Reporting patients to the IRS? fair salary policy; practice name
Can you enlist the IRS to collect debts?
Sometimes patients will receive and pocket reimbursement checks meant for me. To prod them to pay, I'm thinking of sending a warning letter saying that unless they make good on the balance, I'll report the amount to the IRS as earned income for them using form 1099-C. Do your experts think that will work?
No, it would be an empty threat. Form 1099-C can be used only by financial institutions (and a narrow list of other entities) who are in the business of lending money. Send the patients a letter asking them to return the money received in error. If that doesn't work, turn the accounts over to a collection agency-or write them off.
I'm one of three doctors who are planning to merge their practices. Each of our offices has its own pay scale, so employees with similar jobs are currently receiving different wages. How should we determine a fair salary policy when we combine our office staff?
Start from scratch. Create a job description for each position at the new group with a salary based on the fair market value of the skills and responsibilities it requires. (A practice management consultant can tell you what the benchmarks are for your locale.) That will allow you to correct salaries that may have crept to artificially high levels because of longevity, favoritism, or other nonmarket reasons.
Then dismiss all staffers from their current employment and invite them to apply for jobs with the group. The rationale is to create an entirely new business entity. Otherwise, all the partners in the new group could be held liable for a labor complaint that originated in any one of the former practices. To soften the firing, a doctor could say, "We're closing this practice and starting a new one, and everyone who wants to stay will be a new employee of the new practice, including me."
Explain that everyone hired by the new group will be paid according to the new fair market value salary schedule, not by how long they've previously been with the office. But establish an incentive plan to allow all staff to reach or exceed their pay at their old job, depending on the success of the new practice. Also, clear the decks by paying out in cash any accrued benefits like sick pay, rather than carrying them forward to the new group.
A good name for your practice
We're trying to settle on a name for our new group practice. Should we use last names?
Pick a name that reflects your location or specialty; for example, Riverside Pediatrics. That way, if a partner leaves or joins your group, you won't have to change the name on all legal documents, printed materials, and listings.
In this issue, the answers to our readers' questions were provided by: Robert G. Baldassari, CPA, Matthews, Carter & Boyce Fairfax, VA; Keith Borglum, http://www.PracticeMgmt.com, Santa Rosa, CA; Jack Rue Coleman, CHBC, Dental-Medical Economics, Dallas, TX.
Do you have a practice management question that may be stumping other doctors, too? Write: PMQA Editor, Medical Economics, 123 Tice Blvd., Suite 300, Woodcliff Lake, NJ 07677-7664, or send an e-mail to email@example.com