Many primary care physicians are transitioning their practices to a “concierge” model, sometimes called “Direct Primary Care” or “Retainer” practice. In a concierge practice, patients pay a fixed annual or monthly fee to receive certain non-medical services in addition to the usual professional services rendered by physicians. Concierge services include such “extras” as same-day or next-day appointments, 24-7 access to the physician through email and/or telephone, longer appointments, and home visits. The concierge model can allow physicians to earn additional compensation through the fees paid for concierge services and to spend more time with patients.

But there are some important legal and compliance challenges to setting up a concierge practice, including possible payor challenges and contract requirements. Here we highlight some of the key issues to consider.

Which Services Should You Offer?

Concierge practices typically offer some combination of the services listed below. The choice of services is often related to the concierge fee the physician plans to charge. That fee is determined by consideration of various factors including what the market will bear in the geographic area of the practice and the level of services offered.  Services may include:

•             Availability of physician 24 hours a day, 7 days a week by email or phone
•             High-end waiting area
•             Same day or next day appointments, perhaps Saturday appointments
•             Visits up to 30 minutes or longer
•             Arranging specialist visits
•             Doctor accompanies patient to specialist visits and follows the patient in the hospital
•             House calls if warranted
•             Website patient portal
•             Videoconferencing
•             Lectures and other educational opportunities

Should You Treat Only Concierge Patients?

Some physicians maintain a “hybrid” practice, in which they continue to accept non-concierge patients but also have concierge patients. A hybrid practice will necessitate carefully allocating concierge services to those patients who are paying for them without sacrificing care of non-concierge parties.  Other physicians opt to have a “pure” concierge practice, where they only accept patients who have agreed to the terms of participation in the concierge practice. A pure concierge practice will typically reduce the physician’s patient panel significantly, allowing her to spend more time with patients. A physician who elects to run a pure concierge practice will need to smoothly transition the non-concierge patients to ensure that she is not abandoning them in violation of the guidelines of the American Medical Association.

Are There Medicare Issues with these Practices?

If any concierge services could arguably be characterized as Medicare covered services, there is a risk that the practice could be accused of charging additional money (in the form of the concierge fee) for covered services, which is prohibited by Medicare. The Office of Inspector General of the U.S. Department of Health (“OIG”) has expressed concern about this issue, but has not issued any specific guidance as to which concierge services might be considered covered services. As a result, a concierge practice faces some uncertainty regarding compliance.

OIG has also warned physicians not to provide bonus services to induce Medicare patients to use those physicians. This practice could be considered improper remuneration in violation of the Anti-Kickback Statute, as it may be seen as paying these patients for their business.

There are several options for physicians to minimize the uncertainty regarding Medicare. One option is to “opt out” of Medicare, so that the physicians are no longer bound by its restrictions. This decision may have serious financial implications, as many practices rely on Medicare for much of their reimbursement. Another choice is to form a separate company, typically owned by the same physicians who own the practice, which will contract with patients to provide the concierge services. The concierge services must not include any professional services. Keeping the medical practice separate from the concierge company, and ensuring that the services each provides are separate – that is, nonmedical concierge services are provided by the concierge company and professional services are provided by the practice – lessens the risks with Medicare.  In this model, there should be a contract between the medical practice and the concierge company to describe and clarify their relationship.

Do I Need a Patient Agreement?

A concierge practice, whether it be the medical practice itself, if it is providing the concierge services, or a separate concierge company, should have a written contract with each concierge patient, which sets out the fee to be paid by the patient and how it will be paid, the services that will be provided to the patient, and other matters. The agreement should specify that the concierge services do not include medical care. It is important to ensure that the patient agreement is properly drafted so that the practice is protected.

Are There HIPAA Considerations?

There may be unique HIPAA issues in running a concierge practice. If the practice elects to have a separate company provide the concierge services, there may need to be a business associate agreement with that company. If the physicians in the practice undertake to stay in touch with patients electronically, privacy of emails must be maintained. Texting between physicians and patients presents its own hazards as discussed in an earlier post in this blog. Physicians and physician groups should evaluate their privacy practices when transitioning to concierge practices.

There are some complex legal issues involved in transitioning to or creating a concierge medical practice.  Giving careful thought to these issues can help make the establishment of this kind of practice easier. We will address other issues related to concierge practices in future posts.