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On November 30, 2021, the U.S. Supreme Court heard oral arguments regarding the challenges arising from the cuts made by the Centers of Medicare & Medicaid Services (CMS) to the 340B Drug Pricing Program.
The 340B Drug Pricing Program allows hospitals and clinics that treat low-income, medically underserved patients to purchase certain “specified covered outpatient drugs” at discounted prices (applying a ceiling to what drug manufacturers may charge certain healthcare facilities) – 25% to 50% of what providers would typically pay – and then receive reimbursement pursuant to the rates set forth in the Outpatient Prospective Payment System (OPPS) at the same rate as all other providers. (Read more…)
Here are eight things to keep in mind as you prepare to file your 2021 taxes.
1. Income tax brackets have shifted a bit
There are still seven tax rates, but the income ranges (tax brackets) for each rate have shifted slightly to account for inflation. For 2021, the following rates and income ranges apply:
Tax rate
Taxable income brackets:Single filers
Taxable income brackets:Married couples filing jointly (and qualifying widows or widowers)
10%
$0 to $9,950
$0 to $19,900
12%
$9,951 to $40,525
$19,901 to $81,050
22%
$40,526 to $86,375
$81,051 to $172,750
24%
$86,376 to $164,925
$172,751 to $329,850
32%
$164,926 to $209,425
$329,851 to $418,850
35%
$209,426 to $523,600
$418,851 to $628,300
37%
$523,601 or more
$628,301 or more
Source: Internal Revenue Service
2. The standard deduction has increased slightly
After an inflation adjustment, the 2021 standard deduction has increased slightly to $12,550 for single filers and married couples filing separately and $18,800 for single heads of household, who are generally unmarried with one or more dependents. For married couples filing jointly, the standard deduction has risen to $25,100.
3. Itemized deductions remain the same
For most filers, taking the higher standard deduction is more practical and saves the hassle of keeping track of receipts. But if you have enough tax-deductible expenses, you might benefit from itemizing.
The following rules for itemized deductions haven’t changed much for 2021, but they’re still worth pointing out.
State and local taxes: The deduction for state and local income taxes, property taxes, and real estate taxes is capped at $10,000.
Mortgage interest deduction: The mortgage interest deduction is limited to $750,000 of indebtedness. But people who had $1,000,000 of home mortgage debt before December 16, 2017, will still be able to deduct the interest on that loan.
Medical expenses: Only medical expenses that exceed 7.5% of adjusted gross income (AGI) can be deducted in 2021.
Charitable donations: The cash donation limit of 100% of AGI remains in place for 2021, if donations were made to operating charities.1
Miscellaneous deductions: No miscellaneous itemized deductions are allowed.
4. IRA and 401(k) contribution limits remain the same
The traditional IRA and Roth contribution limits in 2021 remain the same as in 2020. Individuals can contribute up to $6,000 to an IRA, and those age 50 and older also qualify to make an additional $1,000 catch-up contribution. If you’re able to max out your IRA, consider doing so—you may qualify to deduct some or all of your contribution.
The 2021 contribution limit for 401(k) accounts also stays at $19,500. If you’re age 50 or older, you qualify to make an additional $6,500 catch-up contribution as well.
5. You can save a bit more in your health savings account (HSA)
For 2021, the max you can contribute into an HSA is $3,600 for an individual (up $50 from 2020) and $7,200 for a family (up $100). People age 55 and older can contribute an extra $1,000 catch-up contribution.
To be eligible for an HSA, you must be enrolled in a high-deductible health plan (which usually has lower premiums as well). Learn more about the benefits of an HSA.
6. The Child Tax Credit has been expanded
For 2021, the American Rescue Plan Act (ARPA) has temporarily modified the Child Tax Credit requirements and amounts for household incomes below $75,000 for single filers and $150,000 for married filing jointly.
First, the ARPA has raised the age limit for dependents from 16 to 17. In addition, the child tax credit has increased from $2,000 to $3,000 for children age 6 through 17 and up to $3,600 for children under 6. If your income exceeded the above limits but was below $200,000 for single filers or $400,000 for joint filers, you’ll receive the standard child tax credit of $2,000 per child.
The IRS began sending monthly advance Child Tax Credit payments to eligible families in July and sent its last advance in December. If your dependent didn’t qualify for the child tax credit, you may still qualify for up to $500 of tax credits under the “credit for other dependents” (see IRS Publication 972 for more details). Tax credits, which reduce the tax you owe dollar for dollar, are generally better than deductions, which reduce your taxable income.
7. The alternative minimum tax (AMT) exemption has gone up
Until the AMT exemption enacted by the Tax Cuts and Jobs Act expires in 2025, the AMT will continue to affect mostly households with incomes over $500,000. Still, the AMT has investment implications for some high earners.
For 2021, the AMT exemptions are $73,600 for single filers and $114,600 for married taxpayers filing jointly. The phase-out thresholds are $1,047,200 for married taxpayers filing a joint return and $523,600 for all other taxpayers.
8. The estate tax exemption is even higher
The estate and gift tax exemption, which is indexed to inflation, has risen to $11.7 million for 2021. But the now-higher exemption is set to expire at the end of 2025, meaning it could be essentially cut in half at that time if Congress doesn’t act.
The annual gift exclusion, which allows you to give money to your loved ones each year without incurring any tax liability or using up any of your lifetime estate and gift tax exemption, stays at $15,000 per recipient.
Don’t get caught off guard
As you prepare to file your taxes for 2021, here are a few additional items to consider.
If you’re not retired, the 10% early withdrawal penalty that was waived for retirement account distributions in 2020 has been reinstated for 2021.
If you’re age 72 or older, make sure you’ve taken your required minimum distribution (RMD) from your retirement accounts or else you face a 50% penalty on any undistributed funds (unless it’s your first RMD, in which case, you can wait until April 1, 2022).
If you haven’t contributed to your retirement accounts already, now is the time. Review your earnings for the year and take advantage of any deductions that can lower your tax bill. Also, keep an eye on Washington for any last-minute tax changes that could affect your return before you file. Tax season will be here before you know it, and it’s never too early to start preparing.
1Operating charities, or qualifying public charities, are defined by Internal Revenue Code section 170(b)(1)(A). You can use the Tax Exempt Organization Search tool on IRS.gov to check an organization’s eligibility.
Posted on January 13, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Spike in Hospitals Suing Patients for Unpaid Medical Bills
• Lawsuits over unpaid bills for hospitals rose by 37% in Wisconsin from 2001 to 18. • Wage garnishments from the lawsuits rose 27% in that time period. • 5% of hospitals account for 25% of lawsuits. Nonprofit hospitals and critical access hospitals are more likely to sue patients, according to the study. • There were 1.86 lawsuits per 1,000 Black residents in 2018, compared to 1.32 per 1,000 white residents.
Posted on January 4, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
In the United States, a high-deductible health plan is a health insurance plan with lower premiums and higher deductibles than a traditional health plan. It is intended to incentivize consumer-driven healthcare. Being covered by an HDHP is also a requirement for having a health savings account. Some HDHP plans also offer additional “wellness” benefits, provided before a deductible is paid.
High-deductible health plans are a form of catastrophic coverage, intended to cover for catastrophic illnesses. Adoption rates of HDHPs have been growing since their inception in 2004, not only with increasing employer options, but also increasing government options. As of 2016, HDHPs represented 29% of the total covered workers in the United States; however, the impact of such benefit design is not widely understood.
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% Covered Employees Enrolled in Account-Based CDHP’s
Posted on January 1, 2022 by Dr. David Edward Marcinko MBA MEd CMP™
INFLATION – Did we say [Health Care] Inflation?
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Why? Inflation, which is the rate of price increases over time, affects all of us on a personal level. We pay electric bills, go grocery shopping, decorate our houses, buy cars—and this year all of those things got more expensive. Especially health care.
Thanks to a nefarious mix of soaring demand for goods and snarled supply chains, US consumer prices jumped the most in 39 years in November, and the 6.8% inflation rate marked the sixth straight month inflation grew by 5% or more. Producer prices, which can eventually trickle down to individuals, also increased at their fastest pace on record last month.
Of course, some inflation is good for the economy when wages keep up with rising prices (the Fed aims for a 2% inflation rate over time). But, so far in the pandemic, that hasn’t happened. While many Americans have gotten a raise in 2021, wage gains haven’t been sufficient to offset inflation, resulting in the erosion of purchasing power—especially for folks on a more or less fixed income.
Where do we go from here?
After months of claiming inflation was “transitory,” the Fed has dropped that term and adopted a more hawkish monetary policy to tamp down surging prices. The central bank is winding down its bond-buying stimulus program faster than originally planned, and also plans to hike interest rates three times in 2022.
In its inflation-fighting efforts, the Fed isn’t alone on the front lines. The Bank of England became the first major central bank to raise interest rates during the pandemic in order to combat the biggest annual jump in consumer prices in 10 years. Russia has raised rates seven times this year. Mexico, Chile, Costa Rica, Pakistan, and Hungary are among other countries which are tightening monetary policy to combat higher prices.
Looking ahead…as if economic policymakers needed another inflation curveball, Omicron has taken the mound. Central banks generally don’t expect the new variant to significantly dent economic growth, but they do think it may prolong inflation by exacerbating the supply–demand imbalance that fueled higher prices in the first place.
On December 2, 2021, the U.S. Department of Justice (DOJ) announced that it had entered into an $18.2 million settlement with Flower Mound Hospital, a 91-bed hospital located northwest of Dallas, to resolve claims that the hospital had violated the Stark Law, the Anti-Kickback Statute (AKS), and the False Claims Act (FCA) by making improper inducements to referring physicians. This Health Capital Topics article will review the facts underlying the settlement. (Read more…)
Posted on December 12, 2021 by Dr. David Edward Marcinko MBA MEd CMP™
Doctors Must Understand the Tax Man
By Staff Reporters
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Mutual-fund physician and other investors with holdings in taxable accounts need to prepare for a tax hit on distributed gains — even if they reinvest the distributions. They can offset some or all of the gains (and taxes) if they’ve sold positions at a loss.
Physicians and people who own mutual funds in tax-sheltered accounts such as 401(k)s or individual retirement accounts and are reinvesting the distributions, on the other hand, don’t have to worry. In those accounts, taxes only count when investors sell holdings in retirement, and those who have funds in qualified Roth IRAs won’t have to pay even then.
When President Joe Biden was elected in 2020, there was much anticipation and speculation regarding what his election would mean for the U.S. healthcare industry in the coming years.
As an ardent supporter of the Patient Protection and Affordable Care Act (ACA) who campaigned on offering a public insurance option similar to Medicare, many in the healthcare industry assumed that the Biden Administration would be a strong proponent of continuing the shift to value-based care, which shift was largely spurred by his predecessor and former boss, Barack Obama, with the passage of the ACA. (Read more…)
Posted on December 7, 2021 by Dr. David Edward Marcinko MBA MEd CMP™
A Curated Report
By Staff Reporters
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The marriage penalty has faded in recent years, particularly after the 2017 Republican tax cuts that targeted high incomes. But the singles penalty remains — the tax code is still written to benefit people in 1950s middle-class marriages who own their homes. That’s not great for the millions of households who are shouldering other cost burdens around single life.
Progressive tax codes are intended, at least theoretically, to ensure equitable distribution of the costs of maintaining civilization. They should (again, theoretically) be readjusted when a certain group begins to shoulder a disproportionate amount of that burden — like, for instance, single or divorced people. That’s not what’s happened, not for couples with two earners and not for the growing number of single or solo households. The reality of how people live and who works has changed. The policy has not kept pace.
The same principle holds true for Social Security, which was created first and foremost as a means of protecting the elderly from living out their final years in the literal poorhouse. The idea was simple: You and your employers pay in part of your salary now, and when you retire, you have enough to survive.
As noted in the first installment of this five-part series, internal medicine is the largest specialty among physicians and an understanding of the various environments in which these physicians operate is crucial in determining their numerous value drivers.
In particular, healthcare reimbursement, the process by which private health insurers and government agencies pay for the services of healthcare providers (including internists), is perhaps one of the most important environments to understand, as it comprises a provider’s expectation of future return on investment.
Let’s say a physician decided to sell his practice and move to another state. The value of the sale was based, in part, on the yearly gross of the practice. The physician accepted installment payment terms from the buyer and moved to the new state. The buyer began to practice medicine at his new office. Although he was busy, his gross never approached the gross of the prior physician.
Eventually the buyer defaulted on the loan. The selling physician sued for the deficit. The defaulting physician and his forensic consultants then performed an in-depth evaluation of the seller’s practice. The buyer and his team noticed some discrepancies in the billing patterns and practices of the seller. Considering these discrepancies to constitute Medicare and insurance billing fraud, the seller counter-sued the buyer on the grounds of misrepresentation, alleging the gross receipts of the practice purchase price, was grossly inflated.
ASSESSMENT: Therefore, the buyer determined that the seller had fraudulently misrepresented the potential of the practice. He also notified state and federal authorities and filed complaints of insurance fraud against the seller.
The seller thought that he would move to the good life in the new state, but his old practice kept him in constant legal trouble.
Posted on November 10, 2021 by Dr. David Edward Marcinko MBA MEd CMP™
For Doctors and Advisors
BOOK REVIEWS WITH FOREWORD
Reviews
Written by doctors and healthcare professionals, this textbook should be mandatory reading for all medical school students―highly recommended for both young and veteran physicians―and an eliminating factor for any financial advisor who has not read it. The book uses jargon like ‘innovative,’ ‘transformational,’ and ‘disruptive’―all rightly so! It is the type of definitive financial lifestyle planning book we often seek, but seldom find. ―LeRoy Howard MA CMPTM,Candidate and Financial Advisor, Fayetteville, North Carolina I taught diagnostic radiology for over a decade. The physician-focused niche information, balanced perspectives, and insider industry transparency in this book may help save your financial life. ―Dr. William P. Scherer MS, Barry University, Ft. Lauderdale, Florida This book was crafted in response to the frustration felt by doctors who dealt with top financial, brokerage, and accounting firms. These non-fiduciary behemoths often prescribed costly wholesale solutions that were applicable to all, but customized for few, despite ever-changing needs. It is a must-read to learn why brokerage sales pitches or Internet resources will never replace the knowledge and deep advice of a physician-focused financial advisor, medical consultant, or collegial Certified Medical Planner™ financial professional. ―Parin Khotari MBA,Whitman School of Management, Syracuse University, New York In today’s healthcare environment, in order for providers to survive, they need to understand their current and future market trends, finances, operations, and impact of federal and state regulations. As a healthcare consulting professional for over 30 years supporting both the private and public sector, I recommend that providers understand and utilize the wealth of knowledge that is being conveyed in these chapters. Without this guidance providers will have a hard time navigating the supporting system which may impact their future revenue stream. I strongly endorse the contents of this book.
―Carol S. Miller BSN MBA PMP,President, Miller Consulting Group, ACT IAC Executive Committee Vice-Chair at-Large, HIMSS NCA Board Member This is an excellent book on financial planning for physicians and health professionals. It is all inclusive yet very easy to read with much valuable information. And, I have been expanding my business knowledge with all of Dr. Marcinko’s prior books. I highly recommend this one, too. It is a fine educational tool for all doctors.
―Dr. David B. Lumsden MD MS MA,Orthopedic Surgeon, Baltimore, Maryland There is no other comprehensive book like it to help doctors, nurses, and other medical providers accumulate and preserve the wealth that their years of education and hard work have earned them. ―Dr. Jason Dyken MD MBA, Dyken Wealth Strategies, Gulf Shores, Alabama I plan to give a copy of this book written ‘by doctors and for doctors’ to all my prospects, physician, and nurse clients. It may be the definitive text on this important topic. ―Alexander Naruska CPA, Orlando, Florida
Health professionals are small business owners who need to apply their self-discipline tactics in establishing and operating successful practices. Talented trainees are leaving the medical profession because they fail to balance the cost of attendance against a realistic business and financial plan. Principles like budgeting, saving, and living below one’s means, in order to make future investments for future growth, asset protection, and retirement possible are often lacking. This textbook guides the medical professional in his/her financial planning life journey from start to finish. It ranks a place in all medical school libraries and on each of our bookshelves. ―Dr. Thomas M. DeLauro DPM, Professor and Chairman – Division of Medical Sciences, New York College of Podiatric Medicine
Physicians are notoriously excellent at diagnosing and treating medical conditions. However, they are also notoriously deficient in managing the business aspects of their medical practices. Most will earn $20-30 million in their medical lifetime, but few know how to create wealth for themselves and their families. This book will help fill the void in physicians’ financial education. I have two recommendations: 1) every physician, young and old, should read this book; and 2) read it a second time! ―Dr. Neil Baum MD, Clinical Associate Professor of Urology, Tulane Medical School, New Orleans, Louisiana
I worked with a Certified Medical Planner™ on several occasions in the past, and will do so again in the future. This book codified the vast body of knowledge that helped in all facets of my financial life and professional medical practice. ―Dr. James E. Williams DABPS, Foot and Ankle Surgeon, Conyers, Georgia
Almost everything you own and use for personal or investment purposes is a capital asset. Examples include a home, personal-use items like household furnishings, and stocks or bonds held as investments. When you sell a capital asset, the difference between the adjusted basis in the asset and the amount you realized from the sale is a capital gain or a capital loss.
Generally, an asset’s basis is its cost to the owner, but if you received the asset as a gift or inheritance, refer to Topic No. 703 for information about your basis.
For information on calculating adjusted basis, refer to Publication 551, Basis of Assets. You have a capital gain if you sell the asset for more than your adjusted basis. You have a capital loss if you sell the asset for less than your adjusted basis. Losses from the sale of personal-use property, such as your home or car, aren’t tax deductible.
Posted on October 22, 2021 by Dr. David Edward Marcinko MBA MEd CMP™
By Morning Brew, NF and Staff Reporters
One of the world’s most prolificoffshore tax havens is locatedmore than 1,000 miles from any shore.
The US state of South Dakota now rivals notorious tax shelters like Panama, the Cayman Islands, and Switzerland as a destination for the top 0.01% to shield their wealth from the grubby hands of tax authorities, the newly released Pandora Papers show.
Quick recap: The Pandora Papers, published one week ago, represent one of the biggest leaks of financial docs in history. They show how celebrities, world leaders, and business magnates take advantage of opaque financial laws to hold onto as much of their wealth as they can…and, in some cases, get away with crimes.
And while none of that is particularly surprising, what is surprising is the changing geography of tax havens. The ultrarich are taking their money out of traditional tax shelters like the island of Jersey (one of the Channel Islands) and stashing it in rural US states like Nevada, Wyoming, and, most of all…South Dakota.
Of the more than 200 US trusts appearing in the Pandora Papers, 81 were located in South Dakota.
South Dakota’s trust industry held $367 billion in anonymous, untraceable assets in 2020, a nearly 4x increase from $75.5 billion in 2011. And these trusts aren’t catering to cattle ranchers who made it big—they’re linked to individuals in 40 different countries outside the US.
The bigger issue? 28 US-based trusts are linked to individuals or companies accused of misconduct overseas, such as money laundering, bribery, and human rights abuses, per the Washington Post.
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And now the question you’ve all been waiting for…
Why South Dakota?
It’s not why most people arrive in South Dakota—by accident. For decades, the state has intentionally loosened regulations on its financial services sector to grow its economy and create finance jobs, particularly in the city of Sioux Falls.
This deregulation push, spurred by trust industry insiders, turned a South Dakotan trust into “the most potent force-field money can buy,” wrote the Guardian’s Oliver Bullough.
By setting up a trust in South Dakota…
Your assets are protected from claims by creditors, angry clients, or even your ex-spouse (a level of security not afforded by other tax havens).
You are not subject to income tax, inheritance tax, or capital gains tax in the state…because South Dakota has none of those.
You never actually have to go to South Dakota.
In sum, if you’re a shady billionaire or a corrupt president of a Latin American country with something to hide, South Dakota looks like a mighty attractive place to shield your fortune from governments.
Or, rather, the US more broadly is an attractive place to hide your wealth. After years of bashing “offshore” havens for sheltering tax avoiders, the US has moved up to second in the world rankings for financial secrecy.
Generally speaking, all income is taxable unless it’s specifically excluded, as is the case with certain gifts and inheritances. In most instances, the income you earn will be reported to both you and the government on an information return, such as a Form 1099 or W-2. If the income you report doesn’t match the IRS’s records, you could face problems down the road—so be sure you include the income from all of the following forms that are applicable to your situation:
1099-B: The form on which financial institutions report capital gains.
1099-DIV: The form on which financial institutions report dividends.
1099-MISC: The form used to report various types of income, such as royalties, rents, payments to independent contractors, and numerous other types of income.
1099-R:The form on which financial institutions report withdrawals from tax-advantaged retirement accounts.
Form 1099-INT: The form on which financial institutions report interest income.
Form SSA-1099:The form on which the Social Security Administration reports Social Security benefits (a portion of which may be taxable, depending on your level of income).
Form W-2:The form on which employers report total annual compensation, payroll taxes, contributions to retirement accounts, and other information.
If you receive an inaccurate statement of income, immediately contact the responsible party to request a corrected form and have them resend the documents to both you and the IRS as soon as possible to avoid delaying your tax return. Also, be aware that you must report income for which there is no form, such as renting out your vacation home.
When you sell an investment, you’ll need to know both the cost basis (what you paid for the investment) and the sale price to determine your net gain or loss. The cost basis of your investment may need to be adjusted to account for commissions, fees, stock splits, or other events, which could help reduce your taxable gain or increase your net loss.
Financial institutions are required to adjust your investments’ cost basis and provide that information on a Form 1099. However, brokerages aren’t required to report the cost basis for investments purchased prior to a certain date, which means you’ll be responsible for supplying that information (see the table below). Be sure to keep records of all investment purchases and sales—even those for which your brokerage is responsible.
Your reporting responsibility
Depending on security type and date of purchase, you—rather than your brokerage—could be responsible for reporting the cost basis of your investment to the IRS.
An August 2021 study published in the Journal of the American Medical Association (JAMA) analyzed medical and surgical episodes of care in U.S. hospitals to determine whether outcomes differed in hospitals that participated in Medicare’s Bundled Payments for Care Improvement (BPCI) Initiative depending on whether the patient being treated was attributed to a Medicare Shared Savings Program (MSSP) accountable care organization (ACO).
This Health Capital Topics article will discuss the study’s findings and potential policy implications.(Read more…)
In Response to a Question Regarding the Ending of Haven Healthcare–the Joint Venture Among Berkshire Hathaway, JP Morgan Chase and Amazon to Improve Healthcare for their Employee Health Plan Members–Warren Buffett Made the Following Statement:
“Healthcare is the Tapeworm of the US Economy and the TAPEWORM WON.”
Additionally, Warren Buffett Goes on to Say that ‘Prestigious‘ People in the Community Run Hospital Boards and These People Are ‘Fairly Happy‘ with the Healthcare System the Way It Currently Is.
It is Likely that Warren Buffett Formed Some of This Opinion in Speaking About Healthcare with the Vice Chairman of Berkshire Hathaway, Charlie Munger, and Berkshire Board Member and Famous CEO, Tom Murphy.
Charlie Munger Has Served on the Board of a Los Angeles Hospital for 31 Years and Tom Murphy Currently Serves on the NYU Langone Hospital System Board of Directors.
The Support of the Status Quo by ‘Prestigious,’ ‘Fairly Happy’ Hospital Board Members Cannot Be Understated… It Blocks Change and Warren Buffett Appears to Think Similarly.
Posted on October 5, 2021 by Dr. David Edward Marcinko MBA MEd CMP™
FORPHYSICIAN INVESTORS
By David Belk MD
Health Insurance Company Financial Index
Below is a listing of the Nine largest for-profit health insurance Companies. The Annual financial statements are linked to the year for each Company and a four page summary report is linked to the name of the health insurance company at the top of the listing.
The relevant pages in each financial statement I used to prepare my summaries are listed next to each year’s statement. Aetna and Coventry’s summaries are combined because they merged in 2012. Health Net also Merged with Centene in 2016 leaving only seven major health insurance companies.
Posted on October 1, 2021 by Dr. David Edward Marcinko MBA MEd CMP™
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BY MORNING BREW
The Legend of the $1 Trillion Platinum Coin
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You may have heard that a deadline to suspend the debt ceiling is rapidly approaching, and if lawmakers don’t do anything it could lead to “economic catastrophe,” in the words of Treasury Secretary Janet Yellen.
But what if we told you there was a solution to the debt ceiling fiasco so crazy…it just might work?
The solution: Yellen could have the Treasury mint a $1 trillion platinum coin, deposit it at the Fed to “retire” loads of US federal debt, and then enable the government to carry on with business as usual without having to worry about defaulting on its existing debt.
“The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”
The law is crystal clear, and has been deemed kosher by numerous academics. “The statute clearly does authorize the issuance of trillion-dollar coins,” Laurence Tribe, a Harvard Law professor, told Washington Monthly back in 2013.
In fact, nothing says we have to stop at $1 trillion. Yellen could go big with a $10 trillion coin, hypothetically. As Bloomberg’s Joe Weisenthal explains, none of this would lead to inflation because it’s merely an “accounting trick”—not an influx of money into the economy.
Have we tried this before? The $1 trillion platinum coin idea seems to pop up every time the US faces a debt ceiling crunch. It was first introduced by a Georgia lawyer in 2010 and gained traction during the debt-ceiling crisis of 2011.
Things really turned up in 2013, when the government was…you guessed it, facing another debt ceiling deadline. The hashtag #MintTheCoin became popular on Twitter, and economists like Paul Krugman advocated for unleashing the coin. “If we have a crisis over the debt ceiling, it will be only because the Treasury Department would rather see economic devastation than look silly for a couple of minutes,” he wrote.
But each time the $1 trillion coin is mentioned as a way of resolving debt ceiling problems, the people in charge dismiss it as a distraction from Congress doing its job. “Neither the Treasury nor the Federal Reserve believes that the law can or should be used to produce platinum coins for the purpose of avoiding an increase in the debt limit,” The Treasury wrote during…well, yes, another debt ceiling emergency in 2015.
As for our current predicament, the Biden administration rejected the minting of the $1 trillion coin yet again last week.
Bottom line: Perhaps some enterprising future Treasury Secretary will manifest the platinum coin into existence, but for now it remains as mythical as Camelot.
A decentralized autonomous organization (DAO), sometimes called a decentralized autonomous corporation (DAC), is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government. A DAO’s financial transaction record and program rules are maintained on a blockchain. The precise legal status of this type of business organization is unclear.
A well-known example, intended for venture capital funding, was The DAO, which launched with $150 million in crowdfunding in June 2016, and was nearly immediately hacked and drained of US$50 million in cryptocurrency. The hack was reversed in the following weeks, and the money restored, via a hard fork of the Ethereum blockchain: the Ethereum miners and clients switched to the new fork.
A Ponzi scheme (/ˈpɒnzi/, Italian: [ˈpontsi]) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Recall Bernie Madoff.
The scheme leads victims to believe that profits are coming from legitimate business activity (e.g., product sales or successful investments), and they remain unaware that other investors are the source of funds. A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.
Do your children have income-generating assets in a custodial account?
If so, be sure you understand the so-called kiddie tax.
This law was passed to discourage wealthier individuals from transferring assets to their children to take advantage of their lower tax rates. The kiddie tax has seen many iterations but current rules tax a minor child’s unearned income—including capital gains distributions, dividends, and interest income—at the parents’ tax rate if it exceeds the annual limit ($2,200 in 2021).
The tax applies to dependent children under the age of 18 at the end of the tax year (or full-time students younger than 24) and works like this:
The first $1,100 of unearned income is covered by the kiddie tax’s standard deduction, so it isn’t taxed.
The next $1,100 is taxed at the child’s marginal tax rate.
Anything above $2,200 is taxed at the parents’ marginal tax rate.
So – If your child also has earned income, say from a summer job or legitimate work in your medical office or practice, the rules become more complicated.
The saver’s credit is a tax credit that’s intended to promote retirement savings among low- and moderate-income workers. It can reduce an eligible taxpayer’s federal income taxes when they save in a qualified retirement plan. It may be especially useful to medical students, nurses, interns, residents and fellows.
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In 2021, the maximum credit is worth $1,000 for individuals and $2,000 for married couples filing jointly, although it phases out for higher earners. To qualify for the credit, individuals must have an adjusted gross income of $32,500 or less. The income threshold for married couples is $65,000.
Because the credit is non-refundable, eligible taxpayers are able to use it to effectively reduce their tax bill to zero – but it cannot provide them with a tax refund.
Current reimbursement structures involve the submission and payment of medical CPT® coded claims. But, some doctors feel they need to “up-code” to maximize revenue or “down-code” for fear of having a claim denied. Contradictory business goals bastardize the system into a payer versus provider tug-of-war, with patient care as a potential bargaining chip. Instituting quality metrics should be included in this equation and, a hybrid reimbursement model may be a viable option while integrating quality care metrics and reducing costs for all stakeholders.
This hybrid reimbursement system might use a two-payment structure.
For the first payment, claims would be paid at hypothetical rate of 60% within one week of submission.
The second payment, consisting of the remaining zero to 40% of some total maximum allowable fee, be paid quarterly. It would be based on scores like patient satisfaction and stewardship of healthcare resources by analyzing a statistically valid sample of patient encounters taken from the electronic health record.
Such a hybrid system would remove unnecessary steps, like re-submitting claims, and would lower the operational and administrative costs of claims processing. These changes would decrease operational cost and drive quality stewardship of the healthcare dollar.
Posted on September 9, 2021 by Dr. David Edward Marcinko MBA MEd CMP™
ALERT FOR PHYSICIANS AND ALL INVESTORS
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1. You can trade actively in a Roth IRA
Some physician investors may be concerned that they can’t actively trade in a Roth IRA. But there’s no rule from the IRS that says you can’t do so. So you won’t get in legal trouble if you do.
But there may be some extra fees if you trade certain kinds of investments. For example, while brokers won’t charge you if you trade in and out of stocks and most ETFs on a short-term basis, many mutual fund companies will charge you an early redemption fee if you sell the fund. This fee is usually assessed only if you’ve owned the fund for fewer than 30 days.
2. Any gains are tax-free – forever
The ability to avoid taxes on your investments is an incredible benefit. You’ll be able to escape – perfectly legally – taxes on dividends and capital gains. Not surprisingly, this superpower makes the Roth IRA very popular, but to enjoy its benefits, you must abide by a few rules.
The Roth IRA limits you to a $6,000 maximum annual contribution (for 2021), and you won’t be able to withdraw earnings from the account until retirement age (59 1/2) or later and after owning the account for at least five years. However, you can withdraw your contributions to the account without being taxed at any time, but you won’t be able to replace those contributions later.
Many traders use margin in their accounts. With a margin loan, the broker extends you capital to invest beyond what you actually own. It’s a useful tool, especially if you’re trading frequently. Unfortunately, margin loans are not available in IRA accounts.
For frequent traders the ability to trade on margin is not just about magnifying your returns. It’s also about having the ability to sell a position and immediately buy another. In a cash account (like a Roth IRA), you have to wait for a transaction to settle, and that takes a couple days. In the meantime you’re unable to trade with that money even though it’s credited to your account.
PLUS A FOURTH RULE
4. You don’t get to deduct losses
If you’re trading in a taxable brokerage account, you’ll get a tax write-off if you make a losing investment. Some investors even make sure they’re getting the largest write-off they can using a process called tax-loss harvesting. They scoop up that benefit and then even repurchase the stock or fund later (after 30 days) if they think it’s poised to rise in the future.
But if you’re trading in a Roth IRA, you won’t get the ability to write off losses. Changes to the tax code in 2017 eliminated the ability to claim any benefit from losses in an IRA account.
Posted on August 28, 2021 by Dr. David Edward Marcinko MBA MEd CMP™
ANTI-KICKBACK STATUTEOverview and Impact
Do you want to learn more about the Stark Law and Anti-Kickback Statute Final Rules and how they impact your practice? Join us for a one-hour webinar, presented with Hancock Daniel.
Historically, Medicare has offered value-based payment models to healthcare organizations on both a voluntary and a mandatory participation basis. Because voluntary participants could self-select into programs to reduce spending, it was assumed that they achieved greater savings than mandated participants, but until recently, no data had tested this.
However, a June 2021 study in the Journal of the American Medical Association (JAMA) found no difference in risk-adjusted episodic spending between voluntary and mandatory payment model participants. (Read more…)
Posted on July 21, 2021 by Dr. David Edward Marcinko MBA MEd CMP™
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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 Studiesprovides 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 Organizationsthat 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
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