Cosentus associates talk about financial and technological changes that will begin in the new calendar year and how they will affect surgery centers.

As the year comes to an end, surgery centers nationwide have several financial and technical updates to look forward and adjust to in 2022. Cosentus Tax Manager Faran Eydi and VP of Technical Services Kirk Porter sat down with TASCS members to talk about these updates and what they mean for your center.

The biggest financial advantage, Eydi said, is the changes to employee retention tax credit under the American Rescue Plan Act of 2021. This credit was extended through Sept. 30, 2021, to eligible recipients. In order to qualify as an eligible recipient, you must meet one of two tests: Either your center would have to have been impacted by the government shutdown or it would have had to have a 20% decline in revenue, compared to the same quarter in 2019.

If the recipient qualifies, they become eligible to claim 70% of qualified wages up to $10,000 per employee per quarter, while being able to claim up to $21,000 for the 2021 tax year. Qualified wages are any compensation that has social security and Medicare taxes paid and federal withholding, Eydi clarified. But you won’t qualify for this credit if you have the PPE loan and you’re expecting to be forgiven.

Another aspect of the financial process that has changed significantly is how net operating losses are handled. With the CARES Act, centers got a five-year carryback for taxable years from 2018-2020. This used to be a huge advantage, Eydie said, but going forward, it has, unfortunately, changed. For tax years after December 31, 2020, businesses that have a net operating loss will only be allowed to carry their loss forward to be used in the future tax year.

In terms of research and development, beginning December 31, 2021, these costs must be capitalized and amortized (paid off with regular payments). Research and development costs incurred in the U.S. will have an amortization period of five years, while costs incurred outside the U.S. will have a period of 15 years. This could apply to anything from new robotic equipment in the OR to vaccine creation.

The final financial change Eydie touched on was Business Interest Expense Limitations. For each year, businesses are required to compute their adjustable income to determine if they are eligible to deduct business interest expenses that were paid during the year. Previously, this was limited to 30% addback that included depreciation, depletion and amortization. After December 31, 2021, businesses will no longer be able to include an addback when computing adjusted taxable income. This results in businesses having more interest expenses not allowed to be used for tax purposes.

On the technological side of things, Porter talked about two key changes: Microsoft Office and Windows 11. Microsoft Office will be changing its prices next year across the globe, so surgery centers that use this program should be aware of the increase in charge they will face.

Beyond that, Windows 11 will be released for PCs, which will lead to more hardware requirements. Because of this, Porter suggested computers older than five years stick to Windows 10. Updates for Windows 11 are 40% smaller than what PC-users will be used to and will operate in the background to minimize interruptions. This update will also include more business-friendly security, which is especially important, as we transition through the holiday season.

Porter added that as the year comes to a close, holiday hacking trends upwards. So, while your ASC rolls into the new year, it’s important to verify with your IT department that the proper security measures are in place, including filtering emails and making sure your antivirus software is up-to-date. It’s important to have back-up measures in place, he said, in case records are compromised and you need a full restore.

As this year comes to an end, we encourage you to start the new one off right by becoming a TASCS member. This will ensure that you stay educated on the evolving healthcare scene through blog posts like these, town halls and so much more.