Operations and Compliance in Concierge Medicine: What Attorneys and Legal Experts Want You to Know Before You Build
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CATEGORY: CMT Leadership Hub · Operations & Compliance
READING TIME: 6–8 minutes
DISCLAIMER
The insights and observations shared here reflect years of reporting on the concierge and membership medicine industry. They are intended to inform and spark thinking — not to replace the counsel of an attorney, financial advisor, or accountant. Content is for general informational purposes only and does not constitute medical, legal, or financial advice. Mentions are not endorsements. CMT is not liable for errors or omissions. Users should conduct their own due diligence before acting on any information found here. By using this site you agree to our Terms and Conditions of Use and Privacy Policy.
INTRODUCTION
The legal and compliance landscape for concierge and subscription-based medicine is more nuanced than most physicians realize — and more favorable than many critics suggest. The structure that allows a physician to operate a cash-based, membership-funded practice while remaining Medicare compliant, tax-advantaged, and legally sound has existed in federal law for decades. The challenge is not the law. The challenge is that most attorneys, consultants, and transition advisors working in this space do not fully understand it.
This article brings together expert commentary from three attorneys with specific experience in concierge and membership medicine structures: James Eischen, Esq. of Eischen Law Office; Jonna D. Eimer of Roetzel & Andress; and Michele P. Madison of Bradley. Their observations cover the practical legal terrain every physician in this space needs to understand — Medicare compliance, cost sharing, coverage and licensing, partner transitions, and why independent legal thinking matters more than following the crowd.
Nothing here constitutes legal advice. Every practice situation is different, every state has different rules, and none of what follows replaces a direct conversation with qualified legal counsel who understands your specific circumstances.
SECTION 1: THE LEGAL FRAMEWORK — IT ALREADY EXISTS
One of the most important and least understood facts about concierge medicine is that the federal legal framework supporting it has been in place for a long time.
In March 2002, Congressman Henry Waxman sent a letter to HHS Secretary Tommy Thompson raising questions about the Medicare compliance of the emerging concierge medicine model. Thompson's reply, on behalf of HHS, signaled clearly that the typical concierge practice structure was Medicare compliant — providing what many in the field considered a meaningful regulatory green light.
Download: Original Waxman Letter (PDF) · Last Known Revision (PDF)Source/Credit: Concierge Medicine Today, LLC. Documents provided from public record via the Tommy G. Thompson Collection, Marquette University Archives.
Jim Eischen, whose law office has focused specifically on the legal structures underlying cash-based and subscription healthcare, describes the framework this way:
"Collaborate with a knowledgeable attorney, consultant, or individual(s) to structure your cash practice to follow three (3) federal statutes and decades of Medicare/OIG guidance (essentially, using what looks like the executive health model but with different branding and added/variable features). This approach ensures Medicare/Medicaid/HMO compliance, allows for healthcare insurance plan integration (if desired, and not necessary), and ensures patient fees are 'qualified medical expenses' eligible for HSA/FSA/HRA/MSA funding (in other words, allows for employer and pre-tax funding) with no changes in existing laws — it works right now." — James Eischen, Esq., Eischen Law Office, 2025
The practical implication: a physician who structures their subscription-based practice correctly — using the existing legal framework rather than improvising around it — can achieve compliance, tax-advantaged patient funding, and operational flexibility simultaneously. The structure exists. The question is whether the advisors helping physicians access it actually understand it.
SECTION 2: BRANDING, TERMINOLOGY, AND THE IRS PROBLEM
One of Jim Eischen's most practical and counterintuitive pieces of guidance concerns the terms physicians use to describe their practices — and why those terms can work against them financially.
"Steer clear of marketing and branding, that, while quite prevalent in the marketplace, is frustrating your patient fees achieving qualified medical expense status. For example, you may dearly love the DPC or concierge [as terms or] brands, but, the IRS is convinced that neither brand's patient fees are qualified medical expenses. Why debate the IRS? Neither brand is likely to fully explain YOUR medical or healthcare philosophy, and neither brand assists with qualified medical expense status so both brands frustrate HSA/FSA/HRA/MSA funding absent changes in tax laws and IRS regulations." — James Eischen, Esq., Eischen Law Office, 2025
This is a compliance consideration with direct financial consequences for patients. If a patient cannot use their HSA or FSA to pay membership fees, the practice becomes less accessible and less financially attractive — not because of the structure but because of the label.
Eischen's broader philosophy flows directly from this observation:
"Avoid formulas, brands, and models that work against you implementing your unique vision of healthcare. Don't replicate, innovate. And, do so using the referenced structuring that for decades has achieved Medicare compliance and tax-advantaged funding options. Call the practice whatever you want, incorporate whatever healthcare services you wish into your subscription, and don't be constrained by the ill-informed guidance in this marketplace that is not using existing laws/guidance to maximize your practice's potential." — James Eischen, Esq., Eischen Law Office, 2025
SECTION 3: THE MEDICARE OPT-OUT QUESTION
One of the most direct and practically important pieces of guidance in this space concerns the question of Medicare opt-out — a recommendation that some consultants make routinely, and that Eischen argues reflects a fundamental misunderstanding of the legal landscape.
"If your attorney or consultant tells you to opt out of Medicare to do cash healthcare — you are not working with the right expert. Opting out creates different but real compliance risk that the person you are working with does not understand." — James Eischen, Esq., Eischen Law Office, 2025
This is not a nuanced suggestion — it is a direct warning. Physicians who receive this advice from consultants or attorneys should ask follow-up questions before acting on it. The compliance risk created by an unnecessary Medicare opt-out can follow a physician for years.
SECTION 4: THE UNIQUELY COMPLEX LEGAL LANDSCAPE OF CONCIERGE PRACTICE
Jonna D. Eimer, a health law and corporate attorney and shareholder at Roetzel & Andress in Chicago, represents numerous concierge medicine practices and has extensive experience with innovative practice models. She advises physicians and physician groups in forming new practices, selling established practices, negotiating employment and shareholder agreements, and navigating regulatory matters. She also counsels clients in forming management services organizations and navigating private equity transactions.
Eimer's core observation about concierge medicine legal work is direct:
"Because each concierge practice has unique patient fee agreements to consider, there is not a 'one size fits all' approach to advising these practices. Concierge practices should not overlook the unique legal and practice issues facing them, from patient fee issues to physician departures. These models have a variety of legal challenges that should be addressed at the early stages of the practice, so they do not lead to partner and patient discord later on." — Jonna D. Eimer, Roetzel & Andress, 2025
SECTION 5: COST SHARING IN MULTI-PHYSICIAN PRACTICES
When more than one physician operates under the same concierge practice umbrella, the question of how to allocate shared expenses becomes surprisingly complex — and is frequently not addressed until it causes conflict.
"Another issue confronting concierge practices is cost sharing and how to divide expenses in this type of practice models. Practices must decide if they are allocating costs based on each physician's patient panel size or based on their respective ownership percentages of the practice. Once you allow for different panel sizes, these differences can become quite problematic, and physicians can end up disagreeing on the fair allocation of these costs. Confronting these differences early in the formation of the practice and providing for them in the practice's operating documents can help avoid difficult and costly conflicts later for the partners." — Jonna D. Eimer, Roetzel & Andress, 2025
This is the kind of structural issue that is inexpensive to address in the formation documents and expensive to resolve in litigation. Getting it right at the beginning is not optional work — it is foundational.
SECTION 6: COVERAGE, LICENSING, AND THE SNOWBIRD PROBLEM
One of the more practically interesting legal challenges unique to concierge medicine involves coverage when patients travel — particularly the "snowbird" dynamic where patients spend months of the year in a different state.
"Because of the unique access provided to concierge patients, some practices have added special coverage when these patients are out of state or on vacation. In light of their patients who winter in warmer climates, like Florida, California and Arizona, some practices have partnered with other concierge practices in these states to offer services to their 'snowbird' patients. Health systems are taking advantage of these practice models also. For instance, Chicago-based Northwestern Medicine opened a concierge medicine office in Naples, Florida, and Ohio-based Cleveland Clinic also has opened concierge medicine practices in multiple Florida locations. Doctors, however, need to be aware that they need to be licensed in the state where the patient resides. Due to these licensing considerations, some concierge physicians are also obtaining licenses in other states to cover patients that often spend their winters in these warmer states." — Jonna D. Eimer, Roetzel & Andress, 2025
The licensing requirement is not negotiable — a physician practicing medicine in a state where they are not licensed faces significant liability regardless of the concierge structure. This is an area where the concierge model's promise of total access requires careful legal planning to deliver.
SECTION 7: PARTNER TRANSITIONS, TERMINATIONS, AND RETIREMENT
The departure of a physician from a concierge practice — whether through retirement, disability, death, or voluntary exit — raises a set of legal and operational questions that most practices have not fully answered in advance.
"The concierge model generally relies on increased access and time for patients because physicians have typically accepted fewer patients. Because of this, it can be very difficult to figure out the fairest way to negotiate a partner's exit and how these patients and fees paid would transfer in the event of such departure. Does the partner get paid only in a buy-out of the whole practice or will the practice buy-out the individual partner upon his or her termination? Would this be handled differently in the case of a retirement? Would the practice consider a buy-out only if another physician can be substituted and take over the patient panel? How then is the new provider paid if fees have already been collected for a given year? It is possible the patients reject the substitute physician regardless of the departing physician's recommendation." — Jonna D. Eimer, Roetzel & Andress, 2025
The relational nature of the concierge model — the very thing that makes it valuable — is also what makes physician transitions complicated. Patients paid for a relationship with a specific physician. That relationship does not automatically transfer.
"Oftentimes, the agreements governing the practice's operations include long notice provisions prior to any termination or retirement because it is not easy to substitute another concierge doctor if one leaves. Also, the patients have paid for the personal relationship and membership with their own doctor, so they do not always feel that this relationship transfers to another doctor. Another thing to consider is if a doctor terminates or unexpectedly dies or becomes disabled and a new doctor cannot cover their patients, what happens to patient fees that have already been collected? The practice needs to consider whether these fees are returned to patients and then whether a new membership agreement is entered into with the new physician. All these considerations need to be addressed in the initial stages of the company's operations." — Jonna D. Eimer, Roetzel & Andress, 2025
The consistent message across both of Eimer's observations: these questions are far easier and less expensive to answer in the operating documents at formation than to resolve after a departure creates pressure. Waiting until a partner wants to leave to figure out what the practice's governing documents say is almost always a mistake.
SECTION 8: HIPAA, EMPLOYMENT, AND INSTITUTIONAL COMPLIANCE
Michele P. Madison of Bradley has significant experience managing legal issues arising in hospitals, physician offices, and integrated health systems — including employment, investigations, risk management, and compliance plan implementation. She provides legal education for health systems' medical staff and management teams and facilitates implementation of compliance plans for HIPAA privacy and security regulations.
For concierge physicians operating in or adjacent to health system structures — including those running executive health programs within hospital-affiliated settings — Madison's expertise in HIPAA, medical staff governance, and credentialing represents an important dimension of the compliance landscape.
Physicians building concierge practices within or adjacent to health system structures should understand that the compliance obligations applicable to those institutions do not disappear simply because the practice model changes. Employment agreements, HIPAA obligations, and medical staff governance requirements persist regardless of the membership structure layered on top.
THE RELATIONAL CONTEXT
Compliance and legal structure are not just risk management exercises — they are expressions of the physician's commitment to building something that lasts. A practice built on a sound legal foundation, with clear operating documents, appropriate licensing, and a structure that achieves Medicare compliance and tax-advantaged patient funding, is a practice that can serve patients and sustain physicians over decades.
As CMT's Editor-in-Chief observed in October 2025:
"Concierge medicine may still be small in size, but it's big in purpose. While fewer than two percent of U.S. physicians practice in some form of membership-based model, what we're seeing is steady, healthy expansion — about four to seven percent each year. Some insiders say it's higher, but we prefer to stay realistic, not evangelistic. As one veteran concierge medicine physician told us just recently, 'You can't measure this movement only by numbers. You measure it by the physicians who've decided to practice medicine the way it was meant to be practiced — thoughtfully, relationally, and sustainably.' So while concierge medicine represents a small slice of the healthcare pie, it's quickly becoming the model others are measured against." — Michael Tetreault, Editor-in-Chief, Concierge Medicine Today, October 2025
The legal foundation is what makes "thoughtfully, relationally, and sustainably" structurally possible. It is not a separate concern from the practice philosophy — it is part of it.
EXPERT CONTRIBUTORS
James Eischen, Esq. (Jim Eischen) Eischen Law Office · Licensed California attorney · 32+ years experience in complex corporate, business planning, healthcare, and real estate matters · Specific expertise in structuring cash-based and subscription healthcare practices for Medicare compliance and tax-advantaged patient funding. eischenlawoffice.com
Jonna D. Eimer Roetzel & Andress · Health law and corporate attorney and shareholder · Chicago, Illinois · Represents numerous concierge medicine practices · Extensive experience with innovative practice models, practice formation and sale, employment and shareholder agreements, MSO formation, and private equity transactions. ralaw.com/people/jonna-eimer
Michele P. Madison Bradley · Significant experience in hospital, physician office, and integrated health system legal matters · Employment, investigations, risk management, HIPAA compliance, medical staff governance and credentialing. bradley.com/people/m/madison-michele-p
DOWNLOADS
WAXMAN LETTER (circa 2002)
Attached is the March 2002 letter from Congressman Waxman we discussed earlier regarding the Tommy Thompson letter search. Thompson’s reply on behalf of HHS should have followed in March or April 2002. Reading the full exchange, the takeaway is clear: in 2002, HHS essentially signaled that the typical concierge practice model was Medicare compliant.
Source/Credit:
Concierge Medicine Today, LLC. Documents provided from public record via the Tommy G. Thompson Collection, Marquette University Archives. Includes Congressman Waxman’s March 2002 letter and Secretary Tommy G. Thompson’s official response (file noted as “Last Revision”).
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Content is for general informational purposes only and does not constitute medical, legal, or financial advice. Mentions are not endorsements. CMT is not liable for errors or omissions. Users should conduct their own due diligence before acting on any information found here. By using this site you agree to CMT's Terms and Conditions of Use and Privacy Policy. © 2026 Concierge Medicine Today, LLC. All rights reserved.