Tax offerings for the health care providers industry
Deloitte’s US Health Care Provider Tax practice consists of a focused set of professionals with significant experience serving health care provider clients across all areas of tax. Services provided include compliance and reporting, domestic and international tax planning, mergers & acquisitions, tax process improvement and efficiency, tax technology solutions, and customs and global trade. The Health Care Providers Tax practice collaborates with tax specialists in our Washington National Tax group, across all service lines in the US, and across the world to address our clients' business challenges.
Tax Implications for Talent Optimization
Healthcare organizations are very labor intensive and the competition for talent is strong. The regulatory environment is increasingly complex while, at the same time, the IRS has increased its enforcement activities and expectations of corporate accountability. Further, many healthcare organizations have grown over time without a focus on improving the efficiency of the internal HR and payroll organization or the efficiency of the benefits being offered. Labor is key to a healthcare organization’s success. Deloitte can assist you with strategy, implementation and monitoring, specifically, HR risk assessment, diagnostic reviews of plans and professional service fees, employee plan and payroll due diligence, consolidation of welfare benefit plans, reporting and disclosure, 5500 compliance, and more.
Risk & Regulatory Tax Solutions
The IRS is focusing more resources on comprehensive exams, focused reviews, and compliance questionnaires of tax-exempt organizations. Despite being granted exempt status by the IRS, tax-exempt organizations are under more scrutiny by the IRS and state and local tax regulators than ever. Keep in mind that tax-exempt organizations are subject to: employment taxes, unrelated business income tax; and excise taxes. Deloitte has experienced professionals who can assist you with a comprehensive tax risk analysis.
Tax Compliance Services
As a result of Congressional and public scrutiny, the IRS conducted the Executive Compensation Compliance Initiative, a detailed review of over 1,000 tax-exempt organizations across the country. The IRS project has led to 30% of the tax-exempt participants have amended their Form 990’s, 15% of the tax-exempt participants have been selected for audit, and the IRS has assessed disqualified persons and organization managers, of some of these organizations, over $21 million in excise taxes. Deloitte can assist you with your concerns including potentially providing an Intermediate Sanctions Opinion as to whether the organization meets the allowable safe harbor under the Income Tax Regulations.
As a result of increased regulatory requirements from federal, sate, and local authorities, health care providers face increased tax planning, compliance, and reporting requirements. At the same time, reduced reimbursements and growing operational demands will likely result in tax departments asked to do more with less. The effective use of technology combined with streamlined tax processes and professionals with the skills needed to operate in a changing environment will become a growing imperative in provider organizations. Deloitte’s tax team includes professionals who are dedicated to serving the health care industry. We work together with our colleagues that specialize in ERP system and tax technology implementations, IT transformation, organizational change, co-sourcing, and business performance improvement.
Tax Implications for Value-Based Care
The evolution from fee-for-service health care models to value-based models is well underway. One visible result of this fundamental shift is that many provider organizations are looking to acquire, partner, or merge with health plans to gain market leverage and cost-effectively deliver a coordinated, high-value experience for health care consumers. While the new business models being built can be mutually beneficial, they can also create challenges. Providers' tax functions are likely to encounter many new tax rules and regulations, including provisions aimed at insurers, with which they may not be familiar.
Deloitte can help you explore ways to manage your tax risk, address your tax exposure, and pursue potential tax savings by helping you understand and comply with:
- tax organizational structuring and planning,
- Sections 6055 and 6056,
- Section 833 medical loss ratio reporting,
- the section 1341 transitional reinsurance program, and
- Section 162(m)(6), which provides limits on compensation deductions for covered health insurance providers.
Sustainable Margins Tax Services
As a result of the Affordable Care Act, health care providers are experiencing reduced reimbursements and margin pressure. In the face of this new reality, provider organizations need to find new ways to refine their cost structures if they are to continue their growth trajectories and build sustainable margins. Deloitte can help you manage your exposure and pursue potential savings through strategic tax reviews, entity rationalization, and a tax department operational assessment. Deloitte’s tax team includes many professionals who are dedicated to serving the health care industry, we offer a flexible approach with strong results.
Mergers and Acquisitions (M&A) Tax Services for Health Care Providers
Changes in reimbursement, the rollout of health reform fees, and required technology related expenditures continue to fuel consolidation and convergence among health care providers, hospitals, physician groups, and health plans in an effort to reduce costs and create bundled care across the health care continuum. The tax implications of these deals can be significant. Deloitte is positioned to provide assistance at each step of the M&A lifecycle for both taxable and tax-exempt organizations. We support tax due diligence to identify historical tax exposures of which buyers should be aware, and explore opportunities for beneficial use of the target company’s tax attributes. During transaction planning and execution, we offer knowledgeable insights for structuring the deal for tax-alignment with your specific M&A objectives, along with your broader enterprise strategies, through deductibility of acquisition costs, preserving specific tax attributes, evaluating a taxable or tax-free structure, and other considerations. To prepare you for post-acquisition integration, Deloitte’s tax integration professionals can help you develop and implement an integration strategy designed to address critical day 1 matters, strive for efficiency in the combined company’s tax department and compliance function, eliminate redundancies in your legal entity structure, and execute on identified tax planning opportunities. Similar to the above buy-side services, Deloitte’s M&A professionals offer many of the same services when assisting you in selling your company or a subsidiary/division.