What is a Hospital CHARGE MASTER?

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By Dr. David Edward Marcinko MBA

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According to George Washington University, a hospital chargemaster is a comprehensive list of a hospital’s products, procedures, and services. Everything from prescription drugs to supplies for diagnostic tests has a unique price listing in the chargemaster, making it a go-to document for hospital administrators such as CFOs, clinical documentation improvement specialists, and revenue directors.

Chargemaster usage dates back to the mid-20th century. At that time, fee-for-service (FFS) health insurance plans, which allow patients to direct their medical care by choosing physicians and facilities and paying a portion of the billed total, had just emerged in the U.S. healthcare system. The chargemaster originally served as something akin to an FFS dictionary, with an entry for virtually anything billable under that economic model of healthcare.

CITE: https://www.r2library.com/Resource/Title/082610254

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Over time, FFS itself has evolved and been challenged by alternatives like value-based care (VBC). Chargemasters built for FFS have changed accordingly, and they remain fixtures of the modern hospital revenue cycle. A standard chargemaster is a large electronic file containing multiple elements for each entry. These attributes usually include:

  • The charge for a single unit of the service in question
  • A Current Procedural Terminology (CPT) code; CPT is the official medical code set of the American Medical Association
  • Potentially, a Healthcare Common Practice Coding System (HCPCS) code; HCPCS is based on CPT
  • Alternative CPT and HCPCS codes if needed, e.g. one corresponding only to specific payers
  • A revenue code associated with the charge
  • Flag(s) indicating if the entry is scheduled for deletion, active or inactive
  • An internal reference number within the ledger for accounting purposes

LINK: https://revcycleintelligence.com/features/the-role-of-the-hospital-chargemaster-in-revenue-cycle-management

COURT: https://www.msn.com/en-us/health/medical/colorado-supreme-court-rules-in-favor-of-woman-who-expected-to-pay-dollar1337-for-surgery-but-was-charged-dollar303709/ar-AAXlqNU?li=BBnbfcL

MORE: https://medicalexecutivepost.com/2013/09/26/some-modern-issues-impacting-hospital-revenue-cycles/

RCC: https://medicalexecutivepost.com/2013/03/06/a-better-approach-to-hospital-cost-estimation/

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GO FUND ME: Medical Campaigns Reveal a Big Problem with Health Care

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By Jules Lipoff, MD: Senior fellow at the Leonard Davis Institute of Health Economics and an assistant professor of clinical dermatology at Perelman School of Medicine, both of the University of Pennsylvania. Erica Mark, medical student at the University of Virginia, contributed to this article. The opinions expressed in this article do not necessarily represent those of the University of Pennsylvania Health System or the Perelman School of Medicine.

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If you follow the news or your social media feed, you know that crowdsourcing medical expenses is increasingly popular for financing health care costs. In fact, you might have contributed to one; 22 percent of American adults report donating to GoFundMe medical campaigns.

CITE: https://www.r2library.com/Resource/Title/082610254

As of 2021, approximately $650 million, or about one-third of all funds raised by GoFundMe, went to medical campaigns. That staggering amount of money highlights how dysfunctional our health care system is, forcing people to resort to crowdsourcing to afford their medical care — but it’s not surprising. In the United States, 62 percent of bankruptcies are related to medical costs. This should be a wake-up call to address and reform the system further.

Related: https://medicalexecutivepost.com/2021/12/30/does-crowd-sourcing-democratize-the-health-care-insurance-system/

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ESSAY: https://www.msn.com/en-us/news/politics/gofundme-medical-campaigns-reveal-a-big-problem-with-health-care/ar-AAXabGB?li=BBnbfcL

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The GAP between Medicare and Commercial Hospital Prices

THE GAP INCREASES!

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By Health Capital Consultants, LLC

Gap between Medicare and Commercial Hospital Prices Increases

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A recent study examined the growth in hospital prices paid by commercial health insurance companies compared to Medicare over a seven-year period and found that commercial health plan rates were, on average, 180% higher than Medicare rates as of 2019.

While the national ratio between commercial and Medicare hospital payment growth rates remained relatively stable during the seven-year study period, ratios varied widely on a regional basis. This Health Capital Topics article will discuss this recent study and its implications. (Read more…)

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HOSPITALS: Management, Operations and Strategies

Tools, Templates and Case Studies

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What is a Retirement QCD?

A Tax-Efficient Way to Donate Money to Charity

By Staff Reporters

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A qualified charitable distribution (QCD) is a withdrawal from an individual retirement arrangement (IRA) that’s made directly to an eligible charity.

CITE: https://www.r2library.com/Resource/Title/0826102549

IRA account holders who were at least age 70.5 as of Dec. 31, 2019, can contribute some or all of their IRAs to charity.

LINK: https://6acebc46b9e64340fdc1a8917e0c290a.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

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Creative Giving Strategies: The QCD - Nebraska Cultural Endowment

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It might seem counterintuitive that anyone would want to give their savings away after making contributions for years in anticipation of the day when they would retire, but there can be tax advantages for doing so.

IRS: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-distributions-withdrawals

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Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors : Best Practices from Leading Consultants and Certified Medical Planners™ book cover

RISK MANAGEMENT: https://www.routledge.com/Risk-Management-Liability-Insurance-and-Asset-Protection-Strategies-for/Marcinko-Hetico/p/book/9781498725989

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Financial Ratio Liquidity Analysis for Medical Accounts Receivable

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Understanding Vital Balance Sheet and Income Statement Components

By Dr. David Edward Marcinko; MBA, CMP™

By Dr. Gary L. Bode; MSA, CPA, CMP™ [Hon]

Dr. Gary L. Bode CPA MSAFinancial ratios are derived from components of the balance sheet and income statement. These short and long-term financial ratio values are “benchmarked” to values obtained in medical practice management surveys that become industry standards. Often they become de facto economic indicators of entity viability, and should be monitored by all financial executives regularly.

Defining Terms

One of the most useful liquidity ratiosrelated to ARs is the current ratio. It is mathematically defined as: current assets/current liabilities. The current ratio is important since it measures short-term solvency, or the daily bill-paying ability of a medical practice, clinic  or hospital; etc.  Current assets include cash on hand (COH), and cash in checking accounts, money market accounts, money market deposit accounts, US Treasury bills, inventory, pre-paid expenses, and the percentage of ARs that can be reasonably expected to be collected. Current liabilitiesare notes payable within one year. This ratio should be at least 1, or preferably in the range of about 1.2 to 1.8 for medical practices.

Other Ratios

The quick ratiois similar to the current ratio. However, unlike the current ratio, the quick ratio does not include money tied up in inventory, since rapid conversion to cash might not be possible in an economic emergency. A reasonable quick ratio would be 1.0 – 1.3 for a hospital, since this ratio is a more stringent indicator of liquidity than the current ratio.

Assessment

A point of emphasis in the case of both the current ratio and the quick ratio is that higher is not necessarily better. Higher ratios denote a greater capacity to pay bills as they come due, but they also indicate that the entity has more cash tied up in assets that have a relatively low rate of earnings. Hence, there is an optimum range for both ratios: they should be neither too low nor too high.

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

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

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

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

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

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On Accounting -VERSUS- Economic Profit

Yes – There is A Difference

[By staff reporters]

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Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™8Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

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FINANCIAL MANAGEMENT STRATEGIES: For Hospitals and Healthcare Organizations

Managerial Accounting

TOOLS, TECHNIQUES, CHECKLISTS AND CASE STUDIES

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Reviews

Navigating a course where sound organizational management is intertwined with financial acumen requires a strategy designed by subject-matter experts. Fortunately, Financial Management Strategies for Hospital and Healthcare Organizations: Tools, Techniques, Checklists and Case Studies provides that blueprint.
David B. Nash, MD, MBA, Jefferson Medical College, Thomas Jefferson University

It is fitting that Dr. David Edward Marcinko, MBA, CMP™ and his fellow experts have laid out a plan of action in Financial Management Strategies for Hospital and Healthcare Organizations that physicians, nurse-executives, administrators, institutional CEOs, CFOs, MBAs, lawyers, and healthcare accountants can follow to help move healthcare financial fitness forward in these uncharted waters.
Neil H. Baum, MD, Tulane Medical School

ORDER: https://www.amazon.com/Financial-Management-Strategies-Healthcare-Organizations/dp/1466558733/ref=sr_1_3?ie=UTF8&qid=1380743521&sr=8-3&keywords=david+marcinko

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What Date has Never Been Known as Tax Day?

By Staff Reporters

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TRIVIA QUESTION: What date has never been known as Tax Day?

A. March 1st
B. March 15th
C. April 15th
D. May 1st

ANSWER: D—May 1st.

After the 16th Amendment cleared the way for the modern version of the federal income tax, the first filing deadline fell on March 1, 1913. Congress shifted Tax Day to March 15 after passing the Revenue Act of 1918, which introduced a progressive income tax structure to increase revenue during World War I. Since 1954, Tax Day for most Americans has been April 15 (or the next business day if the 15th falls on a weekend or holiday).

CITE: https://www.r2library.com/Resource/Title/082610254

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PODCAST: Direct Primary Care Entrepreneurship and Innovation

By Free Market Medical Association

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DEFINITION:
Direct Primary Care (DPC) is an innovative alternative payment model improving access to high functioning healthcare with a simple, flat, affordable membership fee.  No fee-for-service payments.  No third party billing.  The defining element of DPC is an enduring and trusting relationship between a patient and his or her primary care provider.  Patients have extraordinary access to a physician of their choice, often for as little as $70 per month, and physicians are accountable first and foremost their patients.  DPC is embraced by health policymakers on the left and right and creates happy patients and happy doctors all over the country!

CITE: https://www.r2library.com/Resource/Title/082610254

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The STEP-UP In Investment Value?

Understanding the TAX loophole of a ‘step up’ in BASIS value

By Dr. David E. Marcinko MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

The term “step-up” refers to the difference in value and tax liability that an asset has when it is acquired and when it is transferred to an inheritor.

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CITE: https://www.r2library.com/Resource/Title/0826102549

EXAMPLE #2: The proverbial millionaire Doctor Joe, for example, could buy a home for $350,000 and sell it for $1 million, after which he’d pay taxes on the $650,000 gain. But if Dr. Joe passes the home onto his daughter Ella, and she has it appraised at $1 million, its value has taken a “step up” in value to $1 million. If Ella sells the home for $1 million or less, she wouldn’t owe anything in taxes.

ASSESSMENT: For billionaires like Jeff Bezos, Bill Gates and Elon Musk who earn far more through their investments than their salaries, this loophole is a perfect way to shield their wealth. Intergenerational wealth has contributed to surging inequality in America, which grew wider during the pandemic. Since 2019, the wealth of the top 400 richest people in the US increased by $1.4 trillion, per research from Gabriel Zucman and Emmanuel Saez, a pair of left-leaning economists at the University of California, Berkeley.

“Often, for these people, wealth accumulates tax-free their entire lives,” Frank Clemente, executive director at the left-leaning advocacy group Americans for Tax Fairness, opined. President Joe Biden proposed ending this loophole and making billionaires “pay their fair share,” so why does it look like his party won’t touch it?

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INVITE DR. MARCINKO: https://medicalexecutivepost.com/dr-david-marcinkos-

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PODCAST: High Cost Healthcare Claimants

By Eric Bricker MD

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CITE: https://www.r2library.com/Resource/Title/082610254

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Financial Accounting Definitions All Physician Should Know

By Meredith Wood

The Most Important Business and Finance Terms

  1. Accounts Payable
  2. Accounts Receivable
  3. Asset
  4. Balance Sheet
  5. Cash Flow
  6. Fixed Asset
  7. Income Statement
  8. Liability
  9. Profit & Loss Statement
  10. Annual Percentage Rate
  11. Collateral
  12. Loan-to-Value
  13. Debt-Service Coverage Ratio
  14. Lien
  15. Personal Guarantee
  16. Financial Statements
  17. Debt Consolidation
  18. Gross Profit
  19. Statement of Cash Flow
  20. Credit Limit

Running a business involves a constant learning curve. And that applies whether you’re a rookie entrepreneur just starting out with a great idea for a new business or a more established small business owner with a quickly growing business that needs to expand. You should always be learning as a business owner, no matter where you are in your career—there’s always a new tool to master, new problems to solve, and new vocabulary to understand.

In order to not get totally overwhelmed, it’s helpful to take things one segment at a time. For instance, feeling confident when discussing the business’s financial needs should be a priority for every small business owner. After all, you represent the heart and soul of your business in the marketplace. So knowing the “language” of business finance is an integral part of your job as the owner.

The good news is that you don’t have to be an accountant or a financial planner to negotiate in the world of business finance. Here are some business terms and finance terms that will help you find your way to successful small business funding. https://www.youtube.com/embed/0kD4X2fgxGs

Business and Finance Terms to Know

From accounting, to business loans, to general business financial operations, here’s the ultimate list to all the business finance terms and definitions you need to know:

1. Accounts Payable

Accounts payable is a business finance 101 term. This represents your small business’s obligations to pay debts owed to lenders, suppliers, and creditors. Sometimes referred to as A/P or AP for short, accounts payable can be short or long term depending upon the type of credit provided to the business by the lender.

2. Accounts Receivable

Also known as A/R (or AR, good guess), accounts receivables is another business finance 101 term that means the money owed to your small business by others for goods or services rendered. These accounts are labeled as assets because they represent a legal obligation for the customer to pay you cash for their short-term debt.

3. Accrual Basis

The accrual basis of accounting is an accounting method of recording income when it’s actually earned and expenses when they actually occur. Accrual basis accounting is the most common approach used by larger businesses to record and maintain financial transactions.

4. Accruals

A business finance term and definition referring to expenses that have been incurred but haven’t yet been recorded in the business books. Wages and payroll taxes are common examples.

5. Asset

This business finance key term is anything that has value—whether tangible or intangible—and is owned by the business is considered an asset. Typical items listed as business assets are cash on hand, accounts receivable, buildings, equipment, inventory, and anything else that can be turned into cash.

6. Balance Sheet

Along with three other reports relating to the financial health of your small business, the balance sheet is essential information that gives a “snapshot” of the company’s net worth at any given time. The report is a summary of the business assets and liabilities.

7. Bookkeeping

A method of accounting that involves the timely recording of all financial transactions for the business.

8. Capital

Refers to the overall wealth of a business as demonstrated by its cash accounts, assets, and investments. Often called “fixed capital,” it refers to the long-term worth of the business. Capital can be tangible, like durable goods, buildings, and equipment, or intangible such as intellectual property.

9. Working Capital

Not to be confused with fixed capital, working capital is another business finance 101 term. It consists of the financial resources necessary for maintaining the day-to-day operation of the business. Working capital, by definition, is the business’s cash on hand or instruments that you can convert to cash quickly.

10. Cash Flow

Every business needs cash to operate. The business finance term and definition cash flow refers to the amount of operating cash that “flows” through the business and affects the business’s liquidity. Cash flow reports reflect activity for a specified period of time, usually one accounting period or one month. Maintaining tight control of cash flow is especially important if your small business is new, since ready cash can be limited until the business begins to grow and produce more working capital.

11. Cash Flow Projections

Future business decisions will depend on your educated cash flow projections. To plan ahead for upcoming expenditures and working capital, you need to depend on previous cash flow patterns. These patterns will give you a comprehensive look at how and when you receive and spend your cash. This info is the key to unlock informed, accurate cash flow projections.

12. Depreciation

The value of any asset can be said to depreciate when it loses some of that value in increments over time. Depreciation occurs due to wear and tear. Various methods of depreciation are used by businesses to decrease the recorded value of assets.

13. Fixed Asset

A tangible, long-term asset used for the business and not expected to be sold or otherwise converted into cash during the current or upcoming fiscal year is called a fixed asset. Fixed assets are items like furniture, computer equipment, equipment, and real estate.

14. Gross Profit

This business finance term and definition can be calculated as total sales (income) less the costs (expenses) directly related to those sales. Raw materials, manufacturing expenses, labor costs, marketing, and transportation of goods are all included in expenses.

15. Income Statement

Here is one of the four most important reports lenders and investors want to see when evaluating the viability of your small business. It is also called a profit and loss statement, and it addresses the business’s bottom line, reporting how much the business has earned and spent over a given period of time. The result will be either a net gain or a net loss.

16. Intangible Asset

A business asset that is non-physical is considered intangible. These assets can be items like patents, goodwill, and intellectual property.

17. Liability

This business finance key term is a legal obligation to repay or otherwise settle a debt. Liabilities are considered either current (payable within one year or less) or long-term (payable after one year) and are listed on a business’s balance sheet. A business’s accounts payable, wages, taxes, and accrued expenses are all considered liabilities. 

18. Liquidity

Liquidity is an indicator of how quickly an asset can be turned into cash for full market value. The more liquid your assets, the more financial flexibility you have.

19. Profit & Loss Statement

See “Income Statement” above.

20. Statement of Cash Flow

One of the important documents required by lenders and investors that shows a summary of the actual collection of revenue and payment of expenses for your business. The statement of cash flow should reflect activity in the areas of operating, investing, and financing and should be an integral part of your financial statement package.

21. Statement of Shareholders’ Equity

If you have chosen to fund your small business with equity financing and you have established shares and shareholders as part of the controlling interests, you are obligated to provide a financial report that shows changes in the equity section of your balance sheet.

22. Annual Percentage Rate

The business finance term and definition APR represents the yearly real cost of a loan including all interest and fees. The total amount of interest to be paid is based on the original amount loaned, or the principal, and is represented in percentage form. When shopping for the right loan for your small business, you should know the APR for the loan in question. This figure can be very helpful in comparing one financial tool with another since it represents the actual cost of borrowing.

23. Appraisal

Just like your real estate appraisal when buying a house, an appraisal is a professional opinion of market value. When closing a loan for your small business, you will probably need one or more of the three types of appraisals: real estate, equipment, and business value.

24. Balloon Loan

A loan that is structured so that the small business owner makes regular repayments on a predetermined schedule and one much larger payment, or balloon payment, at the end. These can be attractive to new businesses because the payments are smaller at the outset when the business is more likely to be facing strict financial constraints. However, be sure that your business will be capable of making that last balloon payment since it will be a large one.

25. Bankruptcy

This federal law is used as a tool for businesses or individuals who are having severe financial challenges. It provides a plan for reduction and repayment of debts over time or an opportunity to completely eliminate the majority of the outstanding debts. Turning to bankruptcy should be given careful thought because it will have a negative effect on the business credit score.

26. Bootstrapping

Using your own money to finance the start-up and growth of your small business. Think of it as being your own investor. Once the business is up and running successfully, the business finance term and definition bootstrapping refers to the use of profits earned to reinvest in the business.

27. Business Credit Report

Just like you have a personal credit report that lenders look at to determine risk factors for making personal loans, businesses also generate credit reports. These are maintained by credit bureaus that record information about a business’s financial history.

Items like how large the company is, how long has it been in business, amount and type of credit issued to the business, how credit has been managed, and any legal filings (i.e., bankruptcy) are all questions addressed by the business credit report. Lenders, investors, and insurance companies use these reports to evaluate risk exposure and financial health of a business.

28. Business Credit Score

A business credit score is calculated based on the information found in the business credit report. Using a specialized algorithm, business credit scoring companies take into account all the information found on your credit report and give your small business a credit score. Also called a commercial credit score, this number is used by various lenders and suppliers to evaluate your creditworthiness.

29. Collateral

Any asset that you pledge as security for a loan instrument is called collateral. Lenders often require collateral as a way to make sure they won’t lose money if your business defaults on the loan. When you pledge an asset for collateral, it becomes subject to seizure by the lender if you fail to meet the requirements of the loan documents.

30. Credit Limit

When a lender offers a business line of credit it usually comes with a credit limit, or a maximum amount that you can use at any given time. It is said that you reach your credit limit or “max out” your credit when you borrow up to or exceed that number. A business line of credit can be especially useful if your business is seasonal or if the income is extremely unpredictable. It is one of the fastest ways to access cash for emergencies.

31. Debt Consolidation

If your small business has several loans with various payments, you might want to consider a business debt consolidation loan. It is a process that lets you combine multiple loans into a single loan. The advantages are possibly reducing the interest rates on the borrowed funds as well as lowering the total amount you repay each month. Businesses use this tool to help improve cash flow.

32. Debt Service Coverage Ratio

The business finance term and definition debt service coverage ratio (DSCR) is the ratio of cash your small business has available for paying or servicing its debt. Debt payments include making principal and interest payments on the loan you are requesting. Generally speaking, if your DSCR is above 1, your business has enough income to meet its debt requirements.

33. Debt Financing

When you borrow money from a lender and agree to repay the principal with interest in regular payments for a specified period of time, you’re using debt financing. Traditionally, it has been the most common form of funding for small businesses.

Debt financing can include borrowing from banks, business credit cards, lines of credit, personal loans, merchant cash advances, and invoice financing. This method creates a debt that must be repaid but lets you maintain sole control of your business.

34. Equity Financing

The act of using investor funds in exchange for a piece or ”share” of your business is another way to raise capital. These funds can come from friends, family, angel investors, or venture capitalists.

Before deciding to use equity financing to raise the cash necessary for your business, decide how much control you are willing to share when it comes to decision-making and philosophy. Some investors will also want voting rights.

35. FICO Score

A FICO score is another type of credit score used by potential lenders for evaluating the wisdom of entering a contract with you and your business. FICO scores comprise a substantial part of the credit report that lenders use to assess credit risk. It was created by the Fair Isaac Corporation, hence the name FICO.

36. Financial Statements

An integral part of the loan application process is furnishing information that shows your business is a good credit risk. The standard financial statement packet includes four main reports: the income statement, the balance sheet, the statement of cash flow, and the statement of shareholders’ equity, if you have shareholders.

Lenders and investors want to see that your business is well-balanced with assets and liabilities, has positive cash flow, and will have capital to make expected repayments.

37. Fixed Interest Rate

The interest rate on a loan that is established in the beginning and does not change for the lifetime of the loan is said to be fixed. Loans with fixed interest rates are appealing to small business owners because the repayment amounts are consistent and easier to budget for in the future.

38. Floating Interest Rate

In contrast to the business finance term and definition fixed rate, the floating interest rate will change with market fluctuations. Also referred to as variable rates or adjustable rates, these amounts may often start out lower than the fixed rate percentages. This makes them more appealing in the short term if the market is trending down.

39. Guarantor

When starting a new small business, lenders might want you to provide a guarantor. This is an individual who guarantees to cover the balance owed on a debt if you or your business cannot meet the repayment obligation.

40. Interest Rate

All loans and other lending instruments are assigned the business finance key term interest rates. This is a percentage of the principal amount charged by the lender for the use of its money. Interest rates represent the current cost of borrowing.

41. Invoice Factoring or Financing

If your business has a significant amount of open invoices outstanding, you may contact a factoring company and have them purchase the invoices at a discount. By raising capital this way, there is no debt, and the factoring company assumes the financial responsibility for collecting the invoice debts.

42. Lien

This business finance term and definition is a creditor’s legal claim to the collateral pledged as security for a loan is called a lien.

43. Line of Credit

A lender may offer you an unsecured amount of funds available for your business to draw on when capital is needed. This line of credit is considered a short-term funding option, with a maximum amount available. This pre-approved pool of money is appealing because it gives you quick access to the cash.

44. Loan-to-Value

The LTV comparison is a ratio of the fair-market value of an asset compared to the amount of the loan that will fund it. This is another important number for lenders who need to know if the value of the asset will cover the loan repayment if your business defaults and fails to pay.

45. Long-Term Debt

Any loan product with a total repayment schedule lasting longer than one year is considered a long-term debt.

46. Merchant Cash Advance

A merchant may offer a funding method through a loan based on the business’s monthly sales volume. Repayment is made with a percentage of the daily or weekly sales. These tend to be short-term loans and are one of the costliest ways to fund your small business.

47. Microloan

Microloans are loans made through nonprofit, community-based organizations and they are most often for amounts under $50,000.

48. Personal Guarantee

If you’re seeking financing for a very new business and don’t have a high value asset to offer as collateral, you may be asked by the lender to sign a statement of  personal guarantee. In effect, this statement affirms that you as an individual will act as guarantor for the business’s debt, making you personally liable for the balance of the loan even in the event that your business fails.

49. Principal

Any loan instrument is made of three parts—the principal, the interest, and the fees. The principal is a business finance key term and is the original amount that is borrowed or the outstanding balance to be repaid less interest. It is used to calculate the total interest and fees charged.

50. Revolving Line of Credit

This business finance term and definition is a funding option is similar to a standard line of credit. However, the agreement is to lend a specific amount of money, and once that sum is repaid, it can be borrowed again.

51. Secured Loan

Many lenders will require some form of security when loaning money. When this happens, this business finance term and definition is a secured loan. The asset being used as collateral for the loan is said to be “securing” the loan. In the event that your small business defaults on the loan, the lender can then claim the collateral and use its fair-market value to offset the unpaid balance.

52. Term Loan

These are debt financing tools used to raise needed funds for your small business. Term loans provide the business with a lump sum of cash up front in exchange for a promise to repay the principal and interest at specified intervals over a set period of time. These are typically longer term, one-time loans for start-up expenses or costs for established business expansion.

53. Unsecured Loans

Loans that are not backed by collateral are called unsecured loans. These types of loans represent a higher risk for the lender, so you can expect to pay higher interest rates and have shorter repayment time frames. Credit cards are an excellent example of unsecured loans that are a good option for small business funding when combined with other financing options.

54. Articles of Incorporation

This is legal documentation of the business’s creation, including name, type of business, and type of business structure or incorporation. This paperwork is one of the first tasks you will complete when you officially start your business. Once submitted, your articles of incorporation are kept on file with the appropriate governmental agencies.

55. Business Plan

Here is your tool for demonstrating how you want to establish your small business and how you plan to grow it into good financial health. When writing a business plan, it should include financial, operational, and marketing goals as well as how you plan to get there. The more specific you are with your business plan, the better prepared you will be in the long run.

56. Employer Identification Number (EIN) Certificate

In order to be more easily identified by the Internal Revenue Service, every business entity is assigned a unique number called an EIN. When you start your small business, an EIN will be assigned and mailed to the business address. This number never changes, and you will be asked to furnish it for many reasons.

57. Franchise Agreement

For a small business entrepreneur, entering into a franchise agreement with a larger company can be a way to enter the marketplace. The agreement made between you and the larger company gives you the right to operate as a satellite of the larger company in a certain territory for a given period of time. This lets you, the business owner, take advantage of a brand name that’s already familiar in the marketplace and a process or operation that has already been tested.

58. Net Worth

This business finance term and definition is an expression of your business’s total value, as determined by your total current assets less the total liabilities currently owed by the business. With your business’s most recent balance sheet in hand, you can calculate the net worth using a simple formula: Assets – Liabilities = Net Worth.

59. Retained Earnings

Just like it sounds, this term represents any profits earned that are retained in the business. This can also be referred to as bootstrapping.

60. Tax Lien

If your business fails to pay taxes owed to the designated government entity, namely the IRS, you may find your assets seized by the claim of a tax lien. The government can not only seize your assets for liquidation to resolve the tax debt, but they can also charge you penalties on the amount you owe.

Don’t Be Overwhelmed by Health Economics, Business and Finance Terms 

As a small business owner, physicians are required to wear many different hats—often including that of chief financial officer or bookkeeper. Before you let yourself get intimidated by all the business terms and definitions, just remember that knowledge is power.

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CITE: https://www.r2library.com/Resource/Title/0826102549

You can serve your small practice business, clinic, out-patient center or hospital most effectively by becoming familiar with terms used in business and finance and how they will affect your financial health. Armed with a basic understanding of business finance key terms, you will be prepared to face the financial challenges that go along with being a modern doctor, today!

INVITE DR. MARCINKO: https://medicalexecutivepost.com/dr-david-marcinkos-

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Tax Deductions versus Tax Credits

By Staff Reporters

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What is a tax deduction?

A deduction reduces the amount of income you pay taxes on, which means you could pay less in taxes. You subtract deductions from your income before calculating how much taxes you owe. How much a deduction saves you depends on your income tax bracket.

To calculate how much a deduction could reduce your taxes, you multiply the amount of the deduction by your marginal tax rate. For example, if a deduction is worth $5,000 and you are in the 10% tax bracket (the lowest), the deduction would reduce your taxes by $500.

A deduction’s value to you is tied to your tax rate. So if you’re paying a higher tax rate, you can reap more of a deduction’s benefit. The lower your tax rate, the less benefit a deduction will have for you. Imagine that you take a $5,000 deduction, but you’re in the 35% tax bracket — the second highest. Now you’re saving $1,750 in taxes.

CITE: https://www.r2library.com/Resource/Title/082610254

What is a tax credit?

On the other hand, a credit is a dollar-for-dollar reduction in the amount of tax you owe. For example, if you qualify for a $1,000 tax credit of some kind and owe $5,000 in taxes, that credit will reduce your tax burden to $4,000.

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But – Do Not Claim Too Many Tax Deductions

Deductions are enticing to taxpayers because they can reduce the amount of your income before you calculate the tax you owe, which in turn might significantly lower how much you have to pay in taxes or increase your refund. But that doesn’t mean you should go wild writing things off on your tax returns, as experts say claiming too many deductions is the most common reason people end up getting audited by the IRS.

Don’t try writing off deductions that are no longer accepted by the IRS. The tax code has changed over the years, and there are some things the tax agency no longer recognizes. You should remember that some of the tax write-offs were terminated by the IRS, including deductions on alimony, moving expenses, and any expenses related to investing, hobbies, and tax preparation.

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Income Tax Brackets for 2021

By Staff Reporters

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CITE: https://www.r2library.com/Resource/Title/082610254

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If taxable income is:The tax due is:
Under $9,95010% of the taxable income
Over $9,950 but under or equal to $40,525$995 plus 12% of the excess over $9,950
Over $40,525 but under or equal to $86,375$4,664 plus 22% of the excess over $40,525
Over $86,375 but under or equal to $164,925$14,751 plus 24% of the excess over $86,375
Over $164,925 but under or equal to $209,425$33,603 plus 32% of the excess over $164,925
Over $209,425 but under or equal to $523,600$47,843 plus 35% of the excess over $209,425
Over $523,600$157,804.25 plus 37% of the excess over $523,600

,

If taxable income is:The tax due is:
Not over $9,95010% of the taxable income
Over $9,950 but under or equal to $40,525$995 plus 12% of the excess over $9,950
Over $40,525 but under or equal to $86,375$4,664 plus 22% of the excess over $40,525
Over $86,375 but under or equal to $164,925$14,751 plus 24% of the excess over $86,375
Over $164,925 but under or equal to $209,425$33,603 plus 32% of the the excess over $164,925
Over $209,425 but under or equal to $314,150$47,843 plus 35% of the excess over $209,425
Over $314,150$84,496 plus 37% of the excess over $314,150

,

If taxable income is:The tax due is:
Not over $19,90010% of the taxable income
Over $19,900 but under or equal to $81,050$1,990 plus 12% of the excess over $19,900
Over $81,050 but under or equal to $172,750$9,328 plus 22% of the excess over $81,050
Over $172,750 but under or equal to $329,850$29,502 plus 24% of the excess over $172,750
Over $329,850 but under or equal to $418,850$67,206 plus 32% of the excess over $329,850
Over $418,850 but under or equal to $628,300$95,686 plus 35% of the excess over $418,850
Over $628,300$168,993.50 plus 37% of the excess over $628,300

,

If taxable income is:The tax due is:
Not over $14,20010% of the taxable income
Over $14,200 but under or equal to $54,200$1,420 plus 12% of the excess over $14,200
Over $54,200 but under or equal to $86,350$6,220 plus 22% of the excess over $54,200
Over $86,350 but under or equal to $164,900$13,293 plus 24% of the excess over $86,350
Over $164,900 but under or equal to $209,400$32,145 plus 32% of the the excess over $164,900
Over $209,400 but under or equal to $523,600$46,385 plus 35% of the excess over $209,400
Over $523,600$156,355 plus 37% of the excess over $523,600

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INDUSTRIAL ORGANIZATION: For Hospitals, Clinics and Healthcare CXOs, CEOs, CMOs and CTOs, etc.

MANAGEMENT STRATEGIES, TOOLS TEMPLATES AND CASE STUDIES

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Reviews:

Hospitals and Health Care Organizations is a must-read for any physician and other health care provider to understand the multiple, and increasingly complex, interlocking components of the U.S. health care delivery system, whether they are employed by a hospital system, or manage their own private practices.

The operational principles, methods, and examples in this book provide a framework applicable on both the large organizational and smaller private practice levels and will result in better patient care. Physicians today know they need to better understand business principles and this book by Dr. David E. Marcinko and Professor Hope Rachel Hetico provides an excellent framework and foundation to learn important principles all doctors need to know.
―Richard Berning, MD, Pediatric Cardiology

… Dr. David Edward Marcinko and Professor Hope Rachel Hetico bring their vast health care experience along with additional national experts to provide a health care model-based framework to allow health care professionals to utilize the checklists and templates to evaluate their own systems, recognize where the weak links in the system are, and, by applying the well-illustrated principles, improve the efficiency of the system without sacrificing quality patient care. … The health care delivery system is not an assembly line, but with persistence and time following the guidelines offered in this book, quality patient care can be delivered efficiently and affordably while maintaining the financial viability of institutions and practices.
―James Winston Phillips, MD, MBA, JD, LLM

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PURCHASE: https://www.amazon.com/dp/B00BC9IIUM?ref_=k4w_oembed_faGUzLlJ9ojLIx&tag=kpembed-20&linkCode=kpd

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PODCAST: About the WOLFRAM ALPHA Computational Knowledge Engine

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What it is – How it works

SMART CONTRACTS

[By Staff Reporters]

Wolfram Alpha is an online mathematical search engine launched in March 2009 and developed by Stephen Wolfram. It seeks to answer factual queries directly by computing the answer from structured data, rather than providing a list of web pages that might contain the answer.

In this way, WA differs from traditional semantic search engines, which index a large number of answers and then try to match the question to one. Wolfram Alpha has many parallels with Cyc, a project aimed since the 1980s at developing a common-sense inference engine. Wolfram Alpha is built on Wolfram’s earlier flagship product, Mathematica, which encompasses computer algebra, symbolic and numerical computation, visualization, and statistics capabilities.

With Mathematica running in the background, WA is suited to answer mathematical questions. The answer usually presents a human-readable solution.

Link: http://www.wolframalpha.com/

Technology

Wolfram Alpha is written in about 5 million lines of Mathematica (using webMathematica and gridMathematica) code and runs on 10,000 CPUs. As well as being a web site, Wolfram Alpha provides an API (for a fee) that delivers computational answers to other applications. One such application is the Bing search engine.

Capabilities

As an example, one can input the name of a website, and it will return relevant information about the site, including its location, site rank, number of visitors and more. The database currently includes hundreds of datasets, including current and historical weather, drug data, star charts, currency conversion, and many others. The datasets have been accumulated over approximately two years, and are expected to continue to grow. The range of questions that can be answered is also expected to grow with the expansion of the datasets.

Audio: http://www.wolframalpha.com/screencast/introducingwolframalpha.html

Utility and Usefulness

Wolfram Alpha is ideal for use by all readers and subscribers of the ME-P. It may be used by doctors, nurses, financial advisors and insurance agents, economists, mathematicians, editors, and publishers, teachers and students of all academic levels. The graphical nature of output is particularly helpful.

Assessment

Wolfram Alpha has received mixed reviews, to date. Advocates point to its potential, some even stating that how it determines output result is more important than current usefulness.

Note: Info courtesy wikipedia.org

PODCAST: https://www.bing.com/videos/search?q=stephen+wolfram&docid=608027542444182789&mid=7432EA16AEF1CDF4FCDD7432EA16AEF1CDF4FCDD&view=detail&FORM=VIRE

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. Give Wolfram Alpha a click, listen to the audio-cast, and tell us what you think. Your thoughts and comments on this ME-P are appreciated. 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.

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

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

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

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PODCAST: Hospital Finance 101

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A basic understanding of hospital finance is crucial as leaders continue to create policy that shapes healthcare financing. This updated 30,000-foot view of hospital finance is intended to shed some light on the complex system.

By The Center for Health Affairs

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CITE: https://www.r2library.com/Resource/Title/082610254

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“Triple Entry Accounting”

What it is – How it works?

[By staff reporters]

The term “Triple Entry Accounting,” was first used by Ian Grigg, financial cryptographer, and described in his paper published in 2005, three years before the emergence of Bitcoin and its underlying Blockchain protocol.

Here is the original historical article on “Triple Entry Accounting” by Grigg:

LINK: https://nakamotoinstitute.org/triple-entry-accounting/

Conclusion

Your thoughts and comments on this ME-P are appreciated. 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.

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

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Subscribe: MEDICAL EXECUTIVE POST for curated news, essays, opinions and analysis from the public health, economics, finance, marketing, IT, business and policy management ecosystem.

DOCTORS:

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“Fiduciary Financial Planning for Physicians” https://tinyurl.com/y7f5pnox

“Business of Medical Practice 2.0” https://tinyurl.com/yb3x6wr8

HOSPITALS:

“Financial Management Strategies for Hospitals” https://tinyurl.com/yagu567d

“Operational Strategies for Clinics and Hospitals” https://tinyurl.com/y9avbrq5

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Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™8Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

The IRS, Taxation and Virtual Currency!

New Reporting Warning Issued

By Staff Reporters

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Virtual currency transactions are taxable by law just like transactions in any other property. Taxpayers transacting in virtual currency may have to report those transactions on their tax returns.

CITE: https://www.r2library.com/Resource/Title/0826102549

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All taxpayers must answer a question about virtual currency on their return.

On March 18th, the IRS issued a new alert warning all taxpayers that they must answer a section about virtual currency on their 2021 tax refund this year, even if they did not deal with any digital transactions. According to the agency, there is a question on the top of all versions of Form 1040 that asks, “At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?”

“All taxpayers filing Form 1040, Form 1040-SR or Form 1040-NR must check one box answering either ‘Yes’ or ‘No’ to the virtual currency question,” the IRS explained. “The question must be answered by all taxpayers, not just taxpayers who engaged in a transaction involving virtual currency in 2021.”

IRS: https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies

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DOJ Recoveries for False Claims Act Cases Doubled in 2021

BY HEALTH CAPITAL CONSULTANTS, LLC.

DEFINITION: The False Claims Act, also called the “Lincoln Law”, is an American federal law that imposes liability on persons and companies who defraud governmental programs. It is the federal Government’s primary litigation tool in combating fraud against the Government. The law includes a provision that allows people who are not affiliated with the government, called “relators” under the law, to file actions on behalf of the government. Persons filing under the Act stand to receive a portion of any recovered damages.

CITE: https://www.r2library.com/Resource/Title/0826102549

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DOJ Recoveries for False Claims Act Cases Doubled in 2021

On February 1, 2022, the U.S. Department of Justice (DOJ) announced their recovery of $5.6 billion in settlements and judgments from civil cases involving fraud and false claims for fiscal year (FY) 2021. Over $5 billion was recouped from the healthcare industry for federal losses alone, and included recoveries from drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.

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This figure is more than double the amount of healthcare-related recoveries secured in FY 2020, which totaled $1.8 billion. (Read more…)

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MENTAL ACCOUNTING: What is it?

By Dr. David E. Marcinko MBA CMP®

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DEFINITION: Mental accounting attempts to describe the process whereby people code, categorize and evaluate economic outcomes. The concept was first named by Richard Thaler. Mental accounting deals with the budgeting and categorization of expenditures. People budget money into mental accounts for expenses or expense categories

CITE: https://www.r2library.com/Resource/Title/0826102549

Mental Accounting is the act of bucketizing investments and then reviewing the performance of the individual buckets separately (e.g. investing at low savings rate while paying high credit card interest rates).

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Mental Accounting • Money is

Examples of mental accounting are: (1) matching costs to benefits (wanting to pay for vacation before taking it and getting paid for work after it was done, even though from perspective of time value of money the opposite should be preferred0, (2) aversion to debt (don’t like long-term debt for short-term benefit), (3) sunk-cost effect (illogically considering non-recoverable costs when making forward-going decisions).

In investing, treating buckets separately and ignoring interaction (correlations) induces people not to sell losers (even though they get tax benefits), prevent them from investing in the stock market because it is too risky in isolation (however much less so when looked at as part of the complete portfolio including other asset classes and labor income and occupied real estate), thus they “do not maximize the return for a given level of risk taken).

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Some Common Medical Practice Accounting Embezzlement Schemes

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Understanding How to Avoid Office Embezzlement – Old School

[By Dr. Gary L. Bode CPA, MSA]

Without proper internal accounting controls, a medical practice, clinic or any health entity would never reach peak efficiency or profitability. Internal controls designed and implemented by the practice physician-owner, help prevent bad things from happening.

Embezzlement protection is the classic example. However, internal controls also help ensure good things happen, at least most of the time. A procedural manual or text like: www.BusinessofMedicalPractice.com that teaches physicians how to deal effectively with, and avoid, common schemes is suggested.

Common Schemes

Here is a list of some embezzlement schemes to avoid; however it is imaginative and endless.

  • The physician-owner pocketing cash “off the books”. To the IRS, this is like embezzlement to intentionally defraud it out of tax money.
  • Employee’s pocketing cash from cash transactions.  This is why you see cashiers following protocol that seems to take forever when you’re in the grocery check out line. This is also why you see signs offering a reward if he/she is not offered a receipt. This is partly why security cameras are installed.
  • Bookkeepers writing checks to themselves.  This is easiest to do in flexible software programs like QuickBooks, Peachtree Accounting and financial software [www.Peachtree.com]. It is one of the hardest schemes to detect. The bookkeeper self-writes and cashes the check to their own name; and then the name on the check is changed in the software program to a vendor’s name.  So a real check exists which looks legitimate on checking statements unless a picture of it is available.
  • Employees ordering personal items on practice credit cards.
  • Bookkeepers receiving patient checks and illegally depositing them in an unauthorized, pseudo practice checking account, set up by themselves, in a bank different from yours. They then withdraw funds at will. If this scheme uses only a few patients, who are billed outside of the practice’s accounting software, this is hard to detect.  Executive-management must have a good knowledge of existing patients to catch the ones “missing” from practice records. Monitoring the bookkeeper’s lifestyle might raise suspicion, but this scheme is generally low profile, but protracted. Checking the accounting software “audit trail”, this shows the required original invoice deletions or credit memos in a less sophisticated version of this scheme.
  • Bookkeepers writing payroll checks to non-existent employees. This scheme works well in larger practices and medical clinics with high seasonal turnover of employees, and practices with multiple locations the physician-owner doesn’t visit often.
  • Bookkeepers writing inflated checks to existing employees, vendors or subcontractors. Physician-owners should beware if romantic relationships between the bookkeeper and other practice related parties.
  • Bookkeepers writing checks to false vendors. This is another low profile, protracted scheme that exploits the physician-owner’s indifference to accounts payable.

Assessment

Operating efficiency, safeguarding assets, quality patient care, compliance with existing laws, and accuracy of financial transactions are common goals of internal controls.

Conclusion

Your thoughts and comments on this ME-P are appreciated. 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.

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

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ACCOUNTABLE CARE: Competitive Market for Talent is Biggest Challenge in Recruiting

By Staff Reporters

DEFINITION: An accountable care organization (ACO) is a group of doctors, hospitals, and other health care providers that work together on your care. Their goal is to give you — and other people on Medicare — better, more coordinated treatment. The largest effort in payment innovation in Medicare is a portfolio of accountable care organization (ACO) programs that include the Medicare Shared Savings Program (MSSP), the Next Generation model, and Comprehensive End Stage Renal Disease model. But drawbacks include limited choice as some patients will have trouble finding doctors outside of a specific group. The shortage of options could lead to higher patient costs. And, referral restrictions as ACOs provide doctors incentives to refer to specialists within the group.

CITE: https://www.r2library.com/Resource/Title/082610254

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In a recent survey from AKASA healthcare finance leaders ranked the biggest challenges in recruiting and retention within the revenue cycle as healthcare organizations navigate significant staffing gaps across the board.

Great Resignation: https://medicalexecutivepost.com/2022/03/08/healthcare-industry-hit-with-the-great-resignation-retirement/

 •  #1: Competitive market for talent (71%)
 •  #2: Vaccine mandates (42%)
 •  #3: Employee burnout (41%)
 •  #4: Rapid employee turnover (40%)
 •  #5: Limitations to offer remote work (23%)

Source: AKASA via PR Newswire, February 23, 2022

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The “Fair Health” Study of Private Healthcare Claims

By Staff Reporters

Three [3] Key Findings

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 •  Among patients aged 19-35, mental health conditions were the most common diagnosis associated with emergency ground ambulance in the period 2016-2020.
 •  Throughout the period 2016-2020, advanced-life-support (ALS) accounted for a larger percentage of emergency ground ambulance claim lines than basic-life-support (BLS) services. For example, in 2020, 51.5% of emergency ground ambulance claim lines were associated with ALS compared to 48.5% associated with BLS.
 •  Individuals 65 years and older were consistently the largest age group associated with emergency ground ambulance services, though their share of the distribution decreased from 37.7% in 2016 to 34% in 2020.

Source: Fair Health Via PR Newswire, “Ground Ambulance Services in the United States,” February 23, 2022

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“Dictionary of Health Economics and Finance”

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“For-Profit” Medicare Advantage Plan Growth

By Staff Reporters

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Chartis: For-Profit Medicare Advantage Plan Growth 2022

 •  UnitedHealth Group: 765K new lives
 •  Centene Corporation: 338K new lives
 •  CVS Health/Aetna: 323K new lives
 •  Humana: 315K new lives
 •  Bright Health: 109K new lives

Source: The Chartis Group, “Medicare Advantage Enrollment Continues to Surge in an Increasingly Complex and Competitive Landscape,” February 2022

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IRS & PHYSICIANS: Married Filing Separately May Save Taxes?

By Staff Reporters

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The IRS considers taxpayers married if they are legally married under state law, live together in a state-recognized common-law marriage, or are separated but have no separation maintenance or final divorce decree as of the end of the tax year.

CITE: https://www.r2library.com/Resource/Title/082610254

Of the 150.3 million tax returns filed in 2016, the latest year for which the IRS has published statistics, 3.07 million belonged to twosomes who filed separately.

  • These partners reported individual income and expenses on individual tax returns.
  • They had to agree on either itemizing expenses or using the standard deduction.
  • By filing separately, their similar incomes, miscellaneous deductions or medical expenses likely helped them save taxes.

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Consequences of Filing Married Separate | SC Associates

Filing separately with similar incomes

A couple may pay the IRS less by filing separately when both physician spouses work and earn about the same amount.

  • When they compare the tax due amount under both joint and separate filing statuses, they may discover that combining their earnings puts them into a higher tax bracket.
  • Their savings depends on a variety of other factors, however, including their investment situation and whether they have children.
  • The “married filing separately” status cuts the deductions for IRA contributions and eliminates certain tax credits, among other tax breaks.

Using miscellaneous deductions by filing separately (for tax years prior to 2018)

Miscellaneous deductions can lower taxable income, but in order to enter them on Schedule A, they must add up to more than 2% of adjusted gross income (AGI).

  • Physician or other spouses with union dues, job-search costs, tax-preparation fees and un-reimbursed business expenses may find their miscellaneous deductions don’t qualify when their higher combined income raises their AGI.
  • A spouse who travel frequently for business could rack up a sizable tally in airline fees for baggage and itinerary changes that makes the miscellaneous deduction worth pursuing.

Beginning in 2018, these types of miscellaneous expenses are no longer deductible.

Filing separately to save with unforeseen expenses

Adjusted gross income also determines if a couple can use un-reimbursed health care costs and casualty losses on Schedule A to save taxes.

  • Unless out-of-pocket medical expenses exceed 7.5% of AGI for 2021, they don’t qualify as a deduction.
  • Casualty losses must also total more than 10% of AGI and occur in a federally declared disaster area.

The spouse with the loss or substantial medical outlay calculates deductibility against his or her own lower AGI when the couple files separate returns. When one spouse can lower taxable income this way, married filing separately might trim a couple’s overall tax burden.

Filing separately to guard the future

When you don’t want to be liable for your partner’s tax bill, choosing the married-filing-separately status offers financial protection: the IRS won’t apply your refund to your spouse’s balance due. Separate returns make sense to prevent the IRS from seizing a spouse’s tax refund when the other has fallen behind on child support payments.

Couples in the process of divorcing may shun joint returns to avoid post-divorce complications with the IRS, while a spouse who questions her partner’s tax ethics may feel more comfortable living a separate tax life.

Couples living in community-property states should consider state law when deciding how to file.

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BALANCE BILLING: The Emerging “No Surprise” Act

Balance Medical Billing

By Dr. David E. Marcinko MBA CMP®

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The No Surprises Act is looking to make the practice of out of network balance billing a thing of the past.

CITE: https://www.r2library.com/Resource/Title/0826102549

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No Surprises Act: New Law to Protect Against Surprise ...

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Beginning in 2022, there will be few situations in which a patient can receive a bill for out-of-network care they believed would be covered by their insurance company. This new rule should especially benefit patients in emergency situations who don’t have the time or luxury to dig up the details on every provider they encounter.

CONGRESS: https://www.congress.gov/bill/116th-congress/house-bill/3630/

The No Surprises Act also requires insurance companies to provide patients with at least 90 days of coverage if an in-network provider moves out of network. That way, patients aren’t forced to switch providers immediately if such a move happens while they’re in the middle of a treatment plan.

DOCTORS: https://www.elixirehr.com/what-the-no-surprises-act-means-for-healthcare-providers/

Now, the No Surprises Act does have its limitations. Patients can still get a bill for out-of-network care if they visit an urgent care clinic for non-emergency purposes. Also, if consumers are informed that the care they’re about to receive is out of network and they give written consent to move forward, then they may get billed for that care even once the new rule takes effect.

CMS: https://www.cms.gov/nosurprises

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PODCAST: On the Corporate Practice of Medicine Laws

IS PRIVATE EQUITY BUYING DOCTORS ILLEGAL?

By Eric Bricker MD

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Physician Owned Hospitals Myths DeBunked

BY HEALTH CAPITAL CONSULTANTS, LLC

Literature Review Debunks Claims Against Physician-Owned Hospitals


Approximately 250 hospitals across the U.S. are completely or partially physician owned. These physician-owned hospitals (POHs) can offer a variety of services, from general care to specialty services, such as cardiovascular or orthopedic care, known as “focused factories.”

Over the past several decades, healthcare providers and policymakers have claimed that POHs have a negative impact on the healthcare industry, suggesting that: (1) POHs “cherry-pick” the most profitable patients; (2) the quality of care provided at POHs is substandard; and, (3) conflicts of interest exist due to the financial incentive for physician owners to refer patients to their POHs. (Read more…) 

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PODCAST: Patient “Steerage” Explained

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Insurance Carriers Are Contractually Obligated to Include ALL Doctors and Facilities as In-Network When They Negotiate with a Hospital System

By Eric Bricker MD

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MORE: https://medicalexecutivepost.com/2021/12/06/what-is-health-insurance-network-steerage/

NAIC: https://content.naic.org/cipr_topics/topic_network_adequacy.htm

MICRO HEALTHCARE GRIDS: https://thehealthcareblog.com/blog/2022/02/22/get-ready-for-healthcare-microgrids/

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PODCAST: The No Surprises [Medical Billing] Act

Surprise Medical Bills Outlawed?

By Eric Bricker MD

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QPA DEFINITION: The qualifying payment amount is generally the median of contracted rates for a specific service in the same geographic region within the same insurance market as of January 31, 2019. The rate will be adjusted per the Consumer Price Index for All Urban Consumers (CPI-U).

MORE: https://medicalexecutivepost.com/2017/01/07/a-small-step-forward-on-surprise-medical-care-balance-billing/

CITE: https://www.r2library.com/Resource/Title/0826102549

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AUTOMOBILES: Doctors and their Cars?

Some Financial Thoughts and/or Rules?

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By Dr. David Edward Marcinko MBA CMP®

SPONSOR: http://www.CertifiedMedicalPlanner.org

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The 10-year rule for buying a new vehicle

When trying to decide whether to buy a used car or a new one, it’s typically financially wiser to buy used. But if you want to buy new, you should plan to drive the car for 10 years or more.

Better yet – do not buy a new vehicle.

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The 20/4/10 rule for buying a vehicle

If you have to borrow when buying a car, to avoid spending more than you can afford you should put down at least 20%, keep the loan limited to no more than four years (to avoid interest), and spend no more than 10% of your gross income on transportation costs (which includes the car payment, parking, gas, and insurance).

Better yet – do not buy a new vehicle.

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Pre-Owned Used Cars!

MORE: https://medicalexecutivepost.com/2012/11/28/how-doctors-might-buy-a-pre-owned-car/

MORE: https://medicalexecutivepost.com/2014/11/09/doctors-and-rental-cars/

MORE: https://medicalexecutivepost.com/2014/01/08/the-jaguar-touring-sedan-one-of-the-finest-luxury-cars-built-yesterday/

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PODCAST: Medicare Outsources Paying Claims

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The US Federal Government Does NOT Process Medicare Claims.

By Eric Bricker MD

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CITE: https://www.r2library.com/Resource/Title/082610254

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Activity Based Medical Cost Accounting and Management

NON-TRADITIONAL ACCOUNTING METHODS KNOWN IN THE BUSINESS COMMUNITY BUT NOT USED IN HOSPITALS OR HEALTH CARE ORGANIZATIONS

By Dr. David Edward Marcinko; MBA CMP® CPHQ

CMP logo

SPONSOR: http://www.CertifiedMedicalPlanner.org

Sooner or later – as a practicing physician – you will want to ascertain and then demonstrate the cost effectiveness of your medical care. By using the process of Activity Based Cost (ABC) Management, you will be able to do so.  

ALAS: But, if you’re using a traditional accounting system – like most all hospitals today that use the fictional “average wholesale cost” method – you won’t know a thing about your medical practice or clinic activity costs. Hence, again like most all hospitals, fees become simply vacuous.

Managerial Accounting Assignment Help in Australia

Here’s how: https://medicalexecutivepost.com/2007/12/15/activity-based-cost-medical-management/

HOW TO READ A SCIENTIFIC PAPER: https://medicalexecutivepost.com/2021/04/09/how-to-read-and-understand-a-scientific-paper/

DETAILED WHITE PAPERIN-PROGRESS [thru editing but before peer-reviewed publication]: https://healthcarefinancials.files.wordpress.com/2007/12/abcm.pdf

ASSESSMENT: Your thoughts are appreciated.

ORDER TEXTBOOK: https://www.amazon.com/Business-Medical-Practice-Transformational-Doctors/dp/0826105750/ref=sr_1_9?s=books&ie=UTF8&qid=1287563112&sr=1-9

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PODCAST: Medicare Payment Bureaucracy Uncertainty

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Dr. Eric Bricker Explains How Medicare Can Take Money Back from Hospitals if it Wants. If the Hospital Thinks Medicare is Being Unfair, the Appeals Process Takes 3 Years!

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BY ERIC BRICKER MD

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Related: On Medicare Bureaucratization

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UPDATE: IRS Interest Rates Rising, Currency Inflation and Upcoming Earning Reports, etc.

By Staff Reporters

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IRS: The IRS sent out a notice on February 23rd, warning taxpayers about a price hike coming in the next few months. The tax agency said that interest rates will increase for the calendar quarter starting April 1st, 2022. You can accrue interest on two types of payments: over-payment or underpayment. So starting in April, over-payments will have an interest rate of 4 percent, except for corporations which will earn a 3 percent rate and a 1.5 percent rate for the portion of a corporate over-payment that exceeds $10,000. In terms of underpayments, the interest rate will increase to 4 percent overall and 6 percent for large corporate underpayments.

“Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis,” the IRS website explained. The tax agency did not change interest rates in this last quarter, which began Jan. 1, 2022. Before they get changed in April, the rates are currently 3 percent for general over-payments and 2 percent for corporation over-payments, with a 0.5 percent rate for the portion of a corporate over-payment exceeding $10,000. The underpayment interest is 3 percent right now, expect for large corporations which have a 5 percent rate.

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CURRENCY INFLATION: Inflation may occur when the Federal Reserve, or another central bank, adds fiat currency into circulation at a rate that exceeds that of the economy’s growth rate. That creates a situation in which there are more dollars bidding on fewer goods and services. The result is that goods and services cost more. One reason that inflation has been a constant in the US since 1933 is that the FOMC has continually increased the money supply. In response to the 2008 financial crisis, the Fed dropped its lending rate close to zero as a way to inject more liquidity into the economy, which led to increased inflation but not hyperinflation. While those increases have usually moved in step with growth, that hasn’t always been the case.

CITE: https://www.r2library.com/Resource/Title/0826102549

And so, in response to the COVID-19 pandemic and subsequent lock-downs, the Federal Reserve released the equivalent of $3.8 trillion in new liquidity in 2020. That amount was equal to roughly 20% of the dollars previously in circulation. And it is one reason why many investors were watching the CPI closely in 2021.

EARNING REPORTS:

Monday: India GDP data; Earnings from Lordstown Motors, Groupon, HP, SmileDirectClub and Zoom Video

Tuesday: US and China manufacturing data; Earnings from AutoZone, Baidu, Domino’s Pizza, Hostess Brands, J.M. Smucker, Kohl’s, Target, AMC Entertainment and Salesforce

Wednesday: European inflation data; Earnings from Abercrombie & Fitch, Dine Brands, Dollar Tree, Snowflake and Victoria’s Secret

Thursday: ISM Non-Manufacturing Index; Earnings from Best Buy, Weibo, Costco and Gap

Friday: US jobs report

10-Year: Treasuries rallied to 1.902%.

Oil: The rise in oil prices is spilling over at the gas pump: The average gas price in the US has jumped 10 cents, to $3.64/gallon, in the past two weeks.

Partial SWIFT ban: Western governments put aside their hesitations and proposed banning some Russian lenders from SWIFT, the global messaging service that facilitates cross-border transactions. It’s a move that could cause turmoil across global financial markets.

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CURRENCY: Devaluation versus Depreciation

KNOW THE FINANCIAL DIFFERENCE

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BY DR. DAVID E. MARCINKO MBA CPM®

INVITE: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/

Competitive World 27

CMP logo

SPONSOR: http://www.CertifiedMedicalPlanner.org

Devaluation is the deliberate downward adjustment of the value of a country’s money related to another currency, group of currencies or currency standard. It is often confused with depreciation and is the opposite of revaluation which refers to the readjustment of a currency exchange rate.

CITE: https://www.r2library.com/Resource/Title/0826102549

Definition

The government of a country may decide to devalue its currency and like depreciation it is not the result of non-governmental activities.

One reason a country made devalue its currency is to combat a trade imbalance. Devaluation reduces the cost of a country’s export rendering them more competitive in the Global market which is which in turn increases the cost of imports.

If imports are more expensive domestic consumers are less likely to purchase them further strengthening domestic businesses because exports increase and imports decrease there is typically a better balance of payments because the trade deficit shrinks. In short a country that devalue its currency can produce is difficult because there is a greater demand for cheaper exports.

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Advantages and disadvantages of devaluation - Economics Help

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In accountancy, depreciation refers to two aspects of the same concept: first, the actual decrease of fair value of an asset, such as the decrease in value of factory equipment each year as it is used and wear, and second, the allocation in accounting statements of the original cost of the assets to periods in which the assets are used (depreciation with the matching principle).

Depreciation is thus the decrease in the value of assets and the method used to reallocate, or “write down” the cost of a tangible asset (such as equipment) over its useful life span. Businesses depreciate long-term assets for both accounting and tax purposes. The decrease in value of the asset affects the balance sheet of a business or entity, and the method of depreciating the asset, accounting-wise, affects the net income, and thus the income statement that they report.

CITE: https://www.r2library.com/Resource/Title/0826102549

Generally, the cost is allocated as depreciation expense among the periods in which the asset is expected to be used.

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ORDER TEXT: https://www.routledge.com/Comprehensive-Financial-Planning-Strategies-for-Doctors-and-Advisors-Best/Marcinko-Hetico/p/book/9781482240283

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HEALTHCARE: 2021 M&A in Review

Indications for 2022

BY HEALTH CAPITAL CONSULTANTS, LLC

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2021 M&A in Review: Indications for 2022

After an understandable slowdown in 2020, due to the onset of the COVID-19 pandemic, merger & acquisition (M&A) activity in the healthcare industry accelerated in 2021, and the industry is expected to continue the high number of deals and high deal volume in 2022.

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This Health Capital Topics article will review the U.S. healthcare industry’s M&A activity in 2021, and discuss what these trends may mean for 2022. (Read more…)

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CITE: https://www.r2library.com/Resource/Title/0826102549

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What is SWIFT Banking?

Belgium’s Society for Worldwide InterBank Financial Telecommunications

A TIMELY FINANCIAL TOPIC

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By Staff Reporters

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Belgium’s Society for Worldwide Interbank Financial Telecommunications (SWIFT) runs a messaging service that facilitates transactions across 11,000+ financial institutions globally. Think of it as the “Gmail of global banking.”

Entities in every country except North Korea use SWIFT to shuffle trillions of dollars’ worth of funds across borders. And Russia is a SWIFT power user—as a major supplier of energy and other goods, it ranks sixth globally for payment messages sent on SWIFT. So if Russia were cut off from SWIFT, “the nation would essentially be severed from much of the global financial system,” the NYT wrote.

CITE: https://www.r2library.com/Resource/Title/0826102549

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SWIFT: https://www.swift.com/

MORE: https://www.livemint.com/news/world/what-is-swift-why-this-banking-service-could-be-a-big-weapon-against-russia-11645760070928.html

RELATED: https://www.msn.com/en-us/news/world/what-is-swift-and-why-does-it-matter-in-the-russia-ukraine-war/ar-AAUlLDv?li=BBnb7Kz

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BUSINESS PLAN CONSTRUCTION: For Health Industry Modernity

FOR MEDICAL AND HEALTHCARE ENTREPRENEURS AND INNOVATORS

By Dr. David Edward Marcinko MBA MEd CMP®

I was asked by business schools and medical colleagues – and their bankers, CPAs and advisors – to speak about this topic several times last year before the pandemic.

Now, with the specter of M-4-A etc; it certainly is a vital concern to all young entrepreneurs, doctors & medical professionals whether live, audio recorded or in podcast form. And so, here is a written transcript of a recent presentation for your review.

Now, with the specter of tele-health, tele-medicine, M-4-A etc; it certainly is a vital concern to all young doctors & medical professionals whether live, audio recorded or in podcast form. And so, here is a written transcript of a recent presentation for your review.

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New Product Business Plan Sample [2021 Updated] | OGScapital

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READ: https://healthcarefinancials.files.wordpress.com/2017/08/mba-business-plan-capstone-outline.pdf

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55% of Consumers Find it Stressful Paying a Healthcare Bill

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By Staff Reporters

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An annual study of over 1,500 U.S. consumers, shows:

 •  55% of consumers find it stressful paying a healthcare bill.
 •  53% of consumers find it stressful understanding their plan’s coverage and benefits.
 •  53% of consumers find it stressful comprehending what they owe.
 •  59% of consumers find it stressful reconciling a bill issue with their payer.

Source: Cedar via GlobeNewswire, December 7, 2021

CITE: https://www.r2library.com/Resource/Title/0826102549

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UPDATE: The Stock Markets and IRS Online Taxpayer ID

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By Staff Reporters

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MARKETS: The S&P 500 fell into a correction for the first time in two years, joining the NASDAQ Composite, as Russia sent troops into pro-Russian regions in Ukraine. The S&P 500 index ended down 1% at 4,304.76, below the correction level at 4,316.91, which would represent a 10% drop from its January 3rd record close. A correction is commonly defined by market technicians as a fall of at least 10% (but not greater than 20%) from a recent peak. The last time the S&P 500 entered a correction was February 27th 2020, when the market was being whipsawed by fears about the outbreak of the COVID pandemic.

And, this bearish market isn’t sparing 2021 winners like Home Depot, which fell the most in nearly two years after supply-chain bottlenecks squeezed its margins. HD was the Dow’s biggest gainer last year.

CITE: https://www.r2library.com/Resource/Title/0826102549

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IRS: According to a news release issued by the IRS, taxpayers now have the option to verify their identities during live, virtual interviews with agents. The agency stresses that no bio-metric data will be required for those interviews.

However, taxpayers once again have the option to verify their identity using ID.me’s facial recognition services. Addressing privacy concerns, the IRS says new requirements are in place to ensure that images provided will be deleted upon verification. That would apply to any new IRS accounts created and those where selfies have already been collected.

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Cryptocurrency Trades and Income Taxes 2021

Virtual Currency – Real Taxation

By Staff Reporters

What you need to report to the IRS

The IRS treats virtual currencies as property, which means they’re taxed similarly to stocks. If all you did was purchase cryptocurrency with U.S. dollars, and those assets have been sitting untouched in an exchange or your cryptocurrency wallet, you shouldn’t need to worry about reporting to the IRS.

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Reporting is required when certain events come into play, most commonly:

  • Trading one cryptocurrency for another.
  • Selling cryptocurrency for fiat dollars (government-issued currency).
  • Using cryptocurrency to buy goods or services (e.g., paying for a cup of coffee with cryptocurrency).

A critical distinction to make is that triggering a taxable event doesn’t necessarily mean you’ll owe taxes, said Andrew Gordon, an Illinois-based certified public accountant and tax attorney. Just because you have to report a transaction doesn’t mean you’ll end up owing the IRS for it.

READ HERE: https://www.msn.com/en-us/money/taxes/yes-you-must-pay-taxes-on-cryptocurrency-trades-heres-how/ar-AATamDL?li=BBnb7Kz

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INHERITED Retirement Accounts and Uncle Sam

IRS Tax Implications

By Staff Reporters

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If you inherited a tax-deferred retirement plan, such as a traditional IRA, you’ll have to pay taxes on the money. But you can make the tax hit less onerous.

Spouses can roll the money into their own IRAs and postpone distributions—and taxes—until they’re 70½. All other beneficiaries who want to continue to benefit from tax-deferred growth must roll the money into a separate account known as an inherited IRA. Make sure the IRA is rolled directly into your inherited IRA. If you take a check, you won’t be allowed to deposit the money. Rather, the IRS will treat it as a distribution and you’ll owe taxes on the entire amount.

Once you’ve rolled the money into an inherited IRA, you must take required minimum distributions every year—and pay taxes on the money—based on your age and life expectancy. Deadlines are critical: You must take your first RMD by December 31st. of the year following the death of your parent (or whoever left you the account). Otherwise, you’ll be required to deplete the entire account within five years after the year following your parent’s death.

The December 31st. deadline is also important if you are one of several beneficiaries of an inherited IRA. If you fail to split the IRA among the beneficiaries by that date, your RMDs will be based on the life expectancy of the oldest beneficiary, which may force you to take larger distributions than if the RMDs were based on your age and life expectancy.

You can take out more than the RMD, but setting up an inherited IRA gives you more control over your tax liabilities. You can, for example, take the minimum amount required while you’re working, then increase withdrawals when you’re retired and in a lower tax bracket.

CITE: https://www.r2library.com/Resource/Title/0826102549

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Have you Inherited an IRA? It's time to compare your options

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Did you inherit a Roth IRA? And so, as long as the original owner funded the Roth at least five years before he or she died, you don’t have to pay taxes on the money. You can’t, however, let it grow tax-free forever. If you don’t need the money, you can transfer it to an inherited Roth IRA and take RMDs under the same rules governing a traditional inherited IRA. But with a Roth, your RMDs won’t be taxed.

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ALTERNATIVE MINIMUM TAX: Physicians Beware!

By Staff Reporters

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Alternative Minimum Tax

DEFINITION: The alternative minimum tax (AMT) is a tax imposed by the United States federal government in addition to the regular income tax for certain individuals, estates, and trusts. As of tax year 2018, the AMT raises about $5.2 billion, or 0.4% of all federal income tax revenue, affecting 0.1% of taxpayers, mostly in the upper income ranges.

CITE: https://www.r2library.com/Resource/Title/0826102549

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See the source image

Key Takeaways

  • The alternative minimum tax (AMT) ensures that certain taxpayers pay their fair share of income taxes.
  • However, the structure was not indexed to inflation or tax cuts. …
  • For those subject to AMT, there are certain strategies that can be employed to reduce your exposure to this tax.

MORE: https://www.forbes.com/sites/kellyphillipserb/2020/09/11/your-first-look-at-2021-tax-rates-projected-brackets-standard-deductions–more/?sh=119ff37413ba

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PODCAST: The “Secret” to Doctor Pay = RVUs

Relative Value Units

By Eric Bricker MD

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PODCAST: 15 Metrics for Successful Healthcare Companies

Phil Fisher Was One of the Greatest Entrepreneurial Investors of the 20th Century and a Source of Wisdom for Warren Buffett

By Eric Bricker MD

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Related: https://thehealthcareblog.com/blog/2022/02/03/after-the-crash/?utm_campaign=THCB%20Reader&utm_medium=email&utm_source=Revue%20newsletter

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Product Details

CITE: https://www.r2library.com/Resource/Title/0826102549

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