This feature of MM “NEWS” introduces you to Society leaders as they explain their vision of organized medicine’s activities. This month, read Society President Michael T. Goldstein’s letter to the New York Times, after the Times compared health care to working on an assembly line.
To the New York Times
In your recent article, “Doctors Unionize to Resist the Medical Machine,” you highlight a growing problem in the delivery of healthcare in the United States — the attempt to compare the treatment of patients to working on an assembly line. Healthcare has been analyzed and modeled by those who have evaluated other industries, and their conclusions are based on the assumption that processing patients is no different than performing monotonous tasks on an assembly line. The obvious response noted in this article was that physicians should thus follow the lead of other factory workers and unionize.
Unionization is perhaps the best alternative when employees are burdened with impossible workloads, loss of autonomy, inability to do their jobs conscientiously, pay issues, and the risk of burnout. The difference when discussing healthcare is there is additionally a need to remove the impediments that prevent doctors from treating their patients to the best of their ability.
As healthcare has become more of a business, there have been a number of attempts to micro–manage delivery by the government, insurance companies, large institutions and their consultants. Most of this activity is happening with little input from the physicians, which is foolish and will lead to the creation of healthcare “processing plants” as opposed to rendering of medical care. Imagine trying to design the cockpit of an aircraft without pilot input — this problem is is exactly what we have created with healthcare.
Ironically in the article whether or not the physicians see a few more patients each day is of little economic significance. If you examine the bills for hospitalized patients, the total physician component is less than 10 percent and probably closer to five percent. Economies and efficiency could be better obtained looking at the other 90+% of the healthcare dollar. It’s like pinching pennies and wasting dollars.
One of the uncompensated keys to making the correct diagnosis and devising care plans is, as the article points out, spending time with patient, taking a proper history and performing a proper exam. Good histories and exams by competent physicians lead to correct diagnosis, avoidance of unnecessary testing, shorter hospitalizations and better outcomes.
The government and other payors need to understand that the most cost–effective and highest quality healthcare comes from competent physicians being allowed to practice their profession as professionals, and not assembly line workers.
A number of members responded to the Society’s survey about IPA participation and future interest. Here are some of the comments members made:
“I’m very concerned over the future of solo practitioners being able to survive in private practice. Too many concerns to spell out, but I support the NY County Medical Society’s efforts on our behalf.”
‘I’m concerned about decrease or elimination of out–of–network benefits, the trend toward hospital or institution–based practices (often forced participation in hospital–controlled private practice or the threat of no staff position), decreased autonomy, income AND respect for doctors.”
“I have never been approached by or been made aware of an IPA that could help me.”
“I have a small concierge practice with legacy patients — about 75% concierge and 25% legacy I have always been in solo private practice. I work, as I always have, about 60 hours a week . . . I find, as I always have, that I enjoy every aspect of medical care. Each time there was change in the ‘business’ of medicine, I adapted. When HMOs were what “everyone had to join,” I did not. . . . I opted out. I recognize that not everyone can do this, but it worked for me. I run a free clinic along with medical students at my hospital. My work has and continue to be completely fulfilling.”
The Society, working with other county societies in New York City, has been bringing its concerns about e–prescribing gaps and the potential harm to some patients to legislators for the past year. (The Society introduced a resolution at the 2016 House of Delegates of the State Society specifying the regulations or legislation needed to assist in cases when e–prescribing works against a patient’s needs.
The New York State Commissioner of Health Howard Zucker, MD has issued some e–prescribing exceptions as the March 27th deadline neared. It helped in some cases, but many more issues remain.
Here are the exceptions so far:
- Practitioners will be permitted to prescribe on paper or by phone IF "the practitioner reasonably determines that it would be impractical for the patient to obtain substances prescribed by electronic prescription in a timely manner, AND such delay would adversely impact the patient's medical condition." (You should note both points in the chart, including the reasons. Note too: A controlled-substance prescription cannot exceed a five–day supply.)
- There is a “Blanket Waiver” from the Commissioner of Health for s for practitioners who are prescribing in nursing homes, and practitioners who are prescribing an opioid antagonist that allows a non–patient–specific prescription. It is also for any practitioner who is prescribing a controlled or non–controlled substance containing two or more products, which is compounded by a pharmacist; or is to be compounded for direct administration by parenteral, intravenous, intramuscular, subcutaneous or intraspinal infusion; or contains long or complicated directions; or requires a prescription to contain certain FDA–required elements that cannot be accomplished with electronic prescribing; or falls under expedited partner therapy, collaborative drug management, or in response to a public health emergency that would allow a non–patient-specific prescription; or falls under a research protocol.
- There is an “Individual Waiver,” and if you do very little prescribing, you may be granted a waiver whereby you will not be required to e–prescribe at all. This waiver will be good for one year. In order to apply for the waiver:
— Fill out the waiver application form. Click on this link: IndividualPractitioner. Log onto the HCS and follow the instructions. Or, if you'd like a paper version of the application, call the BNE at (866) 811–7957, option 1.
— In most cases, the Bureau of Narcotic Enforcement (BNE) will send you a notice. However, you can also check online to see if your waiver has been approved. Go to the HCS website, https://commerce.health.state.ny.us/hcsportal/hcs_home.portal , and log on. In the column at left, click on Electronic Prescribing Waivers. Where it says Choose One, click on your name. Mid page, you will see Waivers Requested by Practitioner. Look under Status. Does it say Approved?
— It’s not the pharmacist’s responsibility to make sure you have a waiver. However, the BNE will be monitoring the situation.
The Society continues to ask for clarification and point out issues to the BNE, and we will be telling you more as we learn more.
National Government Services has been instructed by the Centers for Medicare/Medicaid Services to initiate the REVALIDTATION process for 38,000 doctors in New York State. These notices come in a yellow envelope looking like the one at this link: J6/JK Provider Enrollment Sample Yellow Envelope
We’re making a big deal of this envelope because if you don’t pay attention to it, there will be serious disruptions to your Medicare cash flow. If you rely on Medicare payments, this mailing is crucial.
Pay attention to the NGS Yellow Envelope immediately and warn your staff and colleagues as well.
You’re invited to this special repeat program, “To Sell or Not to Sell?” from the New York County Medical Society on Wednesday, May 4, 2016, 5:30 p.m. registration: 6:00 p.m. to 8:00 p.m., 1095 Sixth Avenue (42 Street and Bryant Park), Rooms 19.120/138 NY, NY 10036.
Legal, real estate, and financial planning experts will tell you what questions to ask when you make your decisions about practice sales.
Our experts are Scott Einiger, Esq., Einiger and Associates, Special Counsel to NYCMS; Marisa Manley, President, Commercial Tenants Real Estate Representation, LTD; and Edward Alferoff, CFP, Vital Planning Group
Decisions about the future of your practice, the equity you hold in it, and what’s best for you are tough. Some doctors will find selling to a hospital or a larger group is the best option, while others will determine that they want to be in control. The experts at this conference will show you what types of questions you must ask to make sure that the decision you make is best for you. Attend this program and:
- understand contractual issues involved in selling your practice;
- realize the significance of restrictive covenants and termination clauses;
- distinguish between selling your practice and your real estate to a hospital/group;
- learn how your co–op or rental agreement affects potential practice sale;
- learn how to protect the assets you bring into an arrangement;
- safeguard the practice from threats to individual partners; and
- have your questions answered.
There is still opportunity for physicians to qualify for MLMIC’s 20 percent dividend, but you must act quickly. Medical Liability Mutual Insurance Company (MLMIC), the largest admitted medical liability company in the State of New York, was created by physicians of the Medical Society of the State of New York 40 years ago. This year, we are pleased to report that every physician who is insured with MLMIC as of May 1st and maintains continuous coverage through July 1st will receive a twenty percent (20%) dividend from MLMIC.
For example, if your medical liability premium is $100,000, you will receive a premium credit of $20,000 from MLMIC when your policy renews on July 1st.
If you are not a MLMIC insured at this time, act immediately. Over the years, MLMIC’s financial strength has allowed it to pay more than $300 million in dividends to its policyholders, something no other insurer can match.
To learn more, visit www.mlmic.com/2016-dividend or call (888) 793–0393.
These nominees were selected by the Society’s Nominating Committee at its meeting on February 24, 2016.
Scot B. Glasberg, MD, President–Elect
Naheed Van de Walle, MD, Vice President
Jessica J. Krant, MD, MPH, Secretary
Wen Dombrowski, MD, Assistant Secretary
Ami Shah, MD, Treasurer
Jill Baron, MD, Assistant Treasurer
Michael Borecky, MD, Board of Medical Ethics (Two–year term)
Henry Magliato, MD, Board of Medical Ethics (Two–year term)
Marlin Mattson, MD, Board of Medical Ethics (Two–year term)
Michael T. Goldstein, MD, JD, Trustee (Five–year term)
Board Members At Large
Conrad Cean, MD
Arthur Cooper, MD
Keyvan Jahanbakhsh, MD
Anuhadra Khilnani, MD
Keith LaScalea, MD
Mark Milstein, MD
Gabrielle Shapiro, MD
Bijan Safai, MD
Niket Sonpal, MD
Delegates to the Medical Society of the State of New York (MSSNY)
Matthew Bonanno, MD
Scot B. Glasberg, MD
Michael Goldstein, MD
Eli Einbinder, MD
Peter Lombardo, MD
Marlin Mattson, MD
Edward Powers, III, MD
Gabrielle Shapiro, MD
Zebulon Taintor, MD
Alternate Delegates to MSSNY
Jill Baron, MD
Michael Borecky, MD
Andrew Cheng, MD
Daniel Green, MD
Clarita Herrera, MD
Keyvan Jahanbakhsh, MD
Anuhadra Khilnani, MD
Jessica J. Krant, MD, MPH
Henry Magliato, MD
Mark Milstein, MD
Eugene E. Weise, MD
Joel M. Zinberg, MD, JD
In June, 2016, President–Elect Matthew Bonanno, MD, will become the Society’s 178th President.
Incoming president is Matthew Bonanno, MD.. Doctor Bonanno is a graduate of the American University Caribbean Plymouth Montserrat and a board certified plastic surgeon affiliated with Lenox Hill Hospital. He serves as a delegate to the Medical Society of the State of New York.
The candidate for president–elect is Scot B. Glasberg, MD. Doctor Glasberg is a graduate of the New York University School of Medicine, is board certified in plastic surgery, and is affiliated with Lenox Hill Hospital and Beth Israel Medical Center. He is immediate past president of the American Society of Plastic Surgeons.
The candidate for vice president is Naheed Assad Van de Walle, MD. Doctor Van de Walle is a graduate of Fatima Jinnah Medical College in Pakistan. She is board certified in physical medicine and rehabilitation, and is a past president of the New York State Society of PM&R. Doctor Van de Walle is in private practice and is a member of the Society’s Board of Directors.
The candidate for secretary is Jessica J. Krant, MD, MPH. Doctor Krant is a board–certified dermatologist, and a graduate of the Columbia University College of Physicians and Surgeons. She currently serves in this position.
The candidate for treasurer is Ami Shah, MD,, currently assistant secretary. Doctor Shah is a graduate of the Wright State University. She is board certified in internal medicine. She has a part–time practice in internal medicine and also works in global safety risk for Pfizer. Doctor Shah is one of the founders of the Metro Division of the American Association of Physicians of Indian Origin.
The Society led a group of 35 intrepid doctors to join with others from around the State to talk to our legislators about issues important to physicians.
We thank them and invite you to enjoy the photos of New York County Medical Society doctors at work! http://www.newyorkcountymedicalsociety.org/About/Bulletin-Board
- Look for information on The Annual Meeting, coming in June 7th.
At its meeting on January 11, 2016, and February 8, 2016, the Board of Directors of the Society did the following:
- agreed to present resolutions to the MSSNY House of Delegates on topics including e–prescribing problems, maintenance of certification and licensure, unionization, and socio–medical abuses by insurance carriers;
- discussed strategy to deal with issues in the Governor’s budget that jeopardized the workers compensation system, and the excess layer of medical liability insurance;
- planned legislative advocacy events, including a legislative breakfast with the New York county Psychiatric Association — legislators in attend included New York State Assembly Health Committee Chair Richard Gottfried, Manhattan Borough President Gale Brewer, New York City Councilmen Doctor Mathieu Eugene, New York State Senator Liz Krueger, and New York State Assembly member Robert Rodriguez; and
- formalized arrangements for a bus trip to Albany for Physician Advocacy Day.
The next meeting of the Board will be held on April 11, 2016 and May 9, 2016.
Idilus is a Professional Employer Organization (PEO) and physician and hospital consulting company, which can provide physician practices with tax, payroll and other human resources services — plus, for many practices, health insurance using a "name brand" national PPO network. You must sign up for the basic human resources services, and the health insurance is underwritten, but Idilus's offerings are worth your consideration. The Society has entered into an exclusive contract with Idilus that allows members to receive services at pre–negotiated discounts. Please contact Matt Peterson at (877) 545–5666 for more information about Idilus benefits or visit http://nycmsbenefits.com/
The endorsement by NYCMS of selected vendors is not intended nor should it be construed as personalized legal or financial advice. Each physician in conjunction with his/her own advisors must determine what is appropriate for his/her particular circumstances.
The following 24 candidates for membership are presented to the Board of Directors of the Society. Anyone with information reflecting against election of a new member is requested to notify the secretary of the Society as soon as possible
Svetlana Azova, MD
Adam B. Cohen, MD
Meenakshi, Davuluri, MD
Thomas De Prima, MD
Natasha N. Desai, MD
Lisa Deutscher, MD
Jessica Esther Duby, MD
Leesa Mora Galatz, MD
Jamie Marisa Green, MD
Syed Hosain, MD
Maayan E. Keshet, MD
Jason Dimitrios Kofinas, MD
Melissa Dee Leber, MD
Justin Thomas Matulay, MD
Erin M. Nance, MD
Michael Perez, MD
Anoop Raman, MD
Allan H. Schoenfeld, MD
Sadiah Siddiqui, MD
Daniel Craig Smith, MD
Robert Steffner, MD
Seth Stein, MD
Tarik Zahouani, MD
John J. Zhang, MD
The following is courtesy of James McNally, the Society’s Third–Party Payer Coding Assistance Program.
• CMS Extends 2015 Meaningful Use (MU) Hardship Exception Deadline to July 1, 2016:
The Centers for Medicare and Medicaid Services (CMS) has announced that it is extending the deadline for physicians to submit a 2015 meaningful use (MU) hardship exception application from March 15, 2016 to July 1, 2016. If granted, physicians will avoid a three percent penalty in
CMS also indicated that applying for a hardship does not prevent any practice from successfully attesting and earning incentive payments and also covers those who reported in the meaningful use program last year as a safety net.
Physicians should apply for hardship exception category 2.2.d. as it is the one that addresses the delayed rule–making reported previously. This is for any physician who may not be able to achieve some or all requirements under the meaningful use EHR program.
CMS has indicated that it will be liberal in granting hardship exceptions.
• CMS Clarifies Documentation Requirements When Filing a EHR Hardship Exception:
Questions have been received from the membership with regard to whether or not documentation is required when filing a hardship exception for failure to meet the EHR requirements in 2015 in order to avoid the penalty in 2017. As a result, CMS has released an FAQ outlining the documentation requirements for submitting the new hardship application.
FAQ #14113 states the following:
Q: On the new hardship application form for the 2017 payment adjustment there is nothing which says documentation is required to be submitted with the application form. Does this mean that CMS will only require the selection of a hardship category and the completion of the provider’s identifying information in order to approve a hardship exception? Or will CMS be reviewing the application and documentation on a case–by–case basis for each provider?
A: CMS does not require an EP, eligible hospital, or CAH — or any group of providers — to submit documentation for the hardship category selected and CMS will not be reviewing documentation supporting the application on a case–by–case basis. CMS will review the application to record the category selected and use the identifying information to approve the hardship exception for each provider listed on the application. Providers should retain documentation of their circumstances for their own records, but no such documentation is required for review by CMS.
• Payment Adjustments/Reductions Now Posting on Medicare Remittances: Physician practices are starting to see various payment adjustments resulting from sequestration, and programs such as PQRS, EHR Meaningful Use and the Value–Based Modifier. As a result, the following guidance is provided.
First of all, CO–253 indicates a two percent reduction is being applied to all claims from sequestration and affects all physicians.
If your practice did not satisfactorily report PQRS or Meaningful Use of an EHR in 2014, edit message CARC 237 will post and the reductions are as follows.
— two percent from Meaningful Use
— two percent from PQRS
— an additional two percent from the Value–Based Modifier (VM) for practices with more than ten providers who did not satisfactorily report PQRS.
CARC 237 indicates that a payment adjustment is being applied from one of these quality reporting programs. To determine which program is generating the reduction, these additional CARC codes will show on the Remittance as well.
— PQRS – N699
— EHR – N700
— VM – N701
• United Healthcare to Add FESS Procedures to Prior Authorization Listings: Beginning May 2, 2016, some functional endoscopic sinus surgery procedures will be added to the prior authorization list for many United Healthcare commercial plans and United Healthcare Community Plans (Medicaid), excluding Medicare Dual Special Needs Plans (DNSPs) and Medicare Medicaid Plans (MMPs). To review the entire article as well as a list of the codes that will require preauthorization, click on the link here.
• New York Medicaid Issues List of Codes Requiring Prior Approval: Effective immediately, a number of services/procedure codes impacting Otolaryngologists will now require prior approval. To read more, click on the link here.
For guidance on all these issues, contact us through the Society’s Third–Party Insurance Help Program at (212) 684–4681.
The following article is provided by Scott Einiger, Esq., from the firm of the Society’s special counsel, Einiger and Associates.
Davis vs South Nassau Communities Hospital: The Community Has Now Become Your Patient
The price of medical liability insurance, like everything else (other than oil), just got more expensive, based on a recent expansion of a physician's duty of care which greatly increases a physician’s liability risk as held by the New York Court of Appeals. The highest court in New York has ruled that a physician’s duty of care now goes far beyond the patient being treated and extends to the public at large in a “failure to warn” scenario.
In the Davis case, patient Lorraine Walsh was treated at the defendant hospital and discharged on medications prescribed by her physicians in the emergency room that included Ativan and Dilaudid. She reportedly left the hospital an hour later and drove her automobile impaired by these medications and affecting her ability to drive. Her car crossed over a double yellow line and struck the plaintiffs’ vehicle, driven by Mr. and Mrs. Davis.
The plaintiff motorists later sued the defendant health care providers, claiming they had a duty of care to warn Ms. Walsh, their patient, of the inherent danger of the drugs prescribed and that the defendants knew or should have known that their failure to warn her of the inherent risk in operating a motor vehicle created a duty to them as motorists.
While the duty of care clearly was owed to the patient, Ms. Walsh, the Court has now extended this duty to plaintiff motorists as members of the community who, according to the Court, were at foreseeable risk of harm. specifically due to the failure to warn Ms. Walsh of the medication side effects.
Albeit with a stinging dissent of this expansive liability extension (by Judge Fahey), the majority ruling has created the law of the land: practicing physicians now have a duty of care to non–patients in the foreseeable proximity of the treated patient if there is a foreseeable risk of harm.
In essence, the community at large has now become your patient, and liability extends to what your patient does. So what is a practicing physician in New York to do to insulate him/herself from this potential land mine of liability exposure?
Your best option is to document all risks associated with any drugs administered to patients in virtually any circumstance and assume that whatever could happen to that patient can now extend out to the community at large.
The price of medical liability insurance just went up and so did the amount of trees needed to be cut down to document all the possible risks associated with the medications you prescribe.
If you have any questions, please contact Scott Einiger, Esq., Einiger and Associates, through the Society at (212) 684–4681.
June 2, 2016, 8:00 a.m. to 10:00 a.m.: Billing and Coding Update, with James McNally. Corwin Hall, Manhattan Eye Ear and Throat Hospital.
Medical Practice Interview Red Flags: Which Are Real Knock–Out Factors?
The following article is provided by Winston Medical Staffing endorsed by the New York County Medical Society.
How quickly times change! Just a few short years ago, medical practices had to wade through dozens of resumes from candidates scrambling to find any job in a tight economy. Today, the same hiring managers are still facing tough recruiting challenges — but now, it's because top candidates can take their pick of jobs in a newly–booming economy.
In today's tight talent market, you can't afford to rule out an otherwise promising candidate for the wrong reason. You need practical advice for getting to "the truth of the matter" with each candidate and deciding whether a "red flag" signals mere caution or a reason to jump ship. Here are several common "red flags" and tips on how to make the right decision:
According to one CareerBuilder survey, 43 percent of hiring managers will toss out a resume that shows evidence of "job hopping," or staying only a few months with each physician/practice before moving on to the next. Traditional wisdom insists that job hoppers are fickle, don't have a strong skill base, or simply cannot be trusted. After all, if they left their previous three employers after a few months, who's to say you won't be the next one?
In this case, the (near) majority is wrong. In the recent volatile job market, job hopping can just as easily indicate a "rising star" who masters a position quickly and is offered an advancement opportunity by a competing practice — one their current employer simply can't match. Find out whether the candidate falls into this category before saying "no thanks!" Added benefits of working with former job hoppers include their adaptability, broad professional networks, and the firsthand knowledge of your industry (including competitors) they bring to the table. Create a culture that values advancement and initiative, and you'll be able to reap the benefits of a long–term relationship with a former job hopper.
Coursework completed online has picked up a bad reputation, thanks to the worst offenders in the online degree business: those "diploma mills" that simply issue a piece of paper to anyone who has the cash to pay for it.
But not all online degrees are so easy to obtain. Many programs provide the same academic rigor as a brick–and–mortar classroom — and give candidates the same skills and experience they need to flourish within the walls of your business.
Whether a candidate comes with an online degree or a more traditional credential, ask the same questions:
- What courses did the candidate take? What work did they complete within those courses? How do they apply to your specific hiring needs? A degree alone doesn't guarantee the candidate is prepared to work within your company's structure and culture, no matter who granted it.
- Did the candidate complete any internships, work–study, or employment while taking classes? What skills and accomplishments achieved in these settings apply to your specific hiring needs?
- What credibility, certifications, or accreditations does the granting institution have? This information can provide insight into the academic rigor and level of achievement expected.
(Seemingly) Under–Qualified Candidates
Every hiring manager has fielded a resume from at least one bright, enthusiastic, motivated candidate who lacks the experience demanded by the job posting. Hiring these candidates isn't an automatic failure. In fact, it might be the best success you've made in hiring this year. According to a recent Leadership IQ study, only 11 percent of new employees fail on the job because they lack task–specific skills. Eighty–nine percent overcome this lack of skill with motivation to learn, a willingness to accept instruction and correction, and the ability to adapt to the stress of a steep learning curve.
An initially under–qualified candidate who is nevertheless committed to learning stands a good chance of becoming your next superstar. With no "unlearning" to do, they're ready to tailor their work to the methods your company uses for success — and with a keen sense of "beginning behind the starting line," they're more likely to do whatever it takes to perform well.
When to Lower the Red Flag
An initial sense of caution is natural when facing a potential job hopper, a candidate with an online degree, or someone who appears underqualified. Here's how to decide whether the candidate is potential star material before you make the mistake of passing them by:
Ask why they've left their most recent job or jobs. If the candidate moved up, or moved to a place with a better cultural fit, ask about their career goals and the contexts in which they do their best work to determine whether your company can keep offering a similar culture
Online Degree Holders
Delve into their coursework and scholastic accomplishments to see if they match your specific hiring needs. Consider asking behavioral interview questions, such as "Did you handle ___ in your coursework? What did you do?" These questions provide insight into how the candidate tackled the problem in the past, which can help you determine how they will do on the job.
Look for candidates who stress a love of learning, and look for resumes and references that support this claim. Candidates who willingly took continuing education classes, who recently started a brand–new hobby, or who made the leap from one industry or job to another likely offer the motivation and willingness to learn that will help them succeed.
When All Else Fails
Written by MetLife Advanced Markets. Brought to you courtesy of Vital Planning Group, LLC
In December, 2015, President Obama signed the Protecting Americans from Tax Hikes Act of 2015 (PATH). A wide range of tax incentives that had been part of previous tax extender bills were made permanent under the new law. Other incentives were merely extended to a future date certain. What follows is a brief summary of a few of the provisions which may prove beneficial to individual financial, retirement, and legacy planning. For a summary of provisions in PATH related to business owners, please see the related article “Some PATH Tax Incentives Made Permanent for Businesses.”
Please note that this summary does not delve into all of the requirements of the various provisions but is intended only as a general reference for the PATH sections of particular significance to individuals.
Qualified Charitable Distributions Made Permanent
Certain IRA owners may make charitable contributions directly from their IRAs. Such “qualified charitable distributions” (QDCs) will not be included in income, but will not create an income tax deduction. A QDC will count toward the owner’s required minimum distribution (RMD) for the year of distribution. Unlike previous extensions, PATH makes these direct–from–IRA donations available permanently.
The direct transfer — sometimes known as a “charitable IRA rollover” — will enable certain IRA owners to accomplish charitable contribution goals during lifetime with traditional IRA funds without first having to take distributions from the IRA into income. This tax treatment may be of particular interest to taxpayers who do not itemize their deductions, since the tax benefit of the exclusion does not depend on itemization of deductions. Further, since it is not an itemized deduction, does not affecting the itemized deduction phase out (e.g., 3 percent of income over threshold). While a QCD does not create an income tax deduction for the IRA owner, it can accomplish charitable goals while counting towards the owner’s RMD. For a more complete analysis of this provision, please see the related article “IRA Qualified Charitable Distributions Made Permanent.”
Enhanced Deductions for Qualified Land Conservation Contributions Made Permanent
Donations of land conservation easements allow land owners to garner an income tax deduction by donating qualifying development rights, easements, and real property interests to charitable organizations. The value of donations of appreciated real property interests (to be used for conservation) may be deducted in the year of donation up to 50 percent of the donor’s contribution base, less the value of other allowable charitable contributions. The deduction may be carried forward 15 years. Note that farmers and ranchers may take advantage of such donations more quickly, with a current year deduction up to 100 percent of their deduction base. Without extension under PATH, contributions of such land rights would have been subject to the standard deduction limitations otherwise applicable (e.g., 30 percent deduction limit for gifts of capital gain property to a public charity). Farms and ranch donations would have defaulted to a special 50 percent deduction standard..
Clarification of Values Upon Crut Early Termination
The PATH Act mandates that when valuing the life and remainder interests of net income charitable remainder unitrust (NICRUT or NIMCRUT) that terminates prior to its stated term, the valuation method has to meet the same standards as when valuing the remainder value of a standard CRUT — one without a net–income or make–up provisions. Under pre–PATH law, no specific method or standard was explicitly required if the NICRUT terminated early. As a result, the early termination charitable value must be computed based on the unitrust percentage alone (e.g., 5 percent), without adjustment for any net income limit present in the trust’s language.
State and Local Sales Tax Deduction Made Permanent
For tax years 2015 and following, taxpayers will be able to take an itemized income tax deduction either for state income taxes or state sales tax. This provision is a boon for taxpayers living in states without state income tax. For taxpayers in states with both state income and sales tax, they should seek help from their tax preparer as to which deduction will be more beneficial. Under the PATH provision, taxpayers may continue to use the IRS prescribed calculator for estimating sales tax paid or may claim an amount up to that evidenced by actual receipts for the year.
Congress created this deduction originally for the 2004 tax year. It has been extended by each Congress up through the 113th, until it was allowed to expire at the end of 2014.
Child Tax Credit Provisions Made Permanent
The child tax credit provision allows certain taxpayers with a qualifying dependent child an income tax credit of up to $1,000 per child. The credit phases out as a taxpayers modified adjusted gross income (MAGI) crosses specified thresholds. For example, in 2015, the credit begins to phase out for single taxpayers at $75,000 and married taxpayers filing jointly at $110,000.
Prior to PATH, this Internal Revenue Code (IRC) provision had been set to expire in 2017.
Further, for certain low–income taxpayers, the child tax credit can become a refundable credit. If the taxpayer has no tax liability, then up to $1,000 (per qualifying child) may be refundable, to the extent of 15 percent of the taxpayer’s earned income over $3,000.
Exclusion of Mortgage Discharge–of–Indebtedness Income Extended Through 2016
Under legislation passed in 2007 and extended thereafter, some types of cancelled mortgage debt on a primary residence would not result in “discharge–of–indebtedness income” if the taxpayer sold the residence in a short sale. This provision has been extended for sales made in 2016 (or contracted for sale in 2016 and actually sold in 2017).
Example: In 2016, Tom’s house value is underwater, with the fair market value of $200,000 less than his $300,000 mortgage. Tom’s lender agrees to short sale wherein the bank will release the mortgage and will take the $200,000 sale proceeds directly from the buyer. Tom does not have to recognize any of the $100,000 cancellation–of–indebtedness income.
Mortgage Insurance Premiums Deduction Extended Through 2016
PATH extends for one year the deductibility of qualifying mortgage insurance premiums. Mortgage insurance is typically required where the buyer will finance more than 80 percent of a home purchase. Premiums on such insurance will continue to be fully deductible through 2016 for taxpayers with AGI less than $100,000 (single or married filing jointly). The deduction phases out ratably as AGI increases to $110,000. Note that the underlying mortgage must meet specified requirements. For example, it must have been taken out on Jan 1, 2007 or later. While a refinancing mortgage may qualify, the amount of the mortgage will not be qualified to the extent the refinance exceeds the original mortgage loan amount (i.e., not on cash taken out in the refinance).
Residential Energy Property Credit Extended Through 2016
The act extends the credit of up to $500 for up to 10 percent of qualifying expenses related to residential energy improvements like adding insulation, energy efficient windows, and energy efficient heating/cooling systems.
529 Plan Provisions Modified
PATH changes the definition of qualified education expense to include the purchase of computer equipment and technology (e.g., software and internet access) beginning in 2015. The rules for taxation of non–qualifying distributions from 529 plans have also been changed. Under the new PATH rules, each 529 distribution not used for a qualified expense will be taxed (or not) based on the principal and earnings of that account alone. That is, taxation will no longer involve aggregation of all 529 accounts for purposes of applying the 10 ten percent penalty.
Where tuition is refunded by a school for higher education (e.g., college), account owners will have 60 days from the date of the refund to redeposit the refunded amounts back into a 529. Qualifying re–deposited amounts will not count as having been distributed and will not count as a contribution to the plan.
In addition to the general 529 rollover provision, PATH also removes the residency limitation for 529 ABLE accounts . (tax-preferred savings accounts for younger disabled individuals). For 2015 and following, ABLE accounts may be established by a resident of one state in another state. Choice will allow the account to be better suited in terms of account limits, investment options, fees, etc., than if the individual were limited solely to an ABLE account in his/her state of residence.
Education Deduction and American Opportunity Tax Credit Made Permanent
The AOTC credit allows an income tax credit of up to $2,500/year for up to four years of higher education (i.e., post-secondary education) for qualifying taxpayers. Instead of claiming the AOTC credit, a taxpayer with an eligible dependent child in college may instead claim an above–the–line deduction for tuition and specified related expenses. Both the credit and the deduction have been extended permanently.
The $4,000 education deduction is limited to $2,000 for married couples filing jointly with AGI over $130,000 (individuals over $65,000). Both the deduction and the AOTC credit phase out ratably for married taxpayers filing jointly at $130,000 – $160,000 of AGI ($65,000 – 80,000 for individuals).
Simple Ira Plans Allowed to Receive Rollover Contributions from Qualified Retirement Plans
For transfers made after the date of enactment, a SIMPLE IRA that has been established for at least two years may receive rollover contributions from qualified retirement plans and IRAs. Prior to this legislation, a SIMPLE IRA could only accept rollovers from other SIMPLE IRAs. Note that this two–year blackout period corresponds to the restriction on rollover distributions from a SIMPLE IRA. A rollover from a SIMPLE IRA established for more than two years may go to a traditional IRA (or other qualified retirement plan) but may go only to another SIMPLE IRA if the distributing account has been established for less than two years.
Affordable Care Act Excise Tax on Certain High-cost Health Care Plans Postponed
The ACA will impose a tax on certain high cost health care plans (sometimes known as “Cadillac plans”). The PATH act delays imposition of this tax for two more years (until 2020). Further, payment of the excise will be income tax deductible.
Any discussion of taxes is for general informational purposes only and does not purport to be complete or cover every situation. MetLife, its agents, and representatives may not give legal, tax or accounting advice and this document should not be construed as such. Clients should confer with their qualified legal, tax and accounting advisors as appropriate. Metropolitan Life Insurance Company, 200 Park Ave, New York, NY, 10166.
Vital Planning Group, LLC is not a MetLife company. L0216458087[exp1216][All States][DC]
Congratulations to these members who are celebrating the 50th anniversary of their graduation from medical school in 2016.
Louis V. Angioletti, MD
Joseph Ralph Anticaglia, MD
Jerome Samuel Breslaw, MD
James P. Christodoulou, MD
Edward S. Crane, MD
Barry Howard Dolich, MD
Ronald Edmond Drusin, MD
Albert G. Fleischer, MD
Andrew Robert Ganz, MD
Carolyn P. Greenberg, MD
Diane Hochlerin, MD
Gerald Imber, MD
George Reginald Jordan, MD
Patrick J. Kelly, MD
Howard A. Kiernan, Jr., MD
Roger L. Lallemand, MD
Barbara Joan Leibowitz, MD
Richard U. Levine, MD
Charles J. Lightdale, MD
Hamid Mootabar, MD
Michael Francis Myers, MD
Barton Nisonson, MD
Mark Pasmantier, MD
Thomas Allen Poole, MD
Jon Michael Reckler, MD
Klaus Peter Rentrop, MD
Russell Allen Rodewald, MD
Philip Michael Rogers, MD
Alfred Rosenbaum, MD
Rosalinda Rubinstein, MD
William Shain Schley, MD
Bhadra Shroff Shah, MD
Ronda R. Shaw, MD
David Sibulkin, MD
Robert Small, MD
Susan Cobb Stewart, MD
N. Noel Testa, MD
Camilo Uy, MD
Joseph Brennan Walsh, MD
John Joseph Williams, MD
Wen–Chang Yang, MD
The New York County Medical Society is pleased to introduce its new website at nycms.org It still has information about Society events, benefits, billing and coding advice, newsletter articles and the Classified section. Now add on free CME webinars and the latest health news. Same address, new site at nycms.org
Ira Snow Jones, MD, died February 9, 2016. Doctor Jones received his MD degree from Columbia University College of Physicians and Surgeons in 1943.
Boris Krynski, MD. Doctor Krynski received his MD degree from University of Geneva Faculty of Medicine in 1938.
Stanley L. Lane, MD, died March 1, 2016. Doctor Lane received his MD degree from New York University School of Medicine in 1939.
Philip H. Lieberman, MD, died December 26, 2015. Doctor Lieberman received his MD degree from SUNY Upstate Medical University, Syracuse in 1953.
Thomas A. Poole, MD, died November 16, 2015. Doctor Poole received his MD degree from Harvard University School of Medicine in 1966.
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