“I cannot keep my doors open with my shifting payor mix and reduced reimbursement,” Dr. Carl Coyote remarked to his health care lawyer in a coffee shop meeting.

“Well, you could re-work your practice to focus on higher paying contracts, or perhaps develop a concierge line of business, or just go the employment route,” the lawyer quipped.

“I have been doing this for twenty-five years and I love my patients, but I am too old to change it all up or become an employee. I did all that was asked with that HIPAA and EHR stuff and wasted tons of time on the failed ICD-10 launch. I just would hate to complicate things further, but I also do not want to jettison my practice. Tell me more about concierge,” he added.

Talk of concierge is common today in health care as physicians struggle to keep their practices afloat due to greater regulatory burden and dwindling reimbursement. But, concierge is not for everybody and basically is akin to starting a brand new business in a tough economy where most folks now are required to maintain health insurance.

The purpose of this article is to explain the concept of concierge medicine and highlight some key issues.

First, there are many different models with respect to what a concierge medical practice might look like.

In a so-called “pure” concierge practice, the physician accepts no insurance and enters into private contracts with patients to deliver a suite of medical services, generally primary care services. The services are paid out of pocket by patients through a flat annual or monthly fee and are not billed through to insurance. Patients are encouraged to have insurance to cover all other services like hospitalization, specialists, and ancillary items. Some states like Oregon and Washington have specific statutes that require such concierge, retainer, or direct care practices to register with the state and provide some assurances to patients about those private contracts. See, e.g., ORS 735.500; see also RCW 48.150.

In a “cash only” type of practice, the physician also does not accept insurance but provides information to enable patients to file their own claims with insurers.

Finally, in a “hybrid” practice, the physician does accept insurance but the concierge part of the practice is established to charge a fee for services that are not covered by insurance.

Each model presents legal and practical challenges.

For example, in a pure concierge practice, physicians who want to work with Medicare beneficiaries would need to opt out of participation with Medicare through a formal process and enter into special contracts with those beneficiaries.

Over in a hybrid practice, a common challenge is that physicians need to navigate the issues with charging a separate fee to patients and not running afoul of both government and commercial payor restrictions. Some of those restrictions are not necessarily legal issues but more about heavy-handed political tactics by payors to try and bar physicians from charging insured patients anything beyond copayments, deductibles, and coinsurance (even for non-covered services).

As a practical matter, some physicians deciding to convert from an insurance-based practice to a pure concierge practice may find that their current panel of, say 1,500 patients, is reduced by 90% or more after the conversion given that many patients who do have insurance coverage understandably do not want to give up their primary care benefit to pay out of pocket.

Dr. Coyote may not like what he hears about the various models because under any model there will be administrative change needed in the practice. If Dr. Coyote does move toward some type of concierge practice, counsel will need to listen intently and try to help figure out the business goals for the doctor and see what is the best match for those goals.

Reference Links

Oregon Retainer Practice Law

https://www.oregonlegislature.gov/bills_laws/lawsstatutes/2013ors735.html

Washington Direct Practice Law

http://apps.leg.wa.gov/rcw/default.aspx?cite=48.150