Legal Checklist to Help a Physician Sleep at Night
By Jeana Goosmann
You chose your career because you wanted to take care of patients and improve the health of others, but additional stresses and concerns might keep you awake at night. To make your lives a little easier, here are six easy steps to take to give you peace of mind at the end of the day.
1. Form a company. In many cases, it is a smart move for physicians to form a Professional Limited Liability Company or a Professional Corporation to protect them from liability. PLCs can help protect you from disgruntled employees, accidents, compliance issues, and wrongful practice lawsuits. To help protect your assets from an unforeseen liability, forming a company can be a smart and relatively painless solution that requires only a few steps a year in order to keep it going. Just remember to refrain from intermingling personal assets with the company assets to protect yourself.
2. Protect your family by executing a current estate plan. Estate planning is equal parts getting a plan in place and keeping it current, as recent laws might have effected old plans. Large moments in life, like marriage, having children, starting a company, mean that you should create or renew your estate plan, which has been outgrown by your life-changing events. Setting up a Domestic Asset Protection Trust, or DAPT, in South Dakota allows a physician to create a trust for their benefit, and yet still be protected from lawsuits in a worst case scenario.
3. Be prepared: Review your insurance coverage. A key aspect for every health care professional, whether you are employed by a hospital, a member of a practice group, or practicing solo, is to have adequate insurance coverage to provide a safety net you want under you in case of emergency. As a health care professional, malpractice liability coverage is essential; you want to look at coverage not only for civil lawsuits but also administrative actions such as licensing. Cyber liability insurance, disability insurance and life insurance could be overlooked by young professionals, but they are essential to life as a doctor.
4. Tax planning is key. Failure to do any tax planning is like leaving money on the table, or handing it to the government. Strategic use of mortgages, and the ability to deduct the interest thereof, can be used to reduce taxable income. Another useful strategy is tax-harvesting losses, selling assets that have decreased in value to create a capital loss that can be used to offset other capital gains, and to a limited extent, ordinary income. Though it requires a detailed analysis, there may be other deductions and credits available on both the federal and state level.
5. Review all contracts, both service and employee. It is essential that you know and understand the terms of all your contracts, including but is not limited to compensation, professional liability coverage, non-compete clauses and contract expiration dates. Generally, a contract should be reviewed at least 5 months prior to the end of the contract in order to capitalize on the opportunity for a new or enhanced agreement. Ensuring contracts are following the Family Medical Leave Act, Fair Labor Standards Act, and the Americans with Disabilities Act will help you avoid time in court. In addition, as a health care professional many of your contracts need to meet the regulatory requirements of the Anti-Kickback Statute, the Stark law and/or HIPAA. Each year there can be minor or major regulatory changes to these healthcare rules and it is important that your contracts remain in compliance with those regulations.
6. Mitigate compliance risks. The health care sector is one of the most heavily regulated sectors of the economy and it is also the sector that is growing most rapidly. Dealing with the Stark Act, HIPAA, the Affordable Care Act and others can feel like a daunting task where violations that cause extreme monetary penalties and other industry sanctions that can potentially be catastrophic to the growth of your business. We’ll help you in identifying your short-term and long-term business plans and figure out the easiest way to integrate them into your business.
Navigating through the rules and regulations of the health care industry is not an easy task, but consulting with professionals who are familiar with the regulatory issues in the health care industry will help you focus on your professional goals. Talk to an attorney today, so you can count sheep in peace.
Jeana Goosmann, is CEO & Managing Partner at Goosmann Law Firm.