Given the significant reduction in volume that most practices are experiencing, group leaders should be thinking about ways to conserve cash. Here are some ideas. We are happy to discuss this issue with you personally.
If it isn’t too late, file an extension for the 2019 tax return; delay funding any remaining 2019 corporate retirement plan contribution.
Do not fund 2020 corporate retirement for now; employees can consider stopping their 401k contributions if they need the additional cash flow. However, to do so, they will need to complete a 1-page form authorizing our office to make the change.
Do not issue any bonuses.
Request all employees to delay seeking reimbursement for professional expenses.
Delay payment of other discretionary spending, if any.
If individual employees are concerned about their personal cash flow, they should consider seeking a personal line of credit. Corporations can also think about corporate loans and lines of credit, either from a bank (which could be tedious and time consuming), from shareholders, or ideally through the Government, to fund some level of salary support during the crisis. Corporate borrowing presents a variety of issues that will require discussion with your accountant and HMA consultant.
Work with your recently retired colleagues to suspend any buy out payments until the crisis is over. Further, have your corporation’s Board vote to postpone any termination benefit/buy out payments for staff who resign over the next few months until the cash flow is restored to the previous levels.
Work with your billing companies to ensure that you are meeting the requirements and billing for any telemedicine, critical care and ventilator management services, if you provide them.
We are hearing of a new consideration entitled “Covid Pay”. Several our clients mentioned that their Hospital administration suggested that they create and maintain a log of hours that each of the group’s employees spend related to the crisis. Although we don’t currently understand what this means, and how doing so will result in compensation, HMA suggests that you and your colleagues immediately begin to log hours and description of services that are being provided during those hours.
Identify the services, if any, that your colleagues could provide to the Hospital to deal with the projected influx of sick patients. If there are any such services, consider having the Hospital lease your employees from the practice to provide those services.
Assuming we expect a snap back of elective imaging services soon, have staff take vacation time now so they don’t take the time when we are busy.
Address those administrative projects that have remained on the “to do” list.
Review your use of per diems, locums, contractors and part-timers. This is a balancing act because you are going to need them soon and you want them to remain loyal to you.
Once a group has exhausted all sources of new revenue and expense reductions and determines the level of staffing that will be required to cover your department, assuming that you still have excess staffing and related expenses, the group needs to seek volunteer employees who are willing to take unpaid time off, reductions in FTE work status and/or other ways to reduce staffing costs (e.g. Across the board pay cuts).
Hope it is helpful. Feel free to reach out if you have any questions.