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What Does “Physician Retirement” Truly Mean?

Posted by admin on June 21, 2019

*Editor’s Note: This is the first in a series of articles from the Senior Physician Section. This first article is contributed by Jack Hasson, M.D., Senior Physician Representative.

Physicians do not retire. They may leave the practice of medicine, but they remain physicians throughout their entire life. It is their inner being…their soul.

Most of us enter our profession as a calling to care for people, and we develop skills that would allow us to help others, using those skills to make a better and healthier life for our patients.

Thus, physicians may leave the practice of medicine, but they never stop being physicians, because medicine is their life. There is then a subtle distinction between medicine as work, which may change over time including retirement, as opposed to medicine as a calling, and a compassionate drive to care for others that never leaves us.

This transition of our practice of medicine over time should be planned, but this is rarely done as we do with other things in our life such as planning for long-term financial security. Physicians have no guidelines for long-term practice security, and this issue needs to be addressed.

I will try through these publications to have senior physicians discuss their success in the continuation of the practice of medicine as they age. Through these different but in their own way successful transitions of the practice of medicine over time, younger physicians can begin to think about long-term planning for their continued enjoyment of their goal of serving patients throughout their lifetime.

My own story is about the practice of pulmonary and critical care medicine as I left my training, which was very demanding, including a demanding call schedule with late nights in the ICU. As a young physician, I didn’t miss a beat, balancing family, my running schedule, community service, and hospital committees and offices with no loss of energy or fatigue. It was not until I was in my 50s that I would tire more easily, especially after a long weekend call, and as with most of us, I didn’t want to admit I was aging. After all, I was still healthy and running marathons. In my 60s, I realized I could not sustain the pace of my practice and consider retirement, but I still felt healthy and still enjoyed the practice of medicine. I was fortunate in the ability to be able to make the transition to a pulmonary clinic practice with no hospital duties are night call and this was a game changer for me. I was young again and never fatigued, and was able to continue the practice and love of medicine, but with a pace, I could handle without tiring. I was lucky. This was not a planned move on my part but aging forced the issue.

I would recommend a career planning process for young physicians. They should make these plans just as they make financial plans for their future. Making transitions to different types of practice that will not stress or fatigue one as you age should be made earlier rather than late before burnout consumes a love of medicine that may not be rekindled. Looking back, I would have earlier in life planned my options for new careers in medicine that over time would be less stressful to me and more enjoyable as I aged. Ideally, a seamless transition to these less stressful options would be best.

I was once told by a physician that wisdom comes with age, but sometimes age shows up all by itself. Let’s hope without professional life choices, we show a little wisdom as we age, and choose a path that keeps us as practicing physicians in some capacity throughout our life.

For Medical Association members interested in more information about the Senior Physician Section, please contact Lori M. Quiller, APR.

Tags: physician, retire, senior

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Looking Forward to Retirement? Solo Practitioners Can Still be HIPAA Compliant as You Close the Doors

Posted by admin on July 27, 2018

Maybe you’ve been planning for retirement for some time or perhaps you’ve had a bad month and have decided that you’re better suited for life on the lake. In either circumstance, when you get ready to leave your practice and wind down your affairs, don’t forget that you still have responsibilities pursuant to state and federal laws and regulations and those obligations don’t cease just because you won’t be returning to the office.

The Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Economic and Clinical Health Act (HITECH) require providers ensure the confidentiality, integrity and availability of their patient’s protected health information (PHI). Thus, providers are tasked with preventing unauthorized access to PHI, ensuring that their records are not inappropriately altered or destroyed, and assuring that the records are available to the patient or other authorized individuals or entities.

Patient Notification

Pursuant to Alabama law, “When a physician retires, terminates employment or otherwise leaves a medical practice, he or she is responsible for ensuring that active patients receive reasonable notification and are given the opportunity to arrange for the transfer of their medical records.”[1] The law does not specifically define how much time is considered “reasonable,” thus; the type of practice or scope of services provided should be considered in determining reasonable notice. In all instances, notification should be provided in a manner that allows the patient adequate time to act upon the notification and either obtain a copy of their records or find a new physician.

Patient notification should be provided via U.S. mail and should include the following:

The date that the practice intends to close;
How the individual may obtain a copy of their medical record or have their records transferred to another physician; and
Contact information for the new physician if the patient records are being transferred to another physician without the patient’s consent. (Note: The retiring physician should enter into a Business Associate Agreement (BAA) with the purchasing physician to permit the purchasing physician to obtain and maintain the aforementioned patient records. By virtue of that agreement, the purchasing physician is acting as a custodian of records and is required to ensure the confidentiality, integrity and availability of those patient records regardless of whether the patient decides to utilize the purchasing physician for their treatment services. Pursuant to HIPAA, the purchasing physician cannot utilize those patient records unless and until the patient consents.) Alternatively, if the records are not being transferred to another physician, the notice should inform the patient of where the records will be located after closure, how long they will be retained, and contact information to make record requests.

Tip #1: While not required, it is suggested that patient notification be sent via certified mail, return receipt requested to the patient’s last known address. This allows the retiring physician to place those receipts in the patient files to demonstrate the attempt to notify the patient of the retirement or closure.

Tip #2: Don’t forget about the patient’s right to confidential or alternative communications when performing the mail-out. If your practice has agreed to a reasonable request of a patient to receive communications by alternative means, you must ensure that you have considered that request. For example, if they have requested that you use a particular P.O. box, instead of their home address.

Malpractice Carrier Notification

At the top of your list for entities to notify should include your medical malpractice carrier. Your medical malpractice carrier can give you a tremendous amount of guidance and many offer a checklist that you can use to ensure that you are covering all of the steps that will keep you eligible for coverage at the time of closure and beyond. Be sure to ask them about any extended malpractice coverage that can be considered for any allegations of medical malpractice that may arise after closure.

Sell v. Closure

When a practice is sold to another physician, the aforementioned BAA between the retiring physician and the purchasing physician may be utilized for the appropriate maintenance and availability of records. But when a practice closes, it is often necessary for the retiring physician to contract with an outside entity to maintain the records and ensure their future availability in accordance with HIPAA and state laws. Finding the right record management company is essential in this circumstance, in addition to entering into the required BAA.

Whether you enter into a BAA with a purchasing physician or record management company, ensure that the agreement includes provisions relating to record retention and disposal applicable to the types of records your practice utilizes. For example, there are special rules for mental health, substance abuse, and notifiable disease records. As the BAA is being drafted, attorneys and compliance experts should be consulted to ensure that appropriate provisions are included.

Closing Won’t Allow You to Escape HIPAA Fines

On Feb. 13, 2018, the Department of Health and Human Services announced a settlement with Filefax, Inc. for $100,000. It was determined that Filefax was a medical record storage company which inappropriately handled the medical records of approximately 2,150 patients by not ensuring that the records were secure. “The careless handling of PHI is never acceptable,” said OCR Director Roger Severino. “Covered entities and business associates need to be aware that OCR is committed to enforcing HIPAA regardless of whether a covered entity is opening its doors or closing them. HIPAA still applies.” Though Filefax closed its business, HHS was able to secure settlement proceeds via an appointed receiver which “liquidated its assets for distribution to creditors and others.”

Whether you are currently facing the prospect of retirement or whether it is still on the horizon, it’s never too early to speak with a health care compliance professional about the appropriate steps to take to ensure compliance with state and federal laws.

[1] Alabama Board of Medical Examiners Rule 540-X-9-.10(3)

Article contributed by Samarria Dunson, J.D., CHC, CHPC, attorney/principal of Dunson Group, LLC, a health care compliance consulting and law firm in Montgomery, Alabama. Find more of Ms. Dunson’s contributions on her partnership page.

Tags: close, fine, HIPAA, malpractice, retire, sell

Posted in: HIPAA

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Three Common Mistakes in Transferring Ownership of a Medical Practice

Posted by admin on February 2, 2018

Physicians spend their careers building top-quality practices, but many devote too little attention to the architecture and terms by which the practices will be transferred at their retirement, death or disability. In our experience, there are three areas, which if neglected, will lead to problems at the crucial point when the ownership of this valuable asset changes hands.

Determining Value

Our clients are most concerned with the value of their practice. While some practitioners underestimate the value of their practice, many overestimate the amount which can be captured in the sale of the practice interest they own. A common mistake is to use a value that was read or heard about from a transaction elsewhere. That transaction price might have been determined by a purchaser who was limited in the amount they could pay, such as a hospital. The transaction might have occurred in a state with a higher managed care payer mix than your practice, or in a state with different non-compete laws regarding health care professionals. Practice valuations vary widely and for many reasons. Two practices in the same city and same specialty could have much different values. The terms of the transaction are another powerful force on sales prices and are rarely publicized. Even if you get the value accurately determined, there are still ways to create problems in the monetization of your practice value.

Clear Conversations

The documents relative to the transfer of a group practice ownership percentage should reflect the plan to sell at a future date, and the design of the manner by which the price will be determined. Even for valuable practice interests absent a clear design, potential buyers may feel tricked by a plan to transfer your share of the practice if it is developed late in your career. The time for this understanding is when younger doctors are brought in to the ownership. Buy-sell agreements and cross-purchase agreements serve to clarify expectations at the time of their drafting but should be reviewed every few years for relevance to the current situation, and any needed changes made. The greater the price desired for a practice, the more the need for clear design, pricing and terms. With a good legal architecture and a fairly determined price, your practice liquidation is almost ready for your time to sell, except for one additional issue.

The Fine Print

The legal obligation to pay the fairly determined price is often accomplished by the purchase of life and/or disability insurance on the selling practitioner. That can become a problem if the policies are never obtained, or the premiums payments are halted. In this situation, the buyer has a responsibility to pay a price agreed but with no funds to pay it. No one will be pleased with the outcome of this situation. Compound this problem with the common mistake of letting the practice price be set by the amount of life insurance proceeds, which could be afforded when the transfer architecture was designed, and you have a purchaser obligated to pay too much and with nothing but after-tax dollars from their future earnings. The CEO, chief emotional officer, at home will not respond well to this deal.

If you have a valuable practice, and you negotiate a fair price and terms for its sale, this can be a valuable way to exit your professional career and move to your next endeavor of success. It takes a little planning and periodic monitoring to gain top value.

Article contributed by Warren Averett CPAs and Advisors, official Gold Partner with the Medical Association.

Tags: death, disability, owner, practice, Price, retire, sale, sell, transfer, value

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Five Keys Will Make Your Retirement Dreams Come True

Posted by admin on September 14, 2017

This year, Baby Boomers will delay retirement because of poor investment and lifestyle decisions. In other words, your decisions today determine your retirement choices later.

Insured Retirement Institute reports in Boomer Expectations for Retirement 2017 that only 54 percent of Boomers have any retirement savings, and only four in 10 have tried to calculate how much they need to save to retire. Fifty-six million Baby Boomers will not receive income from a pension and need significant savings to cover the gap. The No. 1 mistake most people make in planning for retirement is thinking they have plenty of time to save or they have too little to start saving. Both decisions will bring you to the same place on the road to retirement.

According to Employee Benefit Research Institute (EBRI), the average IRA balance for people ages 45- to 49-years-old was just over $72,000. For those in their 40s with 401(k) accounts, who’ve been employed more than 20 years, their average balance was just at $159,000. Like the average people in EBRI’s survey, you may have a small balance and a short amount of time. You can reach your dream IF you plan for retirement and follow your plan, consistently.

Key 1: The most important key to planning for your retirement dream is to start. You need a plan, you need to follow the plan and you need to stay consistent. Thanks to the power of compound interest, time is your greatest ally. MoneyUnder30.com describes three individuals, each who save $1,000 per month for 10 years and then stop until retirement. Their starting age for saving was 25, 35 and 45 years old. All three retire at age 65. With 7 percent return on their savings, each had substantially different retirement account balances yet they all saved $120,000 over the 10-year period. The first saver had $1,444,969. The second had $734,549. The last had $373,407. Compound interest and time was the difference.

Key 2 for your dream retirement is to spend less than you make. This is simple but not easy to do. There are many pressures to spend more than you make when credit is easy and debt is accepted as normal. Dave Ramsey says simply, “Don’t be normal!” A majority of doctors live with debt that could be avoided. White Coat Investor (WCI) blog writer, Dr. Jim Dahle, dispels conventional wisdom of good debt and bad debt. WCI recommends ways to minimize the debt that entangles the majority of physicians for most of their careers. His article, “Don’t Buy Stuff You Cannot Afford,” gives practical and straightforward ideas to get out of debt.

Key 3 in the countdown to your dream retirement is from PhysicianonFire.com (POF). This is a physician blog writer whose stated goal is financial independence and to retire early. Related to Key 2, this will make you financially independent. POF challenges his readers to “Live on Half.” Living on half of your take-home pay, or saving and investing as much as you spend, will lead to financial independence in 15 to 20 years. Work becomes optional. Imagine waking up and deciding today is the day I retire and sail into the sunset. Or waking up and deciding, I could
close the doors, but I want to work because I love what I do.

Key 4 is one you might think should be the No. 1 Key. However, if you don’t get good habits started early, No. 4 will not guarantee a dream retirement or life. Key 4 is a no brainer but without it, you don’t get off home base: earning as much as you can for as long as you can. Work smart, manage your practice like a business, and maximize the income from your practice. In my 36 years of consulting with physicians in their practices, managing the business side of medicine can be the biggest challenge.

Key 5 is to choose your investment advisor wisely. A lot of physicians with whom I work have a friend, a brother, or neighbor who does their investing. This decision locks the doctor in an advisory arrangement that cannot be changed for fear of losing the relationship. Resist those kind offers and instead find an advisor who will be accountable for the results of their recommendations. Tommy West at Jackson Thornton Asset Management offers this: “A good advisor will provide a well thought out plan to succeed – to act rather than react.” The best relationship occurs when your financial advisor is both accountable and trusted.

Article contributed by By Patti G. Perdue, CPA.CITP, Jackson Thornton CPAs and Consultants. Jackson Thornton is a Bronze Partner with the Medical Association.

Tags: income, retire, save

Posted in: Management

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Don’t Overlook Your Deductions this Tax Season

Posted by admin on September 27, 2016

Editor’s Note: This article was originally published in the 2016 Winter Issue of Alabama Medicine magazine.

Holidays are over. The tree has been undressed and put away until next year. Your New Year’s Resolutions are drafted, and you’re waiting for the last piece of Christmas cake to be eaten before starting them. It’s also the time of year when you start looking on the calendar to count the days until the next holiday. First is Valentine’s Day, then Easter, and then National Tax Filing Day. (I’m sure that last one is included on most calendars, right?)To help you get ready for National Tax Filing Day, here are some reminders of often overlooked tax deductions which could help reduce your taxes in 2016.

To help you get ready for National Tax Filing Day, here are some reminders of often overlooked tax deductions which could help reduce your taxes in 2016.Job hunting expenses For many Americans, the cost of finding a job could be considerable if they have been actively looking from city-to-city or state-to-state. The Department of Labor has reported employers adding jobs with net job gains in the number of jobs created. Job hunting expenses includes transportation, food and lodging for overnight stays. It might include secretarial expenses if you paid someone to type or print your résumé.

Job hunting expenses For many Americans, the cost of finding a job could be considerable if they have been actively looking from city-to-city or state-to-state. The Department of Labor has reported employers adding jobs with net job gains in the number of jobs created. Job hunting expenses includes transportation, food and lodging for overnight stays. It might include secretarial expenses if you paid someone to type or print your résumé.Charitable contributions Checks, cash or charge. If you donate cash over $250, be sure to get a receipt. If you donate goods such as good used clothing, those unused golf clubs sitting in the corner of your garage, furniture or computers (wipe all data off first), or appreciated property like stock, these are potential tax deductions.

Charitable contributions Checks, cash or charge. If you donate cash over $250, be sure to get a receipt. If you donate goods such as good used clothing, those unused golf clubs sitting in the corner of your garage, furniture or computers (wipe all data off first), or appreciated property like stock, these are potential tax deductions.Reinvested dividends If you sold stocks or mutual funds during 2015, did you participate in a dividend reinvestment program where your dividends were used to buy more shares? If so, these reinvested amounts add to your cost basis for computing the taxable gain on the sale. Your financial advisor can provide this information.

Reinvested dividends If you sold stocks or mutual funds during 2015, did you participate in a dividend reinvestment program where your dividends were used to buy more shares? If so, these reinvested amounts add to your cost basis for computing the taxable gain on the sale. Your financial advisor can provide this information.Health insurance premiums If you are self-employed (and not covered by an employer plan or your spouse’s plan), you may be eligible to deduct premiums paid for health insurance, premiums for Medicare Parts B and D, Medigap insurance and Medicare Advantage Plan. This deduction is available whether you itemize or not.

Health insurance premiums If you are self-employed (and not covered by an employer plan or your spouse’s plan), you may be eligible to deduct premiums paid for health insurance, premiums for Medicare Parts B and D, Medigap insurance and Medicare Advantage Plan. This deduction is available whether you itemize or not.Retirement plan contributions There are too many options to include the details here. Many entrepreneurs and small business owners who are employed by others but also work in their own business might qualify for an additional retirement plan contribution. You need to talk with your financial advisor and tax preparer. Some of the options include SEP, SIMPLE IRA and 401(k)s.

Retirement plan contributions There are too many options to include the details here. Many entrepreneurs and small business owners who are employed by others but also work in their own business might qualify for an additional retirement plan contribution. You need to talk with your financial advisor and tax preparer. Some of the options include SEP, SIMPLE IRA and 401(k)s.

Inherited IRA or pension If you inherited an IRA or 401(k) or another retirement plan from your spouse or a parent, you may be able to deduct the estate tax paid by the IRA owner. Also remember that withdrawals you take are taxable and could be subject to penalty if you took money out before you were 59 ½.

Expensing vs. capitalizing assets In 2014, the rules changed regarding what was required to be capitalized and depreciated. In 2015, the IRS gave us some additional relief by increasing the amount that could be expensed from $500 to $2,500. This safe harbor exception was good news for business owners to expense eligible purchases costing under $2,500 or less per item or per invoice.

Immediate write-off As 2015 was coming to a close, Congress voted to extend several expired tax provisions that will save businesses and individual taxes. Legislation known as PATH Act extended or made permanent a number of tax provisions including immediate expensing of eligible purchases of up to $500,000. To qualify for these deductions, assets must have been placed in service by no later than the end of your business’s tax year. The legislation also extends the 50 percent bonus depreciation for qualifying property acquired and placed in service during 2015 through 2017.

Credit card purchases This one could easily slip by a business owner or individual. A payment on your credit card is not deductible; neither is the interest paid on the card. However, if you have purchased business items or made tax deductible purchases charged to a credit card in December, you count the expense as having occurred in December and claim your deduction on that year’s tax return. You need to keep the vendor or store receipt. Submitting the credit card statement is not enough. If you haven’t already, consider using a separate credit card used strictly for business purposes.

Roth IRAs for your kids If you have teenaged children who work, some of their earned income could be used to make a ROTH IRA contribution. For 2015, this could be as much as $5,500 depending on the amount of their earned income. There is no tax deduction for this contribution but the savings comes later – when they withdraw the money for college or moving out of your house or for their first car.

Now that you have thoroughly planned for National Tax Filing Day, you can start packing for Spring Break!

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

Contributed by Patti G. Perdue, CPA.CITP, Jackson Thornton CPAs and Consultants. Jackson Thornton is a Certified Public Accounting and consulting firm. Our Healthcare group specializes in accounting, practice management, strategic planning, technology and wealth management for physician practices.

Tags: charitable, dividend, expense, IRA, management, retire, ROTH, tax

Posted in: Management

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