Accounting Services for Healthcare
The healthcare industry plays a vital role in society, providing essential services to individuals in need of medical care. Healthcare practices, ranging from individual practitioners to larger medical facilities, must not only focus on delivering quality care but also manage complex financial processes.
Accounting Services for Healthcare Providers
Healthcare practices deal with a multitude of financial transactions, from patient billing and insurance claims to managing operational costs. Accurate and comprehensive bookkeeping is essential for maintaining transparent financial records, facilitating efficient billing processes, and ensuring compliance with healthcare regulations.
Proper accounting practices in healthcare extend beyond revenue tracking. They involve managing expenses related to medical equipment, facility maintenance, and personnel costs. A robust financial system helps healthcare providers make informed decisions to enhance overall operational efficiency.
Tax planning in the healthcare industry involves navigating a set of unique considerations. Healthcare practitioners may have specific deductions related to medical equipment purchases, professional development expenses, and employee benefits. Understanding these nuances and optimizing deductions can positively impact the financial health of the practice.
The structure of the healthcare practice, whether a solo practitioner, partnership, or part of a larger medical group, influences tax planning strategies. Healthcare providers need to assess the most advantageous business structure, considering their specific circumstances and future growth plans.
Taxation Laws in Oklahoma
Taxation law for healthcare industries provides an exemption for sales of medical appliances, devices, and equipment if they are administered or prescribed by a medical practitioner to a Medicare or Medicaid recipient and the cost will be reimbursed by Medicare or Medicaid. Documentation is required to substantiate the exemption, such as the patient’s name and Medicare/Medicaid information as well as details about the item. A non-exhaustive list of qualifying medical products can be found here.
710:65-13-173. Exemption for medical appliances, medical devices and other medical equipment furnished to Medicare/Medicaid program recipients.
(a) General provisions. Sales of medical appliances, medical devices and other medical equipment are exempt if all of the following requirements are met: (1) The item is a drug, medical appliance, medical device, or medical equipment as defined in 710:65-13-169. (2) The item is administered or distributed by a “practitioner” or purchased or leased, by or on behalf of an individual, pursuant to a prescription or work order of a practitioner; and (3) The item is furnished to a Medicare or Medicaid program recipient and the cost of said item will be reimbursed by Medicare or Medicaid.
(b) Documentation required when reimbursement is made to vendor. The documentation set out in(1) through (3) of this subsection must be obtained by the vendor and maintained as part of the vendor’s records to substantiate the exemption claimed: (1) Name and address of the purchaser or lessee or person on whose behalf the item is being purchased or leased; (2) A copy of the prescription or work order; and (3) A copy of the document which shows that the person on whose behalf the item is being purchased or leased is a Medicare or Medicaid patient.
(c) Documentation required when reimbursement is made directly to the Medicare recipient. The documentation set out in this subsection must be maintained as part of the claimant’s records to substantiate the exemption claimed: (1) Name and address of the purchaser or lessee or person on whose behalf the item is being purchased or leased; (2) A copy of the prescription or work order; (3) A copy of the eligible recipient’s Medicare card; and (4) A copy of the receipt or invoice issued by the vendor at the time of purchase, with a notation stating that the cost of the item is reimbursable by Medicare, but that Medicare will not be billed by the vendor.
(d) Sales tax refund claims. Under circumstances where hospitals, nursing homes, similar institutions and practitioners dispense or provide medical appliances, medical devices or medical equipment to Medicare or Medicaid patients, a refund may be claimed by the institution or practitioner for the sales taxes previously paid by the institution or practitioner on such items. The documentation set out in (1) through (3) of this subsection must be obtained as part of the claimant’s records to substantiate the exemption claimed: (1) Name and address of the purchaser or lessee or person on whose behalf the item is being purchased or leased; (2) A copy of the prescription or work order; and (3) A copy of the document which shows that the person on whose behalf the item is being purchased or leased is a Medicare or Medicaid patient.
(e) Medical equipment purchased pursuant to a direct payment permit. To substantiate the sales tax exemption for certain medical equipment pursuant to subsection
(a) of this Section, a healthcare provider holding a direct pay permit must maintain separate from confidential patient records the following information: (1) Patient case number or account number; (2) Type of insurance and (3) Item description or product number.
(f) Medicare and Medicaid recipients. Eyeglasses, contact lenses, and hearing aids are considered items of “medical equipment”, and if their cost will be reimbursed by Medicare or Medicaid pursuant to the terms and conditions set out in this Section, the sale is tax exempt.
[Source: Added at 17 Ok Reg 2677, eff 6-25-00; Amended at 21 Ok Reg 2581, eff 6-25-04, Amended at 22 Ok Reg 1577, eff 6-11-05; Amended at 19 Ok Reg 2070, eff 7-1-08; Amended at 26 Ok Reg 2354, eff 6-25-09; Amended at 27 Ok Reg 2308, eff 7-11-10; Amended at 28 Ok Reg 1844, eff 6-25-11; Amended at 31 Ok Reg 2441, eff 9-12-14; Amended at 37 Ok Reg 2234, eff 9-11-20]
Hire a CPA
Given the intricacies of healthcare accounting and the unique tax considerations, healthcare practitioners benefit significantly from the expertise of a Certified Public Accountant (CPA). A CPA with a specialization in healthcare brings insights into industry-specific tax planning, financial management, and compliance with healthcare regulations.
CPAs assist healthcare practices in structuring financial systems that align with industry regulations, ensuring accurate reporting, and compliance with healthcare-specific financial standards. Their expertise extends to navigating the tax implications of healthcare services, helping practitioners optimize their financial position.
Why Choose Epsilon Accounting Solutions, CPA in Edmond, OK?
Epsilon Accounting Solutions understands the nuanced financial landscape of healthcare practices. With a commitment to personalized service and expertise in healthcare accounting, Epsilon is the ideal partner for practitioners seeking financial efficiency and compliance.
Disclaimer: This article does not constitute tax advice. Please consult Ahmed Baqir, CPA at Epsilon Accounting Solutions PLLC, before making any tax-related decisions or taking any actions based on the information provided in this article. Ahmed Baqir, CPA, has the expertise and knowledge to provide personalized advice tailored to your specific financial situation and goals.