Reed Tinsley, CPA

Reminder: Support Your Auto Expenses

Reed Tinsley — 2009-07-19T11:26:36-04:00

Auto expenses are a very common deduction for business owners and employees who must travel. Often the taxpayer does not know the exact amounts necessary to calculate the proper deduction and the tax preparer must estimate the mileage, business percentage, and ultimate auto deduction with the client’s help. You need to have proper substantiation or, if the IRS examines your tax return, the deduction will more than likely be denied.

If the substantiation is lost or stolen, the IRS will generally deny the deduction because the Cohan rule (which allows a court to estimate deductible amounts of unsubstantiated expenses) cannot be applied for certain expenses, including automobile expenses (IRC § 274(d)(4)). In the case of a lost or stolen substantiation, combined with the nonavailability of contemporaneous records, substitute records may be provided, but they must include sufficient information to support the deduction (Temp. Treas. Reg. § 1.274-5T(c)).

Back in September of last year, the Tax Court in a summary decision upheld the Service’s disallowance of an auto expense deduction of a traveling salesperson due to lack of substantiation (Niyitegyeka, T.C. Summ. 2008-129). It was obvious that the taxpayer traveled for business and would ordinarily be entitled to a deduction, but the submitted evidence was too weak to allow it.

For a complete overview of the case, go to:

http://www.journalofaccountancy.com/Web/SupportYourAutoExpense.htm

Make sure getting off call schedule is addressed

Reed Tinsley — 2009-07-18T09:37:00-04:00

Make sure your physician employment agreements address when a physician can request to be removed from the call schedule and any related reductions to his or her compensation. Most groups I see either require a length of service requirement to get off call or when a physician reaches a certain age. The penalty for coming off call is usually a 20-30% reduction in compensation, depending of course on the medical specialty and the intensity of getting called out after hours. Any reduction in compensation is divided equally among the physicians who remain on the call schedule.

Estate Planning for 2009 and beyond

Reed Tinsley — 2009-07-17T09:30:30-04:00

With the estate tax uncertain and changing over the next 3 years, you should try to avoid the estate tax regime altogether by making tax-free transfers out of your estate. One of the ways to do this is to start a gifting program (remember, I’ve never seen a hearse pulling a u-haul trailer!).

Taxpayers are allowed an annual exclusion from the gift tax of up to $13,000 for 2009. Spouses can combine their exclusion amounts, allowing a married couple in 2009 to give gifts of up to $26,000 per donee tax free. Gifts in excess of the annual exclusion amount may be offset by a taxpayer’s lifetime gift tax exemption.

The key to remember here is to “start” a gifting program. Most wealthy people I deal with start this process way too late and as a result, leave monies in their estate thus exposing it unnecessary state and federal taxation.

Be flexible with office hours

Reed Tinsley — 2009-07-16T09:02:06-04:00

Except for tradition, there's little logic in physicians insisting on certain office hours. Even hospital rounds can be balanced between morning and afternoon to permit balanced office usage.

What is more, doctors find work less stressful when the office is not jammed with too many physicians, too many patients, and too few exam rooms. Average out your group's schedule so nearly the same number of doctors are on hand at any given time.

Your office staff, including receptionists, technicians and nurses, will be more effective-and less hassled-while you save money on space and personnel costs.

Educate patients on HIPAA rights

Reed Tinsley — 2009-07-15T09:13:04-04:00

You can change your physician practice’s stance regarding patient education by bringing staff members on board with a plan and being creative with ideas that are relatively painless for them to embrace. Here are a few examples:

Put a sign on the reception desk saying something similar to, “Do you know your privacy rights? Ask us and we’ll tell you!” Make sure you have plenty of copies of the notice of privacy practices available to give to patients.
Put posters on the reception area wall and in the patient care area hallways, listing the actions your organization is taking to safeguard and protect PHI, such as:

We Care About Your Privacy And Safeguard Your Personal Information! We do this by:
- Making sure no one has access to your personal information except those who need it to perform their jobs;
- Following best practice security and privacy practices;
- Complying with privacy laws such as HIPAA. “If you have a question about how we protect your information, please ask!

Hang posters in patient care areas reminding staff members of privacy practices.
Include blurbs about information security and privacy in the healthcare statements you send to patients.
Put magazines about privacy and security in waiting rooms.

"Organization" providers and NPI

Reed Tinsley — 2009-07-14T09:01:06-04:00

What types of business structures are considered organization health care providers and thus eligible for organization NPIs? What types are not? The final NPI rule defines “organization health care providers” as providers who are not individuals (persons). These are classified as entity type 2 providers. Examples are hospitals, home health agencies, clinics, nursing homes, residential treatment centers, laboratories, ambulance companies, group practices, health maintenance organizations, suppliers of durable medical equipment or pharmacies.

Some health care provider organizations are made up of components or business units that function somewhat independently of the ”parent” health care organization of which they are a part. These components, which are referred to as “subparts” in the regulation, might conduct their own standard transactions, might be at the same or at a different address than the organization provider “parent”, might furnish a type of service different than the organization provider “parent.” These subparts or business units might be required by Federal regulations to have unique identifiers for billing purposes. Each organization must make a determination regarding the status of its subparts, and apply for NPIs as it deems appropriate. The Work group for Electronic Data Exchange (WEDI) has a white paper on this topic that can be helpful to covered entities in making their decisions.

A sole proprietorship is a form of business in which one person owns all of the assets of the business and is solely liable for all debts on an individual basis. Sole proprietors are individuals, and they must apply for their NPIs as Individuals (Entity Type I). The subpart concept does not apply to a sole proprietorship, even one with multiple locations, because the sole proprietorship is not an organization as defined in the Final NPI Rule (69FR3434).

State laws enable the creation of many other different types of businesses. While we cannot address every possible type of business structure, we apply the following broad principle to determine whether a business is eligible for an organization NPI: Any organization that is recognized by the State as separate and distinct from the individual is eligible for an organization NPI. The law in each State will govern how different business types are recognized by the State.

Striking with speed – Feds go after Medicare fraud

Reed Tinsley — 2009-07-13T07:48:56-04:00

Using cutting-edge technology, the strike force can identify Medicare irregularities at unprecedented speeds, completing in days what used to take months. The strike force harnesses resources from the Justice Department, U.S. Health and Human Services and law enforcement.......seems the government has been busy in my backyard of Houston, Texas (as well as other places around the country):

http://www.chron.com/disp/story.mpl/breaking/6525026.html

And by the way, if you don’t think the government is serious about cracking down on healthcare fraud; consider the following 2008 statistics from the U.S. Department of Health and Human Services:

Healthcare fraud recovered: $2.35 billion;

Individuals or entities barred from billing Medicare or Medicaid: 3,100

Criminal actions involving healthcare fraud: 575

Civil actions involving healthcare fraud: 342

This is just another example of why you need a compliance plan in your office and you need an annual compliance review by an outside third party.

Keep physician movement in mind to maximize productivity

Reed Tinsley — 2009-07-11T08:59:24-04:00

Though staff efficiency helps you maximize your per hour patient rate, don't over-emphasize staff movement. Orient your redesign/remodel to minimize physician-not staff-movement and hence maximize the physician/patient encounter rate. For example, a tight exam room arrangement that allows the physician to move just a short distance from door to door maximizes productivity.

Beware of anything drawing the physician away from his or her production area. Sometimes the physician's private office stands adjacent to the exam area. But unless she or he uses it regularly for direct patient contact, it only provides an easy distraction from productive work.

See if the physician can remain in the exam area while dictating notes, talking on the phone or reviewing records (including films and reports).

P.S. Don’t forget to visit my micro-blog on twitter – www.twitter.com/rtacpa. This blog is based on actual client experiences, seminar attendance, and general musings.

Getting creative on the job

Reed Tinsley — 2009-07-10T08:59:15-04:00

I found this great list of 100 Simple, Low-Cost, Soulful Ways to Be More Creative on the Job and wanted to share it with you. Next time you're stuck, pick a few off the list at random and give them a shot.

CMS FACT SHEET LAYS OUT STIMULUS WORK

Reed Tinsley — 2009-07-09T09:35:42-04:00

A fact sheet recently posted on the Centers for Medicare and Medicaid Services Web site explains steps that federal officials will take over the next year to implement the health information technology provisions of the federal stimulus package.

The fact sheet summarizes the Medicare and Medicaid incentive programs for meaningful use of electronic health records and gives timelines for implementation activities. A proposed rule in late 2009, for instance, will cover applying for and receiving incentives, meaningful use definitions, harmonized standards to support interoperability and EHR certification criteria. A final rule would come in 2010. The Medicare incentive program for hospitals begins in October 2010.

Some observers believe the proposed rule could instead be an interim final rule with a comment period and quick turnaround to a final rule. By year-end, we should have a very good idea of where 'meaningful use' is going, and a full look in early 2010.

For the complete fact sheet, Click Here