CONCIERGE MEDICINE

Concierge medicine, also known as retainer medicine, involves charging patients or clients subscription (or access) fees for medical and other health care services. Frequently physician entrepreneurs will create a model of high-end, primary care through concierge medicine, but be unaware of the legal pitfalls from laws relating to insurance, contracts, and so on.

Concierge or boutique medical practices raise legal issues requiring knowledge of insurance laws, contract legal issues, and ethical rules applicable to medical doctors and other clinicians. These issues can apply to clinicians in both the conventional medical space and in the complementary and alternative medicine or wellness sphere.

One of the key legal issues is the extent to which the access or retainer fee for the concierge medical practice includes services that are routinely covered by insurance — such as physical exams, routine medical office visits, and routine diagnostic tests.

A second 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, and otherwise and additionally under state antikickback laws. The “free” service can be viewed by enforcement authorities as an illegal inducement for clinical services.

The third issue is whether the access fee could be considered the practice of insurance, and therefore subject the entity or medical practice offering the pre-paid medical service to state regulation as an insurer. It is possible that fee-for-service arrangements will be viewed as outside insurance regulations; however, access fees for prepaid services raise legal issues.

Fourth, the arrangement must comply with any contractual arrangements the entity or provider has with private insurance companies or third-party payers, as noted. For example, the private insurance company may have a clause that prohibits balance billing — i.e., billing the patient for a service after or in lieu of the rate of reimbursement allowed by the insurance agreement. The prohibition on balance billing usually only applies to covered services so there may be an “out” here. Once again, the contract should be carefully reviewed by an attorney familiar with insurance contracts in the medical arena. Deciding to not accept insurance is one option, although that may reduce overall revenues.

Another concern is how to terminate patients after a set level of services has been provided. State laws and ethical rules prohibit patient abandonment. The patient must be given enough time to find a new and satisfactory physician.

Concierge medical practices must also be aware of advertising laws applicable to physicians and non-physician providers (both allied health and complementary and alternative medicine practitioners), and also refrain from claims of effectiveness, result, and cure that cannot be realized and may only accelerate potential liability. An experienced attorney can review marketing materials for compliance with relevant laws and to help minimize potential liability exposure.

In general, the concierge practice would benefit not only from clear legal review by an experienced health care and contracts attorney, but also by having the lawyer draft a contract between the practice and the patient that clearly specifies the services to be covered by the access or subscription fee; the Medicare status of the physicians involved; whether those providers accept insurance; how the billing will be done; and what will happen when the patient is terminated from the program.

Another concern that arises is when non-physician practices try to package clinical services (such as, for example, acupuncture) and non-clinical, spa services.

Yet another area of legal inquiry is whether conflating clinical and non-clinical services raises kickback or fee-splitting issues, or subjects the clinician to potential charges of exceeding scope of practice. For example, suppose the only arrangement is one in which the patient pre-purchases acupuncture visits, but can see any acupuncturist in the practice. The question is whether this involves fee-splitting or a kickback, in that the discount could potentially be viewed as an illegal inducement (or incentive) from acupuncturist A to see acupuncturist B (especially if A owns the clinic).

CPM, the corporate practice of medicine, may also be triggered if state law applies this legal rule to professions outside of medicine and views the arrangement as the entity itself interfering with clinical practice. Still another potential area of law is that applicable to gift cards, since state law could have legal rules regarding discounts and packaged services.

Once again, the arrangement must be structured carefully by an attorney well-versed in corporate practice of medicine, fee-splitting and kickback laws, insurance law, and other legal rules, so that the transaction passes legal muster and is legally compliant.