Urge your member of congress to fix the physician Medicare payment system

Virtually all health care professions providing Medicare services benefit from federal payment increases based on inflation. Except for physicians. While inflation continues to increase the costs physician offices and clinics face, Congress has yet to prioritize fixing a system that makes seeing Medicare patients ever more challenging.

Two physician members of Congress, Rep. Ami Bera, MD (D-CA) and Rep. Larry Bucshon, MD (R-IN) want to change that. They are circulating a “Dear colleague” letter to House members that will be sent to leadership in both parties, asking that fixing the physician payment system be made an immediate priority.  

The Wisconsin Medical Society and dozens of other physician organizations are joining with the American Medical Association to draw attention to the Bera-Bucshon letter, which has a sign-on deadline of July 27. First, find your Member of Congress. Then urge them to sign on to their colleagues’ letter.

U.S. House

Contact Heidi Green or Mark Grapentine, JD for more information.

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MetaStar celebrates 50th anniversary

For more than 50 years, MetaStar has worked to effect positive change in health and health care. MetaStar’s history dates back to the founding of its predecessor organizations on July 14, 1973. In response to the unexpected burgeoning of costs in the relatively new Medicare and Medicaid programs, the U.S. Congress passed Public Law 92-603. Signed on October 30, 1972, the Professional Standards Review legislation called for review of the necessity, appropriateness and quality of medical care provided to beneficiaries in the major programs authorized by the Social Security Act: Titles XVIII, XIX, and V. The review services were intended to be provided by physician peers in Professional Standards Review Organizations (PSRO).

Two such organizations arose in Wisconsin. The Wisconsin Medical Society, Wisconsin Hospital Association and Wisconsin Dental Association formed an entity called Wisconsin Health Care Review, Inc. (WHCRI), which in turn established a division known as the Wisconsin Professional Review Organization (WisPRO), which later became MetaStar.

The Milwaukee County Medical Society formed The Foundation for Medical Care Evaluation of Southeastern Wisconsin, known as The Foundation. The Foundation operated in the seven southeastern counties of Wisconsin while WisPRO covered the remaining 65 counties. Donald McIntyre served as the initial executive director of WisPRO and Robert Cadmus, MD, as the executive director of The Foundation.

These organizations operated independently and were funded by federal grants throughout the remainder of the 1970s. They provided physician peer review of hospitalizations — evaluating both quality and service utilization — and oversaw the conduct of medical care evaluation studies at the hospitals in their jurisdictions.

Click here to learn more about the history and impact of MetaStar.

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Demystifying the US tax system

Essential for physicians is a basic understanding of the US tax system. After all, it’s not how much you make but how much you keep. Today, let’s learn the fundamentals of income tax and capital gains tax in the United States, shedding light on each and providing valuable insights.

Understanding Tax Brackets

The US income tax system employs a progressive structure. Think of taxable income as a pitcher of water being poured into a series of cups. When the first cup is full, it spills into the second cup, then the third, and so on. The water in each cup is taxed at its own tax rate.  Therefore, the last few drops in the final cup are the only income taxed at the highest rate. Ordinary income fills the initial cups and capital gains the latter cups.

Ordinary Income

Income can be categorized into several types:

1. Earned Income: This includes salaries, wages, tips, and self-employment income—essentially, money earned through active work. Contrast this with passive income below.
2. Portfolio Income: This refers to income generated from investments, such as interest and nonqualified dividends.
3. Passive Income: Passive income encompasses royalties, real estate investments, and limited partnerships.

The ordinary income tax rates range from 10%-37%.

Capital Gains

Capital gains tax is related to the profits earned from the sale of assets and earning qualified dividends. Consider the following key points:

1. Holding Period: The duration of asset ownership before sale determines the tax rate. Assets held for more than one year are subject to long-term capital gains tax rates, while short-term rates use ordinary income tax brackets.
2. Calculation: Capital gains tax is calculated by subtracting the original cost basis (purchase price) of the asset from the selling price. Adjustments are made for depreciation of the asset and reinvestment of distributions. The resulting gain is then subject to the applicable tax rates.
3. Exceptions and Exclusions: Certain assets may qualify for special rules, exemptions, or exclusions from capital gains tax. For instance, selling a primary residence may allow for a tax exclusion if specific criteria are met.

The capital gain rates range from 0%-20%

Note – portfolio income or capital gains generated in a tax deferred retirement account are…deferred. Therefore, you don’t pay tax on the annual income or appreciation when generated. Instead, tax is paid on the amount distributed from the account, unless of course the retirement account is a Roth which may be tax free.

Deductions and Credits

Deductions and credits play a crucial role in reducing adjusted gross income (AGI) and the overall tax liability. Key aspects include:

1. Deductions such as student loan interest, mortgage interest, charitable gifts, and certain business expenses lower taxable income. By subtracting deductions from AGI, one arrives at the taxable income used to determine the final tax liability.
2. Credits: Tax credits provide a dollar-for-dollar reduction in the amount of tax owed. Examples include the Child Tax Credit, Earned Income Tax Credit, and Education Tax Credits.

Valuable Insights

Net worth can be enhanced by investing according to the tax code.  Some examples:

1. Defer income into pretax 401(k) or 403(b) accounts during high tax years.
2. Realize income in low tax years with Roth conversions or Roth contributions.
3. Maximize itemized charitable deductions in high tax years using donor advised funds (charitable account).
4. Hold assets that generate portfolio income in tax deferred accounts and assets that generate capital gains in taxable accounts.

Navigating the US income tax system can be complex, but it’s a critical piece of a financial plan for a physician. Remember to consult a tax professional for your specific situation.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®
WisMed Financial, Inc. part of the Wisconsin Medical Society.  

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Member discounts on business resources and tech with WisMed Perks

Through WisMed Perks, Wisconsin Medical Society (WisMed) members can access vendor discounts on a variety of products and services, including business resources and tech. Below are two examples.

Business resources: ODP Business Solutions

We believe that a well-equipped workspace contributes significantly to efficiency, organization and the overall success of all of your endeavors. Whether you need ink and toner, paper, office or school supplies, count on ODP Business Solutions to be in your corner with products from the brands you love – all in one convenient place.

Get the most out of your WisMed member-only savings and browse ODP's vast catalog online. You can compare prices and easily place your order with just a few clicks. Plus, enjoy the convenience of free next-business day delivery* on qualifying orders within local delivery* areas.

Shop Now at odpbusiness.com/wismed.

Maximize your savings with coupons: Get up to $50 off qualifying online orders. Exclusions Apply. See coupon for details. Offer valid through July 10.

Technology: Lenovo

Save up to 72% off Lenovo’s top brands like ThinkPad, Yoga, Legion systems, and accessories, now through July 16.

Shop now at lenovo.com/us/en/wismed.

Not a MyLenovo Rewards Member? Sign up for free and earn rewards points for future purchases. Plus, you’ll receive expedited delivery at no extra cost!

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