The Executive Suite: Five things to consider before starting a concierge medical practice

A new year brings new ideas and while some practices will remain the same this year, some may consider transitioning their practices to a “concierge” model, sometimes called a “subscription” or “retainer” practice. A concierge practice is a direct contract between a doctor and patient where the patient pays for an agreed menu of healthcare services; patients pay a fixed fee, whether the fee is monthly or annually, to receive medical services administered by a provider. The concierge medicine business model is expected to reach $10 billion by 2028 and is expected to continue to expand.

Some providers find concierge medicine appealing because they can spend more time with their patients listening and understanding their needs, offering better care to them. Additionally, in a concierge model, providers manage to earn more despite a smaller number of patients and establish a work-life balance. The idea of controlling work, avoiding provider burn-out, allocating more family time, pursuing personal & professional interests, offers an attractive choice for all providers. But despite this, there are still several legal and compliance hurdles associated with this practice model.

PITFALL (1) Patient Agreements

The provider will create and enter a patient agreement where the patient agrees to pay some fee and all fee schedule charges at the time of service for access to a specific menu of enhanced services.

Problem
Some patients cannot afford the services under the patient agreement.
Some patients will still try to pay with insurance instead of the patient agreement.
Understand and review the payor agreement to avoid breaching the contract; refrain from offering concierge services that may be covered by a third-party payor agreement.

PITFALL (2) Insurance Licensure

Spend time with your attorney reviewing your patient agreement to ensure it does not violate state law.

Problem
Some provider arrangements may appear less like patient-provider contracts and more like an insurance agreement. Insurance laws in most states have several requirements before any person can offer this to any patient. Thus, it’s important that your attorney reviews your state’s insurance licensure laws and provides you a summary of this review before drafting a provider-patient agreement.

PITFALL (3) kickbacks

Review the ways you are marketing and convincing patients to use your concierge services.

Problem
An issue that arises is that of illegal kickbacks and fee-splitting legal rules. When concierge practices offer “free” services, this raises concerns under the federal anti-kickback statute (AKS) if Medicare is involved, or state antikickback laws. Enforcement authorities can view the “free” service as an illegal inducement for clinical services.

PITFALL (4) Medicare

Understand how Medicare addresses concierge medicine.

Problem
As for governmental healthcare programs, Medicare providers may engage in concierge services if the provider complies with Medicare regulations and the terms of assignment agreements, most notably the requirement to not charge Medicare beneficiaries extra for services already covered by Medicare.
Medicare’s concerns about concierge medicine and assignment agreements are outlined in a 2004 Office of Inspector General Opinion alert titled, “OIG Alerts Physicians About Added Charges for Covered Services – Extra-Contractual Charges Beyond Medicare’s Deductible. Medicare providers should also review federal authorities for Civil Monetary Penalties.

PITFALL (5) Patient ABANDONMENT

Review the way in which you are separating from patients who do not join your concierge services.

Problem
When providers switch over to a concierge model, some patients will not follow your practice. Provide adequate notice to patients of your new business model and provide patients enough time to find another healthcare provider if they choose not to follow your new business model. Review state patient abandonment laws to ensure you remain in compliance with any state regulation.

In conclusion, a concierge practice can be a very lucrative way for a provider to achieve work-life balance by reducing the number of patients, increasing time with patients, and making great profits. But before you transition, speak with an attorney experienced in healthcare business law who can help you through the transition.