|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.
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.”
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
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
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 email@example.com.