Archive for January, 2019

In Memoriam: Patrick Burrus Jones, M.D.

In Memoriam: Patrick Burrus Jones, M.D.

Patrick Burrus Jones, M.D., of Dothan died peacefully at home on Jan. 15, 2019, with his family at his side. He was 84.

Dr. Jones was born in Dothan on Sept. 11, 1934, the only child Reba Pilcher Jones of Dothan, and Patrick B. Jones of Columbus, GA. He graduated from Dothan High School in 1952 and earned his B.S. from the University of Alabama in 1955, with memberships in Phi Beta Kappa and Sigma Nu social fraternity. He graduated first in his class in 1957 from the University of Alabama School of Medicine, as a member of Alpha Omega Alpha National Medical Honor Society.

After interning at Fitzsimmons Army Hospital in Denver, CO, for the Air Force, he served three years on active duty as an obstetrician in Goldsboro, NC, where he delivered more than a thousand babies. Planning for an academic career, Dr. Jones returned to the University of Alabama Birmingham for training in anatomical pathology. In 1966, he returned to Dothan with his young family to start an independent laboratory with Frank G. Stephens, serving a 75-mile radius in the tri-state area until his retirement in 2006.

In his 40-year career, Dr. Jones served on the Medical Association of the State of Alabama Board of Censors, the State Committee of Public Health, the Alabama Board of Medical Examiners (1984-1994), Chief of Staff for Southeast Alabama Medical Center, President of the Houston County Medical Society, and President of the Alabama Association of Pathologists.

He also served as President of the Historic South Inlet Beach Neighborhood Association and on the Board of Directors for Inlet Beach Water System, Inc., in Walton County, FL. Dr. Jones’ principal hobby was golf, but he also enjoyed travelling. He loved poetry and reading history, biography and religious material. A lifelong evangelical Christian, he helped establish Grace Anglican Mission Church in Dothan, Apostles-by-the-Sea in Rosemary Beach, FL and Christ Anglican Church in Cashiers, NC.

Dr. Jones is survived by his wife of 61 years, Nancy Rodenbough Jones, and their three children, Patrick Burrus Jones III (Darlene), Shannon Jones Russell (Bruce) and Thomas Rodenbough Jones (Theresa) and seven grandchildren and three great-grandchildren. Funeral services will be held on Saturday in the Sunset Funeral Home Chapel, 1700 Barrington Road with the Reverends John Wallace and Clark Cornelius officiating. Visitation begins at 1 p.m. at the funeral home before the 2 p.m. service. Interment will follow at Dothan City Cemetery.

The family would like to thank the staff of Covenant Care Hospice and Barbara Jean Harper for compassionate care during his terminal illness. In lieu of flowers, memorials may be sent to Apostles by-the-Sea, PO Box 611-151, Rosemary Beach, FL 32461 (memo: Hurricane Relief) or to Grace Anglican Church, 113 Gloster Ct., Dothan, AL 36303. Robert Byrd of Sunset Memorial Park Funeral Home (334) 983-6604

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New Statistics Show Doctors Positively Impacting Opioid Epidemic

New Statistics Show Doctors Positively Impacting Opioid Epidemic

MONTGOMERY — Alabama’s physicians are having a positive impact on the opioid epidemic here at home while national statistics are showing for the first time, Americans’ odds of dying from an accidental opioid overdose are higher – 1 in 96 – than from a motor vehicle crash – 1 in 103.

Using data from the Center for Disease Control and Prevention comparing overdose deaths from 2017 to 2018, states and the District of Columbia are ranked by the largest positive change between the two years. The area with the largest decrease in opioid deaths ranked No. 1, while the state with the highest increase in opioid deaths ranked No. 50.

Alabama ranked 14 in the new CDC study with a decrease of 5.3 percent.

  • Predicted 12-month count, June 2017: 836
  • Predicted 12-month count, June 2018: 792

Because fatal drug overdoses are often underestimated, the CDC also factored for predicted cases. Metrics include percent completeness in overall death reporting, the percentage of deaths with the cause of death pending further investigation and the percentage of drug overdose deaths with specific or drug classes reported, according to the CDC.

National rankings of fatal opioid overdose rates in each state and the District of Columbia for 2017 are also based on data from the CDC’s National Center for Health Statistics. The data include deaths from both legally prescribed and illegally produced fentanyl.

The age-adjusted opioid overdose death rate for the U.S. was 14.9 per 100,000 individuals. In Alabama, the age-adjusted opioid overdose death rate was 9 per 100,000 individuals. Alabama ranked 36 out of 51 states, including the District of Columbia for 2017, the third lowest in the Southeast and far below the national average.

“This is extremely good news for Alabama and shows that the hard work of our physicians and the programs that the Medical Association and our leadership have instituted are truly making a difference in our state by saving lives,” said Association Executive Director Mark Jackson. “Until 2013 Alabama was one of the only states offering an opioid prescribing education course when the FDA developed the blueprint for Risk Evaluation and Mitigation Strategies for producers of controlled substances. As the need for that prescribing track has grown, we’ve made adjustments to ensure the prescribers attending it will receive the latest information available. Now, we’ve added an online, OnDemand track that makes it even easier for prescribers to get the latest education available. With any luck, Alabama’s death numbers due to prescription drugs will continue to drop. Our efforts are definitely paying off in a big, big way.”

Visit the OnDemand Education Center at www.alamedical.org/onlinecme.

Posted in: Opioid

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New Learning Opportunities Available for County Societies

New Learning Opportunities Available for County Societies

The Medical Association is partnering with Warren Averett in 2019 to provide several topics that you can use to host events that will interest the physician members in your county, at no cost to you. Each talk lasts about 30 minutes and several can be combined for a 60-minute talk.

MACRA/MIPS Refresher. MACRA is now in year three and the law is still changing. This presentation will cover the new areas to address, and what is in the pipeline for years to come.

What Does the New Federal Tax Law Mean to Physicians?  The new tax law affects all taxpayers, but this presentation will center around how the law affects physicians and the items that need to be addressed to minimize your personal tax.

Customer Service in the Medical Practice. Medical practice patients have increasing expectations about their medical care and plenty of options for where to obtain care. The practices where excellence in care is delivered can be selective about which patients to accept and which problem patients to release. The secret to getting highest ratings from patients is often not found in the quality of care you provide. We will share what gets you a 5-star rating and how you can put the processes in place to make raving fans out of your patients and referral sources.

How Can You Increase Employee Morale? Unemployment is at an all-time low, other practices and local employers are bidding at higher pay rates to get your top talent, and younger employees change jobs with greater frequency than older staff. Unless you are willing to pay at the highest wage rate in town, you must cultivate a culture where high morale prevails among your staff. What are the ways other practices are retaining good staff by encouraging fun and a family atmosphere in the workplace?

To book a speaker for your next event, contact Meghan Martin at mmartin@alamedical.org or call (334) 954-2500. CME credit is not provided for these opportunities.  

Posted in: Education

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MOC Study Committee’s Official Statement on “Vision Initiative” Draft Report

MOC Study Committee’s Official Statement on “Vision Initiative” Draft Report

In response to the Medical Association and other state and national medical and physician specialty societies’ grievances with ABMS, its member Boards, and specifically the MOC program, ABMS sought input from a broad range of stakeholders in an effort to envision and craft a board certification system that is responsive and meaningful to physicians. This effort has included professional medical organizations, national specialty and state medical societies, hospitals and health systems and others. The group released its vision for the future of board certification – dubbed the “Vision Initiative.”

The Medical Association has been active on the MOC issue, through both its MOC Study Committee and advocacy at the national and even state levels. Below is the official statement on the “Vision Initiative” from MOC Study Committee Chairman Dr. Greg Ayers:

“The Medical Association of the State of Alabama’s MOC Study Committee supports a voluntary process for board certification in medical specialties and a departure from the sometimes punitive approach toward certification taken by some American Board of Medical Specialties’ specialty boards. This process must maintain high standards for professionalism and encourage lifelong learning that is clinically relevant to patient care within physicians’ individual practices. The MOC Study Committee believes the ABMS various specialty boards should continue efforts to improve upon and ensure inexpensive, accessible options for increasing the breadth and scope of physicians’ skills and knowledge so they may best serve their patients; however, those efforts should never, of themselves, hinder, obstruct nor supersede the actual provision of care. The ABMS Boards should collaborate to pursue implementation of reciprocal, longitudinal pathways for multi-specialty diplomates. The continuing physician specialty certification process of the future should not include the current high-stakes examination and burdensome, duplicative components of Maintenance of Certification. Given physicians’ support for self-regulation, the MOC Study Committee calls upon the ABMS Boards to fulfill its duty to administer specialty board certification in a manner that assists physicians in continuing to improve the quality of care patients receive.”

Greg Ayers, M.D., Chairman, MOC Study Committee

For more information, see also:

MOC UPDATE: Working to Solve Problems with Certification

Posted in: Advocacy

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It’s Not Just About Opioids…

It’s Not Just About Opioids…

According to the National Institute on Drug Abuse, more than 30 percent of overdoses in the United States involving opioids also involve benzodiazepines, or “benzos.” Statistics from the Centers for Disease Control and Prevention show more than 115 Americans die each day from an opioid-related overdose.

However, between 1996 and 2013 the number of adults who filled a benzodiazepine prescription increased by 67 percent from 8.1 million to 13.5 million. In 2015, 23 percent of people who died of an opioid-related overdose also tested positive for benzodiazepines.

In a study published in the British Medical Journal in March 2017 of more than 300,000 continuously insured patients receiving opioid prescriptions between 2001 and 2013, the percentage of persons also prescribed benzodiazepines rose to 17 percent in 2013 from nine percent in 2001. The study showed those concurrently using both drugs are at higher risk of visiting the emergency department or being admitted to a hospital for a drug-related emergency.

In March 2016, the CDC issued new guidelines for the prescribing of opioids, which included a recommendation to avoid prescribing benzodiazepines concurrently with opioids when possible. In October 2016, the Food and Drug Administration issued a “black box” warning for prescription opioids and benzodiazepines highlighting the dangers of administering these medications together. (See https://www.advisory.com/daily-briefing/2016/09/01/black-box-opioid-benzodiazepines)

Let’s talk about benzos.

As with all medications, benzodiazepines have their usefulness. If prescribed and taken correctly, this class of medications can be extraordinarily helpful to patients. Benzodiazepines calm or sedate a person by raising the level of the inhibitory neurotransmitter GABA in the brain. Common benzodiazepines include alprazolam (Xanax), diazepam (Valium) and clonazepam (Klonopin).

Alprazolam is the most prescribed benzodiazepine in Alabama, according to the Alabama Board of Medical Examiners.

“Benzodiazepines are very effective medications for the treatment of acute anxiety just as opioids are very useful for the treatment of acute pain. But also like opioids, benzodiazepines will cause the development of physiologic tolerance if used regularly, and this often causes a loss of therapeutic effect if the dose is not continuously escalated. For this reason, they are not ideal medications as the primary treatment of chronic anxiety,” said Luke Engeriser, M.D., Assistant Professor of Psychiatry at USA Health College of Medicine and Deputy Chief Medical Officer, AltaPointe Health Systems in Mobile. “Benzodiazepines are most useful when prescribed for brief periods when someone is going through a major crisis or exacerbation of symptoms, for example after the loss of a loved one. Ideally, regular use of the medication would only be for one or two weeks. We
also sometimes will use a benzodiazepine for a time-limited period when we are initiating an antidepressant medication like an SSRI or SNRI for treatment of chronic anxiety. Although these antidepressant medications are very effective for anxiety, it sometimes takes a few weeks before the medication has a sufficient therapeutic effect.”

Other physicians, like David Herrick, M.D., of Montgomery, agree with Dr. Engeriser that as physicians prescribe benzodiazepines, extra care should be taken in monitoring the patient.

“All medications have their place, but it’s the way they are used or misused that’s creating a deadly problem. While using opioids and benzos together is not completely forbidden, it is something that has to be done very, very carefully. Most people don’t have to be on benzodiazepines all the time. If the patient has a real anxiety disorder, then that patient should be under the care of a psychiatrist,” Dr. Herrick said. “Benzos are intended to be used for the short term. I think the medical community should consider benzodiazepines just as risky as opioids and monitor and treat their patients who are using them just as carefully as their patients who are taking opioids…with the same amount of care and concern.”

Going back to school.

According to Dr. Merrill Norton, PharmD., ICCDP-D, Clinical Associate Professor at the University of Georgia College of Pharmacy, although benzodiazepines have been in use since the 1950s, education about their proper use and potential harm has not kept up with the times.

“The problem with opioids and benzodiazepines, even at prescribed levels, is understanding which opioid interacts with which benzo?” Dr. Norton explained. “This is where the physician has to be very astute. What needs to happen now is a consistent training mechanism for physicians who prescribe buprenorphine, methadone, or have patients on these medications. What the benzo is doing is helping modify the anxiety that is being triggered by the opioid withdrawal. That’s why they use it. And this is why the physician needs to be better trained not only in the prescribing of the opioid but also with benzos and how they react to one another.”

Dr. Norton suggested before prescribing a benzodiazepine, physicians should evaluate the patient for tendencies to misuse drugs and/or alcohol or if the patient has a history of misuse. Depending on the complexity of the patient’s care needs, consultation or referral to an addiction medicine physician may be necessary. Certain aberrant behaviors also may be a feature in some patients who are prescribed benzodiazepines and may include diversion of valid prescriptions, illicit sale or use in manners alternate to the prescribed dosage, route and frequency.

“Physicians need to know that benzodiazepines are useful short term but have extreme dangers to medication safety to patients who are placed on long-term regimes. Physicians also need to be aware of each benzodiazepine medication’s half-life, tolerance curves, basic pharmacodynamics and pharmacokinetic properties of each, and how to identify and manage benzodiazepine withdrawal when it occurs. Basically, physicians need to re-educate themselves on these medications. I’m finding that most physicians are already very cautious when it comes to prescribing benzodiazepines, but I don’t know how aware they are of the many types of drug interactions that can happen,” Dr. Norton said.

The Medical Association will again offer three live Prescribing and Pharmacology of Controlled Drugs courses in 2019. Drs. Engeriser, Herrick and Norton have all participated in these lectures in the past as guest faculty members and stress the importance of presenting evidence-based information and case studies to the attendees. The courses in 2019 will be March 2-3 in Auburn, Aug. 2-4 in Destin, and Nov. 23-24 in Birmingham. More information about specific topics and faculty will be available from the Association’s Education Department at a later date.

The Medical Association recently unveiled its new online OnDemand Education Center, which includes seven Alabama Opioid Prescribing courses that meet the Alabama Board of Medical Examiners’ requirements for holders of an ASCS and are free to members. One course specifically deals with benzodiazepines: Use and Misuse of Benzodiazepines.

What tools can physicians use to avoid potentially deadly medication interactions?

There are many tools physicians can use to help screen their patients for a history of alcohol and/or drug addiction before prescribing benzodiazepines. Physicians agree that adding a benzodiazepine into the mix of medications for a patient who has a history of addiction may only be adding fuel to the fire.

“Prescribing a benzodiazepine to a patient with a history of addiction to other substances increases the risk that a patient could develop an addiction to benzodiazepines or that the benzodiazepine could trigger a relapse on the drug of choice. When prescribing any controlled substance, we should also regularly check the PDMP,” explained Dr. Engeriser.

The Prescription Drug Monitoring Program was developed to promote the public health and welfare by detecting diversion, abuse and misuse of prescription medications classified as controlled substances under the Alabama Uniform Controlled Substances Act. Under the Code of Alabama, 1975, § 20-2-210, et seq., the Alabama Department of Public Health was authorized to establish, create and maintain a controlled substances prescription database program. This law requires anyone who dispenses Class II, III, IV, V controlled substances to report daily the dispensing of these drugs to the database. For more information about the Alabama PDMP, or to set up an account, log on here: http://alabamapublichealth.gov/pdmp/

Another helpful tool Dr. Norton suggested physicians can have at their fingertips to help spot bad drug interactions is the app, UpToDate. This app is one of the fastest apps physicians can use to double-check for drug interactions as they are writing prescriptions. It is, however, a subscription service, but the app comes with clinical decision support with evidence-based clinical information, including drug topics and recommendations. To learn more about UpToDate, services, subscription options, and how to download the app for your mobile device or EHR, log on here: https://www.uptodate.com/home/why-uptodate

Medical Association members can also subscribe to The Medical Letter on Drugs and Therapeutics at a reduced rate. The Medical Letter is a biweekly publication that provides evidence-based, peer-reviewed evaluations of new FDA-approved drugs with conclusions reached by a consensus of experts; new information on previously approved drugs including pivotal clinical trials, new indications, and safety warnings; consensus recommendations for
the preferred and alternative treatments for common disorders; and comparative reviews of drugs for a given indication with particular attention to clinical efficacy, adverse effects, drug interactions, and cost. A subscription includes online and print access, a mobile app, and CME opportunities. To learn more about The Medical Letter, log on here: https://bit.ly/2Jj2EwW

What’s next?

A new study by the University of Michigan and published in the Journal of General Internal Medicine maps out county-by-county the prescribing habits of benzodiazepines. The South ranks at the top of the spectrum.

The study is based on data about all prescriptions written in 2015 by primary care providers for patients in the Medicare Part D prescription drug program. The researchers combined that information with county-level health and socioeconomic data from the County Health Rankings project, a project of the Robert Wood Johnson Foundation and the University of Wisconsin.

In the single year studied, the 122,054 primary care providers included in the study prescribed 728 million days’ worth of benzodiazepines to their patients, at a cost of $200 million.

The states with the highest intensity of prescribing — which the researchers defined as prescription days of benzodiazepines relative to all prescribed medication days — were Alabama, Tennessee, West Virginia, Florida and Louisiana. States with the lowest intensity were Minnesota, Alaska, New
York, Hawaii and South Dakota. Across all types of providers, primary care and otherwise, benzodiazepines accounted for 2.3 percent of all medication days prescribed to Part D participants by those providers that year.

Physicians agree it’s time to take another look at these medications.

“Benzos have as many problems as opioids do — they are addictive, sedating and deadly if they are not prescribed and used properly.” Dr. Herrick said. “We as physicians need to be more aware of these dangers and treat benzos the way we treat opioids with a lot more respect than we are right now. If you write the prescription and sign your name to it, you had better understand what you’re writing before you hand it off to your patient because it could cost that patient his life. We have gotten a bit cavalier about how we prescribe benzos, and we need to take a look at how and why we prescribe them. This is a real issue, and we need to take it more seriously. It’s time we take a hard look at how these are prescribed and why.”

Dr. Engeriser, however, offered a word of caution. Where physicians who prescribe opioids may have instinctively wanted to stop prescribing them altogether as the national epidemic was on the rise that cannot be the case with benzodiazepines.

“As providers become more careful about prescribing practices, there will likely be an increase in the desire to stop using benzodiazepines for certain patients. Benzodiazepine withdrawal is similar to alcohol withdrawal and can lead to seizures, delirium tremens, and death. For that reason, it is critical that patients not have their benzodiazepines abruptly stopped. There are different strategies for the tapering of benzodiazepines. The important thing in the outpatient setting is to taper the benzodiazepine slowly enough that severe withdrawal symptoms do not emerge. This is often done more easily with a benzodiazepine with a longer half-life such as clonazepam than a shorter half-life like alprazolam. On an inpatient unit, benzodiazepine taper can be more rapid, using as needed benzodiazepines to treat emergent withdrawal, with dosing guided by a scale, such as the Clinical Institute Withdrawal Assessment for Alcohol-Revised (CIWA-Ar).” Dr. Engeriser said.

Posted in: Opioid

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Study: Is the Opioid Crisis Response Overlooking Women?

Study: Is the Opioid Crisis Response Overlooking Women?

CONNECTICUT Women’s Health Research at Yale is calling on a government committee to revise its report on a coordinated response to the opioid epidemic so that it reflects the unique needs of women.

In a commentary published in the peer-reviewed journal Biology of Sex Differences, WHRY Director Carolyn M. Mazure, Ph.D., and Jill Becker, Ph.D., chair of the Biopsychology Area of the University of Michigan Psychology Department, detailed the laboratory, clinical and epidemiological evidence showing the need for the report to endorse and encourage the research of sex and gender differences. They argued such data is necessary to generate gender-based interventions that more fully address the opioid epidemic.

“All data must be reported by sex and gender so that gender-specific treatment and prevention strategies derived from this research are provided to practitioners and the public,” the authors said. “We encourage biomedical researchers and clinical care providers, as well as the public, to insist that a successful response to the opioid crisis should highlight the importance of understanding sex and gender differences in the current opioid epidemic.”

Mazure and Becker noted that the draft report of the White House National Science and Technology Council’s Fast-Track Action Committee (FTAC) created to respond to the opioid crisis does include important concerns about maternal and neonatal exposure to opioids. But they said the draft, released in October, overlooks significant and growing data on sex and gender differences in opioid use disorder (OUD). For example, they wrote that women are more likely than men to be prescribed and use opioid analgesics, and females and males experience pain and the effects of opioids differently.

In addition, women more quickly develop addictions after first using addictive substances, and women are more likely than men to relapse after a quit attempt.

The authors also described how women with opioid addiction are more likely than men to have experienced early trauma and have been diagnosed with depression. And women with opioid addiction suffer greater functional impairment in their lives, impacting their ability to work, secure steady housing, and — because women are more often family caretakers — avoid negative effects on children.

“Our experimental models will not begin to yield the desired information until they employ appropriate models that include both females and males, and our clinical and epidemiological investigations will not uncover needed data until both women and men are studied,” the authors said. “A successful response to the opioid crisis will only be found when scientists, practitioners and the public incorporate the essential importance of understanding sex and gender differences into the solution for OUD.”

Posted in: Opioid

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Speak Up! HHS Wants to Hear from YOU!

Speak Up! HHS Wants to Hear from YOU!

The Department of Health and Human Services Office of Civil Rights wants to hear from health care providers, business associates and members of the public about how they can best modify HIPAA regulations. On Dec. 12, 2018, OCR issued a Request for Information, asking the public for comments on how the regulations can best facilitate continuity of care and decrease regulatory burdens.

“We are looking for candid feedback about how the existing HIPAA regulations are working in the real world and how we can improve them,” said OCR Director Roger Severino. “We are committed to pursuing the changes needed to improve quality of care and eliminate undue burdens on covered entities while maintaining robust privacy and security protections for individuals’ health information.”

They are looking for feedback in the following areas:

  • Promoting information sharing for treatment and care coordination and/or case management by amending the Privacy Rule to encourage, incentivize, or require covered entities to disclose PHI to other covered entities.
  • Encouraging covered entities, particularly providers, to share treatment information with parents, loved ones, and caregivers of adults facing health emergencies, with a particular focus on the opioid crisis.
  • Implementing the HITECH Act requirement to include, in an accounting of disclosures, disclosures for treatment, payment, and health care operations (TPO) from an electronic health record in a manner that provides helpful information to individuals, while minimizing regulatory burdens and disincentives to the adoption and use of interoperable EHRs.
  • Eliminating or modifying the requirement for covered health care providers to make a good faith effort to obtain individuals’ written acknowledgment of receipt of providers’ Notice of Privacy Practices, to reduce burden and free up resources for covered entities to devote to coordinated care without compromising transparency or an individual’s awareness of his or her rights.

Additionally, OCR is encouraging health care providers, business associates and members of the public to answer 54 questions that relate to their experiences working with health care data to determine which aspects of the regulations are necessary and which may be overly burdensome.

The RFI can be viewed by clicking on the following link: https://www.govinfo.gov/content/pkg/FR-2018-12-14/pdf/2018-27162.pdf

The deadline for comment is Feb. 12, 2019.  OCR has provided the following methods to submit comments:

  • Federal eRulemaking Portal. You may submit electronic comments at http://www.regulations.gov by searching for the Docket ID number HHS–OCR– 0945–AA00. Follow the instructions for sending comments.
  • Hand-Delivery or Regular, Express, or Overnight Mail: S. Department of Health and Human Services, Office for Civil Rights, Attention: RFI, RIN 0945– AA00, Hubert H. Humphrey Building, Room 509F, 200 Independence Avenue SW, Washington, DC 20201.

Instructions: All submissions received must include ‘‘Department of Health and Human Services, Office for Civil Rights RIN 0945–AA00’’ for this RFI. All comments received will be posted without change to http://www.regulations.gov, including any personal information provided.

As a compliance professional, I will be submitting comments on areas that impact my clients on Feb. 8, 2019.  If you have questions or concerns, feel free to contact me, and I’ll be happy to discuss your concerns or include your inquiry in my comments. I can be reached toll-free at 1-888-959-9501 or at Samarria@dunsongroup.com.

Article contributed by Samarria Dunson, J.D., CHC, CHPC, attorney/principal of The Dunson Group, LLC, a health care compliance consulting and law firm in Montgomery, Ala.  Attorney Dunson is also Of Counsel with the law firm of Balch & Bingham, LLP.  The Dunson Group, LLC, is an official partner with the Medical Association.

Posted in: HIPAA

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The Tax Cuts and Jobs Act: How It Still Affects You

The Tax Cuts and Jobs Act: How It Still Affects You

Editor’s Note: This article is a follow-up to The Tax Cuts and Jobs Act – How Will It Affect YOU? published in the Winter 2018 issue.

On Aug. 8, the IRS issued proposed regulations for the newly created Section 199A 20 Percent Qualified Business Income (QBI) deduction. 199A has been one of the most talked about aspects of the Tax Cuts and Jobs Act since its passage last December. This provision of the act was included in the tax reform bill in an attempt to give pass-through entities (such as partnerships, LLCs and S corporations) and sole proprietorships similar tax savings that were provided to C Corporations (C Corp tax rates were reduced from a high of 35 percent to a flat 21 percent). The new 20 percent QBI deduction is effective for the 2018 tax year through 2025.

Although the new tax deduction is generous, the structure of the deduction is complicated with many limits, phase-ins, and phase-outs. Whether or not you will be able to take the deduction depends upon many factors, the key being your personal taxable income. Other factors include wages paid by the practice, the value of business property, nature of income, etc.

Physicians are especially impacted by limits on the deduction since the income is earned from what the law labels as a “Specified Service Trade or Business” (SSTB).

What is a Specified Service Trade or Business (SSTB)?

Most unincorporated business owners, partners and S Corporation shareholders benefit from the 199A deduction. However, Congress precludes some higher-income business owners from taking the deduction if the income is earned from an SSTB.

An SSTB is a trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, investing and investment management, trading, dealing in certain assets or any trade or business where the principal asset is the reputation or skill of one or more of its employees. Per IRS regulations:

The term “performance of services in the field of health” means the provision of medical services by physicians, pharmacists, nurses, dentists, veterinarians, physical therapists, psychologists and other similar health care professionals who provide medical services directly to a patient. The performance of services in the field of health does not include the provision of services not directly related to a medical field, even though the services may purportedly relate to the health of the service recipient. For example, the performance of services in the field of health does not include the operation of health clubs or health spas that provide physical exercise or conditioning to their customers, payment processing, or research, testing and manufacture and/or sales of pharmaceuticals or medical devices.

Based on this definition, physician practices are considered SSTBs, and therefore, limits apply on the available deduction.

How does the deduction work?

The QBI deduction is based off “pass-through income,” income reported on a Schedule K-1 earned from partnerships, LLCs and S Corporations or if a sole proprietor, what is reported on Schedule C of Form 1040 individual income tax return. Wages reported on a W2 or guaranteed payments paid to partners do not qualify as QBI. It excludes any investment-related items, such as interest, dividends or capital gains or losses from the sale of property. The maximum deduction available is 20 percent of QBI.

Although the deduction is calculated based on income earned from a trade or business (i.e. – the physician practice), the actual amount of the deduction is dependent on the taxable income of the individual. Most physicians with taxable income over $415,000 filing a joint return will be hard-pressed to qualify for the deduction. As such, it is possible for a large group practice to have some physicians qualify for a QBI deduction and some not qualify when there is a large variation in income among the owners.

The deduction itself is claimed on Form 1040 individual income tax return. Form 1040 will include a new line for the deduction in arriving at taxable income.

How do I know if I qualify to take the deduction?

The deduction is fairly simple and straightforward for individuals with married filing joint taxable income of $315,000 or less ($157,500 or less if filing single). Those taxpayers receive the full 20 percent QBI deduction. Above those taxable income amounts, the 20 percent QBI deduction becomes subject to a tangled web of limitations, phase-ins, and phase-outs. Individuals with income from SSTBs (i.e. physician practices) are subject to even more limitations that, depending on the individual’s taxable income, quickly eliminate the 20 percent deduction altogether.

Let’s first examine the limits applicable to both service and non-service businesses alike once taxable income exceeds the limits noted above. The 20 percent qualified business income deduction is limited by the greater of:

  • 50 percent of W2 wages paid by the qualifying business or
  • 25 percent of W2 wages paid plus 2.5 percent of unadjusted basis of all qualified property.

These limits are phased in for joint filers with taxable income greater than $315,000 but less than $415,000 ($157,500 / $207,500 for non-joint filers) and result in a reduced 1991A QBI deduction.

In addition to the above limits, the ability to take the 199A QBI deduction for individuals with pass-through income from a SSTB is completely lost once individual taxable income exceeds $207,500 if filing single or $415,000 if filing joint. Phase out begins at $157,500 filing single and $315,000 filing joint.

The chart at the bottom of this section summarizes the various limitations, phase-ins and phase-outs for both SSTBs and non-SSTBs.

To illustrate, assume Dr. A is a sole practitioner who files a joint return. Her practice is organized as a single-member LLC. The qualified business income as reported on Schedule C of Dr. A’s 1040 is $240,000 after wages paid to staff of $195,000. Dr. A and her husband’s taxable income for the year is $295,000.

In this example, Dr. A’s tentative 20 percent deduction is $48,000 ($240,000 QBI* 20 percent). Since Dr. A’s overall taxable income is less than $315,000, she is able to take the full deduction of $48,000 since neither the W2 phase-in limit nor the SSTB phase-out limit applies.

But what if Dr. A’s taxable income is over the $415,000 limit noted above? Since the medical practice is considered a SSTB and income is over the allowed threshold, Dr. A is not allowed to take any amount as a QBI deduction.

It is important to note 199A generally requires taxpayers to identify QBI on a business-by-business basis. Physicians who own interests in other non-SSTB pass-through entities may still qualify for a 199A deduction for that trade or business.

IRS Anti-Abuse Regulations

Various planning strategies have been considered by physicians and their advisors on how to avoid the SSTB limitation. Some of these strategies became known as “crack and pack,” which involved splitting a practice into separate legal entities to isolate non-medical activities to qualify for some amount of deduction. One of the entities would provide the medical services and the other entity would lease office space, provide billing services, or various other administrative functions.

However, the regulations issued by the IRS contain various anti-abuse provisions – one of which significantly limits the ability to segregate activities among various entities when there is common ownership among the entities solely to qualify for the 199A QBI deduction. The proposed regulations state if any trade or business provides 80 percent or more of its property or services to an SSTB, and if that other trade or business and the SSTB share 50 percent or more common ownership, then that other business is considered an SSTB too. For purposes of this anti-abuse rule, ownership is both direct and indirect ownership by related parties.

It is a common practice for various components of a physician practice to be held in separate entities, often for legal protection and tax planning. One such example is real-estate held in a separate entity and rented to the practice. This is still acceptable; the anti-abuse regulations just prohibit taking a 199A QBI deduction in such circumstances.

The regs contain various other anti-abuse provisions, such as treating non-SSTB’s as an SSTB if they share expenses/overhead with a 50 percent commonly owned SSTB. In addition, there will be increased scrutiny over changes in classification between employee versus independent contractor or partner/shareholder status due to the impact on qualifying for the 199A QBI deductions. Physicians should consult with their attorney/tax advisor prior to making any such changes in an attempt to take a 199A QBI deduction.

Planning Opportunities

Although not every physician will be able to take advantage of the new 20 percent QBI deduction, the Tax Reform and Jobs Act still provides numerous other tax breaks, such as an overall reduction in individual income tax rates, elimination of some itemized deduction limitations, increased depreciation deductions, etc. For those physicians under the SSTB thresholds noted above, now is the time to time to consult with your tax advisor to ensure optimization of the 199A QBI deduction.

  • Physicians under the SSTB threshold should review and evaluate the following items and discuss with their tax advisor and attorney:
  • Whether he or she is operating the practice in the most appropriate entity form to qualify/maximize the 20 percent QBI deduction.
  • Partners in a partnership currently receiving guaranteed payments should consider revising their partnership agreements and taking draws instead to increase QBI and the corresponding 20 percent deduction.
  • For S Corporations, review compensation agreements and ensure a reasonable compensation is paid for services provided (not QBI), and pay the remainder of income as a distribution (does qualify for QBI).

In Summary

This summary merely scratches the surface of the 199A 20 percent QBI deduction and was written in the context of physician practices. Although the regulations are still in proposed form and not expected to be finalized until later this year, the Department of the Treasury has provided sufficient insight and interpretation of the law to plan for its implementation.

Executive Summary

  • The new 20 percent QBI deduction is based on pass-through income earned from partnerships, S-Corps, LLC’s or sole proprietorships.
  • W2 wages/guaranteed payments do not qualify as QBI.
  • Deduction will be claimed on Form 1040 individual tax return.
  • Claiming the deduction will be difficult, if not impossible to claim for physicians with taxable income over $207,500 if filing single or $415,000 if married filing joint unless there are sources of income from other non-SSTB pass-through entities.
  • Newly issued IRS anti-abuse regulations limit the ability to split apart practice into various entities to isolate non-medical activities in order to take the deduction.
  • Physicians earning under the above thresholds should meet with their tax advisor and attorney now to maximize potential deductions for 2018.

Mark Baker is a Principal with Jackson Thornton CPA’s and Consultants in Montgomery, Ala. He may be reached by calling (334) 834-7660 or email Mark.Baker@JacksonThornton.com. Jackson Thornton is an official partner with the Medical Association.

Posted in: Management

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MME Edit Coming in Early 2019

MME Edit Coming in Early 2019

The Alabama Medicaid Agency is working on implementing Morphine Milligram Equivalent (MME) edits in early 2019. Higher doses of opioids are associated with higher risk of overdose and death – even relatively low dosages (20-50 MME per day) may increase risk. Therefore, beginning in early 2019, Alabama Medicaid will limit the amount of cumulative MME’s allowed per day on opioid claims. The edit will begin at 250 cumulative MME per day and will gradually decrease over time. The final MME target will be 90 MME per day. Claims for opioids that exceed the maximum daily cumulative MME limit will be denied.

Claims prescribed by oncologists will bypass the edit. Long-term care, hospice patients, and children will also be excluded.

Overrides for quantities exceeding the MME limit may be submitted to Health Information Designs (HID). Information regarding override requirements and MME examples will be made available on the Alabama Medicaid Agency website closer to the implementation of the
new limitations. Additional information will be disseminated to all impacted providers through a provider ALERT closer to
implementation; please check the Alabama Medicaid Pharmacy webpage for additional information.

For more information: http://www.medicaid.alabama.gov/content/4.0_Programs/4.3_Pharmacy-DME.aspx

Posted in: Opioid

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