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Physicians are often at a disadvantage when it comes to retirement planning compared to other professionals because they enter the workforce later in life and typically carry a lot of debt. In fact, the average medical student graduates with more than $200,000 in debt.

Regardless of where physicians are in their career, it’s never too late to start planning for the day when they hang up their stethoscope and retire. In addition to retirement, physicians also need to protect their family’s financial future with a solid estate plan that retains the wealth they have worked so hard to accumulate.

With a strong investment plan and a financial strategy that minimizes taxes, it’s possible for physicians to achieve all their financial dreams.

How to prepare for retirement at any stage of your career

Estate planning 101: Protecting your family’s financial future

The No. 1 question physicians ask about retirement is, “How much money will I need to retire?”

The answer can widely vary depending on a host of factors, including age and spending levels. Creating long-term projections can be complicated, so physicians might rely on a simple rule of thumb, such as the 4% rule — essentially taking out 4% of your retirement savings each year — to simplify things.

Joel Greenwald, M.D., CFP, says that kind of oversimplification can lead to running out of money in retirement. “Unfortunately, as with any rule of thumb, particularly ones that are simple, they’re not entirely reliable,” says Greenwald.

For example, the 4% rule only covers a maximum of 30 years of retirement. “People seem to extend that to 35 or 40 years of retirement, which certainly can happen now with people retiring earlier and particularly with longevity,” he says. That, however, means they will most likely run out of money.

In addition, the type of account holding the money can affect the calculations because taxes may take a larger share of the money than anticipated. On the flip side, physicians may die with too much money, meaning they may have missed out on a lot of experiences for fear of running out of funds in retirement.

One of the best strategies to make sure you have the right amount of money is to ask a slightly different question. “It isn’t, ‘How much can (I) safely withdraw from a nest egg at retirement?’ ” says Greenwald. “It’s, ‘How much do I need to be saving every year during my working years, during my accumulation years, so that I make sure I have enough money?’”

In most cases, saving 20% of your gross income allows you to retire in your 60s. And the quickest way to get to that 20% is to automatically invest into a growth-oriented brokerage account each month.

“The reason it needs to be automatic is because a lot of people say, ‘OK, I’m going to get through the year, and at the end of the year, any extra money I have, I (will) put in my investment account,’” says Greenwald. “Lo and behold, come the end of the year, there is no money for the investment account.” The automatic investment ensures the money is not spent and, instead, compounds over time to grow retirement savings.

Another good strategy is to plan for market downturns so that you don’t have to withdraw money from your investment accounts. “What some folks advocate is having a year or two at least of spending in cash or in short-term bonds, so that when you retire or soon after you retire, (if) the market goes down, you’re not having to sell stocks to pay the bills. You’ve got money on the side,” says Greenwald.

Physicians also need a long-term tax strategy to minimize impact and should consult with an accountant who has experience working with doctors on this. “Rather than looking simply at, ‘How do I save on this tax?’ people need to look bigger picture,” says Greenwald. “What things can you be doing over a lifetime to save on taxes?”

The other financial piece that physicians often overlook is creating a solid estate plan. For younger, married physicians with no children, having a financial power of attorney and a health care directive in place is probably good enough. But for older, wealthier physicians, they will need a much more detailed plan that may include a revocable trust to hold their assets. Without a proper estate plan, a lifetime of earnings may be siphoned off to taxes or held up in court. A good plan makes sure your money is protected and goes to the people you want it to go to.

Don’t rely on oversimplified investment guidelines to fund your retirement.

Create a long-term investment plan that includes money for contingencies and market swings.

Analyze your spending patterns now to better understand your retirement needs.

Approach tax-planning with a long-term view.

Form a rock-solid estate plan to protect your wealth.

Articles

Retirement planning for physicians

Collecting what is owed from patients and payers has long been a headache for medical practices. But in recent years, it has become even more difficult due to two overlapping trends. The first is that patients are having to shoulder ever-larger shares of their health costs. According to a Kaiser Health Tracker survey, health costs incurred by families with insurance coverage from large employers — including premium contributions and out-of-pocket spending on health services — increased by 67% from 2008 to 2018.

At the same time, payers have been requiring more and more time-consuming prior authorizations before they will pay for a service, procedure or prescription medication. This is evidenced by a 2019 American Medical Association survey in which 86% of responding doctors said their prior authorization burden had increased over the past five years.

Considering these developments, it’s more important than ever for practices to ensure that their collection technology and processes are streamlined, user-friendly and up-to-date. This strategy that can go a long way toward ensuring a practice’s long-term financial viability.

Revenue cycle management (RCM) explained.

Practical tips to financially assess your practice.

How to select the best RCM partner for you.

vice president of customer success, Rivet Health

When Benjamin Franklin coined the phrase, “An ounce of prevention is worth a pound of cure” he was referring to fire prevention. But that same logic applies to medical practices when it comes to maximizing collections: Investing a little effort at the start of the process avoids having to spend much more time and energy later.

According to Andrew Harding, vice president of customer success for Rivet Health, “revenue leakage” for medical practices has two primary sources — difficulty collecting directly from patients and payers’ claims denials. Collecting from patients has gotten harder in recent years, Harding says, due in part to the growth of high-deductible health plans (HDHPs), which make patients responsible for large portions of their bills. He cites a 2017 

 survey in which 83% of practices with fewer than five practitioners said that slow payments from patients with HDHPs are their top collection challenge.

Compared to insurance companies, which have well-documented collection procedures, a medical practice trying to collect from individual patients is like the “Wild West,” Harding says, because it can include obstacles ranging from incorrect addresses to patients’ inability to pay. “If you’re a smaller group, and up to 50% of your (accounts receivable) is attributed to patients, the time and effort needed to collect from those patients can be very frustrating.”

Moreover, he notes, collection rates decline dramatically the further out you get from when a patient was billed. That makes it important for practices to collect as much as possible from patients early in the process and to prepare patients for what they will owe by providing upfront cost estimates. Harding explains that providers can calculate these by pairing the patient’s benefit eligibility with the provider’s adjusted contractual allowable.

Practices can also up their collection rates by giving patients multiple payment avenues, including phone, portals or point of service, and by helping patients understand both their benefits and payment responsibilities. “It’s surprising the number of patients who don’t understand the connections between deduction, coinsurance and out-of-pocket maximum,” he says.

Harding says the other source of revenue leakage, claims denials, has been on the rise, citing a Change Healthcare study that found the average national rate increased from 9% in 2016 to 10.8% in the second quarter of 2020. Close to half of all denials, he adds, are the result of front-end revenue cycle issues, such as registration errors, incorrect demographics information and missing referrals. “That means right out of the gate at least half of your denials are preventable because they stem from missed or incorrect or unverified data,” he notes.

Harding recommends following these steps to reduce claims denials:

Implement measures for addressing those causes, such as improving registration and financial clearance processes and pre-bill edits.

Ask members of the practice’s claims denials team how they would work various types of denials and to document and share the responses. “It’s astounding the number of times we’ve seen different people have different appeals processes for the exact same payer and denial,” Harding says.

Identify the processes that have the best appeal or recovery rate, and implement those across the denials team.

Make information pertaining to every denial — such as the claim, provider, diagnosis and payer, and the steps taken to resolve the denial — available on one computer screen to easily accessed by every member of the denials team.

Evaluate the electronic health record’s work queue to ensure that deadlines for appealing claims denials are met. “No claim should miss the timely appeal window because you should have a work queue in place that identifies when an appeal is starting to age out,” Harding says.

Communicate with patients prior to service, including your best estimate of costs and information about your practice’s payment policies.

Make it easy for patients to pay by providing multiple payment platforms and technologies.

Review claims denials and identify the top reason(s) for them.

Query staffers who handle claim denials to find the best recovery strategies for each payer and share that information with other members of the team.

Organize the claims denials workflow so that all necessary information is easily available to the person addressing the denial.

Collecting more money from patients and payers

Competition is increasing, and reimbursements are decreasing. Every dollar counts for most medical practices, yet many physicians have fallen into bad business habits that are costing them money.

Patients and payers have changed their payment expectations, but practices often lag behind, relying on outdated systems and processes to collect money. Budgets lack essential details needed for planning, leading to cash crunches at inopportune times, and safety nets like a line of credit either don’t exist or are inadequate.

“All businesses are leaking cash,” says David Zetter, founder and president of Zetter HealthCare Management Consultants. “There is money being lost in almost every single business, and medical practices are even more at risk because of a whole host of issues. When you can’t explain a variance as to why you deposited $43,000 — yet your billing report says you had $60,000 — either every penny needs to be explained or that is telling you that you have problems and need to figure out where the discrepancies are.”

Practices can minimize their leakage and maximize cash flow by setting up detailed financial systems, understanding their payer contracts and managing costs.

The first step to improving a practice’s cash flow is making sure a system exists to track and manage it.

“I think the No. 1 mistake that I’ve seen is people just not actually having a cash flow management system at all,” says Akash Madiah, chief financial officer of the Medical Group Management Association. “And when I say system, it’s the process around it and understanding what the future cash flow needs are going to be for the practice. It all starts with the budgeting process.”

Practices need a thorough understanding of what’s going to happen in the practice in the next year, including when people get paid, whether it’s salary or bonuses and if investments in medical equipment are needed, as well as all the regular costs that need to be accounted for.

“It’s different from a P&L forecast because it’s the actual cash you need out the door that you’re going to need to make,” says Madiah. The forecast needs to also consider expected patient volumes. “Are you going to have a lot more patient visits during flu season? It’s just understanding all those nuances of your practice that is really key for any kind of forecasting ability.”

The system needs to also include a commitment to communicating with patients what their financial responsibilities are before the appointment and then collecting the money due while they are in the office.

“What you have to do is let the patient know upfront — and we advocate for two days out — that they pay not only the copay” but also “whatever their coinsurance may be” by doing an estimate when you verify the insurance, says Derick D. Perkins, a managing partner at Metis Advisors LLC. “And more important than that, you also set up the outstanding balances from previous visits.”

Most offices send letters about balances due to patients but don’t always realize that same patient might be coming in for a visit that week. “That’s your opportunity to set them up on a realistic payment plan,” Perkins adds. “One of the things that most organizations do not do well is they don’t have a firm policy and standards on how to set the plan up for the front office staff.”

To make sure patients can pay the practice, offer financing options. More patients are relying on high-deductible plans, putting more of the burden for payment on them rather than a payer. There are third-party organizations that work with doctors to help patients pay their bills. Patients with financial challenges may rack up thousands of dollars in care, making it unrealistic to pay the practice $25 a month for decades. Instead, they can finance it, and the office collects 85%-90% of the money upfront.

A good cash flow system should also focus on collecting money that’s past due. Perkins says to be careful not to focus exclusively on the largest bills when trying to collect. “Sometimes you never get down to the lower dollar balances,” he says. “Sometimes they can be $100, sometimes it can be $50, but those are the ones that are the most collectible in terms of monthly or one-time payments.”

In some cases, Perkins says it might be more expedient to offer a patient a settlement with a 15%-20% discount just to get cash into the practice rather than spending months trying to collect the full amount. It’s not usually hard to figure out who to offer the deal to.

“You can see the difference in the ones who really care about their credit or the ones that typically want to pay their bills because they are going to offer you something,” says Perkins. “They will take advantage of it and pay something versus the one who is never going to pay. You can see balances in the system from previous visits, and that’s why it’s so important to try to collect as much as you can upfront when they first come in because when that person hasn’t paid their previous balance, the chances of them paying even with the discount are pretty slim.”

Practices need to spend time understanding their payer contracts because the reimbursements are where the revenue cycle starts. Having copies of the contracts with reimbursement rates allows practices to project revenue based on past patient volume and current procedural terminology codes and to double-check that actual reimbursements match with the contracted rates.

Perkins says practices should track key metrics for each payer. For example, if certain procedures are being denied but then paid on appeal 90% of the time, that’s something that can be discussed at the next negotiation. Eliminating denials will boost cash flow by speeding reimbursement from the payer and freeing staff time for other activities.

Knowing the data can also boost a practice’s future reimbursement rate. “Not everyone can really negotiate in certain markets — what you get offered from certain payers is what you are going to get — but you have to have the analytics,” says Perkins. “When you sit down to let them know you want to get paid this amount, at least have the numbers available. Analytics is the key going forward because it reveals a lot more about what’s going on in your accounts receivable and what you are trying to get to.”

With detailed reporting, instead of looking at data on a 30- or 60-day lag, trends can be identified that might show a dramatic drop-off midmonth from a particular payer, buying time to reallocate resources to focus on another payer or making other financial moves, says Perkins.

In addition to payers, track vendors for their efficiency and how they affect your cash flow. For example, many practices use a vendor for collections but don’t always pay much attention to its performance. Perkins suggests using a second placement for debts the first agency didn’t collect on — to not just collect as much money as possible but also to measure the effectiveness of the first agency.

“If the second agency can pick up a good percentage, that means your first agency is probably not doing a good job collecting,” says Perkins.

The quickest way to boost cash flow is to cut costs, but for medical practices, most costs are usually labor.

Madiah says practices need to understand the costs of physicians, nurses and office staff and be willing to make adjustments based on forecasts. “It really starts with understanding your volume that’s coming in the door,” he says. “When you know your volume, you know the right staffing levels to have.”

A common mistake is having the same staffing all year when volume is cyclical. In the down months, hours should be reduced.

Whether to lease or buy equipment is another consideration. Leasing might appear to cost a practice more over the life of the machine, but certain variables need taken into account. “Is this equipment something that’s going to need a lot of maintenance over the years? If so, leasing is always a good option because someone else will take care of that,’ says Madiah. “If you buy it, it’s yours, and you have to commit the time and money to fixing it.”

Likewise, buying an office space for the practice instead of leasing may make sense in some cases, but is managing building maintenance cost-effective for the staff?

“When you have a lease, you might have a landlord that will build out the space and offer you incentives to rent,” says Madiah. “If you own the space, are you going to have the patient volumes to service the building? And is that really what you want to be spending your time doing?”

Improving cash flow doesn’t have to be complicated, but setting up the right system can be the difference between success and failure.

“It’s all about setting up proactive revenue cycle policies and being able to predict what your cash flow is and being proactive with the entire process,” says Zetter. “Most revenue cycle management has been and still is reactive — we chase money. And businesses that chase money don’t make money, and they don’t stay in business.”

Improve your practice’s cash flow with the right financial strategies

Stop leaking money

With a turbulent 2021 drawing to a close, it may seem like the end of year is already here and there’s nothing left to be done for your finances. However, there are some tax planning strategies physicians can still put into action to set themselves up for solid tax savings for year 2021, especially when it comes to deductions.

Here are 10 deductions physicians should explore. Not every deduction is right for every physician, but you won’t know until you ask. It depends on each physician’s individual circumstances, so speak to your tax professional.

One important deduction we see people miss all the time, especially physicians, is something called the qualified business income (QBI) deduction. If you’re a self-employed physician, and let’s say you derive $100,000 from your practice as business income, you can write off 20% of this $100,000, or $20,000, as a deduction. A lot of times physicians say, “Hey, I don’t qualify; I’m a physician.” But if your income is below $315,000, you can qualify for the full QBI deduction, so please make sure you speak to your accountant or tax attorney about it.

Second, there is also a QBI for rental income. Let’s say you have actively managed rental properties and you collect rent. You can write off 20% of the rent as a deduction as well. This is another one that physicians who own rental property miss all the time. The deduction equals 20% of rental income up to a maximum of 2.5% of unadjusted basis of depreciable property.

Third, in case you’ve purchased or you’re thinking about buying a vehicle before the end of the year, 2021 is a great year to do it. Accelerated depreciation, which Congress passed a few years ago, allows you to write off the full purchase of heavy SUVs, trucks and vans that weigh more than 6,000 pounds and are used for business purposes. Usually these big vehicles cost $50,000 to $70,000, and you can get the write-off for the full value of the vehicle by using accelerated depreciation.

The food expense deduction is another good one this year. When you buy food for your corporation, usually you can deduct only half the cost. This year, the deduction doubled, dollar per dollar, to almost 100%. I’m not suggesting that you have party every night at your corporation and spend lots of money on food, but speak to your CPA. This is most likely the last year you can get 100% write-off of food expenses for your corporation.

The standard deduction for 2021 is $12,550 for individual filers, $25,100 for married filers, and $18,800 for head of household filers. Instead of simply taking the standard deduction — most of the time when a physician sits down with a CPA they will do a standard deduction — you can do something called an itemized deduction. If you have itemized deductions — if you did home improvements this year, for example — those could be a part of an itemized deduction so you can go over the standard deduction the government has passed.

Many physicians probably bought stock this year that went up in value. And many physicians probably also do charitable donations. One of the mistakes we see is that they just give out cash as a donation. Now, if you have appreciated stock, the best way to donate is to give the appreciated stock as a donation. The beauty in doing it this way is you don’t pay any taxes on the gain, plus, you get the deduction as well. This is extremely beneficial. If you have a charitable trust and a donor fund, you can give the appreciated stock as a donation as well so you can get a bigger write-off.

We all have to pay federal taxes, but we have state taxes as well. For local property and state taxes, altogether, the maximum state and local tax (SALT) deduction is $10,000. It used to be if you pay property tax, you can write off all of it. But now the government has capped it at $10,000. Certain states, including New York and New Jersey, passed workaround laws that allow pass-through entities to pay the taxes through the corporation rather than individually. In that way, you can write off the full amount of the taxes paid. Speak to your CPA about that as it may apply depending on your circumstances and the state you live in.

If you were lucky enough to have a lot of financial gain this year, speak to your financial adviser and look into something called opportunity zone investment. It’s an area designated by a state as an economically distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. The good thing about investing in an opportunity zone is that as long as you hold the property for more than 10 years, there will be no capital gain taxes. This is a powerful financial tool that can be incorporated into your tax and overall financial planning as well.

In many states, residents can claim deductions for a certain amount for 529 plan contributions made during the year. This lowers state tax liability. As an example, a married couple filing jointly making contributions to a New York 529 plan may claim up to $10,000 per year as deductions when calculating New York taxable income. Contributions must be made by Dec. 31 to use this deduction in 2021.

If you’ve been watching the S&P 500, you’ve likely observed that it is near a record year-to-date high. As a result, before the end of December, many actively managed funds will pay high taxable dividends and capital gains distributions. Tax-loss harvesting provides you the ability to minimize those gains and lower your tax liability by strategically selling securities, especially if they’re short term.

 is a partner at Wall Street Alliance Group. He holds a bachelor’s degree in business administration from University of Nevada, Reno. Syed holds the FINRA Series 7, FINRA Series 63 and FINRA Series 66 licenses, along with licenses for life, disability, and long-term care insurance. He also has been awarded the Behavioral Financial Advisor (BFA) designation.

Securities are offered through Securities America Inc., member FINRA/SIPC. Advisory services offered through Securities America Advisors Inc. Wall Street Alliance Group and Securities America are separate companies. You should continue to rely on confirmations and statements received from the custodian(s) of your assets. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal adviser regarding your specific situation.

10 deductions physicians should check out

Save money on taxes

Being a mentor to other doctors is one of the responsibilities that you may hold at various points in your career. Most doctors have had one or more informal mentors, but few have had a prescribed or long-term mentor that has been a consistent guide for many years. There has been an increase in formal mentoring courses for physicians, and sometimes physician mentoring is structured as a systematized process.

Many hospitals have adopted programs for physician mentorship, pairing up senior physicians with junior level doctors. And professional physician coaches offer programs as well. If you are considering mentoring other physicians, it’s helpful to clarify what type of guidance you intend to provide and to communicate your availability to your mentee—whether you are participating in a formal program or providing informal guidance.

Physicians may look to mentors for a variety of needs. For example, you might have a skill set or you may have reached a position that other doctors would like to achieve. It’s important to recognize your own strengths and to use these strengths to provide guidance in the area that you are familiar with.

Defining the goals of the mentoring relationship can be useful to clarify expectations. If you will spend time guiding a medical student, resident, or a junior physician, you might be happy to do so casually as they navigate their new role. Or you might only consider it worth the effort if they will move forward to progress in a specific way. Knowing your own style will help you determine what type of mentoring you are capable of. And if goal setting is important to you as a mentor, then be clear about your expectations and provide the junior physician who you are mentoring with next steps that you expect them to take before your next meeting.

Another important aspect of setting expectations involves the frequency of your meetings. With an informal mentoring process, you might not necessarily feel the need to provide a set structure. One drawback of this approach is that the physician who you are mentoring might hesitate to contact you—or could end up contacting you more than you would like. Finding a common ground for the frequency and formality of your meetings can be helpful.

If you are going to be checking in and getting updates on their progress, it can be a good idea to schedule your next meeting and to agree on the frequency and intervals of your meetings. This can help you define your own responsibilities and help the junior physician understand what they should expect from you.

Mentoring another doctor can be a long-term process that lasts for years, but sometimes it isn’t possible to continue mentoring someone after they have reached an advanced level in their career. You might not be equipped for guiding someone beyond a particular goalpost that is your niche. After they have reached a given point, you may become more of a peer than a mentor, and you may remain friends for the long term.

Mentoring other physicians can feel flattering, but it’s best to acknowledge when you aren’t the right person to deliver what a potential mentee needs. If a young doctor looking to you for guidance is highly ambitious, it’s important that they aren’t under the impression that you are more successful than you actually are. And if a young doctor is looking for moral support, you might only be able to provide that type of encouragement if you are a deeply confident person yourself.

If you are feeling overwhelmed or intimidated in your job as a physician, consider whether it is the right time for you to take someone else under your wing. As they say on airplanes, put on your own oxygen mask before you help someone else with theirs. Sometimes bowing out of a responsibility that you can't carry out is the most fair and honest thing to do.

Sheri K, Too JYJ, Chuah SEL, Toh YP, Mason S, Radha Krishna LK. A scoping review of mentor training programs in medicine between 1990 and 2017. Med Educ Online. 2019 Dec;24(1):1555435. doi: 10.1080/10872981.2018.1555435

Defining the goals of the mentoring relationship can be useful to clarify expectations.

What you need to know about mentoring other doctors

ince COVID-19 arrived in the United States, health care providers have been working tirelessly to address every aspect of the pandemic. The public saw how frontline workers were making sacrifices day in and day out to keep as many people healthy as possible. But even as the media focused on this heroic work, behind the scenes COVID-19 was prompting significant changes to malpractice laws and regulations at the state and federal levels.

Providers should be aware of what has happened and of the changes that may occur in coming months and years.

At medical malpractice insurer EmPRO, we have been keeping a close eye on the pandemic because global health events have the potential to expose both insured clients and insurers alike to staggering liabilities. Thankfully in New York state, where EmPRO is headquartered, the governor and the legislature moved swiftly to enact emergency measures that shielded health care professionals from the worst liabilities. Had they not done so, the pandemic had the potential to lead to the proposal of new, more stringent regulations and policies, which in turn could have resulted in increased premiums.

New York was hit incredibly hard with COVID-19 cases right from the start, with the first confirmed case on March 1, 2020. The legislature and the governor produced the Emergency Disaster Treatment Protection Act (EDTPA), which extended broad immunity to health care providers and facilities.

Around the state, hospitals filled with patients with COVID-19 had to bring in nurses from out of state, bring health care providers out of retirement, build temporary facilities to provide COVID-19 care and enlist doctors, nurses, physician assistants and others to provide services out of title — meaning outside their usual purview of care.

The EDTPA granted them immunity from liability in the diagnosis and treatment of patients with COVID-19, as well as other patients whose treatment was affected by a facility’s response to the pandemic. Before doctors knew precisely how to care for patients with COVID-19, many frontline health care providers had reasonable concerns that experimental treatments could not only expose them to the disease but also lawsuits. The EDTPA helped alleviate those fears.

Medical malpractice attorney Tom Benvenuto, J.D., of Benvenuto & Slattery says this was a critical decision that empowered health care providers to make every effort to save patients without fear of legal action. “The immunity the EDTPA provided to New York health care professionals was essential to the state’s response and handling of the pandemic because it enabled physicians to pursue necessary measures to care for patients that may have otherwise been construed as extraordinary under otherwise normal circumstances,” he said.

The federal government issued its own legislation on protections for frontline workers, facilities and even personal protective equipment (PPE). The Public Readiness and Emergency Preparedness (PREP) Act provides liability immunity related to the manufacture, testing, development and — importantly for medical providers — use of medical countermeasures against pandemics and other public health emergencies.

Essentially, the government extended liability protection to medical equipment and PPE manufacturers. With this protection in place, manufacturers such as General Motors, Ford, Fitbit and Procter & Gamble were able to quickly launch production lines or repurpose existing ones to make medical equipment such as respirators, ventilators, face shields and masks.

The PREP Act also covered health care facilities that were using these countermeasures. For example, in the event of a PPE shortage — as was seen across the country due to a global shortage — a facility may invoke the immunity from liability if a patient claimed that they contracted COVID-19 at that facility while the facility was reallocating what PPE they had available to them.

In the midst of the pandemic, medical malpractice insurers and the attorneys working with them began planning for a potential tidal wave of lawsuits related to COVID-19, given the potential for morbidity that the diagnosis carried for a significant portion of the population. This would have put a tremendous strain on insurers across the country.

However, the industry so far has seen relatively few cases. In fact, medical malpractice lawsuit filings were down during the pandemic. This was due, in part, to many states implementing a hiatus on filing lawsuits when lockdown restrictions began. Because there are statutes of limitations on filing cases, there may be more COVID-19-based lawsuit filings when those statutes approach their expiration dates. Plaintiffs may file cases in order to buy time hoping that there will be a change in how the courts interpret and apply the immunities. However, in many cases, this situation is still more than a year away.

In August 2020, when New York’s infection rate was less than 1%, the legislature reduced the scope of the EDTPA to cover only patients with COVID-19, eliminating those tangentially affected by a facility’s COVID-19 care for others. Furthermore, the statute was repealed, thereby ending the immunity for providers treating patients with COVID-19 after April 6, 2021. New York has returned to business as usual for malpractice regulations.

Although it has been amended a number of times, the federal PREP Act is still in place, and malpractice insurers, courts and health care professionals are paying close attention to any potential legal aftershocks.

According to Benvenuto, the industry must keep a close watch on how federal courts approach challenges to PREP Act immunities that may be filed. “Although the immunities appear to be ironclad, and cases would likely be dismissed by the court in light of same, any suit that survives an initial motion to dismiss could provide plaintiffs in each state a playbook to filing and maintaining a similar case,” he said.

In the end, the COVID-19 pandemic did not bring about a sea change in medical malpractice regulations or policies. States expanded immunities where and when they had to, and when conditions improved enough to remove those exemptions, it appears most states have gone back to what worked before. Fortunately, this means premiums have not seen a “COVID-19 spike,” but it remains to be seen if this will hold in the future, especially if the Delta variant or another variant proves lasting or if a new pandemic emerges.

Bruce C. Shulan is president and CEO of EmPRO. For more than 30 years, he has served as a senior executive, board member, consultant and attorney to the insurance industry.

COVID-19 is prompting significant changes to malpractice laws and regulations at the state and federal levels.

COVID-19 and malpractice lawsuits: What the future may hold

After lagging large company stocks in recent years, small company stocks — currently the outsiders of the equity market — appear to be mustering to rise.

Various indicators seem to presage an ascent. The signals are perhaps most sanguine for small capitalization stocks in the value category — out-of-favor companies trading below their actual value, based on fundamental characteristics.

Being down makes small caps a more likely bet than large caps as time goes by, as the pendulum of investment inflows swings between opposing equity types.

After shooting up sharply in the fall of 2020, the Russell 2000 Index of small-cap companies has remained nearly flat in a trading range most of this year. The major dramatic question now is: Was the index’s performance a year ago just a tease, or will it resume rising soon?

As one equity category’s pain is often another’s pleasure in the competition for capital, some of the answer lies in recent negative signals from large caps.

As of September, about half the stocks in the S&P 500 large-cap index had fallen 10% or more from their 52-week highs. This decline, now overshadowed by a mid-October spurt, probably wasn’t noticed by many investors because the index’s performance is routinely distorted by the weightings of big tech growth companies. Because of these giants’ performance, the index was down less than many of its members.

The trend of weakening large-cap companies continued to the point where Morgan Stanley noted in October that “88% of S&P 500 members have experienced at least a 10% drawdown,” though on a “closing price basis, the index (had) only corrected by 5%.”

Meanwhile, there have been healthy stirrings from small caps, as represented by the S&P 600 index of small-cap stocks. As of August, this index’s one-year forward price-earnings ratio had been improving relative to that of the S&P 500.

This number was well under the 25-year average. This means that more than at any time in over a quarter century, investors have recently been getting more earnings in return for the prices they’re paying for small-cap stocks. They’re historically cheap relative to large caps, and more likely to rise. Along with these quantitative signals, small caps may have tailwinds from various economic trends:

Most small companies are entirely domestic, so they stand to gain disproportionately from the rapid economic growth now underway as the nation continues to recover from the
COVID-19-induced recession. These companies make stuff people are buying, and consumer confidence is currently strong. Contrary to suggestions of economic weakness, stemming from the current media obsession over supply chain disruption, economic growth is actually strong.

Being exclusively domestically oriented has inherent advantages, as small companies are most likely to benefit from forces of reverse globalization. Some analysts see globalization as reversing to some extent, giving way to a new order of three basic economic zones that are more self-contained. This may lead to more isolated, less globally dependent business environments. Recent examples of reverse globalization include Ford Motor Company’s recent announcement of a
$11.4 billion manufacturing facility in Kentucky (including an electric vehicle [EV] battery plant) and Intel Corp. breaking ground in Arizona on two microchip manufacturing plants costing
$20 billion. This in a world where vehicles are often built in multiple countries: EV batteries are a global product (many are made in China), and microchip plants have typically been located in Asian countries.

There’s increasing corporate and public support for this manufacturing repatriation amid concerns about China’s increasingly troubled economy.

Small-cap value stocks have a beneficial past. Historically, in the first two years of recovery from recession, value stocks have usually far outperformed growth stocks.Already, some small-cap value stocks are outperforming the broader category of small caps. Exchange-traded small-cap value funds, such as iShares Russell 2000 Value ETF (IWN) and Invesco S&P SmallCap Value with Momentum ETF (XSVM), have been running above the Russell 2000 small-cap index this fall.

If the various indications pointing to a near-term rise in small-cap stocks don’t prove prescient, many long-term investors who act on them moderately may be doing nothing more disadvantageous than adding much needed balance to portfolios that were probably lopsided with large-cap stocks. And those seeking small-cap exposure with downside protection might consider small-cap, options-based exchange-traded funds.

Thus diversified, these investors will be ready for the time when — not if — small caps rise. The pendulum always swings back.



David S. Gilreath, CFP, is a 40-year veteran of the financial services industry. He is a partner and chief investment officer of Sheaff Brock Investment Advisors LLC, a portfolio management company for individual investors, and Innovative Portfolios LLC, an institutional money management firm. Based in Indianapolis, the firms manage approximately

Small company stocks appear poised for growth

Interest in remote patient monitoring (RPM) — using digital technologies to track and capture patients’ medical/health data and electronically transmitting it to their health care providers — has been growing for years. But it accelerated in 2020 with the steep decline in in-person patient visits brought on by COVID-19, which forced health care providers to find alternative ways of monitoring patients’ health.

The growth is reflected in a July forecast from ResearchAndMarkets.com that predicted the market for RPM devices will reach $85 billion by the end of 2026, up from just over $20 billion in 2019, or an annual compound rate of nearly 23%.

Similarly, a March VivaLNK survey of hospitals and clinics found that 43% believe RPM adoption will be on par with in-patient monitoring in five years, and 35% believe it will surpass in-patient monitoring.

Along with its benefits for patients’ health, RPM offers the opportunity to become a significant revenue stream for practices. But turning that possibility into reality requires careful organizational planning, gaining acceptance from providers and staff and educating patients on what RPM requires of them and how they will benefit from it.

RPM explained: the benefits and the challenges.

How to reach patients and achieve buy-in and participation.

Revenue implications and strategies to create a
sustainable program.

, senior vice president of operations,
Optimize Health

 vice president of customer success,
Optimize Health

RPM can be an effective tool for improving patient outcomes and driving practice revenue. But implementing a successful RPM program requires careful internal preparation and taking the time to instruct patients on how to use monitoring devices and report their data.

“If you think RPM is right for you, you need to make certain that your providers and staff are educated on what it is (and) how to identify patients that will benefit clinically from an RPM program and that they can educate patients and incorporate RPM into the patients’ care programs,” says Ryan Clark, vice president of customer success at Optimize Health.

Building an effective RPM program starts with getting organizational buy-in, says Clark. “Talk about it with all the impacted areas in your practice. Make sure you have the bandwidth and your clinical staff are all bought in. Start that conversation broadly and early.”

Clark advises identifying clinical and operational “champions,” with the latter being the main point of contact for anyone involved in the program either internally or externally.

At the same time, Clark says, patients need to become partners in managing their health and be educated on how RPM can help them and what’s expected of them. “Is it taking daily readings if they’re trying to manage blood sugar? Do they take them before or after meals? There’s all kinds of patient education that goes into this, and you need to empower your team to speak to that and make patients feel like they have ownership in getting their condition under control,” he says.

Once an RPM program is up and running, it’s important to invest in its maintenance and monitor its results. “You obviously want to track the patient outcomes from the program,” Clark says. In addition, “as more patients come on to the program and you identify additional clinical needs, (you want to ensure) you have the right devices to meet those needs and to measure your reimbursement success and the success of the patient care plans.”

Neha Ajmera, MBA, senior vice president of operations for Optimize Health, says practices most commonly use RPM to manage patients with chronic diseases and/or acute conditions and following discharge from a hospital or nursing facility. Since the start of the COVID-19 pandemic, RPM has also been used to monitor patients with COVID-19 or its symptoms or who have been exposed to the virus.

From the patient perspective, Ajmera says, RPM works best for those who:

Have an acute condition that can improve with frequent measurements and clinical interventions as needed.

Have a chronic condition that can be improved with additional data and coaching.

Are motivated to take responsibility for their health and understand the benefits and expectations of an RPM program

“Ultimately RPM is a partnership between the patient and provider that’s made deeper because of real-time data,” she says.

Kaitlyn O’Connor, J.D., a health care attorney with the Nixon Gwilt Law, says that RPM-related services are covered by five current procedural terminology, or CPT, codes with varying levels of reimbursement. These range from $19 for “initial setup and patient education on use of equipment” (code 99453) to $63 for “device(s) supply with daily recording(s) or programmed alert transmission, each 30 days” (99454).

She adds that Medicare and commercial payers recognize RPM’s value in maintaining patients’ health and improving outcomes and are willing to reimburse for it at relatively high levels. Moreover, by providing physicians with regular data about patients’ health, RPM can reduce costly hospitalizations and emergency department visits.

She cites studies showing that hospital readmission rates for patients with heart failure using RPM were less than a third of those without RPM. Among patients with chronic obstructive pulmonary disease, the rates were less than half.Consequently, O’Connor says, the Centers for Medicare & Medicaid Services has made RPM a “strategic priority” in its effort to reduce Medicare costs, which are on course to double over the next decade.

Get buy-in for an RPM program from every part of your organization.

Identify an RPM program champion and build a team around that individual.

Educate patients on what RPM requires of them and how they can benefit from it.

Dedicate a team member or members time to RPM monitoring and patient engagement.

Invest in the program’s management and growth.

Is remote patient monitoring right for your practice?

The difference between a financially and clinically successful practice and one that is struggling often comes down to whether they have the code right and document thoroughly. Changes in 2021 to major coding categories, such as evaluation and management (E/M) coding for office visits means major change that can hamper your operations if not done well. Denials, one of the major aggravation points for practices, are possible with any filed claim, especially since each payer has their own policies, which change constantly.

What can practices do to tighten up their coding and realize all the revenue they are owed?

Understand E/M coding changes and what it means to the bottom line.

Learn the most common reasons for claim denials and how to prevent them.

 principal of The Dacey Group, Inc., a consulting firm specializing in physician coding and compliance

The E/M changes that went into effect in January were designed to simplify the process and can be a financial net win for practices. Now, physicians will select the correct level-of-care code based on total time spent on the date of the encounter 

medical decision-making (MDM) —whichever is most financially advantageous.

Regarding E/M coding, Dacey recommends that practices understand the intricacies of coding by time and MDM. (For a detailed breakdown, including coding tables, check out the full video and slide deck on MedicalEconomics.com.)

Beyond coding these aspects correctly, the other issue for practices is that some of the documentation categories that are no longer relevant for payment remain relevant on a clinical basis, Dacey notes.

“We know history and exam are no longer relevant for code selection, but you still have to do each for every encounter,” he says. “We’re assuming that the note is still going to have everything in it that it needs from a clinical perspective. Some doctors have just completely abandoned it and just have an assessment plan. That’s not really OK because you still need to have enough to support the clinical element of things, and it also doesn’t tell the payer the whole story of what that encounter is all about.”

The good news for physicians is that Medicare payments for almost every E/M level increased. For example, Dacey says reimbursement rates went up 19% for code 99213, 21% for code 99214 and 23% for code 99215, which are level-of-care codes for established patients.

The key to successfully coding under the new E/M changes is that documenting medical decision-making is key, says Dacey, noting that payers look in the assessment and plan (A/P) to see if you provided enough medical necessity to back up your claim. So be sure to do the following:

Document any specific differential diagnosis and any suspected problems or concerns that need to be considered, ruled out, etc.

Identify the diagnosis, status, prescriptions and treatments to manage each problem.

Characterize the problem — don’t just name it.

Introduce the scope in the history of present illness, and then showcase it in the A/P.

Regarding how to avoid claim denials, Dacey says that most denials are the result of basic mistakes such as filing duplicate claims, not verifying eligibility, failing to review prior authorization or missing the timing deadline.

“There (are) a lot of ways to go wrong here,” Dacey says. “There (are) a lot of ways to very easily get denials.”

The best thing practices can do to avoid denials is to analyze common denials and use that knowledge to build better processes. “The number and types of denials actually tell you where the weak parts are in your machine, what part of your operation needs to get sharper,” he says.

Dacey also points out that while some denials are simple, others are incredibly complex and can affect downstream care, i.e., hepatic encephalopathy (HE). Because of diagnostic coding changes on the transition to ICD-10 some years ago, there is no longer a “pure” HE code; thus, incorrect coding for this condition is leading to prior authorizations, which is leading to patients not receiving the treatment they need and ending up in the hospital. Using the recommended ICD-10 codes for HE patients who are in a coma (K72.91) or not (K72.90) is crucial.

Dacey emphasizes that the key to a coding and documentation program that captures all revenue is not looking for ways to cut corners or for little missed opportunities but, rather, getting it right on the most common patient visits you have.

“Everybody is always looking for ways to cut corners and those little extra things you can do,” he says. “And I keep telling people, ‘Stop looking over there, and look right back at what you do all day long — and make sure you have the big ones right.”

Changes in 2021 to E/M office visit coding mean that medical decision-making and time are key to getting paid, but other aspects such as history of present illness, assessment and plan are still necessary for appropriate clinical care.

Most denials are caused by common mistakes, and the best way to avoid them are to put processes in place to flag the most common reasons for denials in your practice and address them.

Coding and documentation best practices

, a cloud-based clinical and financial software company, and 

The goal of the new company is to help independent practitioners succeed in consumer-driven health care

Medical Economics December 2021