As CPAs, we must provide timely tax and accounting services to physicians, their medical practices and their families. As a general rule, it is not possible to over-communicate with your physician clients.
To be better consultants to our physicians, we must keep many points in mind, including the following:
Surveys are clear that the vast majority of physicians work well over 40 hours a week, with at least a quarter of them working more than 60 hours a week. The mounting pressures of running a medical practice are leading to a staggering number of physicians with burnout. Burnout can be described in many ways — a loss of enthusiasm for work, feelings of cynicism, a low sense of personal accomplishment. The work-life balance so often talked about is being sacrificed and career satisfaction continues to decline. Of primary care physicians, more than 30 percent would not recommend that their children pursue a career in medicine. As consultants to physicians, we must understand this wellness issue.
One issue facing physicians is the mandate to convert to ICD-10 coding systems. The American Medical Association estimates that small practices could spend between $56,000 to $226,000 to implement the systems. Physicians must have a financial plan in place to deal with these estimated costs and with the real possibility of an increase in denials and delayed payments.
Many medical practices are very slow to update systems and train staff for ICD-10 and will likely not be ready to go live by the Oct. 1 ICD-10 compliance date. These practices will run the risk of cash-flow disruption.
As of Jan. 1, eligible physicians began seeing a 1 percent decrease in Medicare reimbursements for each year that they don’t meet Meaningful Use requirements. The penalty will increase each year to a maximum of 5 percent. A recent article by the Medical Group Management Association claimed eligible physicians are having a very difficult time achieving the requirements of Stage 2 Meaningful Use. In fact, only a small percentage had successfully met all the Stage 2 requirements as of this January.
Getting paid for the care delivered by physicians is a problem that is only growing. Physicians who don’t participate in the Physician Quality Reporting System or who are not deemed successful participants will face penalties in their Medicare payments. Private insurers are shifting to value-based reimbursement payments and risk sharing. Physicians’ claim denials will continue to increase. Collecting deductibles and co-payments has always been a challenge, but that challenge will potentially be greater under the Affordable Care Act.
A recent survey in Medical Economics reported that more than 84 percent of physicians surveyed said their medical practices are doing the same or worse financially than they were a year ago. Regulatory requirements are a major reason for rising operational costs. The growing burden of prior authorizations from payers is damaging physician profits.
Physician autonomy is under attack. Physician morale is declining. All of us, as consultants to physicians, must understand these issues.
Jim Rice, CPA, is a shareholder at Sol Schwartz & Associates, P.C. He has 37 years of experience in public accounting. In addition to providing business consultation, financial planning and various other accounting services, Rice specializes in income tax planning and consultation. He works with a high concentration of physician practices and high net worth individuals. Contact Rice at email@example.com or 210-384-8000 Ext. 112.