Concierge Medicine is a system in which the doctor or the practice limits the number of patients in the practice and in exchange for this the patient pays an annual fee. Traditionally this type of practice was limited to the wealthy that were making the decision that an annual fee was worth the increased access.
The passage of the Patient Protection and Affordable Care Act aka Obamacare (the “Act”) may well add to the number of patients who seek this type of health care thus expanding beyond just the very wealthy. As the number of people covered by health insurance increases the number of primary care physicians will not. Many primary care doctors are choosing to close their practices or are retiring rather than continue dealing with the issues of dealing with insurance companies. Thus the remaining providers will be inundated with new patients.
Some of the remaining primary care physicians are making the decision to convert their practices in response to the increased demand for more and better access.
Before you or your practice group consider this as an option there are certain legal ramifications that must considered.
First, for those practitioners who currently have a functioning practice, and decide to leave and enter an existing concierge practice, you must provide adequate notice so as to not appear as if you are abandoning your patients. Abandonment of patients is unethical and may subject you to disciplinary action. To avoid this issue you and/or your practice group must provide enough notice to allow your patients time to find a new physician.
If you or your practice group is making the conversion into concierge medicine you will still need to make it clear that there is a transition and you should send a letter to each patient explaining the reasons for terminating the relationship. The letter should include explain the change and provide each patient the option of leaving or staying. In addition you must include the names of alternative sources of care and/or specific physicians who would be willing to accept new patients.
Once the decision has been made and the letter is ready to be sent the second step or issue to deal with is the contract that your new practice will use. The contract or retainer agreement must not only deal with the usual privacy issues (HIPAA) and other office procedures but the agreement must include a fee structure that deals with insurance (i.e. Medicare and private insurers) and billing procedures.
More specifically, the retainer agreement must clearly outline the levels of services provided to the patient that the patient cannot receive from a general practitioner; such as longer appointments periods, increased physician availability with shorter wait times, a wellness plan, including diet, exercise and other care suggestions. This agreement should also provide for separate billing for certain medical procedures, including surgery, post-operative care and rehabilitative care.
A third, but no less important issue is billing. Many physicians enter into concierge medicine to alleviate the stress of dealing with third party payers. However, as discussed below, Medicare and/or private insurance will dictate what can and cannot be specifically provided for in the retainer agreement between physician and patient. If the physician chooses to accept insurance, he or she must make sure not to double-bill patients. Physicians practicing concierge medicine must be very cautious with Medicare patients. A physician who improperly accepts payment from Medicare patients risks violating the False Claims Act, with possible penalties ranging from $5,000 to $10,000 per claim. Penalties also include restitution of three times the amount of damages that the government sustains due to the act of the physician. This means that you cannot bill the insurance company for the same service that is provided for in the retainer agreement. Medicare presents its own challenges to the practice of concierge medicine since it sets the fee schedule, one that many third party payers use as a baseline. With concierge medicine, however, Medicare patients must still pay a set amount as set by the concierge agreement. If it is clear that the fees charged by the practice were for non-covered services, then such fees would not violate the Medicare rules.
To avoid such fines, physicians who accept Medicare reimbursement have the option of either accepting assignment and billing Medicare directly for their services or not accepting assignments and seeking payment from the patient directly, who then must seek reimbursement from Medicare. Medicare provides an option for practitioners to sign an agreement which provides them with certain benefits, including a five percent (5%) higher reimbursement per Medicare participant. In exchange for these benefits, physicians agree to accept assignment for all claims and cannot charge more than the Medicare fee schedule amount as provided for by Medicare. If a physician chooses not to accept assignments, they are restricted from charging more than 115% of the applicable fee schedule amount. Such restriction is considered “limiting charge.”
Another issue that the agreement must deal with is the fact that all new patients get one physical as an entrance to Medicare within the first year. Included in many concierge physicians’ contracts are hour long yearly physicals. Doctors cannot use that same physical to bill both the patient in their retainer agreement and Medicare for the entrance physical.
The Patient Protection and Affordable Care Act takes into account preventive medicine, which is a large topic that concierge practices bring into their retainer agreements. For example if the retainer is $2,000 per year, and the entrance physical is $500 while the wellness plan is $250, the physician would need to discount appropriately for each Medicare patient. Since Medicare only includes one physical in the first year, the terms of the retainer agreement may only charge for a physical each subsequent year.
The Act gives permission to the United States Preventive Services Task Force to add services to the Medicare coverage. Therefore, concierge doctors are forced to frequently update their retainer agreements, all while keeping the wording generic enough to not infringe upon services included by Medicare. Therefore, it has never been more important for physicians to consult both business managers and attorneys specializing in concierge care before undertaking this type of medicine.
If you have any questions or would like additional information on this issue or other corporate challenges, please contact Paul D. Creme.
Paul D. Creme is an attorney with Hamblett & Kerrigan PA. His practice is focused on business and corporate law. Of particular interest are the areas of software and emerging technologies. You can reach Attorney Creme at [email protected].