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How do I avoid legal and accounting troubles with business partners?

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tax preparation in encinitasWhen choosing strategic business partners one must consider how they will choose the right people, create an appropriate structure, define expected measures of success and identify potential threats or failures. Most importantly, one must not overlook legal and accounting in Encinitas issues that may arise during the partnership. Below are some key points the Financial Post recommends when starting a successful, trouble-free business relationship between two entities.

Protect intellectual property: It is important that any business agreement safeguards the intellectual property of each participant. Doing so helps to reduce the risk of unnecessarily exposing what makes your company special. This alone can have considerable implications on the ownership of licenses and future royalties.

Protect confidential information: To protect confidential information, you can limit its access to those who require it to carry out the obligations defined in the alliance agreement. Another safeguard is to agree upon and monitor specific standards for sharing, managing and guarding confidential information.

Define sharing agreements: Alliances are built on the premise of sharing resources such as data, intellectual property, competitive intelligence, and access to employees and customers. Sharing such resources creates a unique set of legal and business requirements that need to be included in an alliance agreement. Begin by taking an inventory of the resources that you plan to share so that they may be included.

Partner with competitors. Defining the rules around sharing in an alliance agreement is particularly important when forming an alliance with a competitor. For example, competitive partners in the airline industry establish rules around sharing routes, and competitive partners in the auto manufacturing industry develop detailed rules about sharing vehicle components. In fact, hyper-competitive partners often develop a “co-opetition” framework that recognizes two partners may effectively leverage an alliance for some product offerings or targeting some market segments while remaining fierce competitors in others.

Protect expertise and client information: Resources commonly shared during an alliance include human resources and customer data. As a result, there can be concerns that employees may work for the current or former alliance partner. To safeguard against this risk, include in an alliance agreement an employee non-solicitation clause where partners agree not to offer employment to the other partner’s employees during the term of the agreement or for a defined period after the conclusion of the alliance. A similar non-solicitation clause can be added so that partners cannot solicit each other’s clients.

Protect confidential information: To protect confidential information, you can limit its access to those who require it to carry out the obligations defined in the alliance agreement. Another safeguard is to agree upon and monitor specific standards for sharing, managing and guarding confidential information, especially during tax preparation in Encinitas.

Define post-alliance obligations: Whether an alliance is established for a specific, one- time event or it is intended to span several years, participants need to identify the conditions that would cause the partnership to end — either on friendly terms or not (e.g. because of non-performance). The more involved the alliance, the more important it is to consider post-alliance obligations to minimize any potential business disruption or damage to complex relationships (with customers, suppliers, manufacturers and/or distributors).


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What is Obamacare?

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medical collection agencyObamacare, officially known as the Patient Protection and Affordable Care Act (PPACA), is arguably the president’s main achievement during his time in office, but few people understand what Obamacare actually does. This may be due to the bill’s unprecedented length and the healthcare industry’s purposefully complicated tactics to confuse customers, but there answers do exist.

The overarching theme of the PPACA is to make health care more affordable for all U.S. residents. From medical collections to drug production, it will have a large impact on every health-related aspect of our lives. Below we will attempt to breakdown the main parts of the  bill in simple language:

What the PPACA has already put into effect:

  • It forbids insurance companies from discriminating based on a disability.
  • It allows the Food and Drug Administration to approve more generic drugs (making for more competition in the market to
  • drive down prices)
  • It increases the rebates on drugs people get through Medicare (so drugs cost less)
  • It makes a “high-risk pool” for people with pre-existing conditions. Basically, this is a way to slowly ease into getting rid of
  • “pre-existing conditions” altogether.
  • It creates a new 10% tax on indoor tanning booths.
  • It will stop health insurance companies from denying coverage because a customer has hit a “lifetime limit”.
  • Bans “pre-existing conditions” for kids under the age of 19.
  • Forbids insurers from dropping customers while they are sick.
  • Extends Medicare to small, rural hospitals.

What it will put into effect in January 2014:

  • Ends the use of “pre-existing conditions.” Everyone will be charged the same regardless of their medical history.
  • People will be charged a fee if they can afford insurance, but remain uncovered.
  • Medicaid will be expanded to cover more people living below the poverty line.
  • Businesses with over 50 employees must offer health insurance to full-time employees, or pay a penalty.
  • Limits the annual deductible insurers can charge customers.
  • Establish health insurance exchanges and rebates for the lower and middle-class, basically making it so they have an easier
  • time getting affordable medical coverage.
  • Creates new taxes on pharmaceutical companies.
  • Creates new taxes on the purchase of medical devices.
  • Creates new tax on insurance companies based on their market share.

Obviously, there is much more to Obamacare than what is listed above, but this should provide a broad starting point for anyone wondering what will happen to their healthcare. More details need to be worked out, many programs need to be fined tuned, but significant changes are on the way and every medical collection agency and health provider is keeping a close eye on the developments as they come.


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How Can I Invest Like Warren Buffett?

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Warren Buffett is considered one of the richest men in the world and the most successful investor of the 20th century. As a primary shareholder, chairmen and CEO of Berkshire Hathaway he has conducted very intelligent business and investment tactics that others want to learn from and copy.

There are several well-known Buffett strategies that will help any investor, businessmen, or regular tax payer looking to invest or when meeting with our tax experts like tax preparation Encinitas accountants.

A major investment strategy that Warren Buffett utilizes is a modification of the value investing approach that his mentor Benjamin Graham once used. Before buying a business, Warren looks to see if the business has earnings with an upward trend with consistent margins, the debt-to-equity ratio was low and if it was high he made sure that the company could repay their debt.

He also ensures that the return on equity (ROE) is consistent and more than 12%, the company retains earnings for growth, the company has a low maintenance cost of operations, they reinvest earnings in good business opportunities, and the company is able to adjust prices for inflation. Buffett does not hurry to invest in businesses. He will wait for market corrections or downturns to buy successful businesses at reasonable prices. Buffett is known for creating the term “economic moat” which means that he prefers to attain companies that have more competitive advantages over other businesses. As a result of  these investment strategies, Buffett has become a very wealthy and successful man who has earned billions of dollars.

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How Can I Improve My Practice’s Billing Processes?

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Like any other business, the success of a medical practice or healthcare facility depends largely on the capacity of its billing and collections staff to carry out medical accounts receivable processes in an accurate and efficient way. In order to streamline billing tasks for quicker returns and more effective medical revenue cycle management, it is necessary to get your entire staff on board.

Educate employees.

The first step to making sure that your billing processes are on track is educating staff members. Make sure that employees responsible for check-in, check-out, and scheduling are clear about which insurances your practice accepts. This way, patients won’t be surprised to find out later that their office visit wasn’t covered and will have to be paid out of pocket.

It is also important for employees who handle time-of-service payments to understand where to find co-pay collection amounts on benefits statements and insurance cards. When patients get undercharged, your billing staff gets left with extra work trying to collect money that should have been paid before the patient left the office.

Establish collection policies.

Collection policies aren’t meant just for patients. Your employees should know understand medical accounts receivable procedures and billing timeframes for contacting patients. You might want to mail statements out every 30 days, for example, and have staff members follow up with phone calls. After a set amount of time has lapsed without payment, consider sending the account to a collection agency.

Set approximate timeframes for performing certain functions.

To improve efficiency, set goals for your employees and let them know what you expect of them. If one person should be able to process ‘X’ amount of claims per hour, let them know. Be flexible if goals aren’t being met and understand that some tasks are more complex than others. However, if you notice a pattern with one employee continually failing to reach their goal, talk to them and find out what they can be doing differently.

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What to Look for When Outsourcing Medical Collections and Billing

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Once you have made the decision to outsource your practice’s healthcare accounts receivable or medical collections, determining the best company to handle these processes most effectively can be hard work. Following are a few key questions to consider, ensuring that the company you choose to work with is a good match.

What are your practice’s needs? One of the advantages of outsourcing is that vendors can provide sufficient staff resources to get claims and billing tasks processed more quickly, regardless of employees being out sick or on vacation. Make sure that the vendor understands your practice’s needs and expectations and that they can deliver on promises made.

Will the vendor provide regular progress reports? Just because you choose to outsource certain administrative tasks, it doesn’t mean that you are going to let someone else have free reign without accountability. Ask your vendor for weekly or monthly reports so that you can track their progress and success rates. Keep in mind that it could be a couple of months before you start seeing significant improvement in your practice’s healthcare accounts receivable.

Will you have access to their system for monitoring? Whether you choose to outsource your entire medical collections department or just a few tasks, if the vendor is in contact with patients or oversees processes affecting your practice’s revenue, you should be able to access their system in order to check their progress. Experienced revenue cycle partners at AR Logix, for example, record all phone calls with patients and make the recordings available for quality assurance purposes.

Does the vendor have satisfied clients? Find out who the vendor has worked with in the past, check their references, and make sure that most (or all) of their customers have been happy with their services. Don’t just base your decision on the list of customers the vendor provides you with. Do some digging on your own to see if anyone has given them negative reviews online.


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