Posts Tagged financial

ALAPAC Launches $75K in 75 Days Campaign

ALAPAC Launches $75K in 75 Days Campaign

Earlier this month, ALAPAC kicked off its year-end fundraising campaign and is seeking to raise $75,000 in 75 days. As the official political action committee of Alabama physicians, ALAPAC provides financial and technical support to candidates medicine can work with on the myriad of health care issues affecting our state.

It may not be a normal election year, but that doesn’t mean there are not elections. In fact, there are two special elections for the Alabama House of Representatives going on right now. What’s more is that in one of these special elections, Charlotte Meadows – the wife of a physician and a former practice manager – is on the ballot and has already made the runoff with 44% of the vote!

Consider this: there are only two physicians in the Alabama Legislature, both of whom serve in the State Senate. This means there are zero physicians in the House of Representatives. Yet, the members of these bodies make decisions directly impacting you, your families, and your patients.

This is why electing quality candidates is so vital. With so many interest groups with objectives that are not in line with increasing access to quality care and maintaining a positive practice environment in Alabama, having elected officials who understand and respect physicians’ needs crucial. A contribution to ALAPAC can help elect this kind of candidate.

When like-minded people pool their resources good things can happen. So get involved! Making a contribution has never been easier. Simply text “ALAPAC” to 91999 or donate here.


Disclaimer: Contributions to ALAPAC are not tax-deductible as charitable contributions for Federal income tax purposes. Voluntary political contributions to Alabama Medical PAC (ALAPAC) are not limited to the suggested amount. The Medical Association will not favor or disadvantage anyone based upon the amount or failure to contribute. A portion of the contributions may be used in connection with Federal elections. Corporate funds will be used in either state elections or for education purposes. Federal contributions are subject to the limitations of FEC Regulations 110.1, .2, and .5.

Posted in: Advocacy

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How Can You Use Financial Metrics to Improve Profitability?

How Can You Use Financial Metrics to Improve Profitability?

There are many factors that can help your practice maintain financial profitability. It is especially important to review the structure of your financial statements to properly assess and optimize the health of your practice. Recently, we sat down with one of our healthcare experts, Miko Kulovitz, to discuss how important financial reporting can be to practice and what you can do to improve it.  We have outlined our conversation here:

Question: What are some of the common changes you recommend for a medical practice when you first look at its financial statements?

Answer: When we first look at the financial statements, we want to determine the health of the practice. Are they doing well? Are there areas we could improve? And those financial statements don’t always give us the information we need. A majority of practices use accounting software that is similar to QuickBooks, and that set-up isn’t always the best set-up that is going to show the medical practice how the financials need to be arranged. So when we come in, we’ll typically start with the construction of the financial statements and consider if the information is put together in a way that’s going to be useful to the physicians in making decisions and really driving the practice.

Question:  What does that generally look like?

Answer: We really want to be able to see what the operating net income is, aside from the physician expenses. We also want to be able to track by location how each division is doing. We want to see the profitability by provider. So there are a number of metrics that we need to make sure that we can track and have the financial statements divided in a way that presents that information to us.

Question: What are some of the financial metrics and practice profitability metrics that you like to monitor when you begin working with a practice?

Answer: There are a lot of key metrics that we review⁠—from the financials to the revenue cycle management. We want to look at the practice as a whole, see how it is doing and find out how it stacks up to peers on a state level and a national level. We really want to make sure that a practice’s metrics are in line with what other practices of a similar size and specialty are doing.

We also want to make sure that A/R aging is the youngest that it can be. We don’t want A/R to age into older categories because that makes it a lot harder to collect, and we want to see the days in A/R. We want to make sure that money is collected as fast as possible and that the cash flow cycle is healthy. We want to look at the financial statements and see what the overhead percentage is. We want to look at those individual expense categories and see if the larger items, such as the salary, benefits and medical supplies, are in line with what we are expecting to see. And because we work with financial statements of physician practices on a daily basis, we know what those parameters are; so, those anomalies will often stand out to us and help us pose the right questions so we can do the research and see if there are things that we need to explain further.

Question: When you work with medical practices, one of the key things that the physicians are focused on is the compensation formula. Could you make some comments about the common compensation formula structures that you see and what is effective in a practice?

Answer: There is no one-size-fits-all method to compensating the physician. Every practice is different, every specialty is different. So, we really want to take a look at what makes the most sense for that particular practice. The compensation model should be set up in a manner that incentivizes the behavior that’s best for the practice and also rewards the physicians for the work that they are doing. We want to make sure that the compensation model is compliant with Stark Law, that there are no issues that would be a detriment to the practice and that the compensation model is fair. A lot of times, there are issues in which the model is not achieving the goals that the practice wants to achieve, so we really want to take a look to see if this model is performing as we need it to perform and if it is accomplishing those goals.

Question: I would assume a single-physician practice compensation model is not really a big deal. When you get larger and larger, are there some creative ways you’ve seen practices compensate their physicians?

Answer: Again, there are many different ways to do that. The main thing is to focus on the revenues, allocate those appropriately and make sure that the practice is compliant. Also, with the overhead, it’s going to be a matter of the practice’s preferences and what makes the most sense. Some practices split overhead evenly, and some might allocate a percentage of variable or percentage of fixed. Again, there are many ways to slice that. It is really important that we talk to the physicians and get to know the practice to be able to help guide them in a direction for what plan is going to work best for them.

Article contributed by Miko Kulovitz, Healthcare Senior Manager, Warren Averett Healthcare Consulting Group. Warren Averett is an official Gold Partner with the Medical Association.

Posted in: Management

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Don’t Get Caught in a Copay Conundrum

Don’t Get Caught in a Copay Conundrum

In the current environment of increasing patient deductibles and copays, the billing and collection of the patient portion of the services you provide is top of mind. In the Department of Health and Human Service’s report dated May 23, 2017, Alabama’s average monthly health insurance premium amounts increased 223 percent from 2013 to 2017, versus the national average increase of 105 percent. In real dollars, average monthly premiums jumped from $178 to $575.

With deductibles and copay amounts increasing as well, it’s becoming more difficult to collect the patient’s portion of the bill. As a provider, you are more than aware of these financial hardships your patients are facing, especially your sicker patients who absolutely need care. You might routinely waive the patient portion of your services because you sense a financial issue. Maybe you treat other physicians or colleagues and write off their portion of the bill as a professional courtesy. You might even provide care to your team of employees at a reduced rate as a perk of their job. But did you know all three of these scenarios can land you in hot water?

These practices, while intended to be a gesture of goodwill, professional courtesy, or “it’s just the way we’ve always done things,” could put you and your practice at risk of violating federal anti-kickback statutes and violating contracts with insurance carriers – not to mention impacting your practice’s financial bottom line.

According to the Office of Inspector General, the federal Anti-Kickback Statute (AKS) is “a criminal law that prohibits the knowing and willful payment of ‘remuneration’ to induce or reward patient referrals or the generation of business involving any item or service payable by the federal health care programs.” Violating the federal Anti-Kickback Statute can lead to criminal penalties and administrative sanctions. The penalties for physicians who pay or accept kickbacks can be up to $50,000 per kickback plus three times the amount of the remuneration in question as well as imprisonment and exclusion from future participation in federal health care programs. The HHS’s A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud & Abuse states the following:

“…Where the Medicare and Medicaid programs require patients to pay copays for services, you are generally required to collect that money from your patients. Routinely waiving these copays could implicate the AKS, and you may not advertise that you will forgive copayments.” In this case, the HHS would determine a practice is violating the AKS if their standard practice is to waive copays. Patients would become the referral source and would be receiving the benefit of a waived copay.

From a commercial insurance carrier’s point of view, if you routinely write off patient’s copays and deductibles, you are in essence decreasing the total charge for the service you are providing. A $100 visit with a $20 copay that is routinely waived has now become an $80 visit.

Commercial insurance carriers can view this as a breach of contract, and they have recently been cracking down on enforcement of collections. Commercial carriers can stipulate that copay portion is required to be paid in order to reimburse the practice its portion. If they find out you have been waiving the patient portion for services, they can come back and seek repayment of funds they’ve already paid for those patients.

Profit margins for services are getting smaller and smaller, and as a medical practice in today’s post-ACA world, your bottom line can’t afford the consistent waiver, or poor collection of these copays and deductibles.

To navigate this issue, we recommend you review/update or implement policies and procedures guided by these best practices:

  1. Immediately stop any current practices of routinely waiving or reducing copays and deductibles.
  2. Where financial need is an issue, develop a policy with outlined procedures to document a patient’s financial hardship. Having a patient merely sign a document stating they have a financial hardship is not enough to substantiate the patient’s inability to pay. Have a designated staff person/financial counselor document the patient’s financial need. You need to perform due diligence with the patient to prove they are unable to pay. The HHS’s Roadmap for New Physicians states, “… you are free to waive a copayment if you make an individual determination that the patient cannot afford to pay or if your reasonable collection efforts fail.” Train front desk and billing staff on these policies and procedures to ensure consistent enforcement.
  3. Bill copays and deductibles and make adequate attempts to collect from the patient. We recommend at least three statements and a phone call as a best practice. Document all communication and collection efforts in the patient’s file to provide an adequate audit trail, should you need such information in the case of an audit.
  4. If these three practices bear no fruit, you can write off the patient’s copay or deductible.

As you can see, justifiable circumstances of financial hardship or need are situations where you can discount or waive patient copays. Use these best practices to implement consistent and reasonable policies and procedures. Steer clear of routine waivers and discounts of copays, and you shouldn’t find yourself in a copay conundrum.

The Do’s and Don’ts of Deductibles and Copays

What you should do…

  • Always bill the full amount.
  • Make a reasonable effort to collect from the patient.
  • When a patient states an inability to pay, establish policies and procedures to determine financial need and keep adequate documentation.
  • Work out a payment plan with a patient, or agreement for paying a certain amount each visit.
  • Collect up front rather than later. Each statement sent costs you time and money.

What you should not do…

  • Routinely or systematically write off copays or deductibles.
  • Advertise that you will forgive copays.
  • Accept the “in-network” copays if you are an “out-of-network” provider.
  • Devalue your services by waiving or reducing the copay and deductibles due.

The information in this article is not intended as tax or legal advice. Please contact your lawyer or CPA for specific information regarding your individual situation.

Article contributed by Jenna Roton, CPA, with Jackson Thornton CPAs and Consultants, an official partner with the Medical Association.

Posted in: Management

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Do You Qualify for Tax Amnesty?

Do You Qualify for Tax Amnesty?

The Alabama Legislature has enacted the Alabama Tax Delinquency Amnesty Act of 2018 to allow qualifying taxpayers to receive a waiver of penalties and interest on eligible tax types. The application period is now open through Sept. 30, 2018.

The Alabama Department of Revenue (ADOR) launched, a website dedicated to the Alabama Tax Delinquency Amnesty Program of 2018, created by Act 2018-153.

The amnesty application period runs July 1 – Sept. 30, 2018, and applies to eligible taxes due before, or for tax periods that began before, Jan. 1, 2017. All applications must be submitted electronically through the Alabama tax amnesty website, where taxpayers can sign up to receive notifications about the program. The website also provides all the information taxpayers may need on the program and answers to frequently asked questions.

The amnesty program will be available to eligible taxpayers who have not been contacted by the department within the last two years and are not a party to a criminal investigation or litigation in any court of the United States or Alabama pending as of March 6, 2018, for nonpayment, delinquency, or fraud in relation to any Alabama taxes administered by the Department.

Most taxes administered by ADOR, with the exception of motor fuel, motor vehicle, and property taxes, are eligible for the 2018 Amnesty Program. This includes, but is not limited to, corporate and individual income, business privilege, financial institution excise, consumers use, sellers use, withholding, and sales taxes.

All penalties and interest will be waived for approved amnesty applications.

Taxpayers who believe they may have delinquent tax liabilities in Alabama should consult with their tax advisers regarding their eligibility for the tax amnesty program.

For more information on taxpayer eligibility, eligible tax types, leniency terms, the application process, and more, visit or email

Posted in: Management

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