Is a Nurse and Employee or Independent Contractor?
Home Healthcare Agencies have to be careful and as is a Nurse and Employee or Independent Contractor? Independent nurse contractor or employee? Although Homehealth Care Agencies have wholeheartedly promoted this career option on Nursing Career Hub. There are, however, several recent negative IRS rulings against nurse contractors and the IRS is asking “Is a Nurse and Employee or Independent Contractor?”
The IRS simply does not view nurses as self employed in a healthcare facility setting. Nurses do not use their own equipment (Sorry, stethoscope and bandage scissors aren’t enough.); they work scheduled hours; and function under the policies and procedures of the facility, says Gustavo A Viera a Healthcare Accountants and expert in Healthcare Accounting. Furthermore, Medicare and Medicaid will pull funding from facilities using independent contractors for patient care.
Viera’s states those nurses who are treat Nurse and Employee or Independent Contractor within a health care facility can find themselves in a financial and legal quagmire with the IRS. The likelihood of getting audited as an independent nurse contractor is very high. Back taxes, penalties and interest can be devastating.
How to Know if Nurse and Employee or Independent Contractor?
The only setting where you can function as a Nurse and Employee or Independent Contractor is in home healthcare. It must not be a healthcare facility and you must be paid privately by the patient…not Medicare or Medicaid. Don’t be misled by agencies offering hospital contracts to, “self-employed nurses”. Many have fine print in their contracts that essentially state, “If your position is ruled as ‘employee’ by the IRS, you are responsible for all back taxes, penalties and interest.” Consult Gustavo A Viera CPA.
Take it From an Expert
Gustavo A Viera CPA has consulted and/or testified as an expert witness in several cases regarding the employee status of independent nurse contractors as managing partner of a Miami CPA Firm. “In the U.S., there are two work status designations for tax purposes, one is independent contractor and the other is employee. The IRS makes the designation. Nurses working for temporary help services (nursing agencies) providing clinical nursing services to healthcare facilities are designated as employees by the IRS and by state governments taxing (revenue) departments.
If you are working for an agency that has designated you as an independent contractor and the agency (or you) are audited, you and the agency will owe back employee taxes and penalties to both the state and federal governments. The agencies hire independent contractors for one reason, to make more money by not paying applicable taxes.”
Physician Independent Contractors Included
Don’t feel slighted. Physicians are also affected. ER doctors and Hospitalists, many whom called themselves independent contractors, are also finding themselves in legal and financial hot water. They use the facility equipment, work scheduled hours and adhere to the facility P&Ps. Patients often view them as employees of the hospital. Facilities are finding they are liable for these physician’s actions. They are, therefore, turning from contracting self-employed doctors to developing employee-employer relationships.
Organizations with a mission dedicated to delivering premier home health, hospice and community-based services are all too familiar with the economic and regulatory pressures of the current healthcare environment. Now more than ever, business owners, management and staff have been forced to address many issues and challenges, including:
- Increased accountability and outcomes on operations.
- Development of “Best Practices” governance and behavioral guidelines and standards.
- Monitoring compliance with regulatory policies and procedures.
- Implementation of operational and financial controls in new services and initiatives.
In addition, home health agencies and hospices are also subject to the oversight of many regulatory and governing bodies. Whether it is the establishment of corporate compliance programs or changing rules and regulations, they are continuously faced with the challenge of providing a full continuum of services to a diverse population of patients while always adhering to the strict provisions of the Department of Health, Medicare, Medicaid, the Internal Revenue Service and other oversight agencies.
Our Accountants are experienced and at the forefront of the issues and regulations that affect the home health and healthcare industries, and service some of the largest home health agencies in the region. We understand your needs, and we have the resources and expertise required to put your organization in a position of strength.
In addition to traditional accounting, audit and consulting services, we also provide services specific to Home Health Agencies and Hospices including the preparation of Medicare and Medicaid Cost Reports, business valuations, budgets and forecasts.