Healthcare

With mandatory programs on the horizon, the voluntary Bundled Payments for Care Improvement Advanced (BPCI-A) program offers early access to data and valuable experience in redesigning patient care. But with applications closing June 24, 2019, healthcare organizations will need to make some quick decisions about participating in this voluntary Medicare bundled payment program.

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We have been monitoring and reporting on tax reform for several months, including one of the most complicated areas of the new law – Section 199A, commonly known as the 20% pass-through deduction.

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A recent notice from the Internal Revenue Service has provided additional guidance regarding changes that the Tax Cuts and Jobs Act (TCJA) made to the tax treatment of parking fringe benefits. Previously, employers could generally deduct expenses related to “qualified transportation fringe benefits” that they provided to employees, including parking. The new law disallowed this deduction.

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“We want to pay for outcomes, not process ... We need results, American patients need change, and when we need mandatory models to deliver it, mandatory models are going to see a comeback.”

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As we move into the third performance year of the Quality Payment Program (QPP), CMS is starting to take the training wheels off the Merit-based Incentive Payment System (MIPS). The threshold to avoid a penalty in 2019 doubled to 30 points, and the exceptional performance threshold increased to 75 points (up from 70 points in 2018).

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Almost exactly one year ago, Tax Cuts and Jobs Act (TCJA) brought about the most significant tax reform in 30 years. It was a good news, bad news situation. The TCJA included a juicy 20 percent deduction on qualified business income for owners of pass-through entities. Sadly, the provision specifically excluded healthcare professionals and other “specified trades or businesses.” Continue reading >

Bundled Payments for Care Improvement-Advanced (BPCI-A) is one of the latest evolutions of value payment methodologies to come from the Centers for Medicare and Medicaid Services (CMS). The roots of BPCI-A are in the original bundled payment demonstration project, the Acute Care Episodes (ACE) program of 2009, which shares an underlying theme that a single, bundled payment for all providers for a defined episode of care will promote efficiency of care, coordination of care and improvement in the quality of care. CMS would like to see higher quality performance paired with lower expenditures in these identified patient populations.

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Before passage of the Tax Cuts and Jobs Acts (TCJA), both meals and entertainment for clients and business associates were 50 percent deductible for tax purposes as long as business was discussed before, during or after the meal. Expenses for entertainment, amusement and recreation are no longer deductible starting in 2018. However, the wording in the TCJA was unclear on whether meals are now included in the overall definition of “entertainment.”

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Since the passing of the Tax Cuts and Jobs Act (“TCJA”) in December, many healthcare providers started to wonder if there might be a tax advantage to changing their choice of entity. With the new 21 percent corporate flat tax, would C Corporations be a better option? Or would the benefit of the 20 percent pass-through deduction be more beneficial?

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Chalk one up for advocates of consumerism. CMS is encouraging price transparency with its FY2019 Inpatient Prospective Payment System (IPPS) rule released in August.

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The Tax Cuts and Jobs Act (TCJA) made several significant changes to depreciation rules when it became law in December 2017. In the “good news” department, two provisions in the law provided increased opportunities for businesses—including physician practices, hospitals and other medical practices that own or lease buildings—to expense the cost of depreciable assets sooner. On the “not-so-good news” side of things, several types of building improvements will now be depreciated over longer periods when their costs exceed the limits for immediate expensing. In addition to the longer recovery period, the new law and related guidance have created some uncertainty over what improvements may qualify for the same-year recovery provisions.

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On August 8^th, the IRS released proposed regulations addressing the Section 199A deduction, commonly known as the 20 percent pass-through deduction. The guidance clarified several aspects of Section 199A that are of particular interest to healthcare providers, including the definition of “specified service trades or businesses” (SSTBs) and restrictions on splitting up existing businesses. At first glance, it appears that these new rules will limit the ability of healthcare professionals to qualify for the deduction. (For a broader look at the general impact of the proposed regulations, see the HORNE article, “Tax Reform: Guidance For Pass-Throughs Is Here.”)

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The final phase of CMS’ voluntary Bundled Payments for Care Improvement Advanced (BPCI-A) application process is finally here. Whether your hospital or physician practice intends to participate in the model beginning October 1 (or in a future year) or you are a healthcare attorney advising an organization that intends to participate, CMS’ recent announcements regarding the model are noteworthy.

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