August 7, 2020

Provider Relief Fund Grants Offer COVID Relief for Health Care Organizations

The CARES Act Provider Relief Fund is designed to support American families, workers, and healthcare providers in the battle against the COVID-19 outbreak. The U.S. Department of Health and Human Services (HHS) is distributing $175 billion in grants to hospitals and healthcare providers on the front lines of the coronavirus response. Providers that have not yet received funding can still apply before August 28.

Details of Provider Relief Funding

The intent of the HHS grant funding is to support healthcare-related expenses or lost revenue attributable to the coronavirus and ensure all Americans have access to the care they need. The initial $30 billion was allocated based on the facilities’ and providers’ share of 2019 Medicare fee-for-service (FFS) reimbursements. These were payments, not loans, to healthcare providers and are not required to be repaid.

Timeline of Provider Relief Fund Grant Distribution

  • On April 10, 2020, HHS began distributing the initial $30 billion in relief funding to eligible providers throughout the American healthcare system. 
  • On April 24, a portion of providers were automatically sent an additional advance payment based off the revenue data they submitted in CMS cost reports.  Providers without adequate cost report data on file needed to submit their revenue information for additional General Distribution funds.
  • On June 9, Phase 2 of General Distribution began with $15 billion sent to eligible Medicaid, CHIP and dental providers and $10 billion to safety net hospitals.
  • On June 10, HHS launched an enhanced Provider Relief Fund Payment Portal that allowed eligible Medicaid and CHIP providers to report their annual patient revenue, which will be used as a factor in determining their Provider Relief Fund payment. The payment to each provider will be at least 2% of reported gross revenue from patient care; the final amount each provider receives will be determined after the data is submitted, including information about the number of Medicaid patients providers serve.
  • On July 10, the HHS, through the Health Resources and Services Administration (HRSA), announced approximately $3 billion in funding to hospitals serving a large percentage of vulnerable populations on thin margins and approximately $1 billion to specialty rural hospitals, urban hospitals with certain rural Medicare designations, and hospitals in small metropolitan areas. HHS is also opening the provider portal to allow dentists to apply for relief. 
  • On August 7, the HHS announced $5 billion in allocations of CARES Act Provider Relief Fund for nursing homes. HRSA expects the initial $2.5 billion nursing home distribution to occur in mid-August. This will be followed by additional performance-based distributions throughout the fall.

View the full CARES Act Provider Relief Fund Distribution Timeline.

Terms and Conditions of Provider Relief Funding

Within 30 days of receiving the payment, providers are required to sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment via an online portal. Providers that do not accept the Terms and Conditions after 90 days of receipt will be deemed to have accepted the Terms and Conditions.

All recipients will be required to submit sufficient documents to ensure that these funds were used for healthcare-related expenses or lost revenue attributable to coronavirus. There will be significant anti-fraud and auditing work done by HHS, including the work of the Office of the Inspector General.

A condition to receiving these funds is providers must agree not to seek collection of out-of-pocket payments from a presumptive or actual COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider.

Provider Relief Funding and PPP Loans

The monies received from the HHS funding cannot be used for payments to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Additional reporting is required for recipients receiving more than $150,000 in total funding.

Applying for Provider Relief Funding

The original funding did not require any application or request for the monies, as it was based off prior claims data. To be eligible for a Provider Relief Fund grant going forward, health care providers must not have received payments from the $50 billion Provider Relief Fund General Distribution and either have directly billed their state Medicaid/CHIP programs or Medicaid managed care plans for healthcare-related services between January 1, 2018, to May 31, 2020. Close to one million health care providers may be eligible for this funding. 

Applications are currently open for the General Distribution (Phase 2) to Medicaid, Medicaid managed care, Children’s Health Insurance Program (CHIP) and dental providers. Providers that have not yet received funding and would like to apply can download the Provider Distribution Instructions and apply in the Provider Relief Fund Application and Attestation Portal. Applications must be submitted by Aug. 28, 2020.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential impacts and benefits. Visit our COVID-19 Resource Center for more insights or contact Anders below to discuss how we can help you along the Provider Relief Funding process.

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August 4, 2020

Will Telehealth Services Continue Beyond COVID-19?

There is no doubt the COVID-19 pandemic has rocked the American healthcare industry. Organizations have had to quickly adapt to their critical role on the front lines, often at the price of suspending traditionally profitable service lines, causing massive uncertainty in financial planning. One way providers have mitigated these losses is with the rapid adoption or expansion of their offered telehealth services. The benefits are clear: practitioners can continue to service patients and generate revenue while patients feel secure receiving care without risk of disease exposure. But can telehealth be profitable in addition to providing a crucial service to patients?

Growing Profits with Telehealth

In the short-term, demand for telehealth has exploded and an increase in claims from just 0.17% of all claims in March 2019 to 7.52% of claims one year later and projected spending of up to $250 billion in the U.S. by the end of 2020. Additionally, to minimize the financial hit taken by providers during the COVID-19 pandemic, reimbursement rates for telehealth services have been set to match the rates for in-person encounters whereas in the past payers have generally reimbursed at a lower rate. This change may ultimately revert, but there is growing support in Congress to make the policies incentivizing telehealth use by Medicare beneficiaries permanent, and as patients adapt to telehealth encounters, demand is predicted to stay high. Clearly telehealth can be profitable, but there are concerns about sustainability.

Planning for Future Demands

Health care organizations must account for telehealth’s expanded importance in their financial planning and they will need to consider the service lines that have seen increased demand since the beginning of the pandemic; chiefly primary care, but also oncology, dermatology, and emergency medicine. Organizations will also need to factor in expanded access to traditionally popular services such as psychiatry, radiology and cardiology. Scrupulous review of patient throughput data will be necessary to project revenues as generally telehealth encounters are faster and practitioners can be more efficient without travel time between patients, which creates an opportunity for higher patient service volumes. Lower operating costs also factor into forecasting revenues, as fewer in-person encounters will decrease staffing and supply demands. As the U.S. opens back up and suspended healthcare operations return, it will be important to monitor how the change in demand for telehealth shifts, but the foundation is certainly promising.  

Telehealth is Here to Stay

Utilization of virtual healthcare has been steadily growing in recent years, and the COVID-19 pandemic has outlined not only how essential the platform is for mitigating revenue loss for health care organizations, but how much potential there is for growth as well. Patients are perpetually growing more accustomed to an online healthcare platform across a variety of specialties and as demand increases, there are lucrative opportunities for organizations to provide these services. Furthermore, there is mounting public and political support to make the temporary increase in Medicare reimbursement rates for telehealth encounters permanent after the worst of the pandemic has passed. There has never been a better environment to demonstrate the importance of telehealth, and there is little doubt that these services will continue to be instrumental to success in the health care industry moving forward.

How is your health care organization adjusting to the rise of telehealth services? The Anders Health Care Group is here to help telehealth providers reduce operating costs and increase collections. Contact an Anders advisor below to discuss your specific business goals.

Anders Health Care intern Nick Sterner contributed to this post.

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April 3, 2020

CMS Offers Accelerated and Advance Medicare Payments for Physicians, Providers and Suppliers

As part of the CARES Act, the Centers for Medicare & Medicaid Services (CMS) is authorizing accelerated and advance payments to any Medicare physicians, provider or supplier who submits a request to the appropriate Medicare Administrative Contractor (MAC) and meets the qualification requirements. The Accelerated and Advance Payment Program is for the duration of COVID-19.

To qualify for advance/accelerated payments physicians, providers or suppliers must:

  • Have billed Medicare for claims within 180 days immediately prior to the date of signature on the physician’s request form
  • Not be in bankruptcy
  • Not be under active medical review or program integrity investigation
  • Not have any outstanding delinquent Medicare overpayments

Amount of Payment for Physicians

Qualifying physicians can request up to 100% of the Medicare payment for a previous three month period.  This can be a good faith estimate. Inpatient acute care hospitals, children’s hospitals, and certain cancer hospitals are able to request up to 100% of the Medicare payment amount for a six-month period.  Critical Access Hospitals (CAH) can request up to 125% of their payment amount for a six-month period.

Processing Time

The processing time is determined by each MAC, but expected to be issued within 7 calendar days of receipt of the request.

Repayment

CMS has extended the repayment of these accelerated/advance payments to begin 120 days after the date of issuance of the payment. Physicians billing under Part B will have 210 days from the date of the accelerated or advance payment was made to repay the balance.

  • Inpatient acute care hospitals, children’s hospitals, certain cancer hospitals, and Critical Access Hospitals (CAH) have up to one year from the date the accelerated payment was made to repay the balance.
  • All other Part A providers and Part B suppliers will have 210 days from the date of the accelerated or advance payment was made to repay the balance.

Below is an example of the CMS timeline.

Learn more about the advanced payment timeline in the CMS Fact Sheet.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential business impacts and benefits. Visit our COVID-19 Resource Center for more news, tools and insights you need to know in these uncertain times. Contact an Anders advisor to learn more about

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October 31, 2019

Data Breaches in Hospitals are on the Rise – How Health Care Organizations Can Prevent Cybersecurity Attacks

The health care industry is one of the biggest targets for cybersecurity attacks. In 2018 alone, nearly 300 data breaches affected 11.5 million patients, according to a Bitglass report. Cybercriminals see health care organizations as the perfect victim due to the amount of personal health data hospitals and large health care organizations manage.

Hospitals and health care organizations are required to report breaches affecting 500 or more individuals to federal authorities and within 60 days of the breach. The negative press alone, not to mention the financial impact, could be damaging to an organization that suffers a data breach. So, and where do these threats come from and how can these type of incidents be avoided?

Where Do Cybersecurity Threats Come From?

Cybercriminals have many methods for penetrating a network, but a common strategy they use in the health care industry is phishing emails. It’s important to not only be able to identify incoming threats, but also know what happens next if an unauthorized party does access a network.

Phishing Emails

Phishing attacks are a leading cause of breaches in the health care industry, and something that can be avoided internally. Phishing emails come in a variety of types, but all have the same motive of fooling the recipient into taking an action so the cybercriminal can gain access to the organization’s network or obtain sensitive info. Through phishing, cybercriminals gain access to the network through a legitimate-looking email opened by an employee, who then might innocently open an attachment or provide key information such as a username, password or account number. Educating staff on how to identify and react to a phishing email is vital in ensuring cybercriminals are prevented from entering the network.

Ransomware

Once a cybercriminal enters the network, ransomware can be deployed locking the facility’s information systems, demanding a ransom be paid to unlock it. Patient and other records may or may not be stolen during these attacks. Whether or not an entity is able to remediate the breach without paying the ransom, dealing with these attacks is costly. In addition to the frustrations and costs incurred by a typical business, ransomware deployment in a medical facility may disrupt patient care, possibly with life-threatening implications.

Protecting Against Data Breaches

Aside from outdated software and systems, one of the biggest threats to a health care organization’s security is its own employees. Because of this, it’s critical that employees are regularly trained on their role in maintaining security and how to recognize and process illegitimate emails.

To protect yourself and your organization from this industry epidemic, there are actions you must take:

  • Reevaluate security policies and procedures to mitigate data breaches,
  • Review, test, evaluate and modify any incident response and data breach plans, and
  • Conduct regular training and education for employees.

The cybersecurity advisors at Anders can help you implement the best cybersecurity practices to protect you and your organization. Learn more about Anders Technology Services or contact an Anders advisor to see how we can help you mitigate security risk and defend against a costly cyberattack.

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August 27, 2019

Are Physicians Exempt from Sales and Use Tax in Missouri and Illinois?

Many physicians are aware that the medical services they provide are typically exempt from sales tax. However, the physician may still be required to pay sales or use tax in his or her medical practice. The liability depends on the suppliers they are using, if they are reselling to patients, and the state in which they’re practicing.

Physicians making purchases from out-of-state or online suppliers that do not collect sales tax may be responsible to accrue and remit the use tax. They may also be required to remit sales tax if they resell items to consumers.

What if My Practice is in Illinois?

In Illinois, the state sales and use tax rate is 6.25% (plus local tax) on general sales, while items such as food, drugs, medicine and medical appliances are taxed at a special reduced rate of 1%. Illinois physicians are required to accrue and remit use taxes on purchases they use in the performance of their services when purchased from out-of-state suppliers or other suppliers not required to collect tax in Illinois.

State Tax Example

If an Illinois physician purchases tongue depressors from a supplier who does not collect Illinois tax, the physician should self-assess and remit the use tax to the government. The tongue depressors are supplies used by the physician rather than medical appliances, so they are subject to the general sales/use tax rate rather than the special 1% tax rate.

Transferring Goods to Patients

Illinois physicians may find tax laws more favorable when transferring goods to their patients. Under Illinois law, physicians do not collect sales tax on services when primarily rendering services to their patients. Yet, physicians are taxable on the sale of tangible personal property as an incident to the furnishing of professional services, such as bandages, etc. Physicians are also liable for tax when they sell goods like crutches, wheelchairs, and medical bracelets to consumers for use separate from the physician providing professional services. When such items are sold, the physicians should accrue and remit the sales tax to the government.

What if My Practice is in Missouri?

The state general sales and use tax rate in Missouri is 4.225% (plus local tax). Sales and use tax laws in Missouri are similar to Illinois laws. Under Missouri law, physicians providing services typically are not subject to tax on their services. However, tax should be self-assessed and remitted on items used in the performance of their services on purchases made from out-of-state suppliers or other suppliers not required to collect Missouri tax.

Comparable to Illinois, tangible personal property used or consumed in the physician’s practice is subject to tax when the goods are purchased. These goods could include items like diagnostic equipment, surgical tools, medical instruments, and supplies used to provide care to patients.

State Tax Example

For example, a Missouri physician would be required to pay tax when purchasing tongue depressors for use in his or her medical practice. If the vendor did not charge sales tax, the physician should self-assess and remit the use tax to the government

Transferring Goods to Patients

In Missouri, goods purchased by the physician that are not used or consumed in the medical practice are subject to sales tax when the physician resells the goods. In contrast to Illinois, wheelchairs and ambulatory aides, like crutches, are exempt from Missouri tax. As a result, a physician’s sale of a wheelchair would not be taxable in Missouri, though it could be taxable in Illinois.

In additional to ambulatory aids and wheelchairs, other items are also exempt from Missouri tax. For instance, sales, repairs, and rentals of durable medical equipment, prosthetic and orthopedic devices are exempt from Missouri tax. Additionally, insulin, medical oxygen, hearing aids and hearing aid supplies, hospital beds, home respiratory equipment, and all drugs legally required to be dispensed by a licensed pharmacist with a lawful prescription are all exempt from Missouri sales tax.

What are the Consequences of Not Paying These Taxes?

Failing to accrue tax and properly filing sales or use tax returns can result in a variety of potential issues. Individuals and businesses making purchases from suppliers not required to collect state sales tax have the potential to be audited if use taxes are not accrued and remitted on the purchases. Audits could lead to penalties and interest on unpaid taxes.

In Illinois, the statute of limitations to assess a tax deficiency is three years from the time a return is filed. However, the statute increases to six years if a return is never filed. In Missouri, the statute of limitations is three years after the return was filed or was required to be filed. However, if a fraudulent return was filed or a return was never filed, Missouri has no statute of limitations to assess a tax deficiency. As a result, an individual or business could owe several years of tax, interest, and penalties if sales or use tax returns have never been filed.

Sales and use tax can be perplexing, and the consequences of failing to accrue taxes due and file the tax returns can be substantial. The Anders State and Local Tax Services Group is here to help. Contact an Anders advisor to learn more about filing sales and use tax returns.

Tax associate Claire E. Rogers was a contributor to this post. 

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July 23, 2019

Optimize the Revenue Cycle to Increase Profit without Adding Patients

Some health care organizations believe that increasing the number of patients walking through the doors is the surest way to see an increase in revenue. While this is one way of increasing profit, there are several actions your organization can do to optimize the revenue cycle and increase revenue before the patient is seen.

Scheduling the Appointment

Under most circumstances, the initial contact an office has with the patient is over the phone while scheduling an appointment. Developing telephone scripts for office staff is essential to ensure that all necessary information is collected at this time. Make sure these scripts follow the sequence of the practice management system so information can easily be entered. Collecting all required information up front enables you to perform patient eligibility verification, receive appropriate referrals if necessary, inform patients of their financial responsibility such as deductibles, co-payments, and coinsurance, all prior to the office visit.

Hours of Operation

Another factor impacting the bottom line that should be evaluated is your hours of operation. Is your first appointment at nine in the morning and your last appointment at three in the afternoon? If so, you might be limiting yourself to a smaller patient population, and excluding those who work nine to five and are unable to schedule an appointment during those times. Consider implementing extended office hours one evening a week to accommodate those patients unable to schedule a visit during the day.

Claims Process

Although all office visits for the day are complete, the revenue cycle continues. Another element impacting revenue includes charge entry and claims submission. It’s a best practice for office charges to be entered within one day and for hospital charges to be entered within two days of receiving all necessary information, such as, operative notes and demographics. This is typically an area where lost charges can occur, and by preparing a monthly reconciliation, these lost charges can be decreased or eliminated.

When it comes to improving your revenue cycle, it’s essential to evaluate your key indicators to determine which areas are in need of additional attention and concentration. The beginning process of obtaining demographic information, eligibility verification, pre-certifications, authorizations, referrals, and entering charges can either accelerate or postpone the speed at which the organization receives its earned money. With effective internal processes, you can directly impact your revenue without increasing the number of individuals entering the practice. The Anders Health Care Group can help your health care organization identify opportunities and implement revenue cycle improvements. Contact an Anders advisor to learn more.

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May 7, 2019

Making the Move from Volume to Value-Based Physician Compensation

Physician compensation models are evolving to keep up with the new quality metrics defined by the Medicare Access and CHIP Reauthorization Act (MACRA). Switching from a fee-for-service structure to a value-based payment model changes the focus to providing better quality using less resources. Before making the leap, health care organizations need to have a plan that considers how physicians will be impacted adjusting to the new quality metrics.

Benefits of Value-Based Compensation

Value-based models help increase the quality of care for patients while providing benefits for health care organizations and physicians.

  • Managed Care Contracting – MACRA’s Quality Payment Program (QPP) allows physicians to benchmark themselves across the industry and potentially earn higher bonuses for high performance.
  • ACO Participation – Participating as an Accountable Care Organization (ACO) provides better positioning and allows a practice to qualify for shared savings under the Medicare Shared Savings Program. ACOs also receive resources and support such as health IT, data analytics and quality reporting.
  • Healthier Patient Population – With a focus on quality of care and physician compensation based on patient outcomes, a value-based model provides lower costs and better outcomes for consumers. These models emphasize helping patients recover from illnesses and injuries more quickly and avoid chronic disease. As a result, patients face fewer doctor’s visits, tests and medical procedures, and spend less money on prescription medication.

Developing a Value-Based Incentive Program

While there is a lot of confusion around exactly how to structure a value-based incentive program, below are a few steps to begin and manage the process.

  • Form a Committee – Strategically selecting a committee of stakeholders, executives and physicians will keep the project contained while gathering different perspectives. The committee should research what’s going on in the marketplace and evaluate options for implementing policies in the organization. Having physicians on the committee is vital to gaining their support and trust in the new program.
  • Compare Options with Goals – After diving into marketplace data and evaluating against your current compensation models, the group will need to define goals. What will you measure? How will physicians and teams be incentivized? Use these answers to guide your new compensation plans.
  • Communicate – Keeping the organization informed when plans are finalized is key to gaining trust in the plans. Make sure physicians can easily understand the methodology, reporting of data and timing of payments.

The tips above just scratch the surface of implementing a value-based compensation model. The Anders Health Care Group helps physician groups and health care organizations optimize physician compensation models. Contact an Anders advisor to find out how we can benefit your organization.

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February 21, 2019

CMS Creates Pathways to Success for ACOs Starting July 1, 2019

The Centers for Medicare & Medicaid Services (CMS) is taking a new direction with the Medicare Shared Savings Program, established by the Affordable Care Act. The new ruling, called Pathways to Success, is meant to encourage Medicare’s Accountable Care Organizations (ACOs) to move to performance-based risk faster and incrementally. The new ACO criteria will take effect July 1, 2019.

New Participation Tracks

The ruling restructures participation options, eliminating the one-sided shared savings-only model and the two-sided shared savings and shared losses model. A new BASIC track incrementally transitions eligible ACOs to higher levels of risk and potential reward. A second ENHANCED track provides additional tools and flexibility for ACOs taking on the highest level of risk and potential reward.

Effect on the Health Care Industry

According to CMS, 561 ACOs out of 649 total Medicare ACOs participate in the program. These ACOs served more than 10.5 million Medicare fee-for-service beneficiaries in 2018. The ruling is estimated to save the program approximately $2.9 billion over 10 years.

Learn more about the ruling on the CMS website, or learn how the Anders Health Care Group can help your organization. Contact an Anders advisor to discuss how you will be impacted.

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January 14, 2019

CMS Offers New Price Transparency Tool for Medicare Procedures

As price transparency continues to be a main priority in the health care industry, the Centers for Medicare and Medicaid Services (CMS) is helping consumers make cost-effective decisions with a new online tool.

The Procedure Price Lookup tool displays national averages for the amount Medicare pays the hospital or ambulatory surgical center and the national average copayment amount a beneficiary with no Medicare supplemental insurance would pay the provider. These price comparisons are available for certain medical procedures.

What Hospitals, Health Clinics and Physician Groups Can Do

This online tool is launching as a requirement through the 21st Century Cures Act. Outside of federal requirements, it’s becoming more and more important for hospitals, clinics and physician groups to be proactive and make pricing transparency a priority. Beyond initial charges, consumers want to see out-of-pocket costs, and providing this information can help attract and retain patients.

The Anders Health Care Group can identify opportunities to prioritize pricing transparency in your organization while optimizing the revenue cycle. Contact an Anders advisor to discuss your needs.

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October 30, 2018

Fiscal-year Corporations Subject to Blended Tax Rates Following Tax Reform

The new 21% corporate tax rate allows C corporations to pay federal taxes at a significantly lower tax rate than the 35% top rate in prior years. While the new tax rate took effect beginning in 2018, this new benefit is delayed for C corporations with a fiscal-year end. If the company’s tax year begins on or before the effective date of 12/31/17, they will not be able to take full advantage of this tax reduction in the first year.

Calculating Blended Rates for Fiscal-Year Corporations

Fiscal-year corporations will be facing what the IRS calls a “blended rate” for 2018.  This rate will be calculated by applying both the 2017 and new 2018 rates to taxable income for the entire year. The company will then multiply each calculated tax by the percentage of their fiscal year that each tax rate applies. They will then add the two tax amounts together to determine their total tax for the year. Below is an example:

Company X has $20 Million in taxable income and a September 30, 2018 fiscal year end. Company X should first calculate their tax based on their 2017 rates (20 million x .35= 7 million). This 7 million should then be multiplied by the percentage of days applicable out of their fiscal year (92/365 x 7 million= approximately 1.76 million).  They should then calculate their tax using the new flat rate of 21% (20 million x .21= 4.2 million). This 4.2 million should be multiplied by the percentage of their fiscal year that the new rate applies (273/365 x 4.2 million= approximately $3.14 million).  These totals should be added to arrive at Company X’s total tax of $4.9 million.  Company X’s blended rate would be the total tax of $4.9 million divided by taxable income of $20 million to arrive at 24.5%.

Impact on C Corps

This blended rate calculation will result in fiscal-year corporations receiving some of the benefit of the lower tax rate in this first year. For all future years they will be taxed at the flat 21%.

It’s important to note for this blended rate year, deductions will be more beneficial since the tax rate is higher. That being said, these corporations may want to accelerate deductions into the current year.

Contact an Anders advisor with any questions on how these changes may impact your business, or learn more about tax reform changes in our Tax Reform Resource Center.

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