Tax News & Views: Health Care Edition

August 2016 | Vol. 12 No. 28

Tax News & Views: Health Care Edition is a timely news summary bulletin authored by the Health Care Industry Group, Deloitte Tax LLP. The newsletter contains highlights from the latest tax developments in health care on Capitol Hill, at the White House, at the Internal Revenue Service, at the Treasury Department and in the courts. It is a valuable resource for tax and other professionals involved in the tax-exempt health care providers and health plans sectors, helping them remain current on tax developments that stand to have an impact on their businesses.

Deloitte survey: 50% of physicians haven’t heard of MACRA

A survey published by Deloitte’s Center for Health Solutions found that 50 percent of non-pediatric physicians have never heard of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA is intended to drive health care payment and delivery reform for clinicians, health systems, Medicare, and other government and commercial payers. MACRA aims to align physician reimbursement with quality and outcomes. Deloitte’s Center for Health Solutions surveyed 600 US physicians about MACRA and value-based payment models. Some of the key findings of the survey include:

  1. 50 percent of non-pediatric physicians surveyed said they had heard of MACRA; 32 percent only recognize the name.
  2. 21 percent of self-employed physicians and those in independently owned medical practices report that they are somewhat familiar with MACRA versus 9 percent of employed physicians.
  3. 8 in 10 physicians said they preferred traditional fee-for-service or salary for their compensation models
  4. 1 in 4 independent physicians would prefer to be employed while 75 percent would prefer to join a clinical network. Both independent and employed physicians surveyed expect that between a third and two-thirds of the remaining independent physicians will consolidate in the next three years. 
  5. 58 percent of physicians surveyed would opt to be part of a larger organization to diminish individual physician risk and bear risk collectively and/or to have access to a full spectrum of resources and capabilities. 80 percent of those surveyed expect MACRA to drive physicians to join larger organizations or networks.

See the full report, 2016 Survey of US Physicians.

AICPA issues IRS response letter on Form 990

On June 30, 2016, the American Institute of CPA’s (AICPA) issued a letter to the IRS outlining the AICPA recommendations for the 2016 Forms 990 and related instructions. The letter included 21 recommendations that included the AICPA’s view of urgency and importance for each. Some of the highest ranked recommendations include:

  1. Update the definition of reasonable efforts to align with the Schedule L changes by deleting the reference to Parts III and IV.
  2. Update the Form 990, Part IV trigger questions for Schedule L to align with the definition of interested persons updated for the 2014 form.
  3. Update the definition related to Form 990, Part VII, Sections A & B for compensation for purposes of Form 1099 to include box 6 as well as box 7 because medical providers may receive a Form 1099-MISC with compensation for services in box 6.
  4. Define creators and founders for purposes of identifying them as interested persons on Schedule L. Further, include an example of reasonable efforts that addresses the difficulty of organizations that have been in existence for many years in determining who should be considered a creator or founder.
  5. Provide guidance on reporting bond liabilities on Form 990, Part X and Schedule K for affiliated systems where bonds may be held at the parent entity but the liability may ultimately be held at a subsidiary.

Read the full letter submitted by the AICPA.

Did you know?

IRS continues to make changes to Form 1023-EZ
The IRS has completed its one-year post check of the streamlined Form 1023-EZ for small organization’s applying for exempt status and is in the process of conducting a two-year post check. Post checks are designed to review the Form 1023-EZ process and ensure its effectiveness. Jeffrey Cooper, director of EO rulings and agreements at the IRS said, “I’m sure there will be changes as we go forward” while speaking at the AICPA Not-for-Profit Industry Conference in National, Harbor, Maryland.

IRS releases drafts of Forms 1095-C and 1094-C
On July 7, 2016, the IRS released 2016 drafts of Form 1095-C, Employer-Provided Health Insurance Offer and Coverage and instructions as well as Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns and instructions.

Final regulations provide arbitrage guidance for tax exempt bonds
The IRS issued final treasury regulations under Section 1.148 on July 18, 2016. The regulations address the arbitrage restrictions under IRC section 148 applicable to tax-exempt bonds and other tax-advantaged bonds issued by State and local governments.

IRS issues notice of proposed Forms revision for Form 5500
On July 21, 2016, the IRS, the Department of Labor, and the Pension Benefit Guaranty Corporation (“Agencies”) issued a Notice of Proposed Forms Revision for Form 5500, Annual Return/Report of Employee Benefit Plan. The proposed updates to the form aim to improve the reporting for filers, plan participants, the public, and the Agencies in 5 ways: (1) modernize financial reporting, (2) provide greater information regarding group health plans, (3) enhance data mineability, (4) improve service provide fee information, and (5) enhance compliance with ERISA and the Code.

Additional Resources

Deloitte Center for Health Solutions

Deloitte Center for Health Solutions: The source for health care insights: The Deloitte Center for Health Solutions (DCHS) is the research division of Deloitte’s Life Sciences and Health Care practice. The goal of DCHS is to inform stakeholders across the health care system about emerging trends, challenges, and opportunities.

Health Care Current

This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies and provides updates and insights on policy, regulatory and legislative changes.

2016 Health Care Providers Industry Outlook;  Interview with Mitchell Morris, MD

Mitch Morris, M.D., vice chairman and US/Global Health Care Providers leader, Deloitte Consulting LLP, weighs in on the evolution of value based care, aggressive industry consolidation and the role of the consumer.

This edition

  • Deloitte survey: 50% of physicians haven’t heard of MACRA
  • AICPA issues IRS response letter on Form 990

Did you know?

  • IRS continues to make changes to Form 1023-EZ
  • IRS releases drafts of Forms 1095-C and 1094-C
  • Final regulations provide arbitrage guidance for tax exempt bonds
  • IRS issues notice of proposed Forms revision for Form 5500

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Upcoming Webcasts

Tax reporting for the Affordable Care Act: Clearing the higher bar in 2016

For tax year 2015, companies had to demonstrate 70 percent compliance with ACA rules, and a good faith effort could avert penalties for inaccurate reporting. In 2016, the standard is 95 percent. What should you know? Learn about important factors for addressing 2016 compliance requirements.

Health care innovation: Where is long-promised transformation really happening?

New solutions in the health care industry are still needed given the ongoing high cost and variable quality of care, along with uneven access to care. While innovations to address these problems are widely touted, which ones could actually have a transformative impact on the industry? Explore the latest innovations that are transforming the US life sciences and health care industry.

Corporate learning: Employees take charge

Corporate learning departments are changing from education providers to content curators and experience facilitators. Why is this transformation important, and how are companies developing innovative platforms that turn employee learning and development into a self-driven pursuit? Explore how internally focused, corporate-centric learning environments are rapidly evolving into learner-centric user experiences.

Procurement’s evolving role: Questions CFOs should be asking

A year after being tasked with supporting top-line growth, chief procurement officers (CPOs) are now being asked to focus on cost control amidst increased economic uncertainty. What is procurement’s capacity for delivering incremental cost savings, and how can CFOs harness it? Learn results from Deloitte’s fifth annual Global CPO Survey and explore questions CFOs can ask to guide procurement’s efforts.

Cyber risk management: Why threat intelligence requires business intelligence

A surprisingly high number of cyber incidents are detected not by the targeted organization, but by third parties. As enterprises grow more complex and cyber attackers become more skilled at evading detection, how can organizations better identify threats? Learn how riskcentered security operations can help organizations better balance the drive to grow and innovate with the need to guard against cyberattacks.

Driving down risk: Illuminating the blind spots in your business relationships

With globalization spawning multitiered supply chains, private and public organizations alike can become more susceptible to risks posed by third parties. What can be done to address those risks? Learn ways to address the growing risks associated with extended supply chains and third-party relationships.

Technology + talent: Implications of technology on 2016 human capital trends

Workplaces, workforces, and work itself are being reshaped in 2016 by sweeping technology forces. What are the latest human capital trends and how can technology executives proactively acknowledge and address them?

Leadership development: The move to more rigorous, structured, and scientific approaches

Despite increased spending in 2015, leadership development programs continue to disappoint in many organizations. How can organizations use scientifically validated methods to assess existing and prospective leaders and identify gaps in their talent pipeline?

Quarterly accounting roundup: An update on important developments

Do you know what issues the standard-setters and regulators have been addressing lately?


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