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.
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