Articles Posted in Direct Pay (Concierge) Physician Practice

iStock_000033418316_Medium-e1626470315777Increasingly, our healthcare and business law firm’s clients are interested in opening concierge medicine practices.  Hamil Little’s last blog post provided an overview of what concierge medicine is with references to compliance risks.  This post outlines those very serious compliance risks for practices that treat Medicare patients and are not opted out of Medicare.  If you have questions regarding this blog post or starting a concierge practice, you may contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@hamillittle.com. You may also learn more about our law firm by visiting www.hamillittle.com.

Understanding the compliance risks associated with concierge medicine practices requires understanding a fairly easy and, perhaps, obvious concept: Providers cannot bill patients for services paid for by their insurance; a practice referred to as “double billing.”  Applying that concept is easier said than done.  Consider the complexity in this: a concierge medicine practice requires a $200/month fee that includes “longer appointments,” which is a clear benefit to patients.  Assuming the appointment itself is covered by insurance, is the fact that it’s longer something that insurance does not cover?  Maybe, but maybe not.  There are ample examples of how complex this question is and, as it relates to Medicare, CMS and the Office of Inspector General (“OIG”) offer minimal guidance.

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new-practice-startup-01-1-300x225Both concierge medicine and direct primary care practices have become popular alternatives to the traditional insurance medical practice model.  In a previous post, we discussed direct primary care (“DPC”) practices, which are typically different from concierge medicine practices because DPC practices generally cut insurance companies out from the provider-patient relationship.  This post focuses just on concierge medicine practices, which generally offer members non-medical benefits while the patients, or their insurance companies, remain responsible for the cost of all office visits, medical services, medications, treatments, etc.  If you have questions regarding this blog post or starting a concierge practice, you may contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@hamillittle.com. You may also learn more about our law firm by visiting www.hamillittle.com.

Although many states have specific rules on direct primary care practices, it is less common that there are state rules governing strictly concierge medicine practices, which are also referred to as retainer-based or boutique medical practices.  A forthcoming blog post will discuss compliance risks to consider with concierge medicine practices.  This post answers a few preliminary questions about concierge medicine.

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iStock_000033418316_Medium-e1626470315777Direct primary care practices have become popular alternatives to the traditional insurance medical practice model.  Direct primary care practices cut out insurance companies from the provider-patient relationship.  This post intends to outline the recent history of direct primary care in Georgia and the relevant rules that practices must comply with to establish a direct primary care practice.  If you have questions regarding this blog post or migrating to a direct primary care practice, you may contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@hamillittle.com. You may also learn more about our law firm by visiting www.hamillittle.com.

History: Senate Bill 18 in 2019

In 2019, Georgia became the 26th state to designate in its insurance code that Direct Primary Care practices are “not insurance” by passing Senate Bill 18.  At the time, 3.2 million Georgians were living in areas facing a severe physician shortage.  Dubois & Mesa, SB 18 – Direct Primary Care, Ga. St. Univ. L. Rev., Vol. 36:1, p. 136 (2019).  In supporting the bill, Senator Kay Kirkpatrick said:

It is a way for people who can’t afford high dollar plans to get the majority of their care handled for a reasonable and predictable amount of money and is also a way for people to keep their primary care doctor if they change plans or if their doctor is not in their insurance network.

Dubois, SB 18 – DIRECT PRIMARY CARE, p. 136. Continue reading ›

mobile-phone-in-hand-1438231-1-mHow could it not?

The healthcare industry is rapidly evolving.  As recently reported in U.S. News and World Report, next on telemedicine’s horizon may be virtual care clinics.  In fact, so-called virtual care will likely revolutionize the delivery of health care in the coming years. “Virtual,” in this context, alludes to the fact that care providers, doctors, nurses and therapists, may provide most care from many miles away.

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Various genres of “virtual care” delivery exists already.  One notable pioneer is Mercy Virtual.  Mercy, based in Chesterfield, Missouri, emphasizes that an objective of its mission is to ensure access to quality care, explaining: “Mercy Virtual’s mission is to connect patients with leading care providers whenever, wherever they need help.”  In recent years, many other medical businesses are finding and developing their own niches in the evolving virtual healthcare world.  Several of the numerous examples are: Teladoc, which provides online, 24/7 access to primary care physician services; American Well, which claims to offer “telehealth” to more than 100 million people in an online marketplace where customers select their healthcare provider from a list; Carena provides a range of healthcare services that include virtual visits for the employees of self-insured companies; Zipnosis is a platform that, through “phone and video care,” helps patients get answers to their healthcare questions and helps physicians treat primary care ailments; MeVisit enables “e-visits” that allow patients to use their mobile device to connect with a doctor.

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doctorThe American College of Physicians (ACP) recently released an informative policy position paper that assesses how “concierge” and similar direct pay health care arrangements between doctors and patients impact patient care. Our Georgia business and healthcare law firm follows developments in the healthcare industry that affect physicians, medical practices and other healthcare businesses.

“Direct Pay” refers to an important and evolving alternate payment model and health care arrangement between medical practices and patients. Rather than traditional fee-for-service reimbursement models that render physicians and medical practices dependent upon steerage of patients from insurers or other third-party payers, a typical direct pay contracting model utilizes a flat fee, often paid monthly or annually, which the patient pays out of pocket and “direct” to the doctor (as opposed to through an insurance transaction) to compensate the physician for access to a contractually-agreed menu of health care services. The hallmark of direct pay practices is, for the patient, greater access to the physician and, for the doctor, less red tape and a more rewarding professional experience focused on providing care. Direct pay physicians, of necessity, typically limit the number of patients they see, compared to a traditional, third-party payer based model.

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exam-room-1-260748-m.jpgA Michigan legislator’s bill, SB 1033, sponsored by Senator Patrick Colbeck, would benefit direct primary care doctors in that State, and the idea may warrant consideration in other States. The purpose of the bill is to provide physicians who convert their practice to a direct primary care model with the assurance that their medical practice will not be treated as an insurer regulated under state insurance regulations.

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Among other legal hurdles some physicians may face in developing a direct primary (or concierge) care practice model is avoiding the creation of an insurance product. This can be a central legal issue for such practices. A distinguishing feature of the direct primary care model is that the patient, sometimes referred to as a “member” or “enrollee,” receives medical care without paying anything other than a predetermined periodic fee, sometimes referred to as a “medical retainer.” The theory behind the insurance issue is that by accepting a set, predetermined fee in advance of the medical services, the physician or medical practice is, in effect, underwriting an insurance risk. The consequences of a state insurance regulator determining that a medical practice is operating as an insurance company can be severe.

Senator Colbeck’s bill is intended to avoid such problems in Michigan. The bill provides, in part, as follows:

(1) A medical retainer agreement is not insurance and is not subject to this act. Entering into a medical retainer agreement is not the business of insurance and is not subject to this act.
(2) A health care provider or agent of a health care provider is not required to obtain a certificate of authority or license under this act to market, sell, or offer to sell a medical retainer agreement.
(3) To be considered a medical retainer agreement for the purposes of this section, the agreement must meet all of the following requirements:

(a) Be in writing.
(b) Be signed by the health care provider or agent of the health care provider and the individual patient or his or her legal representative.
(c) Allow either party to terminate the agreement on written notice to the other party.
(d) Describe the specific routine health care services that are included in the agreement.
(e) Specify the fee for the agreement.
(f) Specify the period of time under the agreement.
(g) Prominently state in writing that the agreement is not health insurance.
(h) Prohibit the health care provider, but not the patient, from billing an insurer or other third party payer for the services provided under the agreement.

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medical-doctor-1314902-m.jpgA well-intended objective of the Affordable Care Act (ACA) is to improve patient access to doctors. Sometimes this objective is artfully stated as “better” access to care, rather than “increased” access to care, perhaps to acknowledge the reality that as more patients become insured via the ACA, there may actually be less access to physicians. “Better” access may therefore be an argument that, even as an existing physician shortage worsens, new alternatives under the ACA nonetheless improve access to care for the population as a whole. For sure, millions of Americans have enrolled in new insurance coverage via the ACA health insurance exchanges. In any event, whether it will be easier for most Americans to actually see a doctor remains to be seen according to a recent national survey.

The survey, by The Physicians Foundation, concluded that patients are likely to face increased difficulties in finding true access to care if current health care reform trends continue. More than 20,000 doctors nationwide were surveyed by the Foundation, and its findings are detailed and compelling. Among other things, the survey indicates that: 81 percent of doctors believe they are over-extended or at full capacity; only 19 percent of doctors think they have time to see additional patients; and 44 percent of doctors are now planning steps that would reduce patient access to their services (e.g., cutting back on patients seen, retiring, going part-time, closing their practice).
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doctor-patient-relationship-673855-m.jpgThe strain of health care reform and third-party-payer bureaucracy will likely continue to push physicians towards non-traditional business models for practicing medicine. This is especially true for non-specialists. As the trend of physicians to find viable practice model alternatives grows, it is widely expected that the number of direct pay and concierge physician practices will increase significantly.

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Our health care law practice is particularly interested in direct pay and concierge medicine legal issues. While the particulars may vary, the typical concepts upon which such medical practices are built are fixed, affordable fees for patient “membership” in the direct pay/concierge program, 24/7 access to a physician, much more time and involvement in the physician-patient relationship, better preventive care and planning, and a more rewarding professional life for the physician without (or with reduced) headaches of a third party payer medical practice.

The legal and business issues raised by setting up such a practice, however, are important and must be carefully evaluated. For example, one such issue is whether the details of a particular direct pay or concierge model violate Medicare billing rules. The federal laws that govern Medicare patients and federal reimbursement can make it very risky for concierge practices to charge Medicare beneficiaries retainer fees for certain medical services. Medicare billing rules have heavy consequences for double billing of a Medicare covered procedure. The setup of the concierge practice model has the potential to trigger this issue, and some practitioners may be better off opting out of Medicare entirely. However, physicians also have the option of accepting or not accepting assignment, with their choice affecting who they bill for their services. Physicians accepting assignment will bill Medicare directly, while those not accepting assignment bill the patient, who in turn seeks reimbursement from Medicare.
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calculator-stethoscope-1004851-m.jpgMore 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.
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medical-equipment-1342025-m.jpgThe 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).
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