April 13, 2011

The Physician EHR Incentive Does Not Have To Be Taxable to the Physician

Filed under: EHR Incentive — HankMayers @ 3:42 pm

Now that more of the EHR incentive application process is known, I have discovered one piece of very encouraging news:

Under certain circumstances, the EHR Incentive payment may NOT be taxable to the physician as personal income! Here is how it works:

Essentially, the physician can assign his/her incentive payment to any party, including a practice PLLC. This is accomplished by, when registering for the incentive, the physician would provide the PLLC’s TIN (generally a FEIN) as the party to which the payment is to be made. The incentive becomes a business income item, to be taxed in the normal course of the costing etc and taxation liabilities of the practice. For many physicians, this will make a big difference.

Or, the physician can also select the FEIN for the group practice that is incurring the HIT/EHR expense for the entire practice. This arrangement should be documented via a formal agreement between the practice and the physician.

The physician can make a TIN designation each year, but only once per year. This allows a re-designation for a subsequent year in the event that the physician changes practice. To be able to continue to receive the incentive when the TIN changes, there must be a certified EHR in operation at the new location, and the physician must remain a meaningful year for the rest of the “move” year.

1 Comment »

  1. I could not help but remember a piece a copule of years ago where a hospital took 10 years to develop its own EMR system. The very first order of business was that the IT people worked for the doctors.The IT folks followed the doctors around and built a system designed to fit their work flow. IT would then present and the doctors would accept or decline each section until they had a complete system that fit the hospital’s work flows and patient profiles.Since the doctors were part of the process there was little or no training involved.Again, this process took 10 years. This is a far cry from the plug and play; you now work for the IT guys’ mentality of most systems.Steve Lucas

    Comment by Ikechukwu — November 16, 2014 @ 12:49 pm

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