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What’s Missing in Emergency Disaster Plans By Jane ehrharDt

Total Wrist System Reduces Pain, Restores Function

A new minimally invasive treatment for wrist replacement offers pain relief and the restoration of function ... 6

Stark law Changes May Require Groups to Change How they Pay Physicians

Physician groups should check their income distribution plans

OCTOBER 2021 / $5

Emergencies don’t always come from disasters or cyberattacks. “One company I knew had clinics in strip malls,” says Jeff Dance, MBA, executive director of Kassouf Healthcare Solutions that manages 16 healthcare locations. “They had several incidents where cars accidentally went through the front window into the waiting room. They were down for a month. Not only did they have to rebuild, but there was an emotional piece to handle when folks were coming back to work. Most places do not plan for something like that.” More importantly, clinics do not take seriously some pieces of plans that make

it viable in the moment. “They may know where to turn off the gas or, but there will be crowds,” Dance says. “Everybody is going to come to look, but also people come to help, and somebody on your staff has to manage that.” Besides determining who is in charge overall in a crisis— generally the administrator or a doctor—and who handles crowd control, emergency plans should specify a spokesperson for the media. Even a fire can have

media converging on a clinic during the crisis. “Don’t let staff get picked out for their side of the story,” Dance says. “Just because the media sticks a microphone in your face doesn’t mean you have to say something. Insurance and law enforcement are the only people you have to talk with unless your attorney tells you otherwise. “Someone also needs to be designated to shelter patients from media and, unless warranted for health concerns, kept (CONTINUED ON PAGE 3)

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Tuscaloosa Changes Hospitalist Care

Starting November 1, DCH Regional Medical Center in Tuscaloosa will change their hospitalist care to coincide with their sister hospital Northport Medical Center ... 11

PRF Reporting and Avoiding Audits

The first Provider Relief Fund (PRF) reporting deadline of September 30 has come and gone ... 12

Retirement Plan Issues When a Doctor Leaves the Practice

It is always important for medical practices to be aware of the issues that need to be considered with the retirement

Rewriting The Future of Cystic Fibrosis

UAB Researched Drugs That Changed CF Outlook By laura FreeMan

For the parents of a sick child, it was news they never wanted to hear. Learning that their child had cystic fibrosis not only swept away dreams of a long, happy future. It also brought the sadness of knowing their child would likely suffer through repeatedly struggling to breathe, having to endure pounding on the back to clear lungs, and dealing with pain and damage in other organs. When they heard those words come out of a pediatrician’s mouth, there was little to

feel hopeful about. Now there is. After improvements in length of survival over the past couple of decades, a new three-drug combination researched and trialed at UAB is helping 90 percent of cystic fibrosis patients breathe easier. It is even returning the labs of some patients to levels typically seen in people who don’t have the disease. There is also hopeful news for the other 10 percent of patients who have an additional mutation that are currently blocking the benefits of this breakthrough. Recently announced re-

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Steven Rowe, MD

search being conducted in UAB’s cystic fibrosis lab suggests that overcoming the second mutation is possible and help is likely to soon be on its way. Much of the basic science and clinical research development of these medications were done under the leadership of Steven Rowe, MD, director of UAB’s Gregory Fleming Cystic Fibrosis Research Center. “The effects of Cystic Fibrosis are caused by an imbalance of salt and (CONTINUED ON PAGE 8)

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What’s Missing in Emergency Disaster Plans, continued from page 1 onsite. Don’t let them go need to be close with your right away. Have them wait banker. Have their cell until the authorities have number,” Dance says. “So talked to everyone.” can get a cash withdrawal They will also need to to meet payroll if needed. talk with your documenter. Meet staff at the clinic or This designated staff percontact point, hand out son takes photos, videos, cash, keep records, and get and voice recordings or signatures. Have all your notes of everything about controls in place, so it’s not the incident, including the just one person doing the Greg Mikos structure, people’s health withdrawal or disbursewith MK Insurance status and their experience, ment.” to help recreate a chronoPayroll may need to logical record of the event. be available for over a “Because your insurance, year with the growing inthe police, and your risk tensity of disasters these manager are all going to days. When the EF4 mulask,” Dance says. “And tiple-vortex tornado swept take pictures of everyone through Tuscaloosa in at the rendezvous spot.” 2011, clinics were ready to The recordings and photos rebuild in less than a year. of each person who was in “But they couldn’t rebuild the practice, including famin that time frame,” says Jeff Dance, MBA ily in the waiting room and Greg Mikos with MK Inwith Kassouf all staff, can also avert lawsuits. Healthcare surance, “because the city Solutions The importance of desadministration was not up ignated evacuation points is and running enough to issue important in these localized disasters. the building permits. The normal 12 There should be one gathering spot for months of loss-of-income insurance each exit. “This is where we all meet to wasn’t enough. They needed 15 to 16 take a head count,” Dance says. “And months. If you were a one-man shop, make a plan for when you’re missing you could have been out of business.” someone.” Emergency plans may need to Have staff phone numbers accesbe broadened, too, to not only cover sible to leadership so that calling trees extensive disasters, but more diverse and group texts can be put in play imsituations, such as an employee being mediately after evacuating or during robbed in the parking lot and peaceful any disaster to track staff endeavoring to protests morphing into riots. “Before get home safely, such as during the 2014 the election last fall, we had clinics on a Birmingham snow-pocalypse. call with experts on what to think about If cell towers are down, have a prefor any kind of post-election civil undetermined contact point for staff to stay rest,” Dance says. in touch. “Staff should know that you To learn more about disaster prowill meet back at a certain parking lot tection, visit Infragard Birmingham at 4:00 p.m. every day for updates or to Members Alliance, which is a partnerlisten to a certain TV channel or radio ship between the FBI and the private station,” Dance says. sector to prevent hostile acts against our That meeting point offers practices infrastructure and communities, at ina way to keep payroll going during fragardbirmingham.org. down times as well. “Which is why you

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J-1 Waivers and the Employment of Foreign Physicians in Alabama By: Melissa Azallion Kenny, Esq.

Health care providers across the United States continue to face an acute shortage of physicians particularly in Medically Unserved Areas (“MUAs”) and Health Professional Shortage Areas (“HPSAs”), which areas are determined by the United Stated Public Health Service and which include certain areas in and around Alabama. Foreign medical graduates (“FMG”) in J-1 visa status are often seeking physician employment opportunities in designated shortage areas in order to fulfill certain immigration requirements. While in J-1 status, the FMG can pursue medical training or participate in residency programs. At the end of the J-1 program, the FMG must typically return to their home country for two years before they can obtain a U.S. visa (i.e. H-1B) or Lawful Permanent Resident (LPR/green card) status. There are multiple ways for the FMG to obtain a waiver of the two-year home residency requirement including waivers based upon persecution; exceptional hardship to a U.S. citizen or LPR spouse or child; or interested government agency waivers (IGAs) whereby a

Program (the Appalachian Regional Commission; Delta Regional Authority; and the U.S. Department of Health and Human Services), but the focus of this article is the Conrad 30 Program.

Melissa Azallion Kenny

federal government agency (i.e. Veterans Administration), or a State Public Health Department (i.e. Alabama Department of Public Health (“ADPH”)) ultimately determines the FMG’s clinical service in the United States is in the public interest and his or her departure from the United States would be detrimental to the public interest (oftentimes referred to as the “Conrad 30 Program”). Three other J-1 physician visa waiver programs exist in Alabama in addition to the Conrad 30

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Alabama Conrad 30 Program Requirements The Conrad 30 Program has very specific requirements, and each state has its own rules and timeframes which must be closely followed. The Conrad 30 Program in Alabama allocates 30 slots per year for physician placements, and ADPH sets forth very detailed eligibility and application requirements. For instance, the FMG must have a written Physician Employment Agreement with an Alabama-licensed medical facility or physician in the State of Alabama and the Physician Employment Agreement must: (i) have at least a three (3) year term, (ii) require the work to be performed on a full-time basis for at least 40 hours per week, (iii) limit service sites to HPSAs or MUAs in the State of Alabama, (iv) include several immigration-related contractual provisions, (v) include certain verbatim clauses regarding breach, and (vi) not include certain provisions such as restrictive covenants preventing or discouraging practice in any HPSA or MUA. Typically, employment must begin within 90 days from waiver approval as well. In addition to numerous other application and documentation requirements, the employer of the FMG must make a good-faith effort to recruit an American physician (and certain specific efforts must be documented). Some states designate a portion of the waiver slots as “flex slots,” which allow health care providers that are not located in an MUA or HPSA to apply for a waiver, as long as the FMG will serve residents in neighboring underserved communities. However, ADPH does not have flex slots, so FMGs must work for an employer located in an MUA and/ or HPSA in order to satisfy the Conrad

30 requirements. Also, Alabama reserves at least ten (10) slots for primary care or psychiatric physician placements and up to twenty (20) slots for sub-specialty physician placements if not requested for primary or psychiatric placements. The same employer cannot submit more than two sub-specialty waiver applications in the same fiscal year, which runs from October 1 to September 30 of the following year. There are several other rules which must be followed as well related to recruitment, licensure and documentation requirements. Immigration Process and Timing Considerations The immigration process for the Conrad 30 Program involves two steps: (i) filing a waiver application with ADPH for selection and recommendation of the waiver to the U.S. Department of State (“DOS”); and (ii) filing an H-1B visa petition with the U.S. Department of Homeland Security, United States Citizenship and Immigration Services (“USCIS”) requesting a three-year period. The J-1 waiver process also involves submission of a detailed application to the DOS to obtain a case number. The H-1B petition filed with USCIS can be fast-tracked and approved within 15-business days if needed. To begin work, both the J-1 waiver and H-1B petition must be approved. It is critical to begin the process early (usually one year prior to employment) because the J-1 waiver process often takes several months. If the FMG wants to begin work on July 1 of the following year, the waiver application should be initiated in early fall of the prior year. Although the Conrad 30 Program only requires the FMG to work for a three-year period in the MUA and/or HPSA, the FMG might also want to obtain a green card which could require the parties to initiate amendments to the Physician Employment Agreement and evaluate various immigration options.

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Total Wrist System Reduces Pain, Restores Function By Ann B. DeBellis

A new minimally invasive treatment for wrist replacement offers pain relief and the restoration of function. The Anika WristMotion® Total Wrist Arthroplasty (TWA) system is a major advance in total wrist arthroplasty intended to provide a stable, bone-sparing option for the treatment of wrist pain and arthritis. The procedure is also intended to alleviate pain and restore function, mobility, and rotational freedom of an arthritic wrist joint. The WristMotion TWA system was cleared by the Federal Drug Administration (FDA) in October 2020 with limited launch of the product beginning on July 1, 2021. The modular joint preservation system replaces both the radial and carpal sides of the wrist joint for patients suffering from rheumatoid arthritis, osteoarthritis or post-traumatic arthritis. The system was designed to reduce pain while providing patients with a greater range of motion that is closer to the wrist’s normal rotational axis. Orthopedic surgeon Joseph M. Sherrill, MD, a hand specialist in Vestavia Hills, Alabama, has been using the WristMotion hemiarthroplasty implant for his patients since 2015. He has had no failures during the 32 cases he performed. Due to his successful expe-

The Anika WristMotion® Total Wrist Arthroplasty system provides a stable, bone-sparing option for treating wrist pain and arthritis.

rience with the system, Sherrill became interested in Anika’s new Total Wrist Arthroplasty system and was the first surgeon in Alabama to use the system during its launch. “When arthritis is localized in the wrist, you can perform a hemiarthroplasty. You replace only the capitate which is the key component to restoring the wrist,” he says. “It is similar to

hemiarthroplasty surgeries in the hip that have been done for years. Generally, the results are good, but patients can still have issues with pain and progression of arthritis on the radial side of the joint. These problems led me to focus on Anika’s Total Wrist Arthroplasty System.” Prior to the traditional Total Wrist Systems, titanium screws were used to finish shoulder repairs. That led to the development of a wrist procedure – the proximal row carpectomy (PRC) - where the arthritic wrist bones are removed. The WristMotion Hemiarthroplasty system is performed in conjunction with a PRC, which leaves the capitate in place. The WristMotion Hemiarthroplasty implant then replaces the diseased area of the capitate. “With the WristMotion Total Wrist Arthroplasty system, patients who present with arthritis on both sides of the joint now have an innovative, stable solution that addresses concerns related to loosening and maintaining the center of rotation,” says Sherrill. Many surgeons opt to treat wrist arthritis by fusing the joint, Sherrill says, but that treatment can severely limit their ability to move and use the wrist. With Anika’s Total Wrist System, surgeons will have the flexibility to use the WristMotion hemiarthroplasty system or the WristMotion Total Wrist Arthroplasty system depending on the need of

the patient. “I had an active 60-year-old patient who enjoyed tennis, golf, backpacking, etc. He determined that he could develop a more stable situation with the WristMotion hemiarthroplasty instead of the Total Wrist implant. Another patient with advanced arthritis benefitted from the WristMotion Total Wrist implant,” Sherrill says. “The Anika WristMotion Systems allow for intraoperative flexibility and is a much smaller operation than traditional systems on the market. It can provide pain relief and a quicker recovery for patients. Also, the screw design used in the capitate construct of both the hemi and total systems, has never shown any loosening. As a result, I believe we have a product that we can count on for almost 100 percent success.” Sherrill says the design focuses on the stability of the implant, which can result in a more stable joint overall. The height is adjusted on the radial side instead of the carpal side. “Basically, the system allows adjustment of the wrist height and stability of the implant curve on the radial side. It allows rotation for the wrist to bend into what is called a dart thrower’s motion,” he says. “It goes up toward the thumb and down to the little finger and closely reproduces the native anatomic motion of the wrist. It is the most functional activity we (CONTINUED ON PAGE 8)

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Rewriting The Future of Cystic Fibrosis, continued from page 1 water within the cell, due to a lack of the protein that usually regulates it,” Rowe said. “This is caused by a mutation in the CFRT gene, which leads to a misfolding that results in the protein production being reduced or completely lacking. “The first of the three drugs we tested was Ivacaftor, released in 2012 by Vertex Pharmaceuticals. It was designed to help correct the misfolding, and we saw positive results in patients that encouraged us to push forward. In 2015, Tezacaftor was the second drug approved, and it was also aimed at further improving the correct folding. The third drug, Elexacaftor, has now been added to the combination and works as an activator that is giving us the results we had hoped to see.” Marketed as Trikafta®, the effects of the combination drug in alleviating symptoms and improving labs have been

game-changing. Measured in expelled breath volume, sweat tests and other indicators, there are reasons to be optimistic. The drug isn’t inexpensive, but has been covered under most insurance plans. It will require time and data, following patients who are taking the medications for a few years to make a definitive evaluation, but researchers and physicians are hopeful that by reducing the symptoms and the tissue damage Cystic Fibrosis does, this three-drug combination will have a significant positive effect on the prognosis for longer survival and a better quality of life. “The thick, sticky mucus that accumulates in lungs encourages infections that tend to cause scarring and other long-term damage that reduces function. By keeping lungs clearer and not giving infections a place to grow, we hope to

prevent the damage, which should have a positive effect on outcomes,” Rowe said. Happy for the 90 percent of patients who are doing better, UAB’s cystic fibrosis researchers haven’t stopped working on new therapies to help the 10 percent of patients who have an additional mutation that interferes with their ability to share the same benefits of the triple combination medication. “These patients have an additional mutation of ‘nonsense’ genes that act like a red light that stops read through of the protein-producing gene,” Rowe said. “For over ten years, we have been working on an idea using a small molecule like a bridge to jump past the nonfunctioning part of the gene. This would allow the production of the protein to be completed. “We worked with Southern Research Institute to identify promising

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Birmingham Medical News

J-1 Waivers and Employment of Foreign Physicians, continued from page 4

Conclusion The Conrad 30 Program provides a valuable option for FMGs and health care providers seeking to address physician shortages in rural and medically underserved markets. It is important to evaluate immigration issues that come up in the employment relationship, address them at the outset with all parties, and memorialize them in appropriate documents and filings to ensure a smooth and successful process. Melissa Azallion Kenny practices with Burr & Forman LLP in the firm’s Immigration Group. She may be reached at makenny@burr.com.

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candidates and tested one that met the profile. It was successful in getting past the nonsense section to allow the protein to be produced. While this first test substance hasn’t met all our criteria for human testing, it does prove the principle that a new medication can work for patients with the additional mutation. We are working now to identify other small molecules that can have the same effect and meet our safety criteria with a low potential for side effects.” In addition to benefiting patients with an additional cystic fibrosis mutation, this type of advance could be a trail blazer for medications to get past the genetic roadblocks in other diseases like muscular dystrophy and inborn errors in metabolism such as Hunter’s Syndrome. It could be the news many parents whose children are suffering from genetics disorders are waiting to hear.

Total Wrist System, continued from page 6

use with wrist motion.” Sherrill says surgeons should expect straightforward surgeries and good outcomes with the Anika WristMotion systems. “The reamer-based system tells us exactly where the implants will be placed,” he says. “There are also multiple sizes of instrumentation and implants that can be used during the procedure to ensure a proper implant fit of a patient’s wrist joint.” Sherrill predicts that the Anika implants will be a step above current systems. “With the instrumentation of this new procedure, we will be able to see where we need to use saws to cut bones and where to increase joint height on the distal radius instead of the carpal side. The system will provide multiple sizes of well-designed and easy-to-use instrumentation,” he says. “In terms of patients, you want a predictable surgical procedure with a good outcome. The Anika instrumentation and implant system will facilitate that.”


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OCTOBER 2021 • 9


Stark law Changes May Require Groups to Change How they Pay Physicians By Colin Luke and Nora Liggett

Physician groups should check their income distribution plans to make sure they comply with new Stark changes that will go into effect January 1, 2022. Failure to have distribution plans that comply with Stark will mean that those groups can no longer fit their referrals within the in-office ancillary services exception, one of the most widely used and helpful Stark exceptions for physician groups. Unless there is another Stark exception available, which is unlikely, failure to fit within the in-office ancillary services, or “IOAS” exception would mean that the group’s Medicare (and, according to some court cases, Medicaid) referrals to many of their inoffice ancillary services would be illegal. The Stark change was set out in a final rule (the “Rule”) published by CMS in November of last year, and codified in the federal register at 85 Fed. Reg. 77492. CMS issued the new Rule in an effort to clarify and modernize the Stark Law, especially to allow more flexibility for value-based arrangements. Most of the changes were effective January 1 of this year. However, some of the clarifica-

Nora Liggett

tions and changes affect how physician groups can distribute their profits and still fit the definition of a Stark group practice, and those changes will go into effect on January 1, 2022 in order to give groups the time to amend their income distribution plans to be in compliance. Fitting within the definition of a Stark “group practice” is important because only Stark group practices can use the in-office ancillary services exception. The in-office ancillary services exception allows a physician in a group practice to refer Medicare patients for Stark “designated health services” (or “DHS”) that are provided through the group practice. Designated health services include a whole host of ancillary services that may be provided in a physician’s office, including (but not limited to) lab, x-ray,

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Colin Luke

ultra-sound, MRI, CT, physical therapy, radiation therapy and outpatient prescription drug/infusion services. There are several requirements that a group must meet in order to be a Stark group practice. One concerns the compensation paid to the group’s physicians. The Stark regulations provide that a physician in a group practice “may be paid a share of overall profits of the group or a productivity bonus based on services personally performed or incident to such personally performed series, so long as the share or bonus is not determined in any manner which is directly related to the volume of value of referrals by such physician.” The Stark regulations go on to state that a share of overall profits will be deemed not to relate directly to the vol-

ume or value of referrals if the profits are divided per capita, or if the DHS revenues are distributed based on the group’s revenue attributable to services that are not DHS payable by any federal health care program. The Stark regulations also allow groups to split the profits of the entire group, or to form pools of at least five physicians and split the pool’s profits among members of that smaller group. The Stark regulations further provide that a “productivity bonus” may be paid to physicians in the group and will be deemed not to relate directly to the volume of value of referrals if it is paid based on the physician’s total patient encounters or work RVUs, or based on the allocation of the physician’s compensation attributable to services that are not DHS payable by a federal health care program. The new Stark final Rule, however, provides several clarifications to how groups may share profits. Many group practices may have to change their method of distributing practice income to their physicians as a result of these changes. (CONTINUED ON PAGE 14)

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Tuscaloosa Changes Hospitalist Care By Jane Ehrhardt

Starting November 1, DCH Regional Medical Center in Tuscaloosa will change their hospitalist care to coincide with their sister hospital Northport Medical Center, whose changeover began October 1. Both facilities will now be served by Capstone Health Services Foundation and IN Compass Health. The transition began in February when DCH Health System, which includes both hospitals plus Fayette Medical Center, began requesting proposals for hospitalist contracts. The evaluation was conducted by DCH with expertise from PYA, a nationally recognized consulting group specializing in coordinating RFP processes and evaluating the responses. On June 22, DCH announced the outcome of their evaluation. “Partnering with these two healthcare leaders to staff and manage both DCH Regional Medical Center and Northport Medical Center helps ensure quality, continuity and consistency of care, since the same providers, using the same care models, will be delivering care at both locations,” Bryan Kindred, president and CEO of the DCH Health System said in a press release. “This is the right thing for our patients and the community.” Prior to the change, Northport

Charles Abney, MD

had contracted with Pinnacle Physician Group to provide hospitalists for the last six years. “But our physicians have been doing it for 16 years there,” says Charles Abney, MD, owner and founder of Pinnacle, explaining that all their physicians had been employed by DCH Health System as hospitalists. Abney formed Pinnacle in 2009 with another physician in order to serve as hospitalists at Noland Hospital, a 26-bed, specialty facility catering to long-term acute care also in Tuscaloosa. The following year, a local pulmonology group hired Pinnacle as their hospitalists. In 2013, DCH Regional Medical Center asked Pinnacle to help cover their hospitalist needs. The physicians at Pinnacle, who were still employees of DCH Health System as hospitalists at Northport, took on that task for free.

“We were in the position of employees at the time, and it didn’t feel right to ask them for money. We kind of had to do it,” Abney says. By 2015, the physicians ended their hospital status as employees of DCH to continue performing all the same work under the Pinnacle name. “That would be eight years we’ve done it at Regional and received not one extra penny,” Abney says. The group grew to cover about 23 percent of the hospitalist services at the 583-bed hospital. Northport, at less than half the bed count of Regional, continued the paid contract with Pinnacle. Since then, Pinnacle expanded their clientele to serve as hospitalists at those two facilities for another 14 private physicians. Abney says the end of the contract with the hospitals is a major hit and unexpected. “We felt safe. That’s what we misjudged,” he says, but it won’t be their collapse. “All of us have alternate sources of income.” However, the staff and 11 nurse practitioners could likely lose their positions. The biggest hit and possible downfall for Pinnacle will be a rule recently imposed by DCH to exclude any possibility of competition to their own hospitalist program. “We don’t have a problem with them having an exclusive contract,” Abney says, “but they should

have the same contract that we had without this provision to cut out competition.” Pinnacle is pursuing legal means to make that happen and retain their access to serve as hospitalists for at least their current private physician clients. According to the new contract for hospitalist service at Northport and Regional, IN Compass out of Georgia will now provide operational oversight and expertise and will be responsible for day-to-day operations of the hospitalist program. They will also work with Capstone in recruiting, selecting, and hiring those physicians. Capstone Health Services Foundation will employ the physicians that will work as hospitalists. The non-profit corporation is affiliated with University Medical Center and the current employer of University Hospitalist Group physicians, which held the previous contract for hospitalists at Regional. Richard Friend, MD, dean of UA’s College of Community Health Sciences explained in a press release the advantage of utilizing the two entities together. “Partnering with IN Compass will allow Capstone Health Services Foundation to collectively offer DCH local and national knowledge along with the best practices of a leading medical center and a leading hospitalist management company.”

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OCTOBER 2021 • 11


PRF Reporting and Avoiding Audits By Jane Ehrhardt

The first Provider Relief Fund (PRF) reporting deadline of September 30 has come and gone. “But they have granted a 60-day grace period. No fines or penalties should be assessed as long as you file within those 60 days,” says Bill Bach, CPA and director of the Audit and Assurance Group at Kassouf &Co. “There are probably plenty of people who have not gotten the data entered into the portal yet.” The delays in reporting are not surprising with the diverse and ongoing funding sources offered during the COVID pandemic, including PRF, Paycheck Protection Program (PPP), and state funds. And as quickly as these forgivable loan options arose, the rules for reporting and applying for forgiveness are now just as rapid. “The changes are coming out fast,” Bach says. “The applications for the first draw PPP loans have been changed nine different times, and that can cause some confusion. But don’t get overwhelmed and stressed out by reporting. There is information out there, and we have a roadmap to help us through the process.” The department overseeing the PRF reporting, Health Resources and Services Administration (HRSA), pro-

Bill Bach, CPA

vides an abundance of guidance on their website (www.hrsa.gov), including not only the spreadsheets for use on filling out the portal report and a how-to webinar, but a 73-page Reporting Portal User Guide, which is basically a workbook. “Before starting your submission, read through the FAQ to gain a better understanding of reporting,” Bach says. HRSA requires reporting for any entity that received at least $10,000. Anyone falling between $10,000 and under $500,000 should use Table A to report their expenses. An entity that received $500,000 or higher is required to provide additional information, which

means using Table B that separates expenses into more detail. The User Guide supplies two categories of eligible expenses, including general and administrative expenses and a lengthy list of healthcare-related expenses. They fall into five categories and cover anything from hand sanitizer to updating the HVAC system. “They are really generous in this list of expenses you can use,” Bach says. “You want to be sure you don’t double dip, though. You can’t use the same expense to satisfy requirements in multiple funding sources. That’s the largest caveat I could give.” This may not be hard to do, considering most anything utilized or purchased to accommodate corona-virus protection is covered, including retrofitting the facility, increasing bandwidth, and remote worker expenses. “The last category is a catchall,” Bach says. “Expenses here qualify as long as it was spending related to prevent, prepare for, or respond to the coronavirus. So you have a lot of leeway. But documentation must exist to back up any claims.” An audit is automatically required for providers that received at least $750,000 in PRF funds. HRSA offers two options for that audit compliance. “The single audit option is a very com-

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plex audit engagement. Usually, forprofit entities have never had those done before,” Bach says. “We’re advising our clients to stay away from that one and go to the financial statement audit in accordance with Government Auditing Standards option.” This second option concentrates the audit on the PRF funds received whereas the first option calls for a full-blown audit covering the provider’s entire general ledger. Be aware that the CPA who performs these audits must meet the eligibility requirements set out by HRSA under Government Auditing Standards and must be Yellow Book compliant. “Government audit standards require additional continuing education requirements above the normal requirements for CPAs,” Bach says. Should the government audit your PRF report, know that the outcome may not be dire if errors are found. “The biggest risk is that you’d have to reimburse HRSA for some of the funds you received,” Bach says. This first reporting deadline, covering funds received between April 10 and June 30 of last year, is only the first of four PRF deadlines. Because healthcare providers can receive funds thru December 2021, reporting deadlines for PRF (CONTINUED ON PAGE 13)


Retirement Plan Issues When a Doctor Leaves the Practice William C. Presson, ERPA

tirement plan wealth and also greater tax deduction It is always important for benefits than when only medical practices to be aware having a 401(k) Profit Sharof the issues that need to be ing Plan. The theorical apconsidered with the retireproach of a Cash Balance ment plan when a physician Plan is relatively simple. leaves the group. The plan sponsor provides For many physicians, the “credits” to the participant practice retirement plan can accounts each year. The first William C. Presson result in providing one of is a pay credit that is either their most significant assets a fixed percentage of comto be used after retirement. These plans pensation or a specified dollar value. are called qualified retirement plans beThe second is an interest credit, which cause they fall under requirements of is generally a fixed rate of return for the IRS Internal Revenue Code and are eliaccount. For those who love accountgible to receive certain tax benefits, uning, think of these credits as entries on like non-qualified plans. These plans are a ledger. The plan sponsor contributes governed by the Employee Retirement money to the plan trust to support the Income Security Act (ERISA). (Keep in total amount of the calculated credits mind: employment contracts don’t overfor all participants in the plan. ride the rules of retirement plans). The There are specific provisions remost common qualified plans are 401(k), garding when a terminated participant Profit Sharing, Traditional Defined Benmay receive a distribution in any type of efit, and Cash Balance Plans. qualified plan. Back in the old days, it Every year a contribution in the rewasn’t uncommon for a 401(k) Plan to tirement plan(s) is critical for accumulatrequire the participant to reach age 65 ing wealth in the plan(s). While every to be eligible for a distribution. While plan is unique, most plans have certain that’s almost never the case today, it’s requirements that must be met each very possible for a plan to require a wait year to receive a contribution or accrue until after the end of the plan year bea benefit. For example, needing to work fore a distribution from the plan will be 500 hours or be employed on the last day made. If a Cash Balance Plan hasn’t of the plan year or working 1,000 hours been well “funded” under IRS regulaand being employed on the last day of tions, a highly compensated employee the plan year are common contribution (HCE), such as a physician, is restricted requirements. It is even common for plan from taking a lump sum distribution. sponsors to choose a specific individual This doesn’t ultimately impact their and not allocate a contribution on their benefits, but can cause a timing impact behalf regardless of employment status of the payout of said benefits. (In order (as long as nondiscrimination requirefor any HCE to be paid out, the Cash ments are met). It can be the case that Balance Plan must be funded 110 perthere will be little or no employer concent of the liability amount the plan has tributions for a physician for the year in for all participants). which a physician leaves a practice. Example of Why Planning It is often ideal for physician groups Is Needed: to pair a Cash Balance Plan with a 401(k) Owner A is one of three equivalent Profit Sharing Plan. Cash Balance Plans, physician owners in their current pracwhich are defined benefit plans, are tice. The three physicians add a 401(k) popular with physician groups because Plan and a Cash Balance Plan to maxithey allow owners to have substantially mize contributions and take advantage of greater contributions to accumulate re-

PRF Reporting and Avoiding Audits , continued from page 12

are set through March 2023. This assumes no further rule changes and that no additional funds are made available. However, as with the PPP loan forgiveness applications, after this first round of PRF reporting, the process could be become clearer and more concise. “Once HRSA starts seeing reporting coming through, it will allow them to create more meaningful reporting guidance,” Bach says.

Mostly, Bach suggests that with the ever-changing landscape and so much revenue on the line, everyone should get the right help. “Seek expertise from those who know,” he says. “I would want help with this. I would want a sanity check, and I would not want to go it alone.” For direct help from HRSA, call their Provider Support Line at (866) 569-3522 from 8:00 a.m. to 10:00 p.m. Central time, Monday through Friday.

tax deductions. The practice is doing well and generating good revenue, but as usual, Medicare reimbursements and health insurance, are being discussed in political circles, so the owners decide to “prefund” the Cash Balance Plan, while things are good. Thus, they make contributions that are deductible on the corporate tax return, but are in excess of the total benefits for the applicable plan year. They continue to do this for a few years. After time, the Cash Balance Plan has $150,000 more in the plan than is needed to cover the current accrued benefits. Owner A decides to leave the practice. Since the Cash Balance Plan is ‘over funded’, there is likely not any distribution restriction (as discussed in the paragraph above). However, there may be a different problem. The Cash Balance Plan requires that Owner A gets paid out the “lump sum equivalent” of his benefit. What this means is Owner A doesn’t have any claim on the $150,000 of excess funding even though he helped contribute approximately $50,000 of the $150,000 excess into the plan. Owner A didn’t fully understand this as they were making excess contributions and, while they all enjoyed the tax deduction benefits, Owner A feels like he’s owed

one-third of the excess assets that they contributed. If the situation was reversed and the plan was underfunded by $150,000, Owner A would be unable to simply withdraw his benefit and disregard that the plan was underfunded by $150,000. These are real and common issues, which is why planning is essential. A qualified retirement plan or plans can provide one of the best methods for physician practices to maximize retirement benefits. Differing plan designs with various eligibility and payout requirements can prove very useful to practices, which is why it is wise for the physician group to consult with a retirement plan design expert to ensure they have a plan (or plans) designs that make the most sense for their practice. As you can see from the illustration above, planning is key and the best time to plan is at the design stage and again prior to when physician exits are anticipated. William C. Presson, ERPA is a Senior Manager at Pinnacle Plan Design. During his career, Presson has started and sold his own Third Party Administrator (TPA) practice, served as COO for a national trust company and led the TPA operations for a large regional CPA firm.

More Experience Cabaniss Johnston is now part of Phelps Dunbar. 13 offices across the Gulf South and in London. George L. Morris, Partner 2001 Park Place North Birmingham, AL phelps.com

Birmingham Medical News

OCTOBER 2021 • 13


GRAND ROUNDS

Stark law Changes May Require Groups to Change How they Pay,

Oliver Speaks to Birmingham MGMA About Glenwood

continued from page 10

THE CHANGES AND CLARIFICATIONS INCLUDE: • No Pools Based on Service Lines. CMS acknowledged in the preamble to the new Stark Rule that many groups allocate all of a particular service line’s revenue to a particular pool of physicians, but CMS said it never intended that. Instead, a group must take all of the profits from the DHS referred by physicians in a pool and use that amount as the dollars to be split among that pool of physicians. It is still permissible to create pools based on physician specialty or practice locations, but the profits to be divided amongst the members of that pool should include the profits arising from all DHS referred by the physicians in that pool. • Distribution Methodology Can Differ. CMS clarified that one pool of physicians can have their DHS referral profits split and paid in one manner, whereas the group can split another pool of physicians’ DHS referral profits using a different methodology, as long as neither methodology directly rewards referrals. • DHS Profits Can Be Split, But Not Revenue. CMS clarified that its rule allowing profit shares applies only to the profits of DHS. CMS acknowledged that some groups split all the revenue from a particular type of DHS, but that was never what CMS intended to occur. CMS believes that “a group’s distribution of revenues to

a referring physician rather than profits, which are calculated by deducting the expenses in furnishing the designated health services, could serve as an inducement to make additional and potentially inappropriate referrals to the group practice.” • Profits Cannot be Split Based on nonDHS Referrals if those Referred Services would be DHS if paid for by Medicare. Some groups split DHS income based on their split of non-DHS revenue, even if the non-DHS revenue is split in a manner that directly rewards referrals. These groups believed that this division of DHS revenue was acceptable as one of CMS’s methods of splitting DHS profits deemed not to be based on volume or value of referrals. In the new Rule, CMS revised the language of its “deemed not to relate to the volume or value of referrals” examples to be more consistent with what it says was its policy intent. Accordingly, CMS revised the language of one of its deemed permissible methods by replacing “are not designated health services payable by any Federal health care program,” with “and would not be considered designated health services if they were payable by Medicare.”

MGMA board members present $2500 to Glenwood.

In September, Ken Oliver with Glenwood spoke to a meeting of the Birmingham MGMA about Glenwood’s mission to provide treatment, education, and research in the area of children’s mental health. Glenwood, which was founded as a non-profit in 1974, has grown from a single employee in a small space donated by St. Luke’s Episcopal Church to an organization with a team of 350 clinicians, medical and educational teams, direct care staff, administration and support personnel op-

CU²RE Program Awarded $5.2 million

The Department of Family and Community Medicine’s Comprehensive Urban Underserved and Rural Experience program (CU²RE) at UAB has received a supplemental award from the Health Resources and Services Administration for $5.2 million. The CU²RE program is designed to enhance the recruitment, training and retention of medical students dedicated to serving as family medicine physicians in the medically underserved urban and rural areas of Alabama. HRSA provided the initial funding for the program in 2020. This $5.2 million supplemental funding will be used to increase educational

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erating on a 363-acre campus in southeast Jefferson County. Glenwood works to enable individuals to live life to their fullest potential, supporting children and adults impacted by autism and other behavioral health needs. At the conclusion of the meeting, the Birmingham MGMA presented Oliver with a check for $2500 to support Glenwood’s mission, along with art supplies for the non-profit’s school program.

activities for medical students, redesign family medicine curriculum across all UAB regional campuses, provide CU²RE students with stipends to offset medical education costs, and implement new faculty, staff and student development initiatives. Selected students in the School of Medicine will receive mentoring from family medicine physicians, early access to clinical hours, a 10-patient panel to work with over four years, leadership and interprofessional education, and more.

BBH Names New CEO Brookwood Baptist Health and Brookwood Baptist Medical Center has named Jeremy Clark as chief executive officer. Jeremy Clark Clark, who started his career at Brookwood Baptist Medical Center over 15 years ago, returns to Birmingham from Hilton Head Regional Healthcare, a 150 bed two-hospital system in South Carolina, where he has been the market CEO for the last six years. Under his leadership, the system has grown exponentially, and brought many firsts to the area, including advances in orthopedics, women’s care and cardiac care. Prior to this, he served as CEO of Saint Francis HospitalBartlett, a 196-bed acute care hospital in Bartlett, Tennessee. He also served as the chief operating officer at Good Samaritan Medical Center in West Palm Beach, Florida. “I am delighted to return home, and look forward to being an integral part of further advancing healthcare offerings in this community,” Clark said. “My wife and I are incredibly excited to raise our children in this area, in close proximity to some of our family and friends.”


GRAND ROUNDS

$100 Million Gift Will Transform UAB School of Medicine EDITOR & PUBLISHER Steve Spencer VICE PRESiDENT OF OPERATIONS Jason Irvin CREATIVE DIRECTOR Katy Barrett-Alley CONTRIBUTING WRITERS Cara Clark, Ann DeBellis, Jane Ehrhardt, Laura Freeman, Cindy Sanders, Marty Slay Birmingham Medical News 270 Doug Baker Boulevard, Suite 700-400, 35242 205.215.7110 Ad Sales: Jason Irvin, 205.249.7244

Dr. Marnix and Mary Heersink have donated $95 million to the UAB School of Medicine. When combined with a $5 million from Triton Health Systems, the total support to the school is $100 million. In appreciation for the Heersink’s gift, the school of medicine has been renamed the UAB Marnix E. Heersink School of Medicine, and UAB has established the Mary Heersink Institute for Global Health and the Marnix E. Heersink Institute of Biomedical Innovation, a first-of-its-kind biomedical institute that will focus on entrepreneurial healthcare innovation initiatives that foster healthcare and socioeconomic transformation. The primary location of the institute will be at UAB, with a prominent physical presence in Dothan, the Heersink family’s hometown.

Mary and Marnix Heersink

“UAB’s history of achievements and aggressive pursuit of excellence motivated me to partner with the school to advance our shared priorities,” Dr. Heersink said. “This gift will build on the school’s tremendous momentum and enhance its ability to innovate and deliver.” In just five years, the UAB School of Medicine grew its National Institutes of

Health research portfolio by $100 million, making it one of only eight schools in the country to do so. This growth catapulted the School of Medicine’s NIH ranking from No. 31 in 2014 to No. 21 among all schools and the top 10 for public medical schools. In addition, 12 departments ranked among the top 20. Dr. Heersink is a cataract and laser refractive surgeon and co-owner and chairman of Eye Center South in Dothan, a practice he and John Fortin, MD opened in 1980 which now has 12 offices in Alabama, Florida and Georgia. Heersink and his family opened Health Center South, a 140,000-square-foot medical complex for doctors of all specialties in Dothan. Heersink is also an owner or agent of many other companies, including real estate holdings and manufacturing entities in the United States and abroad.

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