By RALPH Z. LEVY & CYNTHIA A. MOORE

Adverse tax issues can arise for physicians and other professional practice groups interested in issuing equity to attract and retain junior physicians.  If equity is issued at below fair market value, the new equity owner will incur significant federal income tax consequences on issuance.  If the new practice entity owner leaves the practice, the practice entity could experience difficulty in funding the amount needed to repurchase the equity from the departing professional.  These adverse tax and other consequences at buy-in and buy-out can be avoided by proper planning and a well-designed buy-sell agreement.

 Issues for the New Practice Owner

Federal tax law taxes income of all types, whether cash, property, or other forms.  For employees of a practice entity, if an employee is issued equity in a practice and does not pay for the equity at its fair market value, the employee must include in income for federal tax purposes the “bargain element” of the equity received.  This applies regardless of the form of the equity – be it stock in a professional corporation (PC), a membership interest in a professional limited liability company (PLLC), or a partnership interest in a professional limited liability partnership (PLLP).

 Issues for the Practice Entity

Even [Read More]

Lansing Lines is presented in cooperation with MIRS, a Lansing-based news and information service.

Universal Lead Testing Bills For Children Heading To Gov’s Desk

Young children must be tested for lead poisoning, with records of their testing placed on the same immunization certificate used to document childhood vaccines, under legislation currently on its way to the Governor’s desk.

“What this legislation does is it requires universal testing for minors for lead, and really what this is about is making sure that we are giving protection to kids from a variety of potential vectors of exposure to lead,” Sen. John Cherry (D-Flint) said to members of the media today, speaking about HB 4200 and his own SB 31 , which are tie-barred.

Cherry’s SB 31 deals specifically with the new testing instruction itself, mandating a physician to have a child tested for lead – or to order a test for them – once at 1-years-old, once at 2-years-old and once at 4-years-old if the minor resides in a geographic area flagged by the state’s health department for posing an elevated risk for childhood lead poisoning.

Additionally, if the child has not been tested earlier in life, they may be tested for lead poisoning at least once between 2- and 6-years-old.

HB 4200 by Rep. Helena Scott (D-Detroit) deals with the written certification [Read More]

By HARRIS MEYER
As regulators review Kaiser Permanente’s proposed acquisition of a respected health system based in Pennsylvania, health care experts are still puzzling over how the surprise deal, announced in April, could fulfill the managed care giant’s promise of improving care and reducing costs for patients, including in its home state of California.

KP said it would acquire Danville, Pennsylvania-based Geisinger — which has 10 hospitals, 1,700 employed physicians, and a 600,000-member health plan in three states — as the first step in the creation of a new national health care organization called Risant Health. Oakland-based Kaiser Permanente said it expects to invest $5 billion in Risant over the next five years, and to add as many as six more nonprofit health systems during that period.

Industry experts believe KP’s aim is to build a big enough presence across the country to effectively compete with players like Amazon, Aetna CVS Health, Walmart Health, and UnitedHealth Group in providing health care for large corporate customers. Kaiser Permanente executives touted the potential for spreading the group’s vaunted brand of quality, lower-cost care around the country.

But it’s not clear how KP will be able to bring its model, in which facilities and doctors receive a monthly per-member fee for all care, [Read More]

By SUSAN ADELMAN, MD
I am a pediatric surgeon. I have operated on babies who were born without a functional anal orifice, but I have never operated on babies who were born with what were called ambiguous genitalia. It just never came up in my practice. These were specialized procedures done by surgeons with advanced training and experience in such delicate matters.

With that caveat, let me weigh in on the subject of surgery designed to transition a child from his or her biological gender to the opposite gender. When I was in practice, a request for this type of surgery primarily came up in the case of babies with ambiguous genitalia that did not fit their genotype properly, usually because of hormonal abnormalities. This was more than 50 years ago, when most young surgeons were taught that, in the case of feminized or partially feminized genitalia, since it was impossible to create a functioning penis, it was more prudent to remodel the perineum by creating clearly feminine looking external genitalia. So that is what they did. Sadly, some of these children were actually biologic males and later felt themselves to be male as they grew up—a potential psychologic, anatomic and physiologic tragedy. It must be pointed [Read More]

By EWA MATUSZEWSKI
We’re a smart bunch in healthcare. We are always innovating, elevating and evolving with a tech-centric mindset. But in our quest to achieve quality scores of 3.0, 4.0 or the coveted 5.0, have we forgotten some of the basics so critical to quality, patient-centric care?  The recent hospital stay of a family member fraught with missteps and a mind-boggling lack of communication and human connection, has me thinking of a decidedly old-fashioned tool that needs to be re-emphasized in the health care context: the satisfaction survey.

In modern terms, it’s actually the user experience survey, but for our purposes it’s the patient experience of care survey. I can hear your response already. “We already have patient review options on Google and Yelp! And then there are physician reviews through CAHPS.” Of course, online review portals abound, but for purposes of overhauling the patient’s experience of care, there needs to be dialogue rather than a complaint or love letter forum.

I wonder if our adherence to national regulatory organizations like CQA, URAC and The Joint Commission – all important to quality care – have allowed us to be sidetracked from also appropriately measuring the patient care experience. The auto industry has multiple regulatory agencies, but their [Read More]

By SHEA MACE & DANIEL AYYASH
Wachler & Associates, P.C.

Overview

On Aug. 1 the Centers for Medicare and Medicaid Services (CMS) issued a final rule establishing the Medicare hospital inpatient prospective payment system (IPPS) rates and long-term care hospital prospective payment system (LTCH PPS) rates for the 2024 fiscal year (FY). CMS is required to publish annual payment rates by law, which are based on factors such as diagnosis, patient condition, treatment provided, and the local cost of labor. Inpatient hospitals who participate in the Hospital Inpatient Quality Reporting (IQR) program and show adequate utilization of an electronic health record (EHR) will see a payment increase of 3.1%. Long-term care hospitals will see an increase of 3.3% in the standard payment rate but actual payments for discharges will only increase by approximately 0.2%. The rule is slated to be published in the Federal Register on August 28 and will take effect October 1, 2023.

The Hospital Inpatient Prospective Payment System (IPPS)
The IPPS, establishes prospective rates of payment for Medicare Part A beneficiaries requiring acute care hospital inpatient stays. Each stay is categorized into a Medicare Severity Diagnosis-Related Group (MS-DRG), which then has a payment weight assigned to it. MS-DRGs are based on factors such as the patient’s diagnosis, [Read More]

By ALLISON TUOHY
Dickinson Wright

Hospitals play a vital role in ensuring the well-being of communities by recruiting and employing skilled physicians. However, physician recruitment in compliance with the Stark Law can be a complex task for hospital administrators, especially as hospitals and medical practices face an average 7.6% annual physician turnover rate.[1]

The Stark Law, which was enacted to prevent potential conflicts of interest and ensure the integrity of physician referrals, prohibits physicians from referring patients for designated health services to entities in which they have a financial interest unless an exception applies. At face value, physician recruitment arrangements present potential Stark Law violations if hospitals expect referrals from physicians or hope to gain financial benefits from relationships with the physicians.

An important Stark Law exception is the physician recruitment exception, which applies to hospitals, federally qualified health centers, rural health clinics/hospitals, and physicians joining established medical groups.[2] The recruitment exception allows for a hospital to pay a physician to relocate to the geographic area served by the hospital and join the hospital’s medical staff.[3] This geographic area served is the area composed of the lowest number of contiguous zip codes from which the hospital draws at least 75% of its inpatients. [Read More]

Lansing Lines is presented in cooperation with MIRS, a Lansing-based news and information service.

Cannabis Sales Set Record In July As Price Rebounds

Cannabis sales hit a record high in July, according to Cannabis Regulatory Agency (CRA) data, which also found prices for marijuana-related products on the rise after hitting an all-time low in January.

Total sales in July set a state record with nearly $271 million. Prices are still down year-over-year, but the CRA data showed the average per-ounce price of flower, known as bud, has increased steadily since the industry low of $80 in January to nearly $99 in July. The amount being sold and held in inventory also grew over six months.

“I don’t know that you can point to any one specific thing, to be honest, but I mean I think it’s a multitude of consumer attitudes, more municipalities coming online, the enforcement issues, and we’ve been doing this since 2017,” said PharmaCann Government Regulatory Affairs Officer Shelly Edgerton.

Edgerton, former president of the dissolved Michigan Cannabis Manufacturers Association, said the market seems to be maturing. She said manufacturers had become more efficient in their production methods and distributors had learned how much product they needed to maintain freshness on their shelves.

Overall, January saw 341,587 pounds [Read More]

By CHERYL PLATZMAN WEINSTOCK

If you or someone you know may be experiencing a mental health crisis, contact the 988 Suicide & Crisis Lifeline by dialing “988,” or the Crisis Text Line by texting “HOME” to 741741.

Aimee Quicke has made repeated trips to emergency rooms, hospitals, behavioral health facilities, and psychiatric lockdowns for mental health crises — including suicidal thoughts — since she was 11.

The 40-year-old resident of Le Mars, Iowa, has bipolar and obsessive-compulsive disorders. “Some of the visits were helpful and some were not,” she said. “It was like coming in and going out and just nothing different was happening.”

Then she heard about Rhonda’s House, a rural peer respite program that opened on the other side of the state in 2018, through acquaintances in her community.

That facility, and dozens of others like it established nationwide over the past 20 years, offers a short-term, homelike, nurturing environment for people who are experiencing a mental health crisis but don’t need immediate medical attention. At respites, patients are treated like guests, proponents say, and can feel heard and keep their dignity without having to relinquish their clothes and other belongings.

During her weeklong stay at Rhonda’s House, which founder and executive director Todd Noack referred to as “a bed-and-breakfast [Read More]

By BRAM SABLE-SMITH, DANIEL CHANG, JAZMIN OROZCO RODRIGUEZ & SANDY WEST

Hal Dempsey wanted to “escape Missouri.” Arlo Dennis is “fleeing Florida.” The Tillison family “can’t stay in Texas.”

They are part of a new migration of Americans who are uprooting their lives in response to a raft of legislation across the country restricting health care for transgender people.

Missouri, Florida, and Texas are among at least 20 states that have limited components of gender-affirming health care for trans youth. Those three states are also among the states that prevent Medicaid — the public health insurance for people with low incomes — from paying for key aspects of such care for patients of all ages.

More than a quarter of trans adults surveyed by KFF and The Washington Post late last year said they had moved to a different neighborhood, city, or state to find more acceptance. Now, new restrictions on health care and the possibility of more in the future provide additional motivation.

Many are heading to places that are passing laws to support care for trans people, making those states appealing sanctuaries. California, for example, passed a law last fall to protect those receiving or providing gender-affirming care from prosecution. And now, California providers are getting more calls from people seeking to relocate [Read More]

By EWA MATUSZEWSKI
‘Dr. Smith’, a specialty physician, retired during the pandemic. His office lease was up and the thought of committing to another five-year lease amid ongoing uncertainty seemed unwise. Did he move onto a life of golf, travel, and other leisure focused activities? Hardly. He didn’t move on at all. As a matter of fact, he was bored silly. It was an opportunity to switch fields and take on a new position at a local hospital that crystallized his thinking on retirement. Namely, he didn’t want to be retired – at least not yet.

I have plenty of other anecdotal stories of physicians who retired too soon. What I’m beginning to believe is that we can find a role for these retired-too-soon physicians. Admittedly, many do not want to return to their previous physician lives. The stress of running a private practice and its myriad details and push and pulls – especially the hiring and retention of staff and the many business details and uncertainties of self-employment – has permanently lost its appeal. And for those who were hospital-employed, the internal politics of health systems, a perceived lack of autonomy and the constant push to use more hospital services, keeps them from returning.

A consistent message [Read More]

By JENNIFER COLAGIOVANNI, ESQ
Wachler & Associates, P.C.
The pandemic changed the relationship between patients and their healthcare providers, and telehealth use surged during the COVID-19 pandemic. Specifically, Medicare beneficiaries used telehealth services 88 times more often during the first year of the pandemic than in the year prior.  Medicaid and private health plans saw similar growth in the use of telehealth.  With this growth came concerns about the risks of fraud, waste, and abuse. The Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) recently released a toolkit setting forth methods to analyze telehealth claims and identify risks associated with telehealth services in the wake of the COVID-19 pandemic.

The toolkit is designed to assist public and private plans with oversight efforts and additional safeguards. The OIG toolkit provides an approach for analyzing claims data to identify potential areas of program integrity risk associated with telehealth, including seven program integrity measures that may further indicate fraud, waste, and abuse.  Developed based on analysis of both Medicare fee-for-service and Medicare Advantage claims, the seven measures focus on different billing practices that may indicate efforts to inappropriately maximize telehealth payments.  And while the toolkit is written as guidance to public and private stakeholders, these [Read More]

By ANDREW SPARKS
Dickinson Wright
A recent decision by the Supreme Court clarified the required intent for a defendant to be held liable under the False Claims Act.  According to the Court, the FCA’s scienter requirement refers to a defendant’s knowledge and subjective beliefs – not what an objectively reasonable person might have known or believed.  This ruling removes potential defenses for FCA defendants and makes the dismissal of FCA claims on the basis of scienter much less likely before discovery has been completed.

Background

The consolidated cases involved allegations that two pharmacies defrauded Medicare and Medicaid by selling drugs at a lower rate to the public, while receiving reimbursement at a higher rate from the government.  See United States et al. ex rel. Schutte et al. v. Supervalu Inc., et al, No. 21-1326, and United States et al. ex rel. Proctor v. Safeway, Inc.,, No. 22-111.

A brief explanation of the payment system is helpful to understanding this ruling. State Medicaid plans offer outpatient prescription drug coverage to qualifying people.  However, the Center for Medicare and Medicaid Services has issued regulations that limit pharmacies’ reimbursement rates to the lower of either the (1) actual acquisition cost plus a dispensing fee or (2) the provider’s usual and customary [Read More]

Lansing Lines is presented in cooperation with MIRS, a Lansing-based news and information service.

Appellate Court Affirms Dismissal Of Suit Challenging MSU Vaccine Mandate

A federal appellate court affirmed this month the dismissal of a lawsuit challenging Michigan State University’s COVID-19 vaccine mandate.

In a published opinion from Circuit Judge John K. Bush, the court held that MSU’s policy “furthers a legitimate government interest of protecting public health.”

Bush added: “Thus, the policy passes rational basis review. Given that MSU’s policy satisfies rational basis review, no employee’s rights are violated, and thus the policy is not an unconstitutional condition on plaintiffs’ employment.”

The panel, including Judges Raymond M. Kethledge and Helene N. White, also rejected the plaintiffs’ argument that MSU’s policy is preempted by federal law regulating the distribution and use of pharmaceuticals.

MSU announced in July 2021 a directive that all faculty and staff had to be fully vaccinated or receive at least one of a two-dose series of vaccines by Aug. 31, 2021, including employees who worked remotely.

The policy provided for religious and medical exemptions.

The plaintiffs – Jenna Norris, Kraig Ehm and D’ann Rohrer – each tested positive for COVID-19, and they claimed their naturally acquired immunity should exempt them from the policy, but the university disagreed.

While Norris was eventually granted a religious exemption, Ehm’s employment was [Read More]

Health departments, both state and local, learned many lessons from going through the COVID-19 pandemic. Communications, making friends and funding stood out as top of mind.

Michigan Association of Local Public Health Executive Director Norm Hess said the group was having a “high-level review” to look at the pandemic response and would release it in June or July.  He said there was one lesson that all areas of health quickly had to learn.

“The communication aspect is definitely something that we want to delve into and make sure that in the future we have really good processes for that,” Hess said.

He said in the beginning, the federal Centers for Disease Control had to get messages out to the states.

Each state had to integrate them into their own state health laws and then communicate that to the local health departments.

The health officers then had to adjust those to local ordinances and communicate that to residents.  The process was slow.

“All of this is happening while the news is reporting on it every day and social media is 24/7,” he said.

He said all the players needed to be in the loop and not be surprised by new information emerging daily, forcing everyone to adjust the strategy and confusing the residents who were [Read More]

A nationwide shortage of cancer drugs cisplatin and carboplatin has Michigan hospitals asking state and federal government leaders for help.

Manufacturing delays at several pharmaceutical companies are causing the nationwide shortages of the two critical chemotherapy medications, which are used to treat several types of cancer, including bladder, lung, ovarian and testicular cancers.

As a result, Michigan hospitals and health systems are forced to find alternative treatments for patients, some of which may be less effective, the Michigan Health & Hospital Association said.

“The MHA is in communication with our members of Congress to make them aware of the extent of the drug shortage and any potential solutions,” said John Karasinski, MHA’s senior director of communications, who noted that the MHA would like to see both the state and federal governments implement strategies to help ease the crisis.

The Michigan State Medical Society also called for urgent action to address the shortage, saying the “escalating scarcity” of the two drugs “is reaching a tipping point with each passing day.”

Dr. M. Salim Siddiqui, president of the Society who has personally witnessed the devastating effect on cancer, said the Society is urging Michigan officials to “meticulously assess regions within the state that are most susceptible to chemotherapy shortages and the subsequent impact on [Read More]

By EWA MATUSZEWSKI

I get the sense I have written this column before. If I have, I approach this version with more vim and vigor and, admittedly, a bit of annoyance. The topic is physicians organizations, what they do, who they serve and what they are – and are not.

What they definitely are not, is new. I begin with this, because a respected Michigan business publication recently published an article about a physicians’ organization that formed to counter the efforts of large health systems trying to control their anesthesia specialty. Perhaps it was a beat unfamiliar to the reporter, but the article was written as if physician organizations were a new concept. Well, our organization has been around for more than 40 years, and I can attest that we were not the first. As a matter of fact, one of the reasons for founding our PO was because primary and specialty care physicians who immigrated to the U.S., and ultimately Michigan, were having a difficult time getting into other POs. We saw a need to help foreign-trained physicians blend in and set up and grow their medical practices. Today, our organization and other POs in Michigan – there are more than 40 – continue that mission [Read More]

By STEPHEN SHAVER, Wachler & Associates, P.C.

The US Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently released a report outlining the results of a review it conducted of claims for physician and other practitioner services provided to Medicare patients during Medicare Part A covered skilled nursing facility (SNF) and hospital stays. OIG asserted that physicians were miscoding the location where these services were provided, leading Medicare to make tens of millions of dollars in overpayments. This report is likely to lead to overpayment demands, further audits of providers, and increased scrutiny of place of service (POS) codes.

Each time a physician or other fee-for-service (FFS) healthcare practitioner submits a claim for reimbursement, the provider includes a two-digit POS code indicating where the services were provided. For example, POS code 11 means “office.” Although the codes themselves are a claims submission standard under the Health Insurance Portability and Accountability Act (HIPAA), the code list and rules are maintained by the Centers for Medicare & Medicaid Services (CMS). Regarding Medicare Part B reimbursement for physician and other practitioner services, CMS reimburses some (such as those with POS codes for hospitals and SNFs) at the “facility” rate, and others (such as those with the [Read More]

By SARA JODKA

Introduction

As the intersection of technology and healthcare becomes increasingly nuanced, the field of genomic medicine is rapidly evolving and expanding. Genomic medicine, or personalized medicine focusing on the data holding information on base sequence in an individual’s genome, uses an individual’s genetic information to guide healthcare decisions. This revolutionary medical field promises immense benefits to patients, researchers, and healthcare providers. Nevertheless, it brings with it a number of complex privacy concerns that must be adequately addressed in law to ensure that patient data remains confidential and secure.

This article examines the current legal landscape, identifies the unique challenges genomic data privacy poses, and explores the opportunities for developing legal frameworks for genomic medicine.

Genomic Data and Privacy Concerns

Genomic data is sensitive personal information that can reveal not just an individual’s current health status but also potential future health risks, including predispositions to specific genetic conditions. It can also reveal information about an individual’s family members, which extends privacy considerations beyond the individual.

These issues present unique challenges inherent in the privacy of genomic data – including the highly predictive nature and permanency of this data. Unlike other health data, which can change and be modified by lifestyle and environmental factors, genomic data does not change over [Read More]

Lansing Lines is presented in cooperation with MIRS, a Lansing-based news and information service.

Conversion Therapy Ban Moves Again, Less than 24 Hours Later

Bills that ban conversion therapy for minors were voted out of the House Health Policy Committee after being voted out of a subcommittee less than 24 hours prior.

Conversion therapy, the practice of attempting to change an individual’s sexual orientation, gender identity or gender expression to align with heterosexual or cisgender norms, is not therapy at all, said Rep. Felicia Brabec (D-Ann Arbor), chair of the Behavioral Health subcommittee.

The bills are an explicit ban on “saying to someone, ‘who you are is not OK, and it’s wrong.’ That’s not what we do in therapy,” Brabec said.

Rep. Graham Filler (R-St. Johns) asked about how the ban would affect an individual seeking therapy to rid themselves of homosexual or transgender feelings.

Brabec said therapy is client-led and affirming to allow a “safe, welcoming space” for clients to explore their identities.

Rep. Jamie Thompson (R-Brownstown) asked if a conversion therapy ban would mean a 6-year-old having transgender thoughts or feelings would have their suspicions “affirmed,” and Brabec said the affirming environment of therapy is “one of trust and it’s affirming no matter what folks are coming in for.”

Testimony during a recent Behavioral Health [Read More]

By DARIUS TAHIR

What use could health care have for someone who makes things up, can’t keep a secret, doesn’t really know anything, and, when speaking, simply fills in the next word based on what’s come before? Lots, if that individual is the newest form of artificial intelligence, according to some of the biggest companies out there.

Companies pushing the latest AI technology — known as “generative AI” — are piling on: Google and Microsoft want to bring types of so-called large language models to health care. Big firms that are familiar to folks in white coats — but maybe less so to your average Joe and Jane — are equally enthusiastic: Electronic medical records giants Epic and Oracle Cerner aren’t far behind. The space is crowded with startups, too.

The companies want their AI to take notes for physicians and give them second opinions — assuming they can keep the intelligence from “hallucinating” or, for that matter, divulging patients’ private information.

“There’s something afoot that’s pretty exciting,” said Eric Topol, director of the Scripps Research Translational Institute in San Diego. “Its capabilities will ultimately have a big impact.” Topol, like many other observers, wonders how many problems it might cause — like leaking patient data — and how often. “We’re going to find [Read More]

The number of patients assigned to nurses would be limited and nurses’ mandatory overtime reduced, under legislation reintroduced in the House and Senate with Michigan Nurses Association (MNA) support.

The package, called the Safe Patient Care Act, was intended to improve nursing retention. It was immediately opposed by the Michigan Health and Hospital Association.

Sen. Sylvia Santana (D-Detroit)’s SB 334 , and Rep. Stephanie Young (D-Detroit)’S HB 4550 limit the number of patients a nurse can be assigned.

The bills establish a one-to-one ratio in intensive care units, during trauma or critical care for triage duties, in operating rooms, during conscious sedation and post-anesthesia, during active labor and birth, immediately postpartum and in cases of an unstable newborn.

In pregnancy cases before labor, the ratio would be one nurse to three pregnant patients, not including cases of continuous fetal monitoring.

Non-trauma emergency departments and pediatrics would each be required to staff one nurse for every three patients, while postpartum care, behavioral health and acute rehabilitation cases would require one nurse for every four patients.

Sen. Stephanie Chang (D-Detroit)’s SB 335 and Rep. Betsy Coffia (D-Traverse City)’s HB 4551  prohibit hospitals from punishing nurses who refuse to accept overtime requests outside of a declared state of emergency, with a $1,000 fine for violation.

Sen. Jeremy Moss (D-Southfield)’s SB 336 and Rep. Carrie A. Rheingans (D-Ann Arbor)’ HB 4552 require hospitals to [Read More]

By EWA MATUSZEWSKI
I wrote in February that we are entering the era of the community health worker (CHW). I reiterate that today, but fear that I spoke too soon on one aspect of the CHW movement. Unsurprisingly, it’s reimbursement. Here’s what I said then:

“Many insurers are also beginning to recognize the community health worker as the new, must-have care team member for an efficient connector between clinician and community…Some services of a CHW are reimbursable to the provider; however, they must be connected to a clinical organization.”

While I was accurate in noting the existence of reimbursable services, I believe I was too optimistic in how I presented the information. The reality is, as our learning organization, Practice Transformation Institute, welcomed several freshly minted Community Health Workers following a commencement celebration earlier this month, reimbursement for billable services they are prepared to provide are in limbo.

Data continues to affirm that CHWs are critical members of the public health workforce who connect individuals with resources, advocate for communities of all socioeconomic backgrounds – but especially those facing health and racial inequities – and, on net, contribute to improving the quality of healthcare. Yet, at this relatively early stage of true integration of CHWs into clinical practice teams, [Read More]

By ROLF LOWE
Over the last thirty years the transition from handwritten and dictated patient notes to electronic health records (EHR) has created efficiencies for providers. While EHRs were introduced with the idea of better patient care and less administrative burdens, they have also created issues that didn’t exist when the norm was to create a contemporaneous handwritten note in a patient’s chart. One of these issues is the “cloning” of a procedure or a SOAP note in a patient’s chart. The Centers for Medicare and Medicaid Services in its EHR Provider Fact Sheet defines cloning as the practice of copying and pasting previously recorded information from a prior note into a new note. The practice may also be referred to as copy and paste, carrying forward or same as last time (SALT). CMS, as well as other payers, see this as a problem in health care institutions and settings that is not being addressed.

One of the ways CMS is addressing this issue is through its various audit programs. Uniform Program Integrity Contractors (UPICs), who perform audit work for Medicare and Medicaid programs, rely heavily on Section 1888 of the Social Security Act, Payment for Benefits, when auditing a provider’s chart to deny a payment for [Read More]

By RALPH LEVY, JR.
In prior articles in this publication, this author addressed a federal tax issue faced by practice entities- the possible attack by the Internal Revenue Service (IRS) on a common practice of incorporated medical and other types of practice groups.  By use of the “zero out” technique to pay compensation to the practice group’s owners as salaries during the year and year-end bonuses, practice groups organized as ‘C’ corporations (set up as a professional corporation or professional association under local law) will pay little or no federal income taxes.  The potential tax risk to this compensation method is that depending on the facts and circumstances of each situation, the IRS could disallow the compensation deduction for the “salary” and bonuses paid and treat these payments as non-deductible dividends made by the practice entity to its shareholders.  In such case, the practice entity would be liable for federal income taxes on the disallowed compensation deductions.

However, the care and feeding of practice groups to avoid adverse federal income tax issues involves more than maintaining the recommended compensation practices as outlined in more detail in these prior articles.  This article will discuss two other areas that could result in federal tax indigestion for practice entities.

Area #1           [Read More]