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Three Good Reasons that You Should Take a Salary from your Company Print E-mail
Written by Jeff Kramer, CPA   
Sunday, 08 August 2010 10:52

 First and foremost, if you operate an S corporation and have taken distributions, or draws, from the business, you could raise red flags with the IRS by having no salary. Disclosure of distributions is required on the corporate tax return, so the IRS is aware of payments. The following excerpt was taken directly form an S election acceptance notice received by a newly formed entity: 

"We would also like to take this opportunity to inform you of your tax obligations related to the payment of compensation to shareholder-employees of S corporations. When a shareholder-employee of an S corporation provides services to the S corporation, reasonable compensation generally needs to be paid. This compensation is subject to employment taxes. Tax practitioners and subchapter S shareholders need to be aware that Revenue Ruling 74-44 states that the Internal Revenue Service (IRS) will re-characterize small business corporation dividends paid to shareholders as salary when such dividends are paid to the shareholders in lieu of reasonable compensation for services. The IRS may also re-characterize distributions other than dividend distributions as salary. This position has been supported in several recent court decisions."

Another reason that may apply to you is payment of health insurance premiums. If you are paying for your own health insurance, including your spouse and/or children, you could be missing out on a large tax benefit by not taking salary from your company. Although health insurance payments are deducible on your personal return, they are limited on Schedule A by your adjusted gross income (AGI) and possibly phase-out limitations. Taking salary from your company in an amount greater than or equal to the annual health insurance premiums allows you to deduct them as a full adjustment against other income giving you a greater tax savings.

Lastly, if you have children/dependents under the age of 13 for which you incur child care expenses, both you and your spouse need to have a salary in order to deduct any qualifying payments.

As each situation is unique, please make sure to consult your tax advisor to ensure that you receive the appropriate tax advice.

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Last Updated on Thursday, 23 December 2010 06:54
 
I Now Pronounce You Physician and EMR? Print E-mail
Written by Amy Monagan   
Saturday, 31 July 2010 14:54

It's common knowledge that Electronic Medical Records systems are necessary to keep your practice running efficiently in today's society.  However, there are over 290 companies out there all stating that they have the "Best Solution," so how do you decide which one is right for you? Every EMR solution is different and some are better suited to certain practices, specific specialties, etc.  Finding the right EMR solution for your practice is much like finding your future husband or wife, there are so many things to consider and questions to ask before you make the leap.  So, before you say "I do" to your EMR I have some advice.

Narrowing down EMR systems that are suited for you has gotten very easy; the very first step I suggest is visit www.EMRConsultant.com.  This website offers a free service to physicians; you build a profile, and answer some questions about your practice and workflow.  Those answers are then analyzed and put through a logical unbiased matrix to determine which EMR vendors will be a potential match for you.  It has really gotten that simple.

Once you have narrowed your search down, visit www.EHRscope.com/reviews, this website offers reviews on the EMR vendors. You can read for yourself what physicians are saying about their experiences with that EMR.  It's all there, the good, the bad, and the ugly.  Physicians review on a scale of 1-5 their experience with everything from ease of use, implementation, training, support, customer service, and so many other important items that you should take into account when considering your EMR vendor.

Remember, what Grandma always said: "running off to elope is bad" .  So that being said, keep these two essential tools in your back pocket. This way you can be fully prepared and informed when you are ready to make the EMR leap.

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Liability issues relating to healthcare professionals interaction with patient surrogates in FL Print E-mail
Written by Jeffrey Segal MD JD & Michael J. Sacopulos JD   
Sunday, 18 July 2010 16:37

             Patients suffering from serious illness often are unable to participate in their own healthcare.  From the physician's point of view, the incapacitated patient presents not only medical conditions in need of treatment but also legal issues to be addressed.  Physicians must turn to their patient's guardian, power of attorney, or surrogate for assistance in determining preferred course of treatment.  It is the legal issues related to the relationship between the physician, incapacitated patient, and surrogate that this article seeks to explore.

            Incapacitation of acute medical in-patients is significant.  Some studies place the percentage of incapacity amongst acute medical in-patients at forty percent (40%).[i]   These incapacitated patients and their physicians must rely upon surrogates to select and consent to a course of medical treatment.  Unfortunately, studies show that many patients and physicians are ill prepared to handle this situation. 

            The New York Times recently reported that many physicians, especially older ones and specialists, indicated that they would postpone conversations with terminally ill end-of-life patients.  These discussions frequently took place once no more treatment options were available and the patient had deteriorated. [ii]  It could be surmised from this that physicians may not be fully informed as to their incapacitated patient's wishes when entering into conversations with that patient's surrogate.

            Current studies reveal that patients are woefully unprepared should they need a surrogate to assist in their care.  One study found that physicians did not know whether a patient had a Living Will approximately thirty-five percent (35%) of the time.  In twenty-four percent (24%) of the time, a physician did not personally speak with the patient's surrogate.  In a full ten percent (10%) of cases, the physician could not even identify a patient surrogate.  Finally, when questioned, physicians reported sixty-nine percent (69%) of the time that their incapacitated patient either did not have a Durable Power of Attorney for Healthcare or if such a document existed, the physician was unaware of it. [iii]

            With these facts as a backdrop, it should be no surprise that physicians and patient surrogates experience some level of difficulty in communication.  Physicians reported that disagreements between themselves and surrogates were common.  However, it should be noted that "overt conflict" was rare, occurring only five percent (5%) of the time.  It is also been reported that agreement on medical treatment between physician and surrogate was less likely when physicians experience trouble contacting the surrogate.  Also, Asian physicians experience more difficulty reaching agreement with surrogates than their white colleagues.

          Even when communication went smoothly between the physician and patient's surrogate, many difficult decisions had to be made without any prior discussions with the patient as to healthcare preference.  Over fifty percent (50%) of the time, physicians and surrogates had either not discussed healthcare preferences and end-of-life issues with the patient or were unaware of the patient's desires as to these issues.  It should also be noted that physicians may be placed in a position of taking care of a patient in an acute condition with whom they had no pre-existing relationship.  This situation places the physician several steps removed from determining patients' preferences.  Obviously, this less than optimal condition is difficult for both physician and surrogate.  In fact, nearly one-quarter (1/4) of physicians felt that decision making in this circumstance caused them a great deal of distress. 

 

Click here to finish article

 

About the Authors

Jeffrey Segal is a board-certified neurosurgeon who was educated at the University of Texas and the Baylor College of Medicine, earning  Phi Beta Kappa and AOA Medical Honor Society recognition. Dr. Segal is the founder and CEO of Medical Justice.

Michael J. Sacopulos is a partner with Sacopulos, Johnson & Sacopulos of Terre Haute, Indiana.His area of practice concentrates upon healthcare litigation including medical malpractice defense and third party payor issues.   He is General Counsel of Medical Justice Services, Inc.

 

Click here for information on Medical Justice. 

Contact via email info@medicaljustice.com or call 877.MED.JUST (877.633.5878). 


 

[i].         The Lancet, Prevalence of mental incapacity in medical inpatients and associated risk factors: cross-sectional study, Volume 364, Issue 9443, Pages 1421-1427, 16 October, 2004;

[ii].        The New York Times, Denise Grady, Facing End-of-Life Talks, Doctors Choose to Wait, 12 January, 2010;

[iii].       Journal of General Internal Medicine, Alexia M. Torke, M.D. MS, Physicians' Experience with Surrogate Decision Making for Hospitalized Adults, 25 July, 2009;

 

 

 
Mitigating Risk Via Informed Consent Print E-mail
Written by Gene Rosov   
Sunday, 18 July 2010 16:03

Informed Consent is easily misunderstood.  It is not, as we so often might think, a piece of paper representing a patient's agreement to a procedure or surgery or program.  Quite the opposite.  According to the "Bible" of informed consent - Fay Rozovsky's "Consent to Treatment," "Consent is a process, not a form.  It is a communications process....a two-way flow of information that helps care providers identify potential risk, and then to design care plans in a way that helps reduce the risk of harm."   

Further, Rozovsky writes "Those who wish to litigate subsequent to an adverse or unanticipated outcome may do so regardless of a robust consent process."  Frequently, if there is an adverse outcome, litigation is the result.  While consent communication can help diffuse litigants, it does not always stop them from litigating on the very issue of informed consent.  While consent to treatment is a fundamental component of medicine, it is often poorly executed in the field.  The results of poor consent to treatment can be catastrophic for all involved: patient, physician, family, institution.  Therefore, whether litigation does result or not, proper consent to treatment is a sine qua non of good medical care.

 There are three profound difficulties facing physicians who wish to deliver the best possible informed consent.

 1.     Consent to treatment means disclosing potentially terrible outcomes.  "Yes, and you might die" is not something many physicians wish to say, even if there is a possibility of death.  Reason: hope springs eternal in the human breast, and physicians and patients alike find that hope - or "faith" in the healer - is a critical component of the healing process.  Fear is its enemy.

2.     Consent to treatment is uncompensated.  Physicians are generally paid for their time and skill.  But no ICD-9 code exists for "informed consent."  This creates a problematic psychological barrier to the physician.

3.     Good differential diagnosis requires at times that physicians, simply, recognize that they do not know precisely what's going on, but that they make a "best guess" at a diagnosis, and proceed to watch carefully as treatment progresses.  Physicians cannot be paid for their services without a core diagnosis.  Yet, patients often do not want to return, and often do not call or inform the physician when a treatment isn't having the desired result.  So both the billing process, and patient expectations, frustrate the program of differential diagnosis, and thereby also frustrate informed consent.

One of our doctors in the pediatric insurance company I run - a Board-certified emergency pediatrician - reasons this way when presented with an uncertain diagnosis.  "What is the worst possible thing this could be?  What is the most catastrophic diagnosis?  Could this problem, this disease process, this presentation, be this "worst possible thing?"  He then considers the "next worst possibility," and so forth. 

What does this have to do with informed consent?  You cannot readily inform a patient about a treatment for a disease process or procedure, if you are still largely uncertain.  "It could be this, it could be that, it could be something else" is difficult for patients to absorb. I mention this to indicate the intimate relationship between consent to treatment and differential diagnosis.

How do lawyers think about informed consent?  Here's a set of comments from a major malpractice firm (it specializes in ophthalmological lawsuits):

"...An informed consent waiver is not worth the paper it's written on if a) you should not have had the surgery; b) you were not properly screened or verbally informed of the risks; c) the physician botched your operation.  On the other hand, doctors wouldn't make you sign these forms if they didn't offer some protection against lawsuits.  ....the strength of any waiver you signed depends on the skill of your attorney to break it....Our experience has been that most victims did not fully understand the risks - a lack of informed consent - because no doctor ever sat down to discuss "the good, the bad, and the ugly."

In order to provide a high-level of patient safety and disclosure, and to make sure that every possible risk has been thoroughly disclosed to patients and their families, it is imperative that providers implement a well-designed Informed Consent Program.  A good program provides important disclosures to patients while saving doctors time.  Simultaneously, its reporting system assists doctors and patients to focus on the key issues of comprehension or concern. It helps to protect doctors from unreasonable lawsuits, and patients from misinformation.

We believe a well designed Informed Consent Program can almost completely (but not quite, of course) remove the possibility of misunderstandings, mis-communication and misplaced expectations.  It also "drives" patient-physician interaction.  It sets the stage for a well-understood outcome, even if that outcome is less than desirable.  A well designed and consistently implemented Informed Consent Program will achieve the following:

1              To effectively and efficiently deliver critically important information about proposed procedures, surgeries and programs to patients.

2              To save doctors time and the difficulty of remembering every element related to a particular procedure's informed consent.

3              To communicate important items to patients which doctors are uncomfortable saying

4              To offer patients a chance to deeply understand their need for a procedure in a comfortable home environment, and to share the information directly with others.

5              To enhance patient-physician relationships with definitive consent to treatment.

6              To empower patients to understand the consequences of their decisions.

7              To help patients achieve a deeper sense of personal responsibility for their health care.

 

Contact the author:    

@ 1-866-633-2900 or 
erosov@mdmc.us 

To learn more about the MDMC Informed Consent Program click here

Last Updated on Wednesday, 24 November 2010 11:20
 
Workers' Compensation Q & A Print E-mail
Written by Tom Murphy   
Monday, 12 July 2010 10:42

Q:  If our practice uses a payroll company or Professional Employer Organization (PEO),

 can we carve out the workers compensation coverage to join a dividend program?

 

A:  Many medical practice administrators are unaware that most payroll companies and PEO's will allow them to carve out the workers compensation coverage in order to join a dividend program. The workers compensation coverage is not a priority for payroll companies and PEO's. They are usually willing to work with you in order to maintain your payroll and human resource portions of your practice.

      Moving into an independent workers compensation dividend program is very easy and it can be accomplished by using the payroll company or PEO to provide the payroll information directly to the workers compensation carrier. If you have a small premium (Less than $10K), you can join directly with the assistance of your independent agent with very little effort.

       The benefits of joining a dividend program are the potential yearly payout of up to 25% for small practices and up to 45% for large practices. In addition, the physician officers can choose to be exempt from the policy. Many PEO's include the officers as they become employees of the PEO. This is a large expense that can be avoided. As always, I recommend that you seek qualified, competent expert advice from an independent agent specializing in workers compensation insurance.    

Tom Murphy is a workers' compensation and medical malpractice insurance specialist agent with Danna-Gracey, Inc., an independent insurance agency based in downtown Delray Beach with a statewide team of specialists dedicated solely to insurance coverage placement for Florida's doctors. He can be reached (800) 966-2120 or  by e mail click here.

Last Updated on Sunday, 18 July 2010 15:49
 
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