You built a concierge practice.Now you need to protect it.

“Concierge practices typically charge a fee for membership in their practice, which generally allows patients increased access to the physicians and their services. If the practice is accepting Medicare and/or commercial insurance, the fee cannot be charged for any service already covered by Medicare or insurance. Additionally, if the practice accepts commercial insurance, the fee must be scrutinized to be sure it is allowed under any agreement with a commercial payor of the practice. Some payor agreements may specifically prohibit any patient fee for membership in a practice. Some practices have reached out to their commercial payors directly when converting to a concierge practice and have had these commercial payors review and approve their patient agreements and membership fees.”

“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.”

“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.”

“If your attorney or consultant tells you that you cannot bill insurance or stay in network while doing cash healthcare, you are not working with the right expert. There is a wide range of preference with plan billing in cash healthcare. The right expert can explain to you that you can elect to bill plans a little, a lot, or not at all, and why you have those options without creating compliance risks. You can do zero plan billing, or some, but you should know why you have those options, and why there is no need to opt out of Medicare.”

“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.”

“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.”

“Instead of allowing a combination of guilt and lack of accurate pricing market data to cause you to under-price and devalue your brand, consider instead pricing your practice at true market value but using ad hoc scholarships/discounts and employer funding to improve equitable access to cash healthcare.”

“Consider your practice pricing as establishing your perceived brand value in the marketplace. You need not track the national franchise-style concierge enterprise pricing or DPC pricing: both are frequently published, but most cash practices do not market their prices, so the actual market is much higher than your online search reveals. So the easiest prices to find are not necessarily reflective of the actual market, and imitating them will devalue your perceived brand. Instead, work with an experienced attorney or consultant who actually knows the unpublished typical prices for cash practice models. And remember, most if not all of those published price versions of cash healthcare are not structuring their fees/services to allow for employer/tax-advantaged funding, and perhaps their lower prices are unintentionally reflecting that. Pre-tax and employer funding options allow for higher price points, and can be used to provide versions of this care with 100% employer funding that can enable more folks to benefit from this care model.”

“Another issue confronting concierge practices is cost sharing and how to divide expenses in this type of practice model. 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.”

“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.”

“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.”

“Physician owners in a concierge practice also need to consider at the formation of a practice how the profits of the practice will be divided in the case of a sale to a third party. Will profits be divided based on a physician's ownership in the practice or based on an individual physician's production and fee generation? If a practice has providers with vastly different production and patient panel sizes, then this is important to consider because the higher producing partner may want a sale to a third party to take into account these differences. Another partner may feel strongly that profits should be divided based on ownership percentages in the practice entity, which may be equal even if the providers have different numbers of patients. Frequently, the potential buyer has their own considerations for valuing the practices and may ascribe different values to each physician's practice. The buyer may base its valuation of the practice on patient panel size and fees generated by each individual physician.”

“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.”

“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.”