Direct Pay (Concierge) Physician Practice

Overcoming Compliance Hurdles for Direct Pay (a/k/a “Conceirge”) Medical Practices

May 31, 2014 | Little Health Law

More than ever, physician innovation is needed in business models for medical practices to deal with problems associated with our cumbersome third party payer healthcare system. Our Atlanta health care law firm supports direct pay practice medicine as a positive trend. Many doctors are now setting up direct pay (a/k/a “concierge”) medical practices. This practice model in its purest form eliminates third party payers, and the patient-“member” of the concierge plan pays a fixed, prepaid fee for a menu of physician services that typically offer the patient greater access to the doctor. Varying hybrid concierge models exist that include some limited use of insurance plans. Direct Pay practices will likely continue to emerge and flourish as doctors seek smart business alternatives to deliver care in spite of a challenging regulatory and third-party payer healthcare environment.

For patients, belonging to a concierge practice usually means more access to and time with a doctor who really gets to know them and increasingly with flexible, affordable financial options to suit individual needs. For doctors, direct pay practice models can offer handsome compensation and desired relief from the medical hamster wheel of having to see a patient every six minutes to make reimbursement numbers work, with all the red tape and other burdens that attend having to spend too much time dealing with insurance companies. So what is the downside to a direct pay practice?

There are many legal and business issues unique to health care that confine doctors in how they set up a medical practice. These issues must be carefully evaluated to ensure medical compliance and avoid unpleasant business issues down the road. Although policy makers have not created direct restrictions prohibiting the concierge practice model, for those physicians who want to start or convert to this model, many legal considerations warrant caution and special care in setting up the business. Medicare presents a strong example. Doctors that accept Medicare reimbursement can either accept assignment and bill Medicare directly for their services or seek payment from the patient (who, in turn, seeks reimbursement from Medicare). Physicians can execute “participation agreements” with Medicare and receive greater reimbursement (5%). However, Medicare participating doctors cannot charge more than what is allowed by the Medicare fee schedules. Non-participating doctors who do not accept assignment cannot charge more than 115% of applicable amounts in the Medicare fee schedules. Violations of Medicare assignment rules can be prosecuted under the federal False Claims act.
Continue reading ›

The Affordable Care Act Will Enhance Direct Practice Medicine Opportunities

December 28, 2013 | Little Health Law

The Affordable Care Act (ACA), widely known as “Obamacare,” will create new opportunities for primary care doctors (and some specialists) who weigh starting or converting to a direct primary care model. At first blush direct care medicine practices, also known as “concierge,” “boutique” and “retainer-based” practices, which charge patients a monthly or annual membership fee and tend to exclude (or limit) third party payer involvement (one of the strong points for pursuing the model), would seem limited as an opportunity by the ACA’s objective of getting everyone “insured.” But the opposite may prove to be the case. Actually, the ACA may drive a strong need for new concierge medicine doctors.

A New Era of High Deductibles

While a stated goal of the ACA is to decrease the number of uninsured Americans, a consequence of the ACA will likely be that many newly insured patients under plans obtained via the new insurance exchanges will soon realize that due to very high deductibles, much or all of the costs of treatment (i.e., all non-preventive care) incurred over the course of a year must be paid out of pocket by the insured. For a typical household in Richmond County, Georgia, for example, as of this writing there are 18 plans available via the exchanges: 7 “Bronze Plans,” 6 “Silver Plans,” 4 “Gold Plans,” and 1 “Platinum Plan.” For the Bronze Plans, the annual deductibles range from $4,000 to $6,300. It is widely expected that most people will seek to minimize their premiums and opt for one of the Bronze Plans, only two of which have annual deductibles of less than $5,000.

What will that mean? That will mean most doctor visits (excluding preventive care) will be paid out of pocket by the “insured” patients who presently may not realize what is in store for them by way of doctor bills. As the public becomes aware of how the ACA will actually work for them (i.e., even though they are “insured” they are writing checks for doctor bills), the appeal to consumers of concierge options will increase. As recently reported in the Wall Street Journal, “People with deductibles of $5,000 or more should think about how many times a year they typically see the doctor and for what, keeping in mind that annual checkups are free under the ACA. If doctor visits typically cost $150 and the patient has six appointments a year, a concierge practice offering the same services for $40 or $50 a month might be cheaper.” Pros and Cons of Concierge Medicine (November 1, 2013).
Continue reading ›

THE INEVITABLE CHOICE for many primary care doctors: Direct Primary Care, a/k/a Concierge Medicine

October 12, 2013 | Little Health Law

Many doctors feel the involvement of an insurance company or other third party payer in the practice of medicine is a source of headaches for their medical practice. Nothing on the horizon seems to indicate that red tape, administrative burdens, and an arbitrary manner by which some insurers and other payers decide when and how claims get paid will abate. There seems to be no chance that a third party payer’s involvement in the practice of medicine will make rendering patient care better and easier. So what should doctors do to make a happy living providing care? How can patients afford and get the care and attention they need to protect their health?

The inevitable choice for many primary care doctors (and patients) is direct primary care, or “concierge” medicine. The driver of this model is obvious: no more insurance company (or, at least, a lot less third party payer involvement in medical practice). For consumers, concierge plans are no longer just for the wealthy, but are affordable for most individuals and families. For a direct monthly fee, often less than a cell phone bill, “members” get personalized, ready access to a doctor who can take the time to get to know them and help them stay healthy. Primary care physicians will see concierge medicine grow as an opportunity in coming years, particularly with the unavoidable commotion and difficulties the Affordable Care Act (ACA) will cause all providers and patients as myriad struggles in ACA implementation unfold.

Primary care doctors that get serious about evaluating a concierge business model will also realize, however, that this business model presents particular legal pitfalls that must be carefully dealt with to ensure the viability of the business over the long term. Some potential issues to be considered and addressed, for example, concern:

– the unlicensed practice of medicine in states where the “treating” doctor does not have a license (if, for example, the doctor is consulting by email with a patient who has moved his residence)

– compliance with HIPAA privacy and security rules in a practice that relies more heavily upon electronic communications Continue reading ›

A Viable Solution For Doctors and Patients to the Third-Party Payer Mess: Concierge Medicine

June 2, 2013 | Little Health Law

The concierge practice of medicine is the wave of the future. This is very good news for the American consumer and tax payer.

As the price tag for Medicare has increased, so has the pressure on federal lawmakers to do something to avoid the looming fiscal disaster that attends rising health care costs. Since the U.S. Taxpayer demands that Medicare costs somehow be contained while, ironically, the U.S. Voter (same person, different hat) views Medicare as a sacrosanct entitlement to consume health care, the lawmaker “solution” has thus far focused the cost-cutting pressure on the supply side of health care, including cutting physician reimbursement. See, e.g. The Plea for Repeal of the Medicare Sustainable Growth Rate, May 4, 2013 post, this Blog. The trend of private insurers and other non-government payers is to follow what Medicare does (at least with respect to setting physician reimbursement rates and billing rules). An unintended consequence of the downward pressure on physician reimbursement together with modern health care’s increasing red tape/regulation and associated costs and headaches has been to drive primary care physicians out of private practice altogether. They are fed up. Many doctors have found (or are looking for) hospital employment. Others have retired. This trend has been referred to as the “silent exodus” of physicians and threatens to profoundly impact patient access care in a negative way. See National Survey Points to a “Silent Exodus” of Physicians, Merritt Hawkins, September 24, 2012.

Thankfully, some physicians are discovering that the concierge practice of medicine can be a smart, rewarding way to own and operate a private medical practice as a business that, rather than suffering the severe strains of the third-party-payer model, is free to actually focus on practicing medicine. For many doctors, the concierge medical practice model is returning private practice to its correct state — a real practice of medicine, medical judgment and care that is patient focused and free from the intrusion into the business of rendering care that a commercial or governmental third-party payer necessarily creates.
Continue reading ›