Online Exclusive

A Prescription for Enhanced Revenues: Working with Healthcare and Medical Clients

From privacy regulations to an overhaul of our nation's healthcare system, medical and healthcare clients have enough to figure out without focusing time and energy on accounting processes, software and systems. That’s best left up to the professionals who actually work in accounting.

Now is a great time for accountants and technology consultants to prescribe their remedies, not only to provide practical solutions, but to enhance productivity and add to the bottom line. To provide a balanced perspective, I sat down with two providers of services to healthcare clients:

Larry Lioz, CPA, JD, LLM, tax partner, and Al Materazo, CPA, audit
partner — both with Margolin, Winer & Evens ( in Garden City, NY; and

R. Scott Elliott, president of Bradford-Scott Data Corporation ( in Indianapolis, Ind.

This is part two of a three-part series of articles focused on specific markets served by tax and accounting firms. Part One looked at Manufacturing Businesses and Part Three explores financial management for Agriculture-Focused Businesses.

Scott Cytron: Tell me a bit about your companies and your niche in healthcare.

Larry Lioz: Margolin, Winer & Evens is an accounting and business advisory firm with a specialty in providing business guidance to healthcare companies. For more than 60 years, our healthcare clients have included multi-physician groups, skilled nursing facilities, assisted living facilities and home healthcare agencies.

Scott Elliott: Founded in 1983, we specialize in healthcare and credit unions, with approximately 85 employees located in Indianapolis and Fort Wayne. Our Healthcare Division specializes in ambulatory EHR (electronic health records) and Practice Management, and we are one of the largest healthcare IT vendors in the Midwest with more than 1,600 physicians and thousands of users on our products. We have over 25 years’ experience working with a range of customers, from large hospital networks to single physician practices.


Scott Cytron: What are the most in-demand services for your healthcare clients?

Al Materazo: Similar to other industries, healthcare and medical clients have needs that revolve around the tax and attest functions. In mergers & acquisitions, for example, clients ask us to review the documents to assess tax and financial reporting ramifications. They want us to prepare projections of the merged entity to determine the financial soundness of the transaction, as well as provide compliance with loan covenants.
We also provide an analysis of loan agreements, reviewing the documents to make certain the client will be in compliance with the loan covenants at the inception of the loan and project probable compliance in the future. We will also advise our clients as to whether the terms are reasonable, based on our experience, and suggest what areas the client should negotiate for more favorable terms.

Larry Lioz: Specific in healthcare, we help clients keep abreast of current issues, such as the Red Flag Rules, electronic health records, recovery audit contractors (RAC) and HIPAA compliance. We also focus on profitability issues and income distribution. Healthcare clients seek our advice when purchasing real estate with respect to ownership, structures and financing. We perform cost segregation studies to maximize top depreciation benefits — a significant benefit in a medical building where there are structural, electrical and HVAC modifications to support equipment. Many healthcare practices seek our advice on how to finance capital equipment purchases and the related effect on their taxes and financial reporting.

Scott Elliott: More than anything else, our clients want service, service and more service. This has truly become part of our corporate DNA. For example, we have a policy of 29 minute or less callback times on support calls, with a 2008 average of only seven minutes. We also offer same-day hardware and software support.

Beyond great service, clients want software and hardware solutions, training and support, and integrated solutions for electronic health records, practice management and electronic data interchange. As a Sage VAR, we sell, and consult on Sage Intergy EHR, a CCHIT-certified (Certification Commission for Healthcare Information Technology) product, Sage Intergy Practice Management, Sage Intergy Practice Portal, and Appointment Reminders, available to users of Sage Medical Manager and Sage Intergy.

In addition to providing a designated trainer for an account, we offer on-site and computer-based training, unlimited classroom and Web training, and annual trainer account reviews.

Scott Cytron: How do you work with clients to help them evaluate what accounting solutions they need? Are these casual conversations or do you have a more defined process?

Larry Lioz: We work with software vendors to analyze internal and external reporting requirements of the client, and work with the vendor to make sure the accounting solution will provide the necessary reports. We also ensure the accounting software provides the right features for the particular client.

For example, we want to make sure it doesn’t fail to meet the requirements but also doesn’t over deliver on what the client needs.
Scott Elliott: We always use an onsite evaluation to assess a client’s healthcare accounting needs. We gather the information clients potentially provide to their accountant — how they provide that information, what delays the experience during the process and how their accountants prefer to receive the information. The knowledge we gain not only facilitates how we implement our system, but ultimately improves the process for providing a practice’s vital financial information to its accountant.


Scott Cytron: How do you think pending healthcare legislation will influence your service delivery?

Larry Lioz: I think healthcare practices may make less money and incur additional expenses for staff, creating more paperwork and requiring more sophisticated software to keep track of additional reporting requirements that would be required by the legislation.

We will help our clients navigate through the legislative requirements that affect their accounting systems. We also suspect they will be forced to implement or upgrade their electronic health records systems; this will no doubt be further encouraged by future legislation.

We anticipate more activity in mergers and acquisitions due to the legislation. Some healthcare practices may not be able to afford to operate under the new legislated guidelines and will seek to merge with other practices.

Scott Elliott: We’re very excited about the current media focus on pending healthcare legislation because it puts us in a great position to better serve our healthcare clients. With 26 years of experience, our CCHIT-certified EHR product and our fully integrated practice management system, we have all the resources and tools necessary to capitalize on the EHR adoption “push.”


Scott Cytron: How can accounting firms learn to be more responsive to their healthcare clients?

Al Materazo: By continually educating ourselves through industry newsletters, journals and attending conferences to be as up to date as possible so we can educate clients and respond to their questions. The regulatory environment is changing quickly, and clients are relying on us to help them keep up.

Larry Lioz: Meet with the client on a regular basis to avoid surprises. It is critical to stay in touch with your healthcare clients, especially now as the operating environment is changing so rapidly. Also, respond to telephone calls and e-mails within 24 hours; if you don’t give them the answer, someone else will.


Scott Cytron: Scott, tell me two ways you interface with a tax and accounting firm to help the firm serve its clients who work in healthcare.

Scott Elliott: Since our inception in 1983, Bradford-Scott has been a client-driven organization providing unparalleled service and support to the medical industry. We have helped many firms service their clients by offering tools to eliminate data entry and user error, and by being able to generate month-end financial spreadsheets. These automated monthly downloads can be formatted in either Excel or PDF, and are completed through direct interface. Tax and accounting professionals often arrange for us to work with their clients directly, thereby saving Tier 1 support and training costs.


Scott Cytron: Tell me an “ah-ha” story about one of your clients that surprised you in some way with regard to providing accounting services.

Larry Lioz: In the first year, when we worked with a particular client, the company’s bookkeeper relocated. Our Small Business Department stepped in to provide bookkeeping services while we were interviewing new bookkeeper candidates. In the course of doing their bank reconciliations, we discovered the client was backdating deposits — recording deposits a month earlier than they were received.

For example, January’s deposits were actually recorded in the prior December, showing more revenue for the year than was actually received. This practice had gone on for a number of years, and the ultimate result was that the client was paying taxes on income that was not yet received. In addition, we had to restate the financial statements to account for the prior period adjustment.

Today, we review this client’s information quarterly so that any future anomalies will be discovered and corrected on a timely basis.

Scott Elliott: One of our Family Practice clients in Indiana was struggling with the coding levels on his office charges. Because he was reluctant to code up to level 4, he constantly under-coded his charges, and the fear of an impending audit made him consistently underpaid for the services he provided.

One big asset of our Sage Intergy EHR product is that it has a built-in E&M coding tool. The system more thoroughly documents and defines the office visit, thereby giving clients a better understanding of which coding level they should be using. The result is less room for error and that, of course, means far fewer audits.

When this particular client went live on Intergy EHR, he was amazed at how comfortably and easily he could increase his level 4 charges. His increased revenue, together with a quicker return on his investment, has made him a very happy client … and that made us happy, too.


For more than 20 years, Scott H. Cytron, ABC, has worked with CPAs and accountants, providing public relations, marketing and communications services. Author of The CPA Technology Advisor’s MarketingWorks column, he works with firms and companies in professional services, including accounting, healthcare, legal, financial planning, collections and debt, and high-tech. You can contact him at