A 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.
Atlanta and Augusta, Georgia Physician Practice Law Firm
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.
Direct pay and concierge medical practices appear to be a rising trend that will make physicians and their patients happy. Doctors who pursue this opportunity report more time with patients, freedom from insurance bureaucracy and strong earnings. The Michigan bill may be a good omen for many physicians with strong interest in this business model. Hopefully, other States will follow suit in facilitating direct pay and concierge practice opportunities for physicians.
Kevin Little is a Georgia based, business and health care lawyer. Our law firm has offices in Atlanta and Augusta, Georgia. You can contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta) or firstname.lastname@example.org.
Source: SB 1033
*Disclaimer: Thoughts shared here do not constitute legal advice.