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What to Expect When New Tariffs Are Imposed

Tariffs impact Gilmore Jasion MahlerThere's been a lot of upheaval and uncertainty in global markets recently, and, for the United States, part of that is the new imposition—by both America and China—of tariffs. Beyond any financial arguments about whether or not trade wars are good and easy to win, there's no doubt whatsoever that trade wars, specifically in the form of tariffs, will change the market. And though it may take a while for these effects to be felt by the public, the impact of tariffs will be felt first and most deeply by manufacturing.

Big Industries Get Hit

Tariffs can have a huge impact on manufacturing and many other American businesses in unexpected—but understandable—ways. The U.S. has recently gone after the industrial sector with tariffs specifically targeting steel and aluminum.

Any steel or aluminum coming into the U.S. from specified nations now has an additional percentage cost added to the existing price. In other words, tariff impact on manufacturing means foreign steel and aluminum providers now have to pay an additional 25% and 10%, respectively, before they can cross the border into the U.S. and be used by American businesses.

Of course, steel and aluminum are pretty commonly used materials in a wide variety of industries, businesses, and applications. So, that extra cost will affect more than just the materials industries that are importing them into the country.

Tariffs Generate a Widespread Ripple Effect

As steel and aluminum import taxes increase, many businesses feel a ripple effect. Not only do tariffs impact the manufacturers of these metals affected, but also a manufacturer’s clients who turn steel and aluminum into consumable products.

For example, cookware and plumbing manufacturers will pay premiums for the materials needed to produce their goods. Further down the line, bakeries, restaurants, hardware stores, plumbers, and many other tradespeople will see increases in the cost of steel-based and aluminum-based products that are necessary to their professions. In turn, those bakers and plumbers must now decide whether to absorb the loss or raise the prices of goods and services to their customers in order to offset the price increase on metals.

Every link in the chain is affected by tariffs: the first-level producers, manufacturers, small and mid-sized businesses reliant on those products, and finally the everyday consumer.

What to Do About Tariffs

Governments know that tariffs are going to have a huge impact on the economy of the other countries involved a trade war. That’s why they are effective means of negotiating market conditions. However, many businesses and consumers get caught in the middle. So what can a small or mid-sized business do as tariffs are on slapped on the products they need?

While it may not be the solution for every manufacturer, one effective way to mitigate tariffs on manufacturing is to source materials from unaffected nations. Steel and aluminum, for example, are receiving tariffs from many nations, but Australia and Argentina are exempt. Sourcing metals from these countries means business can go on as usual.

For businesses using metal-based products, it may be best to arrange your affairs before tariffs begin to affect you. For example, if you need new tech equipment, with aluminum and steel parts, purchase that equipment soon or second-hand. You can also make more strategic business moves when scaling up. Say you're looking to expand your restaurant business to new cities, consider purchasing a space that's already outfitted with most or all of the features you'll need, so you can reduce the costs associated with acquiring new, and often imported, materials.

If you'd like to know more about tariff impact on manufacturers or which tariffs may affect you, reach out to your GJM team. Let us guide you through a complex, ever-shifting market and global trade climate.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

Get to Know GJM’s New Marketing Assistant

Courtney Haas Gilmore Jasion MahlerWe’re pleased to welcome a new marketing assistant to the firm. Here’s a chance to meet Courtney Haas in this Q&A.

Describe your role at GJM: My role at GJM as a marketing assistant is to bring positive attention to our firm. My job is to share information about who we are and what we do at Gilmore Jasion Mahler! My job duties include adding content to our website/social media pages, preparing proposals and materials for client meetings, assisting in coordination of our manufacturing roundtable events, overseeing promotional products, etc.

When did you start working at GJM? August 20, 2018

Why did you choose the accounting industry? I did not choose the accounting industry, the accounting industry chose me! I chose the marketing industry as a way to express my creative, outgoing nature. I chose to major in marketing knowing that I could use my knowledge and experience in various business settings.

What do you like best about accounting? I knew nothing about accounting marketing when I came on board. My position gives me an opportunity to use my creativity and I've already learned so much. The thought of finding something I’m passionate about and spreading the word to others seems second-nature. I never have been one to keep quiet, so when I find something I love, I want everyone else to know about it too! I enjoy creating new relationships as well as researching different ways individuals perceive information and doing my best to find the most successful outlet(s).

Are you from the Toledo area originally? If not, where are you from? Yes, I was born and raised in the Toledo area. I graduated from Springfield High School and am currently a senior at the University of Toledo, majoring in marketing and minoring in international business.

What do you like about living in Northwest Ohio? I love experiencing all four seasons. Just when we get comfortable with one season, another is on its way! I also love that we’re in a great spot to be traveling to nearby cities… Cleveland, Cincinnati, and Pittsburgh are all just a quick drive away!

Anything you’d like to share about your past professional experience? I previously worked at Midland Title, a local title insurance company. There, I worked as an escrow processor. My role at Midland Title was to work with various lenders to develop the closing disclosures for clients prior to closing on their property. After closing, I disbursed the file, wired funds, sent documents to the county for recording, etc.

Courtney Haas Skydiving Gilmore Jasion MahlerDo you have any pets, hobbies, family? I do not currently have any pets but that may not last much longer! I am the youngest of three in my family. I have two older brothers, Matt and Justin. My parents, along with Matt and myself live in the area. Justin lives in Pittsburgh which gives me a great reason to visit!

How do you like to spend your free time? Unfortunately the majority of my spare time is spent doing homework as I finish my marketing degree at the University of Toledo! Aside from that, I enjoy spending time with family and friends. Most of my long weekends are spent visiting friends in Cleveland, Pittsburgh or even Traverse City! I love to be as adventurous as my schedule and bank account will allow! My latest adrenaline rush came from a spontaneous sky diving experience!

Are you involved in any community organizations, do any volunteer work? I volunteer regularly for Acoustics for Autism. I am excited to be more involved in volunteer work through GJM!

What is something people may be surprised to find out about you? I just returned from a 10-day trip to Spain & Italy! I travelled to Barcelona, Milan and Rome through the College of Business at UT. While the trip was shorter than I would have preferred, I learned a great deal in those 10 days! Most importantly being the extent to which Italians worship wine and pasta – from that I’ve learned, I OBVIOUSLY have a little Italian in my blood! Truthfully, it was one of the most amazing, educational trips I have ever been on and I am looking forward to traveling in the future.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

Final Changes to Home Health Payments for 2019

home health payments 2019It’s official. Changes are coming to the payment system for home health agencies and we now know what those changes look like.

Medicare home health agencies have access to the Prospective Payment System (PPS) under the 1997 Balanced Budget Act. Though regularly amended annually, major changes to this system have, until now, been mostly talk. In October 2018, however, the Centers for Medicare and Medicaid (CMS) issued the final rule containing several major changes to the operations, regulations, and payment system for HH PPS for calendar year 2019.

Current System

The current system is based on a case-mix model. Under this system, a home health agency receives payment for each 60-day episode of care, which is adjusted based on the assessment of a patient’s condition and expected therapy needs. Additional payments can be made for the costliest beneficiaries, for cases in which the cost of care exceeds a threshold amount established for each case-mix group. Low-utilization patients who require four or fewer visits in a 60-day episode are paid on a per visit basis.

Major Changes for Fiscal Year 2019

The final rule establishes a 2.2 percent increase for the payment rate in the Home Health PPS which is estimated to be approximately $420 million. According to CMS there will also be a new rural add-on policy that requires CMS to classify rural counties (and equivalent areas) into one of three categories based on:

  1. high home health utilization
  2. low population density
  3. all others

Rural add-on payments for calendar years 2019 through 2022 vary based on counties’ (or equivalent areas’) category classification.  Further notes include a slight tightening on outlier payments with the Fixed Dollar Loss ratio dropping to 0.51% from 0.55%. Lastly, Low Utilization Payment Adjustment (LUPA) stays the same.

Major Changes Looming for Fiscal Year 2020

There are also major changes planned related to how payments will be calculated and distributed. Final refinements to the case-mix methodology, known as the Patient-Driven Grouping Model (PDGM), intend to better estimate cost based on resource use and are to be implemented on January 1, 2020. CMS states “The PDGM removes the current incentive to overprovide therapy, and instead, is designed to reflect CMS focus on relying more heavily on clinical characteristics and other patient information to allow payments to more closely reflect patients’ needs. Using patient characteristics to place home health periods of care into meaningful payment categories is more consistent with how home health clinicians differentiate between home health patients in order to provide needed services.” The PDGM will also change the payment structure to a 30 day payment unit from a 60 day episodic payment. The overall changes seek to remove therapy thresholds, and better incentivize quality of care over quantity.

Finally, the Final Rule defines “remote patient monitoring” as part of the Medicare Home Health Benefit and includes this as an allowable cost on the Home Health Agency (HHA) cost report. The definition would cover the collection of physiological data to include information that is digitally stored and/or transmitted from the patient to the HHA. This is in effort to better utilize emerging technology that has been able to digitally capture data, such as ECG, blood pressure, and glucose monitoring.

Other Changes

CMS plans to change some aspects of their home health quality reporting (HH QRP) program. These changes outline different factors for consideration when removing measures and proposing new reporting features, both for the future and the present changes. The goal is to lower agency costs when it comes to reporting – the current estimate is these measures will reduce agency spending by an estimated $60 million total, or $5,150 per year per agency.

Summary

CMS continues to update HH PPS and other related home health policies starting in 2019, with some policies rolling out between 2019 and 2021. Overall, these changes are intended to promote higher-quality treatment while staying budget-neutral. Rural counties will receive a payment add-on by classification based on population and home health use, and agencies will have fewer items to report to Medicare. Finally, new items, such as remote patient monitoring, will be included as an allowable cost starting as early as next year.

jamie dixon gilmore jasion mahlerJamie Dixon contributed this blog. Jamie is a member of the Gilmore Jasion Mahler Healthcare Specialist Team, with an expertise in long-term care, home healthcare and hospice. A member of the Ohio Council for Home Care and Hospice, he has served on the organization’s Financial Issues Committee for close to 20 years. 

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

When Should You Retire?

Planning for your financial future can be overwhelming. That includes trying to figure out when might be the best time to retire. Gilmore Jasion Mahler Tax Partner Kathi Iott, CPA works closely with her clients to find the best answers for their personal situations. She says choosing the right retirement age for you hinges on one critical question you need to ask yourself. She tells you what that question is in our latest video blog.

 

Kathi Iott has two decades of public accounting experinece. Her expertise is in tax planning and consulting.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm's professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

We’re Still Growing. Welcome, Alex!

GJM is growing! We’re excited to welcome Alex Francis to the team as an accounting services senior associate. Here’s a chance to get to know Alex a bit.

Describe your role at GJM: I assist with 401(k) plan administration. This is a little bit of an adjustment from my previous roles but I’m excited to learn more.

When did you start working at GJM? August 20, 2018.

Why did you choose the accounting industry? I chose by accident! I was looking for an opportunity that would allow me to grow professionally and use some of my experience from my past position. I feel so fortunate to have been selected and am continuously impressed by GJM.

Are you from the Toledo area originally? If not, where are you from? My parents were both in the military so I was actually born in Germany. I have lived in Ohio the majority of my life and graduated from Perrysburg High School. I attended BGSU for undergrad (Healthcare Administration) and grad school (MBA).

What do you like about living in Northwest Ohio? I love that NW Ohio is close to everything and that it’s continuously growing! 

Do you have any pets, hobbies, family? I have one younger sister, Lisa (she’s the pretty lady on the right in the picture). We are exactly 15 months and 1 week apart in age. She is having her first child and I’m so excited to be a first-time aunt! I also have a sweet little pup named Lily. In my completely biased opinion, she’s the cutest dog—definitely the most spoiled too! I also love to bake and I’m slowly but surely getting better.

How do you like to spend your free time?  I love spending time with my family/friends. I’m currently on a podcast kick so I’m always looking for new ones to listen to while I’m driving. I love exploring new places so I’m always making an effort to take a trip out of NW Ohio. I recently went to D.C. and had a chance to attend the Quicken National—easily one of my most memorable trips!

What is something people may be surprised to find out about you? That I was born in Germany! Sadly, I can’t remember much of my time there and have not been back since we moved. It’s definitely on my list of places to go!

Are you involved in any community organizations, do any volunteer work? I’ve have been fortunate enough to spend the past three years working with a variety of non-profits through a committee in my previous role. I love to volunteer whenever I have the chance.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.