What to consider before starting a concierge practice

The concierge medicine business model is expected to reach $10 billion by 2028 and is expected to continue to expand.

Some practices may consider transitioning to a concierge model, which is 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 health care 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, ultimately 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 burnout, allocating more family time and pursuing personal and professional interests offers an attractive choice for all providers. But despite this, there are still several legal and compliance hurdles.

A concierge practice can be a 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 experienced attorney who can help the transition.

Here are some possible pitfalls:

Patient agreements

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

  • 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, and refrain from offering concierge services that may be covered by a third-party payor agreement.

Insurance licensure

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

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

Kickbacks

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

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 antikickback statute,
if Medicare is involved, or state antikickback laws. Enforcement authorities can view the free service as an illegal inducement for clinical services.

Medicare

Understand how Medicare addresses concierge medicine.

As for governmental health care 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 (OIG) advisory opinion alert titled “OIG Alerts Physicians About Added Charges for Covered Services — Extra Contractual Charges Beyond Medicare’s Deductible, Coinsurance: A Potential Assignment Violation.” Medicare providers should also review federal authorities for civil monetary penalties.

Patient abandonment

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

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 health care 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.