Legal Considerations for Concierge Medical Practices

Even before the COVID-19 pandemic, medical professionals were developing innovative ways to care for their patients, and the public health emergency only accelerated the need for, and growing interest in, alternatives to in-person medical office visits. For example, as Frier Levitt has noted in several recent articles, the pandemic accelerated the use of telehealth as a mechanism to provide virtual patient care. Another platform that is demonstrating significant demand and growth potential is concierge medicine (sometimes referred to as retainer‐based medicine, boutique medicine, platinum practice, or direct care), a model in which providers typically charge a fixed periodic or annual fee to cover a variety of defined services, without billing a third party.  There are reportedly more than one thousand active concierge medical practices established throughout the United States, and residential communities and office spaces have begun to include concierge medical services as part of their amenities. 

An attractive aspect of concierge medicine to providers is the ability to limit their patient volume, thus allowing them to spend more time with patients and ultimately, furnish more personalized and comprehensive care.  Studies indicate that patients tend to be more satisfied with concierge care, and providers are able to avoid the burnout associated with an overbooked schedule and stringent health plan requirements. A survey conducted by Concierge Choice Physicians found that patient satisfaction with medical concierge services was as high as 98 percent, and The State of the Concierge Physician reported a 2019 survey in which more than 80 percent of physicians described their professional morale as very positive.

Providers considering the concierge model must take into account their patients’ ability and willingness to pay privately for their healthcare, while still being responsible for paying the premiums, copays, and coinsurance costs of their health insurance plans.  The majority of patients will still need their health insurance, as certain services, such as a surgery or an inpatient hospital stay, may be cost-prohibitive under a private-payment model.  Acknowledging the growing public interest in the concierge approach to care, the Internal Revenue Service has proposed regulations that, if enacted, would permit payments for concierge medical services to be eligible for health reimbursement arrangements or treated as tax-deductible medical expenses. Such measures would likely increase the appeal of the concierge model to patients considering their healthcare options.

A common misperception among physicians is the belief that a private-pay arrangement avoids the burdens of legal compliance associated with the traditional practice model. In fact, the concierge model implicates a number of potentially significant legal considerations, including but not limited to the Federal Anti-Kickback Statute, Medicare payment rules, and state insurance regulations. Another important consideration is that charging patients for concierge services may preclude the physician from participating in the patient’s health insurance plan.  Once a comprehensive regulatory analysis has been performed, the concierge arrangement must be memorialized in a carefully drafted written agreement between the practice and the patient.

How Frier Levitt Can Help

Despite the economic challenges created by the COVID-19 pandemic, and thanks to potentially favorable future tax treatment of patients’ concierge medical expenses, the concierge model is continuing to gain traction as an alternative approach to care. If you are interested in exploring the feasibility of implementing a concierge medicine practice, contact Frier Levitt to speak with an attorney.