide a positive return in the long run. By helping provide a perspective on how the market normally behaves; the focus can be shifted from how the market currently stands, a temporary fluid condition, to the longer range behavior of markets. This provides a sense of stable emotions that allows the client and the advisor to make better financial decisions.

Non-Monetary Goals?

A financial advisor can also help you realize that financial planning is more than investments and that some goals are not solely monetary. It is less stressful and far more productive for people to keep their eyes on their goals, not on the dollar value of their portfolio. In the end, your net worth is not the same as your self‐worth.

Assessment

Because emotions play a significant role in all decisions we make, a major part of an advisor’s job is to help the client keep their focus on the positive steps that can be taken to meet those goals instead of reacting based solely on emotions!

About the Author

Sid graduated from the University of Illinois with a degree in accounting and has been practicing as a CPA since 1975 and financial advisor since 1987. Sid received the CERTIFIED FINANCIAL PLANNER certification in 1987 and in 1988, received the AICPA Certificate of Education Achievement in Personal Financial Planning. In 1989, Sid received the designation of Chartered Financial Consultant (ChFC) and in 1991 the AICPA specialty designation of Personal Financial Specialist (CPA/PFS).

Channel Surfing the ME-P

Conclusion

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
ADVISORS: www.CertifiedMedicalPlanner.org
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
Dictionary of Health Economics and Finance
Dictionary of Health Information Technology and Security
Dictionary of Health Insurance and Managed Care

Filed under: Ethics, Financial Planning, LifeStyle | Tagged: behavioral finance, Emotional Intelligence, Four Basic Emotions, Investment Advice, Medical Decisions, Sidney A. Blum, www.glfoa.com | 1 Comment »

About the RetireMark Planning System

Posted on August 8, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

From HealthView Services (HVS)

By Staff Reporters

According to their website, HealthView Services (HVS) is one of the only firms in the country that builds solutions for the financial services industry to address out-of-pocket health care costs that individuals will face during retirement.

Founding

HVS was founded in 2008 by a team of experienced executives who identified a serious deficiency in financial planning in relation to retirement planning. In order to fill this void, HVS founders employed a group of expert physicians, experienced actuaries, and healthcare industry programmers to develop the HVS RetireMark Planning System.

Financial Planning and Health-Risk Assessment Tools

At its core, RetireMark is a combination of financial planning and health-risk assessment tools that provide financial institutions, independent advisors, and healthcare related firms with web-based reports. These customized reports project personalized out-of-pocket healthcare costs, life expectancy, and the Income Floor—a sophisticated and revolutionary approach to income distribution for retirement protection.

Customization

HVS’s product offerings can be customized to meet each institution`s exclusive needs and be seamlessly integrated into existing marketing and branding platforms. In addition to the software, HVS provides clients with training programs, seminars, and customized presentations in order to expand sales and grow revenues.

Assessmernt

In collaboration with industry leaders such as the Retirement Income Industry Association (RIIA), HVS has developed innovative solutions to address the growing needs of investors in transition. HVS is also a regular contributor to the HealthWatch segment of Retirement Weekly, a www.MarketWatch.com publication. By partnering with such prominent organizations, the firm hopes to become a pioneer in this emerging field.

Conclusion

So, give em’ a click and tell us what you think www.hvsfinancial.com

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Hospitals: http://www.crcpress.com/product/isbn/9781439879900

Physician Advisors: www.CertifiedMedicalPlanner.org

Filed under: Financial Planning, Health Insurance, Research & Development, Retirement and Benefits | Tagged: About the RetireMark Planning System, health care costs., HealthView Services, HealthWatch, Retirement Income Industry Association | Leave a comment »

Succeed with the “Business of Medical Practice” Textbook

Posted on August 8, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

ADVERTISEMENT

[Transformational Health 2.0 Skills for Doctors]

By Ann Miller RN, MHA

www.BusinessofMedicalPractice.com

December 23rd, 2011 – The Institute of Medical Business Advisors [iMBA] Inc, in Atlanta, GA www.MedicalBusinessAdvisors.com and Springer Publishing Company of New York, just released the third edition of “The Business of Medical Practice” [Transformational Health 2.0 Skills for Doctors] edited by iMBA founder Dr. David Edward Marcinko MBA, CMP™ and President Hope Rachel Hetico RN, MHA, CPHQ, CMP™

Internal Contents

The 37 chapter, 750 page hard-cover textbook provides a comprehensive resource for those physicians, medical professionals, practice managers, nurse executives, health care administrators and graduate students seeking working knowledge on running a private facility or medical clinic.

Three Major Sections

The BoMP is comprised of three enterprise-wide sections: [1] Qualitative Office Operations, [2] Quantitative Aspects of Medical Practice and [3] Health Policies, Ethics and Leadership. Topics like ARRA, HITECH, ACA and the social networking aspects and ramifications of health 2.0 connectivity for all stakeholders are included for modernity.

Tools and Templates

Tools used throughout the book help readers reference and retain complex information. These tools include:

Sidebars. Key terms, key concepts, key sources, associations, and factoids all serve to enhance and reinforce the core takeaways from each chapter.
Tables. Tables are used to display and reference benchmark data, draw comparisons, and illustrate industry data trends.
Figures. Graphical depictions of concepts help you comprehend the material.
Charts. Charts allow easily referenced standard industry taxonomies alongside comparisons of related topics.

Assessment

For a further description of the Business of Medical Practice, with online “live’ community, please click: www.BusinessofMedicalPractice.com

To order directly: http://www.springerpub.com/product/9780826105752

Conclusion

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OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Filed under: Book Reviews, Health Economics, Health Insurance, Health Law & Policy, Healthcare Finance, iMBA, Inc., Information Technology, Practice Management, Recommended Books | Tagged: Business of Medical Practice, david marcinko, hope hetico, www.BusinessofMedicalPractice.com, www.medicalbusinessadvisors.com | 21 Comments »

Should Doctors Know the Top Black and White Hat Hackers?

Posted on August 7, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Attention Medical Professionals, HIT Specialists and EHR Devotees

[By Staff Writers]

Question: What is LulzSec?

LulzSec, short for “LulzSec Security”, is a hacker group that claims responsibility for several high profile attack.

LulzSec has gotten attention since May 2011 for targeting high profile website with poor security.

Assessment

The most prolific anti-EHR / anti-EDR contributor to this ME-P is investigative reporter Darrell K. Pruitt DDS; friend or foe of HIPAA and HIT data security?

Conclusion

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

DICTIONARIES: http://www.springerpub.com/Search/marcinko
PHYSICIANS: www.MedicalBusinessAdvisors.com
PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
ADVISORS: www.CertifiedMedicalPlanner.org
BLOG: www.MedicalExecutivePost.com
FINANCE:Financial Planning for Physicians and Advisors
INSURANCE:Risk Management and Insurance Strategies for Physicians and Advisors

Filed under: Ethics, Information Technology | Tagged: Adrian Lamo, Black Hat Hackers, eDRs, EHRs, ePHRs, Jonathan James, Kevin Mitnick, Linus Torvalds, Richard Stallman, Tim Berners Lee, White Hat Hackers, Wozniak | 16 Comments »

Doctors to Get a Smaller Piece of American Pie?

Posted on August 6, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

And Contracting Lifestyles for Us All

By Rick Kahler MS CFP® ChFC CCIM www.KahlerFinancial.com

“Any way you slice the pie, Americans better come to grips with the fact their lifestyles are going to contract.” That’s the bottom line I’ve gleaned from attending several conferences and listening to some of the nation’s top economists recently.

But, what about Doctors and Medical Professioanals?

New Medical Practice Entrepreneurial Business Rules for Young Physicians [circa 2012]

The Fundamentals

Basically, the US is spending far more than it takes in via tax revenues, creating an annual deficit. The shortfall is covered by borrowing the money, which adds to the national debt. The Treasury Department borrows the money from two sources: private investors (individuals, banks, companies, and other governments) and the Federal Reserve Bank.

The Federal Reserve Bank

Where does the Federal Reserve get money? I’ve written about this before and our Editor has commented on it. They create it with a keystroke, which is the digital-age equivalent of printing money.

The Modern US Monetary System

It’s important to understand that the US government has no intention of ever paying down the US debt. Neither politicians nor economists can agree on whether to stop borrowing (or creating) money to fund the annual deficit. To actually reduce the national debt, we must run surpluses, something we haven’t done in over 15 years and then it was only for one year. We actually have never paid off our debt from WWII.

Deficit Spending

Reducing our deficit spending requires us either to raise taxes, cut spending, or borrow (which includes creating) more money. If we raise taxes to cover the deficit, we will most likely force a recession or depression. We simply can’t take $1.3 trillion out of the private sector without imploding the economy. If we cut spending, we will most likely create a recession or depression, as we simply can’t cut $1.3 trillion of government spending overnight without imploding the economy. If we do both, we will most likely still have a recession or depression.

Print or Borrow

At the moment, Congress can’t agree what to do, so we continue to borrow and print money. An increasing national debt means higher borrowing costs (interest). This means we need more revenues (from taxes or creating more money) to continue to fund Social Security, Medicare, welfare programs, infrastructure, and national defense. Creating (printing) money can lead to rising inflation, though it doesn’t automatically do so, as Japan has demonstrated for 20 years. This results in the devaluation of our global purchasing power, meaning the cost of everything we buy from other countries increases. It’s clear that the most appealing option to politicians and most economists is to continue to borrow and inflate.

Why the Government is Not-Like Medical Professionals

The Message

No matter how you cut and paste these options, one result is the same. Americans’ lifestyles will contract. This will come either from less government support and services, less spendable income via higher taxes, or an erosion of purchasing power from a declining dollar. This is the last message most Americans want to hear. The attitude is like that of the overspender who recently asked me, “How can I cut my expenses but maintain my current lifestyle?” The most honest answer is, “Sorry, but it can’t be done.” True, it’s possible to find creative ways to keep the parts of your lifestyle that matter the most. However, reducing expenses almost always means a lifestyle reduction. This is one reason so many people resist budgeting.

Assessment

For most doctors, lawyers, CPAs, FAs, laborers and all Americans, budgeting means reducing spending, even though that isn’t inherently what budgeting is. In its purest form, it is becoming aware of our current spending patterns and redirecting income to the areas of spending that will best support our desired lifestyle. The more our income shrinks, the more crucial it becomes to redirect it carefully and consciously.

Personal Budgeting Guidelines for Doctors

Conclusion

In other words, if we have to settle for a smaller piece of pie, we’d better make sure we’re buying the kind of pie we really want.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Hospitals: http://www.crcpress.com/product/isbn/9781439879900

Physician Advisors: www.CertifiedMedicalPlanner.org

Filed under: Funding Basics, Health Economics, LifeStyle, Taxation | Tagged: Deficit Spending, Doctors to Get a Smaller Piece of American Pie?, Federal Reserve Bank, Rick Kahler CFP®, www.KahlerFinancial.com | 2 Comments »

Opinion Poll on the Most Disruptive Health Issue Today?

Posted on August 6, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

A Voting Opinion Poll

Today’s opinion poll for all modern hospital executives, financial advisors, health economists, patients and physician leaders is right on-point.

It was sent in by an astute ME-P subscriber and we are most pleased to oblige.

VOTE HERE

And so, what is the most singular disruptive development that you should be thinking about if you want your medical practice, clinic, hospital, state, local government or healthcare organization to thrive in the coming years?

Conclusion

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Hospitals: http://www.crcpress.com/product/isbn/9781439879900

Physician Advisors: www.CertifiedMedicalPlanner.org

Filed under: Ethics, Health Law & Policy, Information Technology, Voting Polls | Tagged: CMS, health 2.0, HIE's, Medicaid, Opinion Poll on the Most Disruptive Health Issue Today?, PPA, RECs | Leave a comment »

Appreciating the Financial Toll Drug Use Has on Us

Posted on August 5, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

The Cost of Drug Abuse

What does it cost to send a drug addict to jail? Far more than it needs to as demonstrated by this infographic.

War on Drugs

Thanks in part to the War on Drugs, more than half of the inmates in the federal prisons are there because of drug-related offenses.

It’s a staggering statistic, one that helps explain the explosive growth of the prison system over the past thirty years, as officials struggle to keep up with the influx of inmates convicted of, in many cases, minor drug possession.

Source: www.clarityway.com via www.fastcodesign.com

Conclusion

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Hospitals: http://www.crcpress.com/product/isbn/9781439879900

Physician Advisors: www.CertifiedMedicalPlanner.org

Filed under: Drugs and Pharma, Ethics | Tagged: drug-related offenses., Drugs, drugs in prison, The Financial Toll Drug Use Has on Us, war on drugs | 1 Comment »

What Health Care Fraud Costs Us

Posted on August 2, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Scrutiny Needed from the Patient Citizenry – Too?

As health care takes the center stage at the forefront of contemporary politics it is under scrutiny from several angles.

The Fraud Rate

One aspect of the health care system that has been garnering growing levels of interest is the rate at which medical fraud occurs. As the developed world steeps itself further and further into the digital age, things like medical history and billing records become more easily susceptible to fraud since they’re accessible from virtually anywhere.

Expensive Care

And, the fact of the matter is that trying to stay healthy is an expensive business. Each year, 300 million Americans spend about $2 trillion on health care, but the amount of that money that is lost to fraud seems to have grown a great deal in recent years.

Types

The government continues to crack down and identify fraudsters in all their forms—and they do come in many forms. Perhaps the most common type of health care fraud concerns how medical care providers bill. This type of fraud relies heavily on the fact that many patients don’t take the proper amount of time to really scrutinize their medical bills and invoices.

Source: InsuranceQuotes.org

Assessment

Fraud can cost a huge amount of money for victim, insurance companies and society. The best defense against fraud remains understanding EOBs forms and what’s on your medical bills.

Conclusion

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

DICTIONARIES: http://www.springerpub.com/Search/marcinko
PHYSICIANS: www.MedicalBusinessAdvisors.com
PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
ADVISORS: www.CertifiedMedicalPlanner.org
BLOG: www.MedicalExecutivePost.com
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

Filed under: Ethics, Health Insurance, Health Law & Policy | Tagged: health abuse, health costs, health fraud | 6 Comments »

Doctors and Financial Advisors “Working 9 to 5”

Posted on August 1, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

What an “Old” Way to Make a Living

[Challenging the Current Business Process Model and Scheduling Paradigm]

By Dr. David Edward Marcinko FACFAS MBA CMP™

[Editor-in-Chief]

First off – my apologies to Dolly Parton for bastardizing the title of her song

My dad worked for General Motors; the 11-PM to 7-AM shift to be precise. The company ran 3 shifts [8hr. X 3da. = 24 hrs / day / 7 days / week]. He was always home during the day for his children. In fact, it seemed as though he never slept. My mom worked the 9-AM to 5-PM shift / 5 days / week as a banker. What a great arrangement; loving parental child care 24/7/365.

Then, after my own medical school, internship, residency training, fellowship, clinical practice and business school, I often wondered why corporate America and her white collar workers used the 9-5 work day paradigm and not the traditional blue collar 3 shift [24/7/375] manufacturing model – like GM?

Working

With a 24/7/365 work day schedule [3 shifts/day], fixed office costs would remain the same, while variable costs would increase slightly but be compensated for by increased revenues, less HR stress, fewer utilities and reduced private and public infra-structure maintenance, etc [old styled B-school pedagogy]. This would increase operating capacity and output [patient/client output, CPT® codes, hourly fees, AUMs, etc]. You know – real top line revenue and bottom line profits. And, that’s a good thing for business and commerce.

But, is this 3 shift model applicable to the healthcare industrial complex and the financial services industry? If not – why not? And, I mean real work – examining and treating patients and interviewing clients – not automatic websites or interactive blogs, etc. Doctors, consultants and FAs actually interacting with real folks; not avatars!

An Old but Novel Idea?

As a medical business process consultant, my simple idea is more than two decades old. Yet, it remains largely untested and still considered novel … Perhaps until now! Offering extended hours is one way that physicians – can position themselves for the changes coming in the new healthcare era. How else will we accomodate 34 million new Medicaid insured patients.

In fact, so should financial advisors and medical management consultants. Shoot, why can’t most professionals use this model. Why be constrained to person, place and time [3-Dimensions]?

The Decision

This decision, however, should not be taken lightly and should be evaluated both from a provider, patient, civics, cultural and business standpoint. So, please read this essay for an elegant description of this model.

Then, our ME-P text books can be used to go granular into the nitty-gritty details; with real-life tools, templates, case models and checklists, etc.

Assessment

Link: Ready to offer extended patient hours?

Link: New Medical Practice Entrepreneurial Business Rules for Young Physicians [circa 2012]

Conclusion

Your thoughts and comments on this ME-P are appreciated. Colleagues – when not if – are you going 24/5 … or 6 … or 7?

Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Hospitals: http://www.crcpress.com/product/isbn/9781439879900

Physician Advisors: www.CertifiedMedicalPlanner.org

Filed under: "Advisors Only", "Doctors Only", Book Reviews, Career Development, iMBA, Inc., Practice Management, Touring with Marcinko | Tagged: Dr. David Edward Marcinko MBA CMP™ | 2 Comments »

Events Planner: August 2012

Posted on August 1, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

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Events-Planner: AUGUST 2012

By Staff Writers

“Keeping track of important health, economics and financial industry meetings, conferences and summits”

First, a little about us! The Medical Executive-Post is still a relative newcomer. But today, we have almost 175,000 visitors and readers each month from all over the country, in addition to our growing subscriber base. We have been a successful collaborative effort, thanks to your contributions. As a result, we are adding new resources daily. And, we hope the website continues to provide the best place to go for journals, books, conferences, educational resources, tools, and other things you need to establish the value your healthcare consulting and financial advisory intervention.

So, enjoy the Medical Executive-Post and this monthly Events-Planner with our compliments.

A Look Ahead this Month – And now, the important dates:

Aug 05-08: AHRMM Conference, San Antonio, TX
Aug 28-31: NMA Meeting, New Orleans, LA

MarcinkoAdvisors@msn.com

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Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Hospitals: http://www.crcpress.com/product/isbn/9781439879900

Physician Advisors: www.CertifiedMedicalPlanner.org

Filed under: Alerts Sign-Up, Breaking News, Events-Planner, iMBA, Inc. | Tagged: Events-Planner, institute of medical business advisors, Medical Executve-Post | Leave a comment »

When A Regular IRA is Better than ROTH

Posted on July 31, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

More on IRAs for Doctors www.schwartzaccountants.com

By Andrew D. Schwartz, CPA

Each winter, when my staff and I meet with our physician and other clients to review their tax information, we get this question a lot, “Should I go with the Roth version of my employer’s 401(k) or 403(b) plan, or should I stick with the traditional version?”

Taxpayers first had the option of contributing money to a Roth account back in 1998. Remember, when you contribute money to a Roth account, you elect to forego a current year tax break in exchange for a promise from the government that distributions taken from the Roth account down the road won’t ever be taxed.

Through 2005, the only access you had to these tax-free accounts was to contribute to a Roth IRA. Many middle-income and high-income taxpayers never had the opportunity to contribute to a Roth IRA, however, since their incomes exceeded the relatively modest threshold based on their filing status. (The Roth IRA threshold for 2012 is $125k for single individuals and $183k for married couples.)

What Congress Likes

Congress liked that people were giving up a current year tax break by opting to go with a Roth IRA instead of to a Traditional IRA, so decided to expand this opportunity to 401(k) plans and 403(b) plans. As we wrote in our October 2005 Newsletter in an article called The New Roth 401k and 403b, employers could begin to offer the Roth version of these plans as of January 1, 2006.

What’s the difference between the Traditional and Roth versions of these popular retirement savings plans? With the traditional 401(k) or 403(b) plan, the salary deferrals you make reduce your taxable salary and grow tax deferred. You will then owe income taxes on distributions taken from these accounts when you retire.

Example:

As a doctor, let’s say you earn $200k, and you max out your 403(b) salary deferrals for $17k during the year. In this case, your W-2 will report taxable wages of $183k in Box 1. Assuming you are in the 33% federal tax bracket, the $17k you contribute into your 403(b) plan saves you $6,667 in federal income taxes. That’s a pretty good tax break I would say.

What happens if you instead decide to go with the Roth version of the 403(b) plan for your salary deferrals? When you contribute money to a Roth account, you forego a current year tax-break. Your W-2, therefore, will report the full $200k as taxable wages in Box 1, instead of $183k that would be reported had you gone with the Traditional 403b. The benefit of giving up this tax break is the tax-free treatment of the compounded growth on the $17k of salary deferrals. In other words, you won’t owe any federal income taxes on the distributions taken from this account when you retire.

The Max Factor

When my clients ask me for advice about the Roth 401k or 403b plan, I immediately look at Box 12 of theirW-2 forms to see how much they contributed in salary deferrals during the prior year. According to the instructions of the W-2 form, here are the relevant codes that show up in Box 12 of the W-2 form:

Code D – Elective deferrals to a section 401(k) cash or deferred arrangement. Also includes deferrals under a SIMPLE retirement account that is part of a section 401(k) arrangement.

Code E – Elective deferrals under a section 403(b) salary reduction agreement

Code AA – Designated Roth contributions under a section 401(k) plan

Code BB – Designated Roth contributions under a section 403(b) plan

What I’m looking to see is whether this client is maxing out their salary deferrals during the year. If a client is contributing to the Roth version of the 401k and 403b plan, and is falling short of the $17k max ($22.5k max if 50 or older), I strongly suggest that they consider contributing only to the Traditional version until they are able to max out their contributions.

Assessment

In my opinion, socking away as much money as possible each year into these tax-advantaged, creditor protected accounts takes priority over worrying about saving taxes later. Remember, if money is tight, you have the choice of contributing $10,333 into a Roth 401k account, or taking advantage of the $6,667 tax break offered by traditional 401k plans and putting away the max of $17k into the Traditional 401k account.

I think a financial planning twist on Alfred Lord Tennyson’s poem about lost love sums this up best, “Tis better to save and be taxed than never to have saved at all.”

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OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Filed under: Investing, Retirement and Benefits, Taxation | Tagged: 403-b plans, Andrew D. Schwartz, CPA, individual retirement account, IRA, physician retirement planning, SEP-IRA, When Regular is Better than ROTH | 3 Comments »

The Science and Some Medicine Behind Seat Belt Use

Posted on July 28, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

It’s All About Saving Lives and Ankle Bones

By Muhammad Saleem, and

By Dr. David Edward Marcinko FACFAS MBA CMP™

[Editor-in-Chief]

Vintage 2000 Jaguar XJ-V8-LWB Touring Sedan

The Ankle Bone is Connected to the Foot [er –ah] Leg Bone

The talus is one of the important bones that makes up the ankle joint. Over one half of the talus is covered with cartilage–it serves as an important link between the leg and the foot. The talus moves not only at the ankle joint, but also below the ankle and in the midfoot. Therefore, injuries to the talus can affect motion of the ankle and foot joints.

‘Aviators Astragalus’

Talus [astragalus ankle bone] fractures were almost unheard of a hundred years ago. The first series of talus fractures was described, by Dr. WD Coltart, in men who were injured in the British Royal Air Force in the early 1900s. The term ‘aviators astragalus’ was used to describe these fractures that happened as old war planes made crash landings.

Original Historic Reference Link: AA

Today, talus fractures are seen in high speed car accidents when you don’t-buckle up that seat belt or shoulder harness. I’ve seen far too many during my days covering the local Emergency Room.

So, here is an infograhic on the science behind seat belts. It contains some interesting and some encouraging facts that we wanted to share with our ME-P readers and subscribers.

Mechanism of Injury: Hawkins classification Talar fractures (C) iMBA Inc

The Facts

National seat belt use has increased from 69% in 1998 to 84% in 2010.
Automotive fatalities rank third in terms of lives lost per year, behind cancer and heart disease.
Seat belts are responsible for saving between12,000 to 16,000 lives each year.
Most crash deaths occur within 25 miles of home and at speeds below 40 miles per hour.

Conclusion

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

DICTIONARIES: http://www.springerpub.com/Search/marcinko
PHYSICIANS: www.MedicalBusinessAdvisors.com
PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
ADVISORS: www.CertifiedMedicalPlanner.org
BLOG: www.MedicalExecutivePost.com
FINANCE:Financial Planning for Physicians and Advisors
INSURANCE:Risk Management and Insurance Strategies for Physicians and Advisors

###

Filed under: Insurance Matters, LifeStyle, Risk Management, Touring with Marcinko | Tagged: astragalus, auto accidents, auto deaths, auto insurance, auto safety, •Automotive fatalities, car accidents, car crashes, crash deaths, Dr. David Edward Marcinko MBA, hawkins classification, Podiatry Consent Forms, Science Behind Seat Belts, talar fractures, www.ePodiatryConsentForms.com | 3 Comments »

Understanding The Federal Reserve Act

Posted on July 26, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

[By Staff Reporters]

Uncovering The FED

In the early 20th century, a financial crisis led panicked citizens to withdraw all their money at once, damaging banks. By 1913, Congress responded with the Federal Reserve Act, creating 12 regional banks acting as a federal bank to deal in local and global affairs with both private banks and the federal government.

Balancing v. Manipulation

Some say the Fed was meant to create a balanced economy, while others argue its purpose was to inorganically manipulate free enterprise, rescuing banks that we’d be better off without.

Assessment

Is the Fed still doing its job today? What secrets are being kept from us and how are the Fed’s actions impacting our economy?

Channel Surfing the ME-P

Conclusion

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
ADVISORS: www.CertifiedMedicalPlanner.org
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
Dictionary of Health Economics and Finance
Dictionary of Health Information Technology and Security
Dictionary of Health Insurance and Managed Care

Filed under: Book Reviews, Financial Planning, Funding Basics, Glossary Terms, iMBA, Inc. | Tagged: Ben Bernanke, discopunt rate, federal reserve funds, FOMC, The Fed, The Federal Reserve Act, velocity of money | 3 Comments »

The Financial Impact of Reducing Avoidable Hospital Admissions

Posted on July 25, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Population Health Models

By Staff Reporters

Most readers are aware that colleague David B. Nash MD, MBA is the population health guru for the ME-P. In fact, he is an ME-P “thought-leader.” And, to use a modern colloquialism, he was into population health before PH was cool.

Link: http://nashhealthpolicy.blogspot.com

Preventing Avoidable Hospitalizations

And so, as hospitals and health systems accelerate towards population health models, there is an increasing focus for physicians and health systems to work together to prevent avoidable hospitalizations.

The Infographic

This infographic shows that an average 300-bed hospital is at risk of losing $9.5 million in annual contribution when inpatient admissions for 11 potentially avoidable conditions are completely reduced. These 11 conditions, identified by AHRQ, represent diagnoses for which coordinated outpatient care and early intervention can potentially prevent the need for hospitalization.

Source: Objective Health [McKinsey & Company]

Assessment

A colloquialism is a word or phrase that is employed in conversational or informal language but not in formal speech or formal writing.

Conclusion

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Hospitals: http://www.crcpress.com/product/isbn/9781439879900

Physician Advisors: www.CertifiedMedicalPlanner.org

Learn How to Profit and Thrive in the PP-ACA Era

BOOK FOREWORD / TESTIMONIAL

Filed under: Health Economics, Health Law & Policy, Healthcare Finance, Risk Management | Tagged: David B. Nash MD MBA, Financial Impact of Hospital Re-Admissions, http://nashhealthpolicy.blogspot.com/, Population Health Models, Preventing Avoidable Hospitalizations | 1 Comment »

How Do We Improve Collaboration between Physicians and Hospital Administrators?

Posted on July 24, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

An Opinion Poll for Doctors, FAs and Patients

By Jennifer Tomasik MS [Principal: www.CFAR.com]

“It is the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.”

– Charles Darwin

Beyond institutional mergers and joint ventures, collaboration in healthcare is being driven by other factors; there is a need to move from a healthcare system driven by volume and characterized by fragmentation, waste, high cost, and inconsistent quality to a system where care is coordinated, costs are lower, and quality is higher.

Merger Mania

Merger mania in the 1990’s was driven by similar concerns, including the fear of for-profit competition and the rise of managed care. The results of this earlier round of mergers were unexpected. The 1990s ‘consolidation fever’ raised hospital prices by at least 5%, and did not measurably improve quality.[i] Hospitals purchased physician practices without a great deal of thought about expectations and mutual accountability, and many of those relationships failed—usually with significant financial implications.

Of Savvy Healthcare Leaders

Fearful of history repeating itself, savvy healthcare leaders are thinking differently about how to develop the collaborative relationships they need to succeed today. They see Accountable Care Organizations [ACOs] and Global Payments—where institutions will take on greater risk for the cost and quality of the services a patient requires—as an opportunity to get clear about how they can best position themselves across the full continuum of care. They believe potentials gains are not likely to show up simply as a result of mergers and acquisitions or consolidation per se. Rather than just integrating the bottom lines of their institutions, they are focused on ensuring that those individuals and teams who actually care for patients can productively collaborate with each other, and that they understand the clear and compelling rationale for why that collaboration is necessary.

Nowhere is this relationship more important than between hospital administrators and the medical staff.

What is “Collaboration” Anyway?

Merriam-Webster defines collaboration as “to work jointly with others or together especially in an intellectual endeavor.” While true, we find this definition insufficient for our purposes. Our colleagues at The Rhythm of Business, a consulting firm focused exclusively on collaboration, provide a more productive way to think about collaboration:

“Collaboration is a purposeful, strategic way of working that leverages the resources of each party for the benefit of all by coordinating activities and communicating information within an environment of trust and transparency.”

We add to this definition one additional, yet critical dimension. Collaboration also means working with, and through, differences. Any highly functioning team will, by its very nature, have differences – team members are ideally bringing innovative ideas that compete for “idea space” at the table.

Effective collaboration requires that teams not only value differences, but in fact encourage them to be surfaced. Viewed in this way, collaboration is not an event or an idea. It’s not “agreeing to get along.” Effective collaboration is an ongoing, systematic, strategic process. It is also, we believe, a business imperative – and nowhere more so than in healthcare.

Assessment

Given the often difficult nature of relationships between hospital administrators and medical staff, how do you improve collaboration to increase productivity and performance?

NOTE: [i] Vogt, William B and Robert Town. “How has hospital consolidation affected the price and quality of hospital care?” Robert Wood Johnson Foundation: Policy Brief No. 9. 2006.

Conclusion

And so, how do we improve collaboration between Physicians and Hospital Administrators?

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

About the Author

Jennifer Tomasik, Principal, leads CFAR’s Health and Hospital Systems practice. She works with her clients to solve complex strategic and organizational challenges. Her approach to consulting emphasizes communication and collaboration, supported by a blend of quantitative and qualitative analytics. Jennifer has worked in the health care sector for nearly 15 years, with expertise in public health, clinical quality measurement, strategic management, and organizational change. Her clients include some of the most prestigious hospitals, health systems and academic medical centers in the country. She has a Master’s in Health Policy and Management from the Harvard School of Public Health.

Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Hospitals: http://www.crcpress.com/product/isbn/9781439879900

Physician Advisors: www.CertifiedMedicalPlanner.org

Filed under: Book Reviews, Career Development, Practice Management, Research & Development | Tagged: CFAR, How to Improve Collaboration between Physicians and Hospital Administrators?, Jennifer Tomasik | 3 Comments »

Do Self-Directed Accounts in Retirement Plans Spell TROUBLE for Physicians?

Posted on July 23, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

On Self-Directed Brokerage Accounts

By Jessica Maldonado AIFA® PPC™

Vice President – Searcy Financial Services Inc: www.SearcyFinancial.com

Self-directed brokerage accounts (SDBAs) have long been a loophole to allow plan participants with larger account balances (generally physicians, practice owners, principals, and partners) in a retirement plan the ability to “do their own thing” in investing their accounts.

The theory was that if you open a “window” and a separate account, then the assets held within that account would no longer be managed as part of the plan’s investments because the SDBA was considered a single investment option.

However, due to eleventh-hour guidance provided by the U.S. Department of Labor (DOL) in regard to the new 408(b)(2) service provider fee disclosure rule, now in effect, these SDBAs may create headaches large enough for plan sponsors to stop allowing these windows to operate if a manageable solution is not presented to account for all fees incurred and services offered within SDBAs.

The DOL Issue

The issue is how these accounts are being viewed by the DOL. While SDBAs have generally been accepted to lie outside the monitoring responsibility of plan sponsors (former laws didn’t actually allow this, but regulations were never strict enough to discourage the practice), they will now be viewed the same as all other investments in the plan. Thus, when plan sponsors account for all fees and services associated with their company’s retirement plan, they will now also be required to account for any fees and services associated with the SDBAs for everyone in their plan that has this type of account.

The New Rule

The purpose for the new rule requiring a reporting of all fees associated with the plan is to allow participants a transparent view of how and what fees are paid, and to allow plan sponsors an easy way to aggregate all fees and compare to a benchmark to see if their fees are “reasonable”. The terms “reasonable” and “reasonableness” occur in the regulation a whopping 49 times; clearly the primary focus of the regulation. According to the fact sheet distributed by the DOL, the first quarterly statement must “be furnished no later than November 14, 2012 … This quarterly statement need only reflect the fees and expenses actually deducted from the participant or beneficiary’s account during the July through September quarter to which the statement relates.” Plan sponsors and participants can anticipate seeing the new disclosed fee report at that time.

Lost Options

Participants utilizing the SDBAs as a way to purchase investments of their choice beyond the core offerings of their plan may become disgruntled if the option is no longer offered by their company-sponsored plan. However, the fiduciaries on the plan are responsible for making sure plan expenses are reasonable and are therefore “on the hook” from a liability standpoint for monitoring those expenses and the corresponding services provided. Therefore, plan sponsors must be proactive and prepared with a manageable solution.

Fee Disclosures

Fee disclosures will be required of all “covered service providers” that expect to receive $1,000 or more for providing services to a retirement plan. The $1,000 is cumulative over the entire life of the service provider relationship. These providers must supply actual expenses charged to each participant, including fees paid for fiduciary and non-fiduciary services, third-party administrator fees, record-keeping fees, and any other services provided. These expenses must reflect both direct and indirect compensation, including revenue-sharing between service providers.

Options for Plan Sponsors

Offer Core Investment Choices Only

By only offering a set number of core investment choices for plan participants, plan sponsors can account for the exact investments for which their participants have access. This option will utilize one main service provider (generally the record-keeper) who will be responsible for disclosing all fees related to that retirement plan to the participants. All service providers would therefore report their fees for services to both the plan sponsor and the record-keeper for consolidation onto participants’ statements.

However, taking away the optional window may result in disgruntled employees, especially those who viewed the SDBA as a perk to employment since they may have wanted to have a professionally managed portfolio by their advisor of choice. One possible solution to this would be to offer managed portfolio options within the core fund line-up. If you choose to go this route, make sure the money manager doesn’t cost extra. A professional ERISA 3(38) money manager should provide the managed portfolios and be responsible for the plan’s fund line-up for the same cost.

Require Employees’ Financial Advisors Supply Fee Disclosures for SDBAs

Plan sponsors have the option of continuing to offer SDBAs to employees and requiring their financial advisor deliver the fees disclosures for any fees associated with the account. This could include fees from opening a brokerage window, any third-party service providers utilized on the account and all investment related fees, as well as trading costs. Advisors would have to supply the information to plan sponsors within a reasonable period of time. If they fail to do so, plan sponsors should notify the advisor of the request for fee disclosures, and if they do not comply promptly, according to ERISA guidelines, the advisor MUST be fired immediately as approved service provider and they must be reported to the DOL, or the plan will be in violation of prohibited transactions rules. Prohibited transactions rules violations can disqualify a plan, so this is a very serious matter. Clearly, if a plan has hundreds of these SDBAs, this could be quite cumbersome for a plan sponsor.

Establish Delivery vs. Payment Accounts

A delivery vs. payment (DVP) account is a way for a plan to maintain all of the assets of the plan at one record-keeping and/or custodian platform, but allow outside advisors to trade on individual participants’ account. A DVP account acts as a transaction account and only contains a balance when a trade is being placed. The custodian essentially transfers the assets to the account where the DVP account is set up when the trade is placed, and then the assets are transferred back to the original custodian of the assets. That way, the original custodian and record-keeper always know exactly what’s in the account and they are responsible for all of the fee disclosures. So, this eliminates hundreds of SDBAs and instead keeps everything on one platform. If advisors are to be paid from plan assets, the advisors would submit their bills to the plan’s record-keeper for payment so the record-keeper would always know exactly what the fees are being paid from the participants account.

Engage an Expert Offering Both Plan-Level and Self-Directed Accounts

There are financial advisors who practice personal investment management and offer retirement plan solutions. By engaging a financial advisor who can offer both components to plan sponsors and participants (oversee the plan management for the plan sponsor and oversee the SDBAs for employees), the plan sponsor can rely on one source for the fee disclosures.

Assessment

Now, as a physician or medical professional, do Self-Directed Accounts in Retirement Plans spell trouble for you?

Conclusion

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OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Filed under: "Doctors Only", Investing, Research & Development, Retirement and Benefits, Risk Management | Tagged: 408(b)(2), delivery vs. payment (DVP) account, Do Self-Directed Accounts in Retirement Plans Spell TROUBLE for Physicians?, ERISA 3(38), Jessica Maldonado, SDBAs, www.SearchFinancial.com | 2 Comments »

Update on Health Insurance Claims Processing Costs

Posted on July 22, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Paper versus Electronic

[By Matias Klein]

[Senior VP Technology Portico Systems Integrated Provider Management Solutions]

The average cost of processing a single, clean, paper-based or electronic claim can range from 85 cents to $1.58.

However, according to AHIP, nearly half of all claims (48 percent) were pended due to the submission of duplicate claims (35 percent), lack of complete information or other information needed to justify the claim (12 percent), or invalid codes (1 percent).

The manual adjudication of these duplicate or incorrect claim submissions increases the cost of administration to $2.05. The $2.05 scenario is a best case calculation. In our actual field experience the cost can be as high as $10.00 per claim.

Payment Delays

In addition to the increased administrative cost, one must not forget about the delayed payment to the provider. As stated by AHIP, a duplicate claim can take 9 days to remediate and missing information on a claim can take up to 11 days. This kind of delay damages the relationship between the provider and the health plan, which in terms of costs is priceless.

Enter ID Management

To solve this problem, some healthcare organizations are implementing Master Identity Management (IDM)—a valuable approach to creating an enterprise “source of truth” for provider identity information. But when it comes to payment integrity and claims processing, IDM without a Provider Information Management (PIM) system doesn’t work. Provider relationship and contract data are far too complex, and both types of data are needed to supplement provider identity data in support of claims administration.

Provider Information Management

When IDM is fully integrated with PIM, payers can successfully establish a single, accurate and effective source of truth. An integrated approach also:

Ensures quality – by standardizing, cleansing, cross-referencing and consolidating relevant data, while removing duplicate entries.
Mitigates risk – reducing the downstream impact of inaccurate data on all claims processing, contracting, credentialing, provider directory and connected systems.
Saves millions of dollars – by reducing duplicate entries by even a fraction of a percent, thus ensuring that claims are being processed in an efficient and effective manner.

Assessment

IDM plays a pivotal role in the future of healthcare. As new, collaborative and accountable care delivery models evolve, reliable provider identity management is absolutely critical. Combining IDM with PIM gives payers the most powerful solution for assuring payment integrity while improving provider identity and duplication management.

Conclusion

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

PHYSICIANS: www.MedicalBusinessAdvisors.com
PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
ADVISORS: www.CertifiedMedicalPlanner.org
BLOG: www.MedicalExecutivePost.com
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

Our Newest Textbook Release

Learn How to Profit and Thrive in the PP-ACA Era

BOOK FOREWORD / TESTIMONIAL

Filed under: Health Insurance, Information Technology | Tagged: AHIP, ARs, electronic health care claims, Health Insurance Claims Processing Costs, Hospital Revenue Cycle Management, Integrated Provider Management, Master Identity Management, Matias Klein, medical accounts receivable, paper-based health insurance claims, Portico Systems, Provider Information Management | 5 Comments »

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Vintage 2000 Jaguar XJ-V8-LWB Touring Sedan

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Learn How to Profit and Thrive in the PP-ACA Era

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**Learn How to Profit and Thrive in the PP-ACA Era**