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A keystroke or two opens the door to hundreds of sites on many practice areas - a generous representation of what today's practitioners need to know. Regardless of the specialization, these sections offer in-depth industry info, news, technical support and business tools geared to keeping physicians professionals conversant and current in their disciplines.
By Justin T. Kelton
Maintaining a positive online presence is vital to the success of any medical practice.
A recent survey from Doctor.com revealed that as many as 63 percent of respondents would choose one provider over another because of a strong online presence. Similarly, 60 percent of respondents have chosen one provider over another based on a positive online reputation.
As patients increasingly rely on the internet to determine which provider is best for them, online reviews play a critical role in the success—or failure—of modern medical practices. Unfortunately, it is often impossible for a potential patient to differentiate truthful and accurate reviews from fraudulent ones. Worse, a single disgruntled patient may leave many reviews across a number of platforms, inflicting untold harm with a few keystrokes. Thus, defamatory reviews can quickly destroy a thriving practice.
The risks posed by online reviews are especially dangerous for healthcare practices since health complications can arise or worsen even if providers have done everything properly, and reviewers may be completely misinformed regarding the standard of practice applicable to their situation.
Doctors have a right to defend their reputations and livelihoods against reviewers who spread false and damaging claims. Fortunately, there are a variety of legal options available to combat defamatory online reviews.
Know your rights
Defamation laws vary from state to state but, generally, a person may be liable for defamation when he or she posts a review that contains demonstrably false assertions of fact (as opposed to opinion), that are damaging to the subject of the review.
This means that patients are entitled to post reviews that are statements of opinion, such as “I didn’t care for the doctor’s bedside manner” or “The office was poorly decorated.” While a provider may disagree with a patient’s opinion, those disagreements are not proper bases for legal action because opinion is generally protected by the First Amendment.
Patients can also provide reviews that contain statements of fact, so long as those assertions are accurate. Like statements of opinion, truthful statements of fact are protected free speech under the First Amendment.
However, if a review contains a false assertion of fact, the reviewer may be liable for defamation. This may include statements such as “I was billed for procedures that were not performed” or “The doctor botched the procedure.”
Seek legal advice
Unlike many other industries, healthcare providers operate in a highly-regulated environment. Providers should be extremely careful when confronting defamatory reviews, as they must not violate any of the ethical, legal, or regulatory guidelines, e.g., HIPAA, that govern doctor-patient relationships.
In addition to regulatory concerns, healthcare practices should keep the following steps in mind when considering whether or how to address negative online reviews:
Seek a lawyer. Consult a lawyer with experience handling defamation matters for healthcare providers. These matters are fraught with potential peril if not handled properly, so you need to work with a qualified and effective advocate. After all, your business and reputation are on the line not only because of the defamatory review but in how you respond to it.
Determine if the review qualifies as purported fact. Work with your lawyer to determine whether the statements in the negative online review qualify as statements of purported fact. To do this, you may need to parse the language carefully to determine exactly what the reviewer was communicating. Often times, statements may initially appear to be factual but after a deeper look may constitute opinion, or vice versa.
Address the review. If the review contains only statements of opinion, consider alternative methods for addressing it, such as pursuing any takedown procedures or other features the review platform provides to help business owners address negative reviews.
Increase positive reviews. Make a sustained effort to increase the number of positive reviews. Asking satisfied patients to post truthful online reviews can increase a provider’s overall rating and may dilute the effect of one older negative comment compared to more recent positive reviews.
Determine if a legal claim is viable. If you believe that the review is indeed defamatory, ask your lawyer about whether you have a viable legal claim. When determining whether to pursue legal action, keep in mind that:
Ask yourself if legal action is worthwhile. Consider the severity of the harm inflicted when determining whether to pursue legal action. A widespread defamatory review can lead to the loss of patients as well as significant—and often permanent—reputational harm. Pursuit of a legitimate defamation claim can result in both removal of the offending review and an award of damages to the provider to compensate for the harm suffered.
On the other hand, in cases of very minor misstatements, it may not be worth investing the time and resources required to pursue legal action, even if you may have a valid claim.
Take action
Some proactive healthcare practices have begun fighting back against defamatory online reviews. Although many such cases settle outside of court, providers have been increasingly seeking court intervention where the damages are significant or when the reviewers will not cooperate.
Online reviews play a critical role in virtually all modern businesses, and healthcare providers are no exception. Although physicians operate in a highly-regulated environment, they have the right to defend their reputations and businesses when they are defamed.
If this happens, physicians should consult experienced lawyers to ensure they take appropriate legal measures that comply with HIPAA and other regulations while effectively addressing damaging and defamatory reviews.
Source: Medical Economics, November 30, 2019 (https://www.medicaleconomics.com/news/defending-against-defamatory-online-reviews)
By Ike Devji
As we prepare for the Thanksgiving holiday the clock is ticking on variety of tax planning sales that target doctors. Before you make a move under time and sales pressure, considering the following warnings.
Our last discussion provided a high-level look at some of the tax biggest tax issues the I.R.S. itself has identified, the so-called 2019 “Dirty Dozen”. That list includes both tax strategies to avoid that may amount to tax fraud by you and various scams that target you as a taxpayer.
Today, we take a look at some specific strategies that are being heavily marketed to physicians, often with significant time pressure as we near year end. Please keep these basic rules in mind and get personal, professional guidance beyond social media or the input of your colleagues.
1. Using legal means to pay the minimum amount of taxes legally allowed is good business and a business necessity in the current provider compensation environment. Further, contributions to certain “qualified” tax-deductible retirement plans or those that use cash value life insurance policies may have creditor protection by law, always to important to me as an asset protection attorney and to high-liability professionals like you.
2. Even plans that are based on sound legal principles and current tax lax law carry significant risk if they are abused and lack compliance in the way they are actually sold and implemented. Commonly abused legitimate strategies include self-directed IRAs which are often not compliant, and captive insurance companies that often fail to insure real risk and that pay outsize premiums. Along similar lines are tax advantaged real estate investment strategies, like conservation easements and opportunity zones, all of which I have provided previous detail on.
The danger here takes serval forms, the obvious one is the aforementioned compliance risk. There’s also more traditional investment risk; a non-productive property that’s been dead stock for reasons ranging from an undesirable neighborhood to pre-existing restrictions and liabilities may be sold to investors by promoting the tax benefits on future profits that are unlikely to ever actually be realized. Be sure that you’re well educated or advised enough to actually see the tax lipstick that’s been slapped on a pig.
3. Beware of affinity fraud. In some cases, this means a well-meaning individual in a common social circle, (like a shared professional, religious, or cultural group, as just a few common examples), innocently shares a bad strategy or advisor that they believe will help. In other cases, a bad actor intentionally capitalizes on these affinities and current heightened political fears to peddle overtly frivolous claims including the following:
Anyone suggesting any of the above should be immediately removed from your advisory team, regardless of who did the same planning or who made the introduction.
4. Due diligence on your plan and your advisor is a vital first line of defense. Making a mistake on a plan or choosing the wrong planner can cost you a multiple of just paying the tax itself after you pay taxes, penalties, interest and legal fees. You as the taxpayer, not your advisors are civilly and criminally liable for the accuracy of your tax return and all reported deductions and income. Relying on the fact that you were advised by third parties, including those to who you have paid significant amounts of money is rarely a legal defense.
Where possible, work with licensed professionals. While this doesn’t guarantee that their advice is risk free, it is often better than your odds with unlicensed advisors and promoters who typically haven’t had background checks, have no professional liability, can’t offer attorney-client privilege, don’t have professional standards or accountability and perhaps most importantly, no malpractice insurance that you may need to rely on.
There are many other possible exposures and opportunities in the area of tax planning for physicians. Keep these basics in mind as you consider them and avoid being pressured into making expensive, uneducated choices.
Source: Physicians Practice, November 25, 2019 (https://www.physicianspractice.com/pearls/specific-year-end-tax-strategies-what-watch-out)
By Matt Rolfes
Physicians and medical practice executives don’t always have access to actionable information to identify where they may be falling short in one or more key areas of financial performance. And they often don’t realize it until it’s too late — when cash flow unpredictably drops, and the backlog of unpaid claims reaches crisis mode.
But many times, the main cause of these problems isn’t a lack of discipline on the part of administrators and billing manager—it’s a lack of revenue clarity.
Do you have access to actionable month-end reporting moments after you close? More than just monthly charges, payments, adjustments and an accounts receivable ledger? Can you review and assess your practice’s financial status in 5 minutes or less? Do you know where you’re leaking money and why? Are you getting paid what you should?
If you answered “I don’t know” to any of those questions, you’re not alone. Many of the physician practice executives we talk to are spending much of their time mining financial and revenue cycle management (RCM) reports and gathering data, which leaves them little time to implement organizational change.
In many cases, by the time they compile the spreadsheets to make decisions from, the data is already outdated. Additionally, with retrospective data analysis, you’re always behind, which makes it nearly impossible to proactively evaluate and plan for changes that lie ahead.
In many cases, meaningful financial evaluation is not what you can see, but what you cannot see. To break the cycle of chasing data and playing catch-up, practices need to bring forward meaningful data that drives good decision making. Follow these five steps to let go of the vague and embrace the clear.
Step 1: Commit to improvement.
Times have changed. If you don’t have a clear and concise monthly reporting package, commit to developing one. You likely know how well your practice is faring in some key performance areas, such as Days in A/R, but do you know your net collection rate? What avoidable write-offs are affecting your cash flow? Has your payer mix changed materially? Are your payers responding as quickly as they were last month? Typically, your standard reports from your practice management system or accounting system will tell you only part of the story. If you commit to a new way forward, gaining clarity into your revenue cycle is key.
Step 2: Believe you can tackle the problem.
Once you’ve committed to a new way of doing things, you can begin to let go of what may have been ineffective and time consuming for you. Evaluate metrics that are meaningful to your practice and can lead to better decisions. Dashboards with relevant KPIs can be created in-house using readily available tools such as Microsoft Excel. However, an increasing number of practices are benefiting from more sophisticated business intelligence and reporting solutions that integrate with their practice management software and automate reporting. These systems offer real-time insight into financial and operational key performance indicators such as provider productivity, charge lag, first-pass resolution rates (by carrier), or patient no-shows by geographic location.
Step 3: Consider leveraging technology.
Once you realize that a new approach can restore clarity to your medical practice, take a closer look at what tools are available. Analytics solutions can save administrative staff several hours of work each month, and reduce or eliminate time spent gathering multiple reports from disparate sources. Automating your reporting package may allow you to reallocate resources to different areas of your practice where they can make a greater impact. Furthermore, there are AI-driven workflow automation solutions that enable billing and administrative staff to prioritize tasks more effectively and eliminate the guesswork in managing claims. Economical technology solutions can reduce the burden of reporting, and increase timely access to actionable data.
Step 4: Take action.
Once you’ve considered the costs and benefits of various solutions that enhance revenue clarity, it’s time to get moving. If you’re considering a revenue cycle analytics solution, look carefully at capabilities. Is the technology capable of pulling data from multiple sources and synthesizing it into an easy-to-comprehend, dashboard-ready format? Can it derive insights through machine-learning algorithms? Can you benchmark your practice against other medical groups? You may find that you need a third-party consultant or industry expert to review your performance metrics and provide practice-specific recommendations. A good partner will drill down into what the numbers are saying, so you know what changes to make in order to drive improvements.
Step 5: Celebrate results.
By the time you reach this step, you’ve invested in one or more solutions that help you understand performance and boost profit margins. Shift your focus to measuring progress and using the extra time to implement initiatives that drive improvements. For example, if your average days in A/R spikes among the self-pay patient demographic, revamp your collections strategy, so it’s more proactive. You should be collecting most, if not all, of your self-pay dollars up front before the patient even sees the physician.
Walk into your next board meeting with a list of actions and results, not just a stack of reports. Your board will thank you.
Having revenue clarity is the key to creating a sustainable, profitable medical practice. The healthcare industry is complex enough without having to stress about whether you’ll get paid. The more clarity you have, the less you’ll worry about your bottom line.
Source: Medical Economics, October 25, 2019 (https://www.medicaleconomics.com/news/5-steps-practice-leaders-achieve-revenue-clarity)
By Matt Rolfes
Private equity (PE) companies are very interested in healthcare. In my own practice I have worked with both acquiring and selling physician practices to PE. Recently, in Illinois, there have been a lot of PE acquisitions of local practices in ophthalmology, radiology and dermatology, and it seems 2020 will be just as busy.
It makes sense why senior physicians who are close to retirement are interested in selling to PE. The deal often comes with a significant paycheck, a guaranteed income to take the physician through retirement and a lot less administrative headache. On the other hand, forgotten in many of these PE transactions are the young physicians working in the practice, many of whom were recently hired with the promise of future equity in the practice.
I have recently been in the midst of two physician practice buy-in negotiations when the owners announced they had decided to sell to PE. Such a decision is often devastating to the associate physician, who may feel betrayed by the practice owners and worried about their role in any new practice entity.
If you work for a practice that is about to be acquired, it’s important to consider all your options:
1. Is the practice one that you desire to remain with even if you do not have the chance to become an owner? If not, it may be time to look at your contract and discover what other opportunities are available. Make sure you are aware of contract terms that apply upon termination and be aware that PE deals are structured to keep the practice entity alive or otherwise to allow for non-compete enforcement.
2. Consider what the private equity buyer might be offering physicians who remain in the practice. Although it may not be exactly what you had imagined, employment in the acquired practice may still be an attractive possibility. It’s always worth it to consider the terms of the deal, even if it’s just to buy time to find another job. Often a physician can negotiate the new contract with the same, if not better, terms than with the original practice. Additionally, equity in the management arm of the PE buyer is often a possibility.
When a PE company values a practice, it looks at the revenue being generated by all physicians in the practice. Any one physician may play a significant role in the value of the practice, which incentivizes the buyer to negotiate a deal to keep the physician on board. If you choose the leave the practice, depending on the role you play, there may or may not still be a PE deal to be made. Unfortunately, when this happens it is unusual for things to back to the way they were before. My physician clients often leave the practice when there is a failed deal, afraid there will just be another buyer on the horizon.
3. If a physician rejects the PE offered contract, there are a few things than can happen. The physician or practice could provide notice of termination without cause, or the employer may simply assign the physician’s contract to the buyer (if assignable, which most contracts are). Whatever the outcome, understanding that the manner in which termination occurs can impact enforcement of the non-compete, tail obligations, loan repayment, compensation and other contract provisions is important. Make sure you talk with counsel to best plan your exit strategy.
If you are negotiating a contract with a private practice, you may want to make sure that your contract cannot be assigned without your consent and perhaps discuss the release from any non-compete/tail/loan obligations in the event that the practice is sold. Unfortunately, it is hard to convince employers to include these types of terms in a contract, but it can provide additional peace of mind and protection for a new physician.
Source: Physicians Practice, October 24, 2019 (https://www.physicianspractice.com/mergersacquisitions/what-do-if-private-equity-comes-calling)
By Laura Hegwer
Over the course of their careers, physicians face several major financial decisions that can have a lasting impact on their financial well-being. Here’s a look at some of these key decisions and advice physicians should consider when making them.
When to refinance your student debt
According to the Association of American Medical Colleges, three-fourths of medical students carry education debt (including college and medical school), with the median debt level hitting $200,000 in 2018. A 2018 Medical Economics survey of physician readers found that 30 percent of respondents had student loans upwards of $200,000.
Whether physicians should refinance their debt hinges on the types of loans they have, says Carolyn McClanahan, MD, CFP, director of financial planning at Life Planning Partners, Inc., in Jacksonville, Fla. Her advice: If physicians have loans with high interest rates that aren’t available for forgiveness, they should shop around for better rates. “You could save a lot of money over a long period of time just by decreasing the interest rate by 1 percent or more,” she says.
In fact, physicians should consider refinancing their private loans as early as the first year of residency, according to Andrew Musbach, CFP, co-founder and financial advisor with MD Wealth Management, LLC, in Chelsea, Mich. However, those with federal loans may already have low effective interest rates or may be pursuing public service loan forgiveness, so refinancing may not be beneficial, he says.
Roozehra Khan, DO, assistant professor of clinical medicine at Western University of Health Sciences in Pomona, Calif., paid off $289,000 in student loans in three years without refinancing. She started by whittling down her government loans with 7 to 8 percent interest rates and then moved on to loans with 2 percent interest rates.
As a single professional, she was able to keep her rent and other expenses low while paying down debt. “I continued to live like a fellow when I was an attending—I put almost all of my paycheck toward my loan repayment every month,” says Khan. She made sure to direct the additional payments toward reducing the loan’s principal balance, not the interest.
“I want young people to know this is completely possible,” she says. “When you are able to take financial control, it creates a mental freedom that allows you to be the doctor you want to be.”
Buying life and disability insurance
Many physicians make the mistake of relying solely on the life and disability insurance they receive from their employers when they should also have their own individual coverage, McClanahan says. “I tell everyone, especially young physicians who may be thinking about having children, to get a cheap term life insurance policy right out of the gate that you own and that goes with you if you leave your job,” she says.
Another mistake is purchasing whole life insurance rather than a term policy, Musbach says. While term life insurance provides coverage for a fixed amount of time (often 10 to 30 years), whole life provides permanent coverage along with a savings and investment component. “On the surface, it sounds like a good idea. But in the end, it’s just expensive insurance coverage with mediocre investment returns,” he explains.
He also recommends that residents purchase an individual, “own occupation” disability insurance policy (which provides benefits if they are disabled and unable to work in their “own occupation”) specific to their specialty with a rider that allows them to buy more coverage when they become attendings and their salaries increase. This helps them avoid another lengthy medical underwriting process when they are older and may no longer be as healthy, he says.
Estate planning
According to McClanahan, many young physicians are behind when it comes to estate planning. At a minimum, every physician should have documents designating a healthcare surrogate and a power of attorney, she says.
As soon as they have children, physicians also should draw up wills or trusts that allow them to name guardians for their children and dictate what happens to their estate after their death, Musbach says. “Having an estate plan is going to help your kids save a lot of headaches and also minimize the potential for family conflict,” he adds.
Saving for college and retirement
Many young physicians have difficulty prioritizing their money goals once they begin practice and see their salary jump, experts say. Physicians likely still have student loans and are many years behind their peers in other professions who required less education and training, Musbach says. At the same time, they may have a family and want to save for college or a home.
John Cullen, MD, FAAFP, a family physician practicing in Valdez, Alaska, recalls such struggles early in his career. Nearly 30 years ago, Cullen and his wife, who was earning her teaching degree, had their first of three children while he was in medical school and their second during his residency. The young couple had accumulated about $130,000 in student debt, which they consolidated into one low-rate loan.
Even though both of their incomes were modest, they made it a priority to start investing for retirement right away. To save for college, they took advantage of state-sponsored 529 college savings plans soon after their first child was born.
Comparing his experience with young physicians today, he recognizes that many have a tough time getting an early start on investing while balancing other financial priorities.
“Medical students and residents don’t get nearly enough education on investment strategies for retirement,” says Cullen, who hopes to promote greater financial education in his role as president of the Amer
ican Academy of Family Physicians.
Last year he and his wife, both in their mid-50s, paid off all of their consolidated debt for their house, a sailboat, and loans, so they are able to put away even more money for retirement.
Getting an early start on retirement savings is one of the best money moves physicians can make, experts say. In fact, financial advisors have a mantra: You can borrow for college, but you can’t borrow for retirement. That is why McClanahan and Musbach recommend that physicians save as much as they can in qualified retirement plans like 401k’s and 403b’s, which provide tax benefits and are protected from creditors.
For those in training, contributing post-tax dollars to Roth accounts can provide additional tax diversification before their jump in income makes traditional 401k or 403b contributions (which are made with pre-tax dollars) more beneficial, Musbach adds.
Investment strategies beyond the 401k or 403b
If physicians have maximized their 401k or 403b contributions, they can explore other savings vehicles that may offer tax advantages, Musbach says. Depending on their situation, practice owners may want to consider cash-balance plans, a type of qualified retirement plan that allows them to save considerably more on a pre-tax basis than 401k plan contributions. And for certain physicians who also work in a locum tenens role, a simplified employee pension IRA or 401k may provide an additional tax-advantaged vehicle to save some of their independent contracting income, he adds.
Given their high incomes, there is no need for physicians to take on the additional risk—and hassles—of investing in startups, private deals, or rental real estate to meet their financial objectives, Musbach says. “The goal isn’t to chase the highest return every year, but rather to make sure the way you are investing is aligned with your goals,” he says.
If physicians do invest in a startup or another risky investment, they should use their “play money,” McClanahan advises. But they should shy away from making “friend of a friend” investments in what’s billed as the next big thing, she says.
“Private placements lack transparency, and because of this physicians are often hoodwinked,” she notes.
When to retire
AAFP’s Cullen has no plans to stop seeing patients, although he thinks he could do so while maintaining his financial independence.
Becoming financially independent for life transitions, rather than focusing on retirement, should be every physician’s goal, says McClanahan.
She believes the biggest determinant of when physicians can reach financial independence is how much they spend, not how much they save. “If you develop an expensive lifestyle that you become locked into, it’s going to be hard to achieve financial independence or retirement at a young age,” she says.
Physicians shouldn’t count on the sale of their practice as their nest egg, she adds. Smart investing and modest spending over the long run will likely bring greater returns.
Musbach urges physicians to aim for a state of financial independence where work is optional, not required. As a general rule, retirees can safely withdraw 4 percent from their portfolio each year, he says. That means a doctor looking to draw $100,000 each year would need to save about $2.5 million. Reaching that goal requires saving at least 15 to 20 percent each year, he says.
Hiring and changing financial advisors
There is no set moment, such as when physicians reach a certain savings target or income bracket, when they should consider working with an investment professional, says Gerri Walsh, senior vice president for investor education at FINRA, the Washington, D.C.-based organization that licenses and registers all brokers in the United States. Rather, physicians should contact an advisor whenever they want guidance on managing their money.
When selecting an advisor, Walsh recommends visiting FINRA’s BrokerCheck, a free tool for researching investment professionals that provides information on brokers’ licensing, experience, and history of customer complaints.
When might physicians want to switch advisors? One cause is when they suspect the advisor of engaging in problematic behavior, such as making unauthorized trades, Walsh says. If physicians are not satisfied with their advisor’s explanation, they can contact the firm’s branch manager and visit FINRA’s investor complaint center for more guidance.
Another cause for switching would be if the physician does not believe the advisor is offering unbiased advice. As Walsh says, “If you ever feel discomfort with the products, services, and strategies that are being recommended to you, that is an important point to pause and reflect on the relationship—especially if the products, services, and strategies don’t align with your goals.”
Source: Medical Economics, September 30, 2019, (https://www.medicaleconomics.com/news/how-physicians-should-tackle-their-toughest-money-decisions)
By Zachary Hunt
Physician practices are facing an uphill battle in their quest to remain independent, particularly as the sector moves toward value-based care. Not only are they under siege from national competitors, they are also faced with declining reimbursement rates, intense regulations, greater administrative demands, increasing compliance costs and changing payment models.
These challenges have resulted in many physician practices shuttering or being acquired by larger organizations. In just one year, hospitals acquired 5,000 independent practices and physicians employed by hospitals grew by 14,000. And over the past four years, the percentage of hospital-employed physicians grew by more than 63%, increasing in almost every six-month period evaluated.
Despite these numbers, some physician practices have found a formula for remaining independent and thriving in the new value-based care environment. Family Medicine Partners of Santa Fe, N.M., is one example of independent providers bucking the trend. Despite the regularity at which practices are being gobbled up by hospital chains and larger consortiums, Julia Martinez, MD, and Patrick Samora, MD, decided to undertake the alternative, breaking away from a larger practice to form their own office. With experience at community health centers, critical access hospitals and large, multi-specialty practices, the doctors wanted to focus on providing a personal touch to their patients – many of whom had followed them to their various practices. As the industry was shifting to a quality-based payment model, they seized on the opportunity to forge their own path.
Martinez and Samora had specific goals for their new practice: creating an environment where physicians were not over or underworked, ensuring that all patients get standard care with respect to all preventive services, meeting chronic care needs and treating acute illnesses.
Overall, the key to building a successful, enduring independent practice is to put the right processes and tools in place from the start. This includes:
Independent practices, like ones formed by Martinez and Samora, do not have to be victims to the megamergers and consolidation trends that have proliferated during the transition to value-based care. By clearly defining the business model, understanding how to maximize reimbursements for proactive and preventative care, and employing technology to support the overall mission, physician practices can thrive and deliver on the true promise of value-based care.
Source: Physicians Practice, September 17, 2018, (http://www.physicianspractice.com/medical-billing-collections/three-low-tech-ways-boost-collections)