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CPAs look at their role in health care

When Betty Lou Reeves went to a seminar on aging recently, a social worker handed her a package. Inside were glasses, cotton balls and Popsicle sticks. Reeves was instructed to stuff cotton in her ears and to tie Popsicle sticks on her fingers. When she put on the glasses, she noticed they were coated yellow. Then, Reeves was asked to write what the social worker was saying.

“You couldn’t see anything, you couldn’t hear anything and it was very difficult to write,” said Reeves, a partner at Smith, Turner & Reeves in Jackson. “The point the social worker was trying to make was that a decline in the ability to see clearly, hear clearly and write clearly was very hard to do physically especially when mentally, everything was just fine.”

In 1990, about 17% of the state’s population was 60 years or older. By the time the 2000 census is counted, projections point to an increase of about 2%. The most rapid increase in growth is expected between the years 2005 and 2025 when baby boomers reach the age of 60.

“The elderly population is exploding,” said Reeves. “The explosion hasn’t completely hit, but it’s coming. As we see more and more elderly people, we see an increased desire for the elderly to function independently, the preferred lifestyle for most people. Unfortunately, most elderly people cannot do it without help.”

Already perceived to be a trusted, financial advisors, CPA firms are becoming the “point man” in a team approach to elder care, according to the AICPA.

“The AICPA’s position paper envisions CPAs coordinating a team that includes a health care professional, geriatric social worker, geriatric case manager if available, financial planner, elder law attorney and a CPA,” Reeves said. “The thought is that CPAs can provide this service and have more credibility doing it because of our reputation and our history as trusted, financial advisors.”

Sharon Schamber, a CPA in Hattiesburg, recently began providing eldercare services to new clients.

“It’s a natural evolution of what we already do for our clients,” Schamber said. “But we’re not all calling it eldercare. In fact, the term, ‘eldercare’ has negative connotations. There aren’t many people who would describe themselves as elderly. That’s the term the AICPA adopted. Our firm is marketing it as ‘family assurance services’.”

New clients, usually children of the elderly, complete a needs assessment survey. Schamber reviews the survey and makes recommendations, she said.

“A whole range of services could be offered,” Schamber said. “There are already businesses in Hattiesburg, which is a very big medical community, that are providing some of the services CPA firms are taking on. We try to network with other professionals in the area. CPAs are already used to team building in the estate planning arena and this is very similar.”

Barry Jones of Wise Carter Child & Carraway, a tax lawyer and a CPA, said the business community is only starting to see “the tip of the iceberg.”

“Then you bring in managed health care, home health services and long-term health insurance,” Jones said. “If you look at the last 10 to 15 years, you’ll see the federal government is deciding it doesn’t want to get involved in managing all of these programs. At the same time, private insurance, long-term health care insurance and retirement plans are becoming increasingly important. The whole industry of long-term health care insurance has taken off in the last decade. Attorneys are going to be more concerned with – not actually making arrangements and assisting clients – but the legal relationships, documentation and representation of that person if his interests become adverse to someone else’s or some other agencies. CPAs are going about it very broadly.”

Jones said elder law is comprised of several different categories.

“First, we plan for capacity-type issues, such as durable power of attorney, irrevocable trusts in appropriate circumstances, advanced health care directives geared toward taking care of person and managing property in the event they reach a state in which they are not competent,” Jones said. “Another branch of elder law deals with federal and state programs that affect the elderly, such as social security, Medicare and Medicaid. Third, there’s traditional estate planning, like wills. Fourth, elder law deals with institutions such as hospitals or nursing homes.”

Several years ago, people might have raised eyebrows and wondered what was meant by the terms “elder law” or “eldercare,” Jones said.

“This whole area is evolving and is an outgrowth of the fact that demographically, the entire population is aging,” he said. “As baby boomers age and retire, they are transferring wealth. According to one article I read, as much as $10 trillion will be transferred in the next decade or so.”

To keep up with the demand, attorneys, financial planners and CPAs are adapting their practices, Jones said.

“The AICPA is consciously assisting CPAs in these emerging fields,” Jones said. “They are looking at providing quite broad services to clients, even down to making arrangements for them to receive home health care. Financial planners are similarly looking at broadening services that fall outside the traditional norm. We’ve found that CPAs, health care attorneys and financial planners can work together very successfully for the same client because there are areas each of us will have expertise that the others don’t.”

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or mbj@msbusiness.com.

About Lynne W. Jeter

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