Study finds Cloud could save billions for health industry

Tom Sullivan, editor of the Government Health IT reports:

"While 90 percent of healthcare CIOs view IT innovation as critical to success, the more surprising statistic is that fewer than one-fourth consider their existing infrastructure capable of supporting such technological advancement.

That’s according to a report from MeriTalk, published Monday, examining the potential of IT-as-a-service (ITaaS) within the healthcare realm by surveying 109 CHIME members."

To read more go here.

The Supremes rulling on DOMA and the Affordable Care Act

From Sarah Kliff of the Washington Post's Health Reform Watch:

"A year ago, the Affordable Care Act starred front and center as the most-anticipated Supreme Court decision that session. This session, two rulings on same-sex unions took the spotlight: In one, the high court decided Wednesday to overturn the Defense of Marriage Act, requiring the federal government to recognize gay marriages.

And this time around, the Affordable Care Act has a supporting role: to require the feds to recognize that same-sex marriages now change how the health law’s insurance expansion works."

To read more go here.

Starting A New Medical or Dental Practice?

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Starting your own dental or medical practice will require as many decisions about the business of medicine as it does the practice of medicine.   Making the wrong decisions from the outset will not only result in wasted time and expense to repair your mistakes, but will also prevent you from focusing on your patients and growing your business.  Below are five of the top and, unfortunately, very common, mistakes doctors make in selecting the business form to practice medicine.

1.            Wrong Selection.  There are several different business entity types to choose from when starting your new medical or dental practice.   Your selection may depend on tax or limited liability benefits, the ease of governance, or other legal considerations.   If you select the wrong entity, however, the result may include the loss of tax savings or worse, the improper practice of medicine.  In California,  the corporate practice of medicine in strictly regulated.  For instance, doctors and dentists are prohibited from practicing as a limited liability company (LLC).  Just recently, our office has assisted two different doctors who made the mistake of                 choosing to practice as an LLC because they failed to consult with a health law attorney prior to starting their business.  The result, unnecessary costs to repair the business and delay in the opening of their new practice.

2.            Bad Timing.  In business, as in the rest of life, timing can be a critical factor to your success.  When it comes to the proper entity to select for your new practice, when you file your paperwork can also be a costly mistake.  Depending on where you are in the calendar year and when you anticipate your new practice will open, your attorney may advise you to wait to file your paperwork to save you from paying unnecessary taxes.  Also, incorporating or forming a partnership may take a couple of month depending on your situation, so it is could to consult with an attorney early to determine timing issues.  Our consultations are almost always free.

3.            Unsuitable Tax Status.  Many believe that it is advisable to select a "pass through" entity, such as an S-Corporation or general partnership when starting your dental practice, so that you are  not taxed twice on revenue derived from the practice.  Sometimes it may be advisable to practice as a C-Corporation, despite the double taxation, depending on other factors including whether the business will use some selected pre-taxation benefits plans.  This decision cannot be properly made unless you first consult with a healthcare accountant or tax attorney.

4.            Ignoring the Board.  As indicated previously, the practice of medicine is heavily regulated in California.  State regulations of medicine are generally promulgated by the different healing arts' boards of the state, such as the Dental Board or Medical Board of California.  Following generaal entity selection rules without adhering to board regulations, such as proper business names or multiple offices provisions, may result it more costs to fix all the brochures you just printed and the website you recently paid someone to create.

5.            Incomplete Documents.  Having a CPA or online incorporator form your new practice may save you a little bit of time or money.  But often times, these arrangements result in missed fillings or incomplete corporate documents.   The result is that the doctor or dentist fails to gain the    personal limited liability sought when forming the corporation and inevitably pays more than it would have cost to have a healthcare attorney perform the services in the first place.

If you are thinking about starting a new dental, medical or other health care practice, feel free to contact the Pacific Health Law Group at (310) 776-5384 for a free consultation.  At the Pacific Health Law Group we always seek to add value to your business by providing efficient and complete legal solutions to all of your healthcare legal needs.

 

Dental Patient Referrals: Are referral fees legal in California?

Scenario:  A dentist-client (Dentist A) was recently approached by another dentist (Dentist B) to discuss the referral of new patients to Dentist A's practice.  Dentist B wanted a commission or referral fee on each patient referred to Dental A's practice by Dentist B.  Dentist A declined the offer, believing that this type of arrangement was not conducive to maintaining the high level of trust between himself and his patients.  Was the client correct in his judgment?

Answer:  Yes, Dentist A was correct in his judgment, both legally and practically.  Generally, in California, a dentist may not pay another dentist or non-dentist for patient referrals.  This prohibition is codified under California Business & Professions Code §650 et. seq.   A violation of  this law is also punishable by imprisonment and/or monetary fines up to $50,000.00.  See Business & Professions Code §650(g).

Dentist A's instinct as to this issue was correct for another reason.  Practically speaking, patients are unlikely to trust a referring dentist and/or the treating dentist, where the referral was predicated on a commission and not the general welfare of the patient.  A patient wants to believe, as they should, that a dentist's referral of a colleague is due to the treating doctor's reputation and not because the treating dentist pays for his patients' business.

While it is understandable for a dentist/business owner to explore different avenues to increase revenues, it is always advisable to consult with an attorney on the legal and practical results of such arrangements.

California’s Occasional Sale Rule and Your Practice Sale

Recently, I was representing a dentist in the purchase of a practice and a unique issue came up about the occasional sale tax exemption. My client wanted to know if there was any unforeseen actions he could take after buying the seller's lone practice which would prevent the seller from utilizing the occasional sale exemption and thereby expose my client to liability in the future. The short answer in that transaction was no.

Generally, when a dentist or physician sells her lone practice, she will not have to pay any California sales tax on the purchase price of her practice. This is because the transaction will usually qualify as an "occasional sale" under California law. Pursuant to California's Revenue and Taxation Code, Section 6006.5, an "occasional sale" is defined as:

(a) A sale of property not held or used by a seller in the course of activities for which he or she is required to hold a sellers permit or permits or would be required to hold a sellers permit or permits if the activities were conducted in this state, provided the sale is not one of a series of sales sufficient in number, scope, and character to constitute an activity for which he or she is required to hold a sellers permit or would be required to hold a sellers permit if the activity were conducted in this state.
(b) Any transfer of all or substantially all the property held or used by a person in the course of those activities when after the transfer the real or ultimate ownership of the property is substantially similar to that which existed before the transfer. For the purposes of this section, stockholders, bondholders, partners, or other persons holding an ownership interest in a corporation or other entity are regarded as having the "real or ultimate ownership" of the property of the corporation or other entity.
(c) A sale of property, other than hay, by a producer of hay, provided that the sale is not one of a series of sales sufficient in number, scope, or character to constitute an activity for which the producer would be required to hold a sellers permit if the producer were not also selling hay.

If the dentist in our scenario owned multiple practices, then she could possibly eliminate the occasional sale exemption by selling a second or third practice within the same tax year that she sold her first practice to my client. Regardless, because only the seller can make these "series of sales," there was no future exposure to my client. This was welcomed news to my client and it allowed him to focus on running his new practice without worrying about any future liability to the seller her sale's tax.