BMN Blog

For many physicians, the practice retirement plan can result in providing one of their most significant assets to be used after retirement. These plans are called qualified retirement plans because they fall under requirements of IRS Internal Revenue Code and are eligible to receive certain tax benefits, unlike non-qualified plans. These plans are governed by the Employee Retirement Income Security Act (ERISA).

In my June blog, we looked at what is occurring rate-wise in the Medical Professional Liability market in the United States overall, none of it positive. In this article I want to focus on factors that are just as important as price and which almost always affect premium. (In the third and last installment of this blog I will look more closely at rates in our region, and specifically in Alabama, for both physicians and hospitals).

Mogul, mogul, mogul, drop off. It didn’t take long for the widowmaker, a black diamond trail on Snowshoe Mountain, to send me to the emergency room of Pocahontas Memorial Hospital. Snowshoe Mountain in West Virginia has some of the best snow east of the Mississippi and as a first-time

In the past year, most physicians have been so busy with all the complications and changes in approach to care that resulted from the pandemic that they haven’t had time to examine aspects of their practice that aren’t part of the daily work. If you haven’t performed a recent review of the potential threats to your practices’ financial health, I recommend doing that, starting with your commercial insurance plan.

Partnering with an experienced agent who specializes in the healthcare arena can provide you with multiple carrier options to compare while helping you negotiate more favorable terms than some companies will offer to clients who work directly with the carrier only. Let’s take a look at a few of the items my team is focused on for our healthcare clients and the emerging threats that are continuing to impact more medical businesses. 

Everyone should have a developed, thoughtful, and unique financial plan. However, newly practicing physicians face more unique financial challenges than most recent graduates due to many having considerable accumulation of student loan debt. Once physicians begin earning income, there are pressures to play catch-up with peers who have had longer to establish their careers and savings accounts.

On March 19, the Alabama Department of Public Health (ADPH) issued mandatory health orders to medical practices statewide to delay all elective medical and dental procedures until April 6^th. On March 28, the order was amended such that non-emergency procedures are postponed further notice. Under these guidelines, Medical and dental practices have had to reduce office hours and/or close their office.

By now you have probably heard this and read it a thousand times. But one last time, we will cover it with some background on the whys and how’s.

With more healthcare organizations moving to VoIP (Voice-over-Internet Protocol) for their phone and communication needs, it’s important to understand the technology and how to make it work for your business needs. So let’s start with the basics.

Real estate is the second highest expense behind payroll for most healthcare practices. The benefits of capitalizing during lease negotiations can include a healthy raise through increased profitability, reduced debt, a nicer office and more. On the contrary, if negotiations are not handled properly, the results can be decreased profitability, resulting in the need to produce tens to hundreds of thousands of additional dollars just to pay the same bills that should have cost less.

Just as it’s common for our families to have “Dr. Mom,” it’s also common for one spouse to serve as the family’s Chief Financial Officer (CFO). The family CFO takes the lead in paying bills, making investment decisions, selecting insurance policies and employee benefits, etc. This division of labor is common because one spouse may have more interest in financial matters, and the set-up works fine - as long as both spouses are physically and mentally healthy.

As financial advisors, we help our clients to consider and plan not only for their own goals, but also for some of life’s serious “what ifs.” What if you want to retire early? What if you want to buy a vacation home? What if your child is planning to attend graduate school? What if you need long-term care?  What if you are raising a young family and you get cancer?

There is no one simple solution that will eliminate all business security risks. However, organizations can build a robust internal culture of security that can profoundly decrease those risks. This approach starts from the top down.

Check-ups, tests, and results. Doctors provide, measure, and deliver data to patients every day, often with profound implications. Financial advisors, at least the diligent ones, offer the same to their clients. Much of our data focuses on helping people have confidence that they can do what they want to do and not run out of money at the same time. Approaches and technical tools may vary, often with significant differences in degrees of sophistication. It has been common practice for advisors to use these tools to help project a portfolio’s ability to provide income for retirement. Rates of return are calculated, spending requirements input, withdrawal rates assumed, and end-of-life portfolio values projected.

Regulation Background

The False Claims Act (“FCA” or “Act”) is a federal anti-fraud statute that protects against persons and companies defrauding the government. The Act has been dubbed the government’s “primary litigation tool for recovering losses resulting from fraud.”[1] The FCA imposes civil liability on any one who “knowingly presents…a false or fraudulent claim for payment or approval” to the federal government.[2] It is used extensively to protect against fraud in healthcare.[3]

A 2016 report from the Centers for Disease Control and Prevention (CDC) found that 20 percent of Medicare participants 65 or older don’t take their blood pressure medicine as directed.¹ Additionally, 20-30 percent of prescriptions for chronic health conditions are never filled and roughly 50 percent are not taken as recommended.¹

I find it intriguing that physicians are one of the only professionals who pledge an oath before practicing their craft. Other notable “oath” moments in our country focus mainly on Nationalism and Service (Military, Law Enforcement, Public Servants and Naturalization among others). How different might some professionals behave, if included in their daily duties, was the acknowledgement that they are working under an assumed set of values and principles that help guide their tasks? For CERTIFIED FINANCIAL PLANNER™ professionals this exists, not in an oath form however; but within principles expressing ethical and professional ideals.

Fraud. It’s an ugly thing and it’s everywhere, the medical industry is no exception.  When most people think about fraud, they think about white collar criminals stealing millions of dollars from big name companies, or the “dark web” where most of our social security numbers and credit card numbers are floating around just waiting for a buyer.  The truth is most businesses will experience some type of fraud during their operation.  It is so important for owners and business managers to be constantly vigilant to protect their practices.

One of the greatest challenges facing the healthcare industry isn’t a political issue, it’s a geographic issue. What if I told you that approximately 50 million Americans (17 percent of the total population of the US) have limited access to high quality healthcare because they live in rural communities? Rural healthcare has a unique set of challenges including not only geographic but also economic and lifestyle factors.

I recently visited a specialty practice at a major health system. As I approached the registration desk a posted sign directed me to a standing kiosk to sign in. The family member I accompanied to the visit was unable to stand at the kiosk, so I provided the needed information and signed her in.  Although it was a quick and seamless process, I was concerned because if I needed assistance, there were no employees to ask.  Many practices have implemented kiosk sign-ins and have someone to assist a patient with the process if needed.  Practice administrators have made the decision to implement kiosk to assure verification of the current insurance policy and prompt the patient to pay any out of pocket expense before they see the doctor.  Many of the kiosk solutions allow a pre-registration via email to allow the patient to populate data and upload information from their own device at their convenience.  Benefits of Kiosk Sign-ins include: reduction in the staffing at the front desk, decrease in patient wait time, and most impressively is the increase of time of service collections.

In 2012, I read this article that made me question much of what I thought I knew about my profession of serving clients as a guide for their financial decisions. The designation following my name for which I had worked so hard at obtaining? Good, but not enough. The incredible technology –from complex financial forecasting to automated investment management?  Lacking. 

At the core of the Affordable Care Act (ACA) is the three-legged stool: (1) insurance reforms; (2) the individual mandate; and (3) premium and cost-sharing subsidies. Removal of any one of these legs could destabilize the ACA. The ACA established insurance marketplaces in every state to provide access to ACA compliant private health insurance coverage (Qualified Health Plans) in the individual and small group markets. The ACA provides premium subsidies on a sliding scale for persons with incomes up to 400% FPL for the purchase of an individual policy on the marketplace exchange. It also provides cost-sharing subsidies for persons with incomes below 250% FPL. Prior to the implementation of the ACA, manual rating was typically used by insurers for rate-making in the individual and small group markets and exclusions from coverage for pre-existing conditions were common. Age-based rates were typically 5:1. The insurance reforms in the ACA are largely directed at the small group and individual markets (e.g., guaranteed issue/renewal, no preexisting condition limitations, adjusted community rating capped at a 3:1 ratio for age). Standardization of benefits is achieved by requiring coverage for ten essential health benefits (EHBs) and certain preventive services which in the latter case services must be provided without cost-sharing.

If you surveyed managing physicians and office managers from the Birmingham area about their business continuity plans, how confident do you think they would be with their Disaster Recovery solution? Do they feel prepared? Have they even thought about it?

Over the last year or so, cryptocurrencies and blockchain technology have grabbed the attention of global markets and its participants.

Most companies assume their cyber security is pretty good… until a breach happens and then you find out where the holes were. We often find that apathy and a lack of being proactive may cost you lots of money. An annual security audit is a necessity for all medical practices and companies in todays ever changing world of technology. It is a vital part of protecting your digital assets and cyber security plan for your organization. It’s not just about discovering any vulnerabilities or shortcomings, rather it’s about opportunities to strengthen your network security.

No matter the size of the business, a successful business must be paid promptly and in full. However, often a business, including a medical practice is dealing with numerous overdue accounts receivables.  Such a financial position can be commonplace in today’s business environment.  Although this financial condition is often perceived as “normal” or “accepted” business practice”, savvy business owners should collect promptly and protect their rights in resolving overdue receivables with the proper policy and procedures in place.  Effective policy and procedures generally begin with utilizing a new patient form and/or the credit application.

An Oklahoma physician agreed on August 28, 2017 to pay the government $580,000 to resolve allegations that he violated the False Claims Act by submitting claims to the Medicare program for services he did not provide or supervise. According to the government, the physician allowed a company that employed him and in which he had an ownership interest to use his NPI numbers to bill Medicare for physical therapy evaluation and management services that he did not provide or supervise. The government further alleged that after he separated from the company and deactivated his NPIs associated with the company, he reactivated those NPIs so that the company could use them to bill Medicare for services he neither performed nor supervised.

It has now been two years since the implementation of ICD-10, everyone survived! While denials have been minimal, the goal of implementing ICD 10 to acquire more specificity and a complete picture of health has not been fully achieved.  Physicians and managers have created a new set of shortcuts to assure payment of claims, relying on paper superbills or inappropriate conversions from ICD 9 to ICD 10.

A family medicine doctor is someone you can always feel comfortable voicing your concerns to and leave an appointment feeling as though you were really listened to. They will help you to become an informed and active member of your healthcare decision-making process.
 

Physicians Giving Back with Lee Irvin, M.D.

You probably don’t know Lee Irvin, M.D., of Mobile, and he’s fine with that. He’s the kind of gentleman you’d love to hang out with and have a drink or dinner with…swap stories with. But it’s easy to see that his medical mission over the last couple of years wears heavy on his heart.

Recycling electronics is a great way to help conserve and reuse valuable resources and materials found in many gadgets, including glass, plastics, and various metals such as copper, gold, palladium, and silver. Many electronics, especially computers and televisions, contain toxic materials such as cadmium, lead, and mercury. Recycling and reusing electronics helps to keep these toxic materials out of our landfills and water supply.