t he p hysician a ssistant b usiness o wner r ichard ob ringer, pa-c asapa spring conference 2011
TRANSCRIPT
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THE PHYSICIAN ASSISTANT BUSINESS OWNER
RICHARD O’BRINGER, PA-C
ASAPA Spring Conference 2011
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DISCLOSURES
Stockholder - Zimmer Holdings Stockholder - Cardo Med INC COM Stockholder - Pfizer INC President / Owner – Richard O’Bringer,
PA-C, a prof., corp. dba - Advanced Surgical Associates.
Member / Owner – Axis Surgical, LLC (ortho implant distribution distributorship)
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DISCLAIMERS
This is a Commercial Presentation
Physician Assistant owner since 2004• Not an Attorney or CPA• This is not legal or tax advice• Shared experiences• Overview • Monday morning
www.PAassist.net
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Learning Objectives Communicate PA rights & responsibilities of
incorporating and billing Medicare
Analyze basic options for incorporating
Analyze tax benefits and cost analysis of incorporating
Develop business plans, corporate compliance, HR, resources, & leadership
Create sales and marketing strategies, trends, and tools
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Pre-test question #1Physician Assistants can bill Medicare
“independently,” and be paid directly from Medicare, ONLY using their;
A. Social Security number B. TIN of an approved corporate entityC. PA UPIN NumberD. Through their physicians UPIN
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Pre-test question #2A “distribution” from your corporation does not
need to be reported to the IRS as income?
A. TrueB. False
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Pre-test question #3Which type of corporation is “double taxed?”
A. S-CorpB. C-CorpC. LLCD. LLP
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Who We Are
Advanced Surgical Associates offers PA first assist surgical services to surgeons.
Our services are free since we bill insurance directly
Actively expanding and recruiting PA’s
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Getting Started in Business
Incorporating
hiring firingpayroll
business plan
corporate compliance
billing
bookkeeping
taxes
liability
asset protection
contracting sales
marketing
invoicing
inventory
litigation
insurance
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Spirit of an Entrepaneur
“This just might work and I think I’ll try it”
“The journey of a thousand miles begins with a single step”
~ Buddha
“Beginning is half done!”~ Confucius
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Is Ownership Right for You?
Independent Contracting Offer PA services hourly, per-diem, other? Consulting?
Independent billing Negotiate collection split with doc?
Four walls Clinic, other?
Tax benefits
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Federal Law and PA Ownership4/1/2002 - CMS expands employment & ownership opportunities. PA’s permitted up to 99% ownership interest in approved corporate entity that bills Medicare program. Any other person own 1% (spouse, family member, friend, business partner)
TIN vs. SS#
Some states restrict PA ownership to 49% (varies)Doc must own 51% - Avoids conflict of interestReview laws in your state
Arizona has no such restrictionsNon-medical entity can own 49%Consult with AAPA, State Academy & attorneys who know how to structure
Ownership VS Compensation VS Physician SupervisionPA owners still have physician supervision per state regulation
Education helps to reassure control and compliance
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PA Ownership in Arizona
A medical practice in Arizona may be owned by a professional corporation, a professional limited liability company or certain other types of entities. Arizona law permits PA ownership of such entities or co-ownership with physicians.
A corporation may elect professional corporation status for the purpose of rendering professional services within two or more categories of professional service, unless the combination of professional purposes is expressly prohibited by a licensing law of the state applicable to one or more of the professions in the combination or by a licensing authority with jurisdiction over one or more of the professions in the combination. No such limitation exists precluding PAs and physicians from co-owning a professional corporation. Similar rules apply to professional limited liability companies.
Under recent revisions to Arizona corporate statutes, up to 49% of the shares of a professional corporation or of the equity interests in professional limited liability companies may be owned by non-licensed persons or entities.
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Creating a Business Plan
Do you need a “Formal” business plan?
Check with your bank first, it’s free advice
SBL , SBA, Chamber of Commerce – free resources
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Incorporating 5 Common Mistakes
1. Incorporating without getting the advice of a good CPA
2. Thinking the corporate veil gives you unlimited liability protection.
3. Operating without proper local business licenses
4. Not filing periodic paperwork or taxes as required
5. Incorporating without sufficient capital or revenue stream
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Options for Incorporation
S-Corp
• Single tax – Individual only
Pass through entity
Pass-through taxation means that income of the corporation is not assessed corporate taxes.
Instead, the income or losses of the corporation are distributed among the individual shareholders in direct proportion to their ownership or investment in the company.
Income or loss is then claimed on the individual tax returns of the shareholders as personal income, and it is taxed at a much lower rate than the Corporate tax assessment.
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Options for Incorporation
C-Corp
• Taxed at two levels – “Double Taxation”o Pays tax on its corporate income o Then, distributes profits to stockholders who
pay income tax on those dividendso For companies looking to go public
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Options for Incorporation
Limited Liability Corp (LLC)
• Better for smaller businesses • More flexible than Corporations • May be owned by non-US citizens • May be owned by a Corporation or
another LLC • Unlimited shareholders • Different levels / classes of ownership • Less taxation (individual assessment only)• Offers more asset protection – “limited”
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Options for Incorporation
Limited Liability Partnership (LLP)
• Separate legal entity • May own property – sue / be sued • Liability Protection for all General Partners from
claims against the LLP • Liability Protection for the LLP from claims
against a General Partner • Partner dividends are reported on the partners’
personal tax returns • No date of termination is required in the
Partnership Agreement
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Incorporating
• Why should you incorporate?o To bill Medicareo Tax benefitso Liability – asset protection
• When should you incorporate?o Personal income level above $150,000 -
$200,00
advantages vs. obligations & cost
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Tax Benefits
25% of income tax deferred into; SEP-IRA max $49,000 / year 401K max $54,500 / year • 50yo “catch up provision”• Able to borrow up to 50% of value• More structure & cost to establish & maintain
Independent Contractors, 1099 can also deduct Must offer other employees same• Can require three year eligibility
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Tax Benefits
Vehicle paid for by corp. Lease VS Purchase
Meals with employees & contractors 100% deductable Otherwise 50% deductable
Other Expenses – (some have caps) Legal, travel, malpractice, office, marketing,
advertising, promotions, events, FUN!
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Independent ContractingDefinition
1099 / sole proprietor - interchangeable terms
True independence? Who dictates hours / schedule? More than one revenue source? Multiple clients? State law requirements? Stand alone – biz cards, sub-contractors,
multiple locations?
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Tax Obligations
Independent Contractors, Sole Proprietor, 1099 must pay their own portion of FICA (Social Security & Medicare) 5.65%
FICA 5.65% is paid by each side (employer & employee)
0.5% Modified business tax
0.08% Federal Unemployment $7,000 / year cap
3% state unemployment $27,700 / yr cap (Nevada)
Add 11% to your compensation to offset
Distributions = profit i.e. taxable income (shell game myth)• Payroll Yourself; W2
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Pay your taxes
Follow the rules & be careful looking for loopholes
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Corporate Compliance - Obligations
Business license Annual corporate filing – list of officers Annual officers meeting & minutes State sales tax – file the forms (zero out)
Work comp insurance - $500 / yr for 2 people
self? home office? 1099 contractors? travel? provide - federal posters, background checks, safety manuals,
other ancillary services
OSHA
safety manual annual log of accidents injury report (C4 form)
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Sales & Marketing
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Monday Morning Tools
Like leads to trust
Trust leads to new business
Laughter leads to new business
First impressions strike an emotional cord
Video – is sales really this simple and fun?
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Making a connection with your audience
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Facebook Fans Increase
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Sales Increase
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Procter & Gamble stock rises
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Be yourself, be likable
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How do you make the connection?
Harvard Business Review Rule of 6
Create encounterso Frequency is what matterso Repeated exposures
No pressure Be yourself Reason to return
Building the relationship is the goal, not sales or referrals
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Make the connection
Sound bite (30 seconds or less)
Initial presentation• Keep it simple and to the point• Frequency of information, not volume
o TV commercial
Questions, concerns, & objections• All are signs of interest
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Leadership
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Strengths Engagement TrackBenchmark study of 65 high performing
teams
Journal of Applied Psychology
Dr. Jim Harter, Gallup OrganizationDr. Frank Schmidt, University of Iowa
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Employee Engagement
Top 10%Bottom 10%
0
200
400
600
800
1000
Employee Turnover
847
42
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Employee Engagement
Top 10%Bottom 10%
05
1015202530
Number of Accidents Per Year25.56
0.00
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Strengths Engagement Track
Performance Outcomes
Productivity Profitability Customer satisfaction Employees turnover Safety measures
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Building a productive and engaged team
Communication is key
Do you know what is expected of you at work?
Do you feel that your opinions count? Do you feel someone at work cares
about you?
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Strengths Engagement Track
Changing Course
Identify Change Grow
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Communication
“Seek first to understand, then to be understood.”
~ Stephen R. Covey
The 7 Habits of Highly Effective People
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SummaryGet started
Incorporate Enjoy tax advantages and follow the rules
Sell your idea Develop sound bite Be likeable Create encounters
Foster communication Engage and empower your organization & your people
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Post-test question #1Physician Assistants can bill Medicare
“independently,” and be paid directly from Medicare, ONLY using their;
A. Social Security number B. TIN of an approved corporate entityC. PA UPIN NumberD. Through their physicians UPIN
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Post-test question #2A “distribution” from your corporation does not
need to be reported to the IRS as income?
A. TrueB. False
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Post-test question #3Which type of corporation is “double taxed?”
A. S-CorpB. C-CorpC. LLCD. LLP
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Resources Available on our Website
www.PAassist.net