August 3, 2017 RE: ThursdayShack

Re: ThursdayShack

An Update on the Tax Treatment of Hospital Recruiting Loans by Alan Gassman & Brandon Ketron

Coordinating Business Conduct: Contractor Relationships and Insurances Part 2 by Chuck Wasson, Scotty Schenck & Alan Gassman

 School Anxiety by Dr. Rahul Mehra, M.D.

Two Ways That Medical Practices Can be Paid by Medicare—Beyond Fee for Service Billing and Ancillaries Part 2 by Alan Gassman and Scotty Schenck

The Best Place to Find More Time by David Finkel

Richard Connolly’s World

Humor! (Or Lack Thereof!)


 We welcome contributions for future Thursday Report topics. If you are interested in making a contribution as a guest writer, please email Alan at


This report and other Thursday Reports can be found on our website at

 Quote of the Week

 “Don’t be obsessed with your desires Danny. The Zen philosopher, Basho, once wrote, ‘A flute with no holes, is not a flute. A donut with no hole, is a Danish.’”

-Ty Webb

Caddyshack is a 1980 American sports comedy film directed by Harold Ramis and written by Brian Doyle-Murray, Ramis and Douglas Kenney. It stars Michael O’Keefe, Chevy Chase, Rodney Dangerfield, Ted Knight, and Bill Murray. Doyle-Murray also has a supporting role. The film was later dedicated to producer Douglas Kenney, who died shortly after the film’s release.

This was Ramis’ first feature film and was a major boost to Dangerfield’s film career; previously, he was known mostly for his stand-up comedy.  Caddyshack has garnered a large cult following and has been hailed by media outlets, such as Time and ESPN, as one of the funniest sports movies of all time.  Click HERE, HERE, or HERE to view some of our favorite scenes.


An Update on the Tax Treatment of Hospital Recruiting Loans     

by Alan Gassman & Brandon Ketron  

The following is a brief case synopsis of the cases discussed in the article below:

  1. Salloum v. Commissioner T.C. Memo 2017-127 – If a hospital guarantee advance is not reported as income upon receipt and was then treated as a loan, the doctor cannot deduct repayment in a later year.
  2. Wyatt v. Commissioner T.C. Memo 2015-31 – The taxpayer and the IRS stipulated that the hospital guarantee advance was a loan and was not income upon receipt.  The Court did not scrutinize what the parties agreed to and held forgiveness of the loan was income.
  3. Vancouver Clinic, Inc. v. United States WL 1431656 (W.D. Wash. Apr. 9, 2013) –  The Court held that a hospital guarantee advance is income upon receipt and not a loan due to the fact that neither party expects for the loan to be repaid due to the physician remaining at the hospital for the commitment period.
  4. Rosario v. Commissioner T.C. Memo 2002-70 – The court held that the hospital guarantee amount was a loan relying on the fact that the hospital received a lien on the practice assets and sued the physician for repayment.
  5. TAM 2000-40-004 – The IRS ruled that advances were compensation, even though they were secured by a promissory note and bonus agreement due to there being no unconditional and personal obligation to repay the advances.

The June 2017 Tax Court Memorandum of Salloum v. Commissioner (T.C. Memo 2017-127) involved a traditional Hospital Recruitment Agreement whereby the physician opened a new practice in an under-served community, and received a loan during the first six months of practice as a compensation guarantee.  The end result was that he owed $146,500 after the end of the six month guarantee period.

The Agreement provided that the loan amount would be forgiven if he practiced in the community for a total of three years.  Under the Agreement, the loan was reduced by 1/30th each month the physician remained in the community following the first six months.  For example after the first full year of service, 6/30ths (1/5th) of the total loan balance was forgiven, and the hospital issued a 1099 to him each year for the amount of the loan that was forgiven.

The doctor did not include any of the amounts borrowed in income during the six months, and it is not discussed whether the physician included the amounts forgiven in subsequent months as income.  In February of 2011, the physician terminated his employment with the hospital and left the community.  In 2012, the physician paid to the hospital roughly $47,000 and deducted this amount as a Schedule C expense for repayment of advanced compensation.  The IRS disagreed and brought a collection action arguing that the amount paid to the hospital was a repayment of a loan and not deductible by the taxpayer.  The Tax Court Decision held that the amounts paid to the physician under the Hospital Recruiting Agreement are considered to be loans and the repayment of the loan is not deductible.

The Opinion indicates that the doctor and the IRS both agreed in the first stipulation of facts that the loan amounts received were not income, which we believe was an error on the part of the IRS.

In the 2002 Tax Court Memorandum Decision of Rosario v. Commissioner, a doctor borrowed money to start a new practice in the same manner as described above, but there was nothing in the agreement that indicated that the loan would be forgiven.  Repayment of the loan would not occur until six years later, and the IRS argued that the loan received was unreported income in the year of receipt.  The Court concluded that the parties intended for the payment to be a loan, as proven by the fact that the hospitalist situation received a lien on medical practice assets and also sued for repayment and won the lawsuit.

A different result was reached by the 2013 U.S. District Court of Washington case Vancouver Clinic Inc. v. U.S., where a clinic company gave newly recruited physicians loans in addition to compensation that were forgiven if the doctor stayed with the practice for five years.

The Court concluded that the intent of the parties was to have the doctor stay for five years, and distinguished the situation from the Rosario case, because in Rosario there was no loan forgiveness provision.  The Vancouver Clinic case did not make mention of the Rosario case, and tax lawyer Ralph Levy, Jr., in his 2013 article entitled “Beware of the Tax Consequences of Physician Recruitment Repayments” noted that by comparison the agreement in Rosario did not have forgiveness provisions, plus the amounts owed were secured by accounts receivable and enforcement action was taken.  In Vancouver Clinic, the Court noted that an important factor in determining whether the advancements are considered as loans or as income is whether the parties intend for the amounts to be repaid at the time the payment.  In determining that the advancement is considered income at the time it is received, the Court was persuaded by the fact that in most cases, the hospital expects for the physician to remain at the hospital for the commitment period and for the “loan” to be forgiven.

A previous Thursday Report written on the Vancouver Clinic case and others can be found by clicking here. Link –

In a 2013Tax Court case Wyatt v. Commissioner (T.C. Memo 2015-31), the Tax Court cited to the Rosario and Vancouver Clinic case which presents the two conflicting views on the subject of whether amounts received under a Hospital Recruiting Agreement constitute income upon receipt or a loan.  The Court did not discuss the classification, but instead simply agreed with the parties’ stipulation that the amounts received constituted a bona fide loan.

Based upon the above, it would seem to us most likely that the correct tax treatment of a typical Hospital Recruitment Agreement which requires the doctor to stay in the geographical area and provides for the loan to be forgiven, will be considered to be income upon receipt by the doctor, unless it can be proven that the doctor and the hospital intend for the doctor to leave the area and repay the loan.

It is important to remember that Tax Memorandum Decisions are not reviewed by other Tax Court judges besides the one who wrote the Opinion, are not to have precedential value.  The conflicting opinions of Rosario, Vancouver Clinic, Wyatt, and Salloum will doubtlessly cause confusion, while the Salloum opinion may provide some degree of protection for those doctors who do not include recruitment loans in income upon receipt, notwithstanding that this part of the Decision was probably incorrect.

The wicket gets stickier when the loan from the hospital goes to a medical group, which in turn hires the doctor and uses the money to prevent having negative cash flow in the first year of employment.  If the Employment Agreement signed between the group and the doctor and the Recruitment Agreement signed by the group, the doctor and the hospital, require the doctor to stay in the community until the loan is forgiven, then it would seem more likely that a court would conclude that the loan was not intended to be repaid, unless strong evidence to the contrary can be produced.

One question is whether an IRS auditor might claim that income was incorrectly reported in the year that the loan was made, and that income tax should have been paid instead on loan forgiveness that occurred in the subsequent years.  Fortunately, the Mitigation provisions of Internal Revenue Code Section 1311 – 1314 should enable a physician or a medical group to adjust the current year’s income tax liability by the amount of taxes previously paid, notwithstanding that the statute of limitations will have passed.

It is noteworthy that the original Stark and Anti-Kickback Rules relating to Hospital Recruitment Agreements prevented a medical group from having a non-competition covenant that would prevent the doctor from staying in the community upon termination of employment during the forgiveness term.  These rules were updated in 2007, to provide that reasonable non-competition covenant provisions may be used.  Many states, including Florida, have non-competition covenant laws which require that a non-competition covenant must be reasonable to be enforceable, so the regulation may be read to allow any non-competition covenant that would be permissible under applicable state law in those states where a reasonableness standard applies.

The authors, nevertheless, strongly encourage clients to limit the non-competition covenant to explicitly permit the doctor to at least practice medicine as a solo practitioner or in a small group in a zip code zone or similar small area that can be chosen by the practice at the time of termination of employment.  The zone chosen will be required to have reasonable office space available.


Coordinating Business Conduct: Contractor Relationships and Insurances Part 2 (of 2) 

by Chuck Wasson, Scotty Schenck & Alan Gassman

Schenck is a senior at Northeastern University studying journalism and applying to law school. He started interning with our law firm on June 20 and has already made a significant contribution. Watch out for this new lawyer on the block who should graduate and pass the bar in 2021.

Chuck Wasson has been active in the insurance industry for over twenty years, starting as an insurance adjuster at Sarasota’s Johns Eastern Company, to his current position as President at ARCW Insurance. Over the years, Chuck has developed a corporate philosophy of understanding that the insurance they sell can be purchased from a number of different agencies or outlets. For that reason alone, ARCW Insurance has strived to be different from the rest by being the one-stop shop for all insurance needs both commercial and personal. Chuck graduated from the University of Florida in 1988 and attained the Chartered Property Casualty Underwriter (CPCU) designation in 1998. In 2007, he was given the designation of Certified Insurance Counselor (CIC).

The title of this article isCoordinating Business Conduct: Contractor Relationships and Insurances.” That last word – the word “insurances,” is why we’re really here. Insurance is our main topic, and we’ll talk about what  lawyers and other professionals need to know about structuring business entities, business conduct, and, of course, the insurance part of it.


Question (Alan Gassman): I have a physician client who has several different types of medicines that need to be refrigerated. Is there any chance of liability there?


Answer (Chuck Wasson): In the food industry or medical industry, we always look to make sure our clients have a spoilage coverage exposure. Sometimes physicians that are immunologists will carry $50,000, $60,000, or even $70,000 in refrigerated-type drugs. Technology is subject to, especially here in Florida (I can hear the thunder rumbling as we speak), power outages.  We want to make sure that anything that is temperature dependent has coverage. Insurance companies are pretty strict on what they want to see. They don’t want to see a household refrigerator that is in a break room, that people are keeping stuff in. If you’ve got a substantial non-product that is potentially exposed to any type of temperature change, the insurance company is going to want to see a commercial type refrigerator.  Some of them may even go so far as, in a written agreement, requiring that these refrigerators be alarmed, so that if there is a temperature change plus or minus so many degrees, somebody is notified.


Q:        Let’s say my business accidentally burns down, and I need to get a new front for my business as soon as possible, how will a proper insurance policy help me with those costs?


A:        You may or may not be familiar with loss of income which covers any type of lost income in the amount of a covered loss.  What I think is underutilized is the extra expense coverage portion of that which is an additional part of a loss of income coverage. Oftentimes, there is certain businesses that if there is a type of disaster at their location, that they can set up another location relatively quick.  So, in essence, the loss of income is really not that great.  It is pretty standard right now to see a 48-hour waiting period before the loss of income coverage kicks in.


Where I see potential for this type of business is the extra expense coverage.  For instance, you’ve got a business that is paying $1,000 for rent at a location.  That location is damaged by a covered peril, and then they have to go out and rent another location and that additional location is now $2,000—where there is a $1,000 additional expense that the client is going to have, but it would be nice to go ahead and have that covered.  Also, we’ve got expenses such as forwarding of mailing advertising, putting it in print media to let customers know that you are still in business, but now just at a different location. This can help mitigate those damages on the loss of income.


Q:        What about insuring independent contractors on Worker’s Compensation policies?


A:        This question comes up often.  Just because you pay someone under a 1099, they may not truly be an independent contractor. You have to go by the guidelines of the state as to whether they truly are independent contractors. But, if we are going by the eyes of the insurance world, most of the time they are going to be treated as employees. So if you’ve got someone working for you and they do not have a filed exemption with the state or they do not have their own Worker’s Comp policy, chances are the payroll that you pay them or the fees that you pay them are going to be charged on your Worker’s Comp policy.  There is just no way to get around it, and the insurance companies are pretty strict on this.


For all of the non-construction business clients that filed for Worker’s Comp exemptions, anything effective after  2013, those exemptions are only valid for two years. Insurance agents should try to remind all of their clients that they need to make sure they put some reminder that every two years they are going to re-file for that exemption.  If they don’t and then the Worker’s Comp policy is audited, then that business owner is going to be charged the corresponding rate for their payroll.


At times, it’s actually in the best interest of a business to take the Worker’s Comp.  In the State of Florida right now, Worker’s Comp policies are capped at $130,000, so depending on the industry, the rates for the Worker’s Comp may actually be very low, especially with someone like a physician, the rate is extremely low – it is 48 cents per $100, so it is really worth it for them to take coverage onto the Worker’s Comp policy.  It’s not just loss of wages, there is also some medical coverage, and there is a little bit of death coverage for if an employee dies on the job.  So it’s not a bad coverage and in a lot of situations it is not that cost prohibitive.


Q:        How can insurance help with cyber-fraud, or technology related crimes that damage a business, or their clients?


A:        We are hearing every day about people and companies getting their computers hacked.  But with cyber liability coverage, not just computer hacking is covered.  If you take a credit card, you’ve got a cyber exposure.  You can have someone at your front desk skimming your credit cards or selling personal information of your clients.  If anyone has a laptop or cell phone that they use in business and it gets lost and someone hacks into that, you have an exposure.  There was a situation about a year ago that happened to a large radiology group.  They had a big shred barrel, the kind that are two wheels and they put all of their patient records that they didn’t need and anything that had personal information in this bucket. The city would routinely pick up the bucket, put it on the back of the truck, and one day, sometime between when it left the practice and when it got to the shredding facility, the bucket fell off the truck, and the practice was notified about three days later when someone called and told them about their patient records were flying all over the street.


First off, the practice had to file with the state that there was a potential breach, and then they also had to notify every single patient that was in their practice, because they had no idea as to whose records were actually in that bin that fell off the truck.  The cost for credit monitoring, patient notification, and credit repair was in excess of $1,000,000.  Luckily, they had a cyber policy in place to cover these fees. We are seeing a lot of people that click on phishing emails. We also are seeing more ransomware situations, where computers are held hostage until their owners “pay up.” Advanced ransomware can encrypt your files and require payment to decrypt them. Insurance companies will sometimes pay the big bucks to get the computer unlocked.  Cyber liability is a whole myriad of different coverages, and that is something that every client, whether you are small mom-and-pop shop or a multi-million dollar company, needs to have.


Q:        How do insurance companies gauge what the insurable value of a building is?


A:        Many times, I’ve had clients who haven’t had their buildings appraised for probably ten or fifteen years.  Regardless, those are not insurable figures.  What you want to look at is what the cost of rebuilding the actual structure is, and the only way to have that is to get a certified inspector come out and spend in-depth time looking at your building, the type of building it is, the area that it is in, and what it would cost to rebuild the building exactly the way it is.  A lot of insurance companies, such as like Traveler’s, Hartford, and Liberty Mutual have a little bit of a build in cost-of-inflation factor which will increase a little every year, but sometimes that is not enough.  Other times, it is too much.  I may have a building that actually only costs about $250,000 to rebuild, but because of the increase each year, the policy may be $350,000 or $400,000.  So, it is vitally important that, at least every five years or so, clients get their buildings re-inspected to record what that new cost would be.


Q: I know hurricane season is upon us. How can we best prepare in relation to our insurance policy?


A:        Hurricane season is the ideal time to be looking at their insurance policies.  They also need to be looking at inventories because it is both on the personal side and on the commercial side.  We’ve got fantastic phones right in our pockets. You can walk through a building or walk through your home, open up every single door, open up every cupboard, every cabinet that you have in your business or your building and narrate what you have, because that is going to be invaluable. And that’s precisely what we suggest you do.


When hurricane Andrew hit, it was very difficult for people to try to do any type of inventory on their belongings, both on the business and for houses. That was one of the biggest complaints that I had is filling out the inventory sheet. Businesses just had no idea where to start.


If you don’t have a flood insurance policy and you get a flood policy now, it is going to be a thirty day wait. Right now, there is that storm that is brewing out there that is probably going to hit the panhandle. Once a named storm gets within a certain proximity of the state, they cease writing at all. I mean this affects adding any type of coverage, closing on houses, and closing on businesses. What you need to do is take care of all these issues now, not wait until a potential storm comes.


Alan:   What’s important is that you think through your insurance policy, and get either a good lawyer who knows business or an independent insurance agent, or both. Think through the different coverages you will need and don’t wait until you open your business to think about insurance.



School Anxiety

by Dr. Rahul Mehra, M.D.

MehraVista Health, LLC (MVH) is a national healthcare organization based in Tampa Bay that is led by Rahul N. Mehra, M.D.

MVH provides behavioral health navigation services for those employees, students and individuals to identify the best solution for their need. By background, Dr. Mehra is board certified in Child, Adolescent and Adult Psychiatry by the American Board of Psychiatry and Neurology.

As fun-filled summer vacation draws to a close, be aware of DIDASKALEINOPHOBIA (fear of going to school).  School avoidance, school refusal and school phobia are more common terms interchangeably used to describe a constellation of behaviors occurring among 1-5% of school aged children.  College students also experience “homesickness” when starting their freshman year, returning to college or even beginning graduate school.  Irrespective of age, transitioning to school or college is symbolic of achieving specific milestones in emotional development.  Fear, worry and anxiety are common, normal feelings that families and students experience during this adjustment period.  The ability to work through these emotions helps build longer term resiliency and strengthens coping skills.  Emotional resiliency is a significant protective factor to “toughen up” our mental framework to ward off the ill effects of internal and external stress.

In some instances the fear, worry and anxiety if left untreated can lead to significant maladaptive behavior.  Awareness is the first step to master these concerns.  The following is a brief summary of what to look for age specific

Ages 5 – 11:

  • Clinginess to parent
  • Temper Tantrums
  • Tearful
  • Refuses to separate from parent at home, in car or school
  • Excessive crying
  • Vague physical complaints like sore throat, headache, stomachache

Ages 11 – 18:

  • Defiance
  • Running away
  • Sleep disruption
  • Oppositional
  • Anger
  • Depression

Ages 18 or Older:

  • Anxiety
  • Depression
  • Impulsive, reckless behavior
  • Dark social media posting
  • Poor grades
  • Alcohol/Drug abuse
  • Social isolation
  • Suicidal threats

These behaviors are descriptive and not exhaustive in nature.  Children and young adults are changing rapidly both physically and emotionally.  Many times the behaviors listed above cross over from one age group to the other.

Potential Causes:

  1. Recognize and be aware of your own anxiety, worry or fear.  Students frequently mirror the emotional tone of their caregiver.  Family stress (such as marital conflict, financial issues, physical/emotional illness, moving, etc.) can inadvertently be transferred on to the student irrespective of age.
  2. Arrange a school/college tour before begins to familiarize and normalize surroundings and educators.  This helps begin a relationship with administration in case your student has special needs.  Also, the stress and anticipatory anxiety will be less for you and your student.
  3. The actual physical transition to school can be the most challenging and difficult.  The transition should be quick and supportive but please do not linger.  You may have to leave your child crying but eventually the crying will subside.  Manage your guilty feelings.
  4. Talk to other parents to learn from their experiences.  Realize you are not alone.
  5. Encourage your student to talk about their fears, worry and anxieties.  Listen actively – talking is a way to help build resiliency and enhance the student/parent bond.
  6. Use school resources (counselors) to learn how to best handle the situation and ask for their help.
  7. Give the student a small meaningful object (like a photograph of their favorite pet) which can serve as an emotional “security blanket” when the student is at school.
  8. Always focus on your student’s strengths.  Children often have physical growing pains that are a normal and healthy part of human development. Emotional pains occur similarly.  They are overcome with education, awareness and support.

School and college should be a fun, exciting time for your student and family.  Be positive – this will help ensure your student to have a successful school year.  Please contact MehraVista Health at 866.684.2007 with any questions or concerns.


Two Ways That Medical Practices Can be Paid by Medicare—Beyond Fee for Service Billing and Ancillaries Part 2 (of 2)

by Alan Gassman & Scotty Schenck


We welcome questions comments and any suggestions on this draft article, which is destined to go better places.

Between 2011 and 2015, Medicare released two new ways that medical offices can be paid to help provide good care for patients.

Both methods involve primarily non-physician time and services, and can substantially increase the revenues and quality-of-patient care if handled effectively and efficiently with the relatively large Medicare population.

Chronic Care Management, first instituted in 2015, enables medical practices to earn up to $43 per month by providing an infrastructure to track and be responsive to patients who have two or more chronic conditions that meet the definitions described below.

Annual Wellness Visits, first instituted in 2011, consist of 20 minute or longer patient interviews and discussions with trained, but non-physician practice personnel and pay $172 for the first visit and $111 each year thereafter.

This paper describes the two programs and requirements associated therewith.

Conscientious medical practitioners in many specialties can consider adding these services for patients not receiving them elsewhere, and Medicare patients may begin to become educated and seek the benefits of these services as an enhancement to their otherwise applicable medical care.

Entrepreneurial organizations are gearing up to provide medical practices with protocols, personnel, and other infrastructure, which is permissible so long as patients and referral sources come solely from the practice, and not from such outside consultants.



For CCM services to be properly billed, a practice must establish, implement, revise or monitor a comprehensive care plan for a patient. This is an electronic care plan based on assessments of physical, mental, cognitive, psychosocial, functional, and environmental factors. Practices must make this available to patients and/or caregivers outside the practice. They also must coordinate with home- and community-based clinical service providers. Further, practices must provide 24/7 access to physicians, qualified health care professionals, or clinical staff, as well as a means to make contact with heath care professionals to address urgent needs.

Although clinical staff are allowed to fill several roles in the CCM process, it’s important to remember that medical decision-making with moderate to high complexity must be done by the billing practitioner. Medicare also states that all CCM services codes “are valued to include ongoing oversight, management, collaboration and reassessment by the billing practitioner.” Without this critical oversight, CCM services cannot be billed for. Medicare does also state that “CCM services are typically provided outside of face-to-face patient visits.”

Third-party vendors could provide services for physicians by allowing access to their care plan via technological infrastructure as well as being available via phone or online. The third-party vendor must also ensure that the practice’s patients have a means to contact health care professionals if they are providing 24/7 access and serving as clinical staff.

“For new patients or patients not seen within one year prior to the commencement of CCM, Medicare requires initiation of CCM services during a face-to-face visit with the billing practitioner (an Annual Wellness Visit [AWV] or Initial Preventive Physical Exam [IPPE], or other face-to-face visit with the billing practitioner). This initiating visit is not part of the CCM service and is separately billed.” However, patients that have been seen within the past year can be initiated by gaining consent.

Some lawyers agree that an arrangement where third-party employees serving as clinical staff are legal. There is merit to the concern that a setup could violate Florida fee splitting laws or the federal Medicare regulations required for CMM services. Despite the general supervision standard, it’s recommended that physicians/billing practitioners maintain oversight, and it is required that they perform any complex decision making, obtain consent from patients to initiate CCM services, and approve all updates to patient care plans.

Consent should be garnered by the billing practitioners in all cases because of problems that could arise if a third party talked to a patient, convinced them to initiate CCM services, and received their consent. Florida law states that it is unlawful to “[o]ffer or pay any commission, bonus, rebate, kickback, or bribe, directly or indirectly, in cash or in kind, or engage in any split-fee arrangement, in any form whatsoever, to induce the referral of patients or patronage to or from a health care provider or health care facility.” See Fla. Stat. § 817.505 (1)(a). Initiating CCM services could be seen as inducing patronage to a health care provider for a kickback, because the third-party vendor will obviously expect to be paid for providing clinical staff. This should be avoided.

Changes in 2017 brought a new add-on code for physicians doing face-to-face CCM work. When a billing practitioner “personally performs extensive assessment and CCM care planning beyond the usual effort described by the separately billable CCM initiating visit,” he/she can receive an additional $64 for using CPT code G0506. Since it is part of the initiating visit, G0506 can only be billed once per lifetime per patient.

The title of clinical staff deserves elaboration, since Medicare is somewhat vague in defining who can qualify. See supra, Definitions(8). Executive Director and Legal Counsel of the American Association of Medical Assistants Donald A. Balasa, in his article “Incident-to” Billing, said that all American jurisdictions allow unlicensed allied health professionals, such as medical assistants, to perform or assist physicians in their duties. Balasa adds, however, that “state laws do not permit providers to delegate to medical assistants any tasks that require the exercising of independent judgement, or the making of clinical assessments, evaluations or interpretations.” He said “I am not aware of laws in any state that forbid a physician from assigning to a competent medical assistant the verbatim receiving of information from a patient for the physician’s review, and the verbatim conveying of information to a patient as ordered by the physician.” A setup like this would likely maximize subcontracting efficiency while minimize the superfluous work a physician has to do in addition to required CCM work.

Consequently, medical assistants could serve as clinical staff for a practitioner and furnish the CCM services required for billing. Florida law allows medical assistants to do such, but requires that they be under direct supervision (as opposed to general supervision) of a physician. See Fla. Stat. § 458.3485(1) (“‘medical assistant’ means a professional multi-skilled person dedicated to assisting in all aspects of medical practice under the direct supervision and responsibility of a physician”). So medical assistants would have to be in the same office as the billing physician for a setup like this to exist in the State of Florida.

We recommend discussing with the client physician what setup works best for both parties involved. If they don’t mind having extra personnel in their office, medical assistants could serve as the clinical staff while the physician is there. If a third-party staff vendor wants to operate in a separate building in Florida, they will have to hire someone who does not need to operate under direct supervision of a physician, such as an registered nurse.

What isn’t known to us, however, is whether a third-party vendor could hire medical assistants to work in a state where they did not have to be under direct supervision of a physician, and then subcontract the work from Florida to them (or perhaps from multiple states that have direct supervision requirements).

An interesting question is whether a person who is serving as a certified nurse assistant (CNAs) could perform those same duties. Florida law requires that certified nurse assistants serve under a registered nurse or a licensed practical nurse. A registered nurse is “any person licensed in the state to practice professional nursing.” See Fla. Stat. § 464.003(4). Several types of registered nurses, accordingly, could be qualified health care professionals listed by the American Medical Association and Medicare (including nurse practitioners, also known as NPs). A CNA could therefore work under an NP who is filling the role of “other qualified health care professional” for the purposes of the CCM.

While the overall standards for members who are clinical staff are low, we recommend hiring individuals who have strong communication skills and some background in medicine or health to insure a baseline understanding of the medical concepts they may face. This will help them properly maintain communication between physician and patient.

An Annual Wellness Visit has clearer standards, but no minimum time requirement.

Again, the question arises about who can furnish these services aside from the physicians or qualified practitioners, and what type of supervision needs to take place. When WellTrackONE asked the Centers for Medicare & Medicaid Services (Medicare) who would qualify as a “medical professional,” Medicare responded that the category would include “a health educator, licensed nurse, registered dietician, certified medical assistant, nutritional professional (sic) or other medical practitioner who is licensed.” The important factor, ostensibly, is that these individuals are certified or licensed in an area of health/medicine.

Medicare will pay for an initial Annual Wellness Visit, for up to $172, and one subsequent Annual Wellness Visit  per year afterward, for up to $111. Annual Wellness Visits require a Health Risk Assessment (HRA), with subsequent visits updating it. This assessment involves identifying the risks the patient may be prone to, whether they be hereditary, psychosocial, or behavioral. The assessment can be completed before the patient comes in because it collects self-reported information.

The medical professional administering the Annual Wellness Visit then records the medical history and current health care providers of the patient. Risks for depression, as well as a review of the beneficiary’s functional ability and level of safety (hearing impairment, risk of falling, home safety) are conducted. Measurements of the beneficiary’s height, weight, BMI, and blood pressure are also taken. See The ABCs of the Annual Wellness Visit.

The medical professional administering the visit also gives personalized heath advice and establishes a list of risk factors for the patient and gives recommendations.  Moving away from hypotheticals and into actuality, however, routine examinations are not covered under Medicare or the Annual Wellness Visit. Physicals, eye exams, dental services, hearing aids and certain immunizations are not covered by Medicare, and will result in billing. In fact, if the patient asks the doctor to perform a physical examination, or if it otherwise turns into a type of routine examination that is not covered under Medicare, the patient or their additional insurance provider will be asked to foot 100 percent of the bill. Of course, medically necessary and preventative services are covered by Medicare and would be able to be covered, even if it strayed from the Annual Wellness Visit.

The subcontracting of Annual Wellness Visits would be substantially harder than for CCM services. First, the direct supervision standard means that all of these visits must be furnished in the same office suite as the billing physician/practitioner. Second, the third-party staff vendor would have to hire “health professionals” in order to conduct the visits. At minimum this would be a licensed nurse practitioner, certified medical assistant, or certified nurse specialist. However, they could also hire individuals with medical knowledge to assist nurses with visits, but this might seem less useful to a busy physician. Both of these factors could cause a larger overhead, but subcontracting would still be possible.



(1) Centers for Medicare & Medicaid Services: Herein after “Medicare”, this is the government-funded and -managed health care system in the United States for the elderly (Medicare) and the impoverished (Medicaid). Both Chronic Care Management (CCM) and Annual Wellness Visits fall under the purview of the Centers for Medicare and Medicaid Services.

(2) Chronic Care Management: Also known as CCM, this monthly health care service is available to those with Medicare Part-B, a service available to US citizens or permanent residents (five continuous years) that are also 65 years or older. Patients must have two or more chronic conditions expected to last at least 12 months, or until death. Among other services, medical practices that bill for CCM must manage and update electronic health records for all their CCM patients, create and maintain a “comprehensive care plan;” provide 24/7 access to clinical staff, and  coordinating care with home and community-based clinical service providers.

This requires at least “20 minutes of clinical staff time directed by a physician or other qualified health care professional,” and Medicare also assumes “15 minutes of work by the billing practitioner per month.” Medicare states that, in most cases, they believe that “clinical staff services will provide CCM services incident to the services of the billing physician.” As is seen below under (5) General Supervision, Medicare has made a special exception for CCM services to allow clinical staff to furnish services incident to and under the general supervision of the billing physician.

Physicians and billing practitioners use code CPT 99490 each month to earn up to $43 from Medicare. It is important to note that only one practitioner per month can bill for this service for a specific patient, first-come first-serve (or, in this case, first-collect payment).

(3) Complex CCM: This is chronic care management for patients who, in addition to the requirements for traditional CCM services, also have what Medicare calls “[m]oderate or high complexity medical decision making.” That decision making must be done by the billing practitioner. In addition, “60 minutes of clinical staff time” incident to the billing practitioner are necessary for complex CCM billing, as opposed to 20. Billing practitioners use CPT 99487 for a reimbursement of up to $94, and, for every additional 30 minutes of complex CCM services furnished, practitioners can use CPT 99489 for up to $47 for each billing of 99489.

Complex and regular CCM cannot be reported within the same month.

(4) Annual Wellness Visit: This annual health care service is available to those who have been enrolled in Medicare Part-B for at least 12 months. This includes the gathering of personal/family medical history, basic physical measurements (height, weight, BMI, and blood pressure), a Health Risk Assessment (HRA), and advice from the billing practitioner or clinical staff on how to address specific health risks.

(5) Direct Supervision: A direct supervision standard in a medical setting requires that a physician be in the same building as procedures and services are being furnished, and be able to provide assistance, though they do not have to be in the room or personally provide such services. In Florida, direct supervision by a physician requires the physical presence in the same office suite. See Fla. Stat. § 456.053(3)(e) (Defines direct supervision as “a physician who is present in the office suite and immediately available to provide assistance and direction throughout the time services are being performed”). See also Rule 64B8-2.001(1)(a), Florida Administrative Code (“‘Direct supervision’ shall require the physical presence of the supervising licensee on the premises”). This is the level of supervision required for Annual Wellness Visits.

(6) General Supervision: This standard is looser than direct supervision. Traditionally, general supervision means that physical presence is not required, but that the physician is on call and able to be reached by telecommunication if need be. It is defined in the Code of Federal Regulations as “under a physician’s overall direction and control but the physician’s presence is not required during the performance of the procedure.” See 42 C.F.R. § 410.32(3)(I). This is the level of supervision required for chronic care management (CCM) because Medicare made an exception specifically for that service. Typically, incident to services are under direct supervision standard. See Definition (12).

(7 ) Current Procedural Technology: Also known as CPT, this is a set of medical codes that are used to report medical, surgical, and diagnostic procedures and services provided by health care entities and is published by the American Medical Association. This is how physicians record and bill for medical services and procedures.  Both CCM and Annual Wellness Visits have their own CPT codes.

(8) Qualified Health Care Professional: Also known as QHP, this is defined by the CPT as “an individual who is qualified by education, training, licensure/regulation (when applicable), and facility privileging (when applicable) who performs a professional service within his/her scope of practice and independently reports that professional service.” E&M Coding: Clear and Simple states that non-physician practitioners and QHPs are synonymous. It defines a non-physician practitioner as “a medical provider who is licensed to bill independently to some extent but is not a physician. Examples are an ARNP, PA, and CNM (synonymous with QHP).”

(9) Clinical Staff: Defined by the Current Procedural Technology as an individual “who works under the supervision of a physician or other qualified health care professional and who is allowed by law, regulation and facility policy to perform or assist in the performance of a specified professional service; but who does not individually report that professional service.”

These individuals are allowed to furnish CCM services under the general supervision of, and incident to the services of a physician or other qualified health care professional. This could allow for video supervision and communication from a physician in some states. As long as state law allows a certain individual to “perform or assist in the performance” of a physician or other qualified health care professional’s work, then they can serve as clinical staff, without the need for a license.

Although the CPT does not set qualifications high, third-party staff providers or physicians employing their own clinical staff need to beware of individuals who are excluded by law from participating in federally-funded health care programs. These individuals include those who have committed the following crimes: Medicare or Medicaid fraud, as well as any other offenses related to the delivery of items or services under Medicare, Medicaid, SCHIP, or other State health care programs; patient abuse or neglect; felony convictions for other health care-related fraud, theft, or other financial misconduct; and felony convictions relating to unlawful manufacture, distribution, prescription, or dispensing of controlled substances. See 42 U.S. Code § 1320a–7(a). Those are mandatory exclusions, but you can also check 42 U.S. Code § 1320a–7(b) for permissive exclusions that the Office of the Inspector General under the U.S. Department of Health and Human Services is allowed to exclude from federally-funded health care systems at any given time. The periods in which individuals are excluded vary, please refer to 42 U.S. Code § 1320a–7(c) for more information.

(10) Medical Professional: This is an individual who is permitted to perform an Annual Wellness Visit “working under the direct supervision of a physician.” Keep in mind that any “health professional,” as defined by the Code of Federal Regulations, can provide Annual Wellness Visits. See 42 C.F.R. § 410.15(a) Definition of Health Professional. However, medical professionals are the lowest-qualified tier of employees who can perform such a service. Medicare says this classification includes “health educators, registered dietitians, nutrition professionals, or other licensed practitioner.” Although this leaves quite a few possibilities open for who can serve such a role, Medicare has put an emphasis on these individuals being licensed and having significant medical/health knowledge.

(11) Billing Practitioner: For the purposes of this memorandum, this is a physician or other qualified health care professional who bills Medicare patients for either CCM services or Annual Wellness Visits.

(12) Incident To Service: This refers to any service that is “furnished incident to physician professional services” that are “part of your patient’s normal course of treatment, during which a physician personally performed an initial service and remains actively involved in the course of treatment.”

Pursuant to Medicare regulations, “incident to” services have a general rule that they be provided under direct supervision. Direct supervision of a physician means that those specialists are present in the same building. Medicare created an exception that allows CCM to be provided under a “general supervision” standard. The physical presence of the billing health care professional (physician or non-physician practitioner) is not needed at the time CCM services are being furnished.

Special Notre Dame Announcement


Please click here to see the amazing Notre Dame Tax and Estate Planning Institute agenda and  schedule for the dates in 2017 in South Bend, Indiana. This starts with a late Wednesday 2-hour presentation on what you need to know about bankruptcy law, and wraps up late Friday, followed by the Fighting Irish of Notre Dame vs. NC State on Saturday the 28th.


The DoubleTree hotel adjoins the convention center, and the Thursday evening cocktail reception that is held there should not be missed. We’ll buy drinks after the Wednesday presentation for anyone who mentions the Thursday Report at the DoubleTree bar.


The Best Place to Find More Time

by David Finkel,

Wall Street Journal bestselling author of, Scale:

Seven Proven Principles to Grow Your Business and Get Your Life


As a business owner you’re perennially strapped for time and stretched to the breaking point.

So where is the best place to look to find more time?

Some people say get into the office earlier, other say stay later, and still others suggest you come in and work on the weekends.  All of these can help, but they don’t deal with the real underlying time issue.  What I tell our business coaching clients is that you don’t need to work longer hours (you’re likely already working too many hours as it is), but rather you need to get more value from the hours you are currently working.

The first place to work to “find” more time is to carefully audit the low value junk time you’re already doing so you can replace this low value work with higher order activities.

Action Step:  Time Log  (1 week)

Keep track of your time in 5 minute increments for one week.  Log what you do and note any tasks that you’re doing that you could either pay someone else $30 or less per hour to do, or that would have very little real consequences if you delayed or simply didn’t do them.

These are your low value “junk food” hours.  And if we carry that analogy forward a moment, what’s the easiest way to lose weight?  Is it to work out for an hour a day at the gym?  It isn’t.  The easiest way to lose weight is to replace the junk food, empty calories that you eat with healthier options.

To find more time do the same thing.  Identify your junk time tasks then apply the 4 “D’s” to them, reinvesting the saved time in higher value activities.

This is the easiest place to make changes because consequences of dropping or delegating these junk tasks are small.

So list all the junk activities you do on a weekly basis. Once you’ve identified them, you can apply the following “four Ds” to get them off your plate.

The Four Ds


  1. Delete it. Some low value activities just plain shouldn’t be done by anyone. Look at the action item and ask yourself what’s the consequences if no one did it. If it’s small, then consider just crossing it off of your list altogether.
  2. Delegate it. Maybe it’s a task that needs to get done, but not necessarily by you. Hand it off to your assistant, or a staff member, or a vendor. Anytime you can hand off a lower value activity to someone, you free up both your time and your focus to do more valuable work for your business.
  3. Defer it. Maybe this task needs to be done and done by you, but should it happen right now? Sometimes delaying the action is the smartest choice.
  4. Design it out. If you find yourself handling a recurring low value activity over and over, instead of doing it, improve the process or system to keep the task from coming up in the first place. For example, if you get the same seven customer questions repeatedly, post a FAQ page with the answers on your website. Or perhaps you can preempt questions by giving new clients a “quick start” booklet that proactively answers these seven questions. Or maybe create an instructional DVD that gives new clients your best presentation while answering these common questions. You get the idea. Designing out a recurring activity is the very essence of building a systems-reliant Level Three business. It simplifies processes and empowers your team to get consistently great results with less and less reliance on you, the business owner.


I’ve seen the above formula work magic for clients, helping them get a bridgehead to reduce their working hours and reclaim a sense of control about their business day.

If you enjoyed the ideas I shared, then I encourage you to download a free copy of my newest book, Build a Business, Not a JobClick here for full details and to get your complimentary copy.

A lady walks in the store and steals $100 bill from the register without the owner knowing. She comes back 5 minutes later and buys $70 worth of goods from the $100 bill. The owner gives her $30 in change.

How much did the owner lose?


Richard Connolly’s World

Insurance advisor Richard Connolly of Ward & Connolly in Columbus, Ohio often shares pertinent articles found in well-known publications such as The Wall Street Journal, Barron’s, and The New York Times. Each week, we will feature some of Richard’s recommendations with links to the articles.

This week, the article of interest is “Five Killer Mistakes Trust Lawyers Make: Ways to avoid headaches when crafting a trust” by Richard Nalley.  This article was featured on June 18, 2016 in Barron’s

Richard’s description is as follows:


When you pay a lawyer to craft a trust, you are ostensibly buying peace of mind, but the “experts” sometimes make mistakes or, with the best of intentions, steer their clients toward wrong choices.

Benjamin Pruett, a principal and fiduciary counsel at Bessemer Trust in Washington, D.C., quips that clients’ “requests make perfect sense to a logical, rational, normal human being. But lawyers, not being normal, logical, or rational human beings,” can wind up creating a set of problems.

 See the attached article for the five of the most common mistakes that trust lawyers make identified by ACTEC attorneys John Bergner, Bruce Stone, and Reed Moore and others.  To View the Full Article Click Here


Humor! (Or lack thereof!)


A golfer standing on a tee overlooking a river sees a couple of fishermen and says to his partner, “Look at those two idiots fishing in the rain.”

“Golf is a good walk spoiled” –Mark Twain


…and of course, the king of golf humor Bob Hope always had a 1 liner about his favorite past time:

“Golf is my real profession. Entertainment is just a sideline. I tell jokes to pay my greens fees.”

“If you watch a game, it’s fun. If you play it, it’s recreation. If you work at it, it’s golf.”

“If you think golf is relaxing, you’re not playing it right.”

“Titleist has offered me a big contract not to play its balls.”

“I never kick my ball in the rough or improve my lie in a sand trap. For that I have a caddie.”

“I’ve been playing the game so long that my handicap is in Roman numerals.”

“If I’m on the course and lightning starts, I get inside fast. If God wants to play through, let him.”