Concierge Medicine and the Law: Insights for Full and Hybrid Practices

 

 

Daniel Marino:  

Welcome to Value-Based Care Insights. I'm your host, Daniel Marino. Working with many practices around the country, there's been this growing trend of physicians to explore shifting into concierge medical practice. We've been approached by a number of physicians over, really, the last year or so. Really exploring their interest and trying to understand, is this a good alternative for them as they think about continuing to practice medicine and delivering care to their patients while being able to limit some of the business challenges that they're having. Particularly for primary care, we've talked many times on the program that, the stress level of primary care physicians is just really through the roof, and everything from the all the business challenges that they have, to pressures on economics, to being able to support patients and so forth, you know, continue to be a challenge for primary care. So what we're seeing is a lot of primary care physicians, are thinking about shifting to concierge, as an alternative. But I'll tell you, in a lot of the work that we've been doing, it's not just easy as flipping a switch and saying, hey, we're going to go from traditional practice to a concierge practice. There's a lot of components that need to be taken into consideration. We've had the opportunity to create quite a few business plans for physicians who have thought about making that shift, and in some cases it's worked, and in some cases it hasn't. When we think about concierge medicine, there's really two approaches. There's full concierge, where physicians, don't accept any insurance, they opt out of Medicare, and they create a structure with patients where it's a membership fee, and they provide a number of services to patients. Patients pay for services within that membership fee, and potentially for additional a la carte services. The second one, though, is the hybrid concierge model, which is a little more complicated. So the hybrid concierge model looks at being able to accept insurance, with either some or all the plans that the physician's practice historically has been involved in, as well as potentially accepting Medicare and being able to process payments through Medicare and so forth. And as I mentioned, that is a little bit more complicated. There's a lot of new regulations, a lot of new requirements. Medicare has changed some of the coding rules recently. So, as I mentioned, it's complicated for the physician, but it's also complicated for the patient. 

Well, I'm excited to have with me today an attorney who is a national expert in concierge requirements and regulatory aspects of medicine. Christina Kuta, she is a partner with Roetzel and Andress. Her practice focuses on corporate transition, regulatory support for physicians and medical groups, and has done a lot of work speaking around the country, working with practices around the country, on setting up hybrid or really concierge medical practices. Christina, welcome to the program! 

 

Christina Kuta:  

Thank you for having me, Dan. 

 

Daniel Marino:  

So, Christina, let's kind of start from the top, if we can. You know, I mentioned a little bit the differences between the full concierge practice versus a hybrid practice. In your opinion, what's really that difference? 

 

Christina Kuta:  

So, I'll tell you from a legal perspective, the big difference is there's a lot more legal considerations and implications when you have a hybrid practice. So, full concierge practice, as you indicated, is really where the provider accepts no insurance, has opted out of Medicare. It's an entirely cash-based only practice. With an exception of a few states that do have some regulatory framework for those types of practices, there really aren't a lot of legal implications. The provider opens their practice, takes no insurance can't bill Medicare, and they charge cash for services. That's sort of the what I call the pure, full concierge model. The hybrid model, however, is different in that often the practice itself does still accept insurance, is enrolled as an insurance provider, is an enrolled non-opted-out Medicare provider. And because of that, they are very limited in what they can charge patients for. How they can charge patients, and how they can have a practice that does take cash for certain services. And, you know, certain perks for the practice, and still remain compliant with their insurance contracts, and with, you know, various laws and Regulatory frameworks that might implicate that type of practice, because they are still billing for services. 

 

Daniel Marino:  

Sure. Well, let's dive into that a little bit. You know, we've worked with a number of practices who are in these different Medicare value-based programs the advanced primary care model is one, ACOs, and, and so forth, and Medicare has, has changed a lot of the coding rules this past year, and things that, under some of these programs that they didn't historically allow or reimburse for, they are reimbursing for. You know, some areas around screenings and wellness and so forth. How does that fit into the hybrid model, particularly if physicians want to continue to accept Medicare for their patients? 

 

Christina Kuta:  

Yeah, so it has been trickier. I mean, Medicare's evolving a little bit, which is fantastic for practices. But it is a little bit of a hiccup when you have a hybrid-type model practice. So, the general rule for Medicare, and I know, you know, today we'll talk a little bit more about the Medicare opt-out process, but generally a provider is not allowed to charge cash to a patient for a service that Medicare otherwise covers. So, a Medicare patient can't walk into a physician office if that physician's enrolled in Medicare and say, hey, I don't want you to bill Medicare for this visit for what I think is my strep throat that Medicare otherwise covers, I just want to pay cash for it. They're not allowed to do that. The provider's not allowed to charge cash for that. That is a violation of Medicare regulations. So, traditionally, some of these hybrid practices have charged for things like certain wellness evaluations, or having a dedicated office staff member 24-7 being available, or having a coordination of care, things that Medicare clearly wasn't charging for, or, pardon me, wasn't reimbursing for. So, if Medicare doesn't pay for something then you can charge a patient cash. There's no restriction. Medicare is now starting to pay for some of those services, pay for certain wellness services, pay for certain coordination of care services, paying for the ability to have, you know, a direct access to the practice on a 24-7 basis. Now, certainly, you still have to meet certain requirements for these CPT codes and, actually be eligible for reimbursement, but they are starting to inch away at things that used to be very clearly in the category of Medicare doesn't cover for this, now it's in a grayer area, so practices need to be very careful in a hybrid model. If that's something that they're providing, and they're providing it in a way that would meet a Medicare billable code, they can't charge cash for it, so it can't be part of the fee they're charging for a concierge practice. 

 

Daniel Marino:  

But what about if we have a physician who only accepts traditional Medicare, and let's say is not involved in the advanced primary care model, or has not historically charged for CCM, or any of that? Are they still are they allowed to charge the patient for wellness exams if it isn't part of the traditional Medicare program? 

 

Christina Kuta:  

So it's a grayer area right now, because while Medicare's evolving in some ways, the Medicare regulations haven't really kept up with the juxtaposition between the concierge-type practice and these, you know, other payment models that Medicare has developed. So, you know, in general, if you want to be safe as possible, what I tell clients is. If it's a service that otherwise is covered by Medicare, but you can't bill for it because you're not in that particular model, but you're a Medicare-enrolled provider, not opted out, err on the side of caution and don't charge cash for it. The patient can go to somebody who does participate in that model and can be otherwise, receiving reimbursement for it. Because we are still in a very gray area, and one thing you. Most of the people I work with are somewhat risk-averse, and they don't want to get on Medicare's bad side, and you don't want to get in a situation where Medicare comes back and says, yeah, this is something Medicare pays for. They may not pay you for it, but Medicare does cover it, and your patient should have been told to go somewhere that covers it. And now you've got to pay the patient back, and there can be fines and penalties, potentially, for billing patients for things that you should not have billed them for. So it can be a it can be a little bit of a hassle, so erring on the side of the caution would be don't do it. 

 

Daniel Marino:  

Yeah, I would agree with you, and it is a gray area, because I'll tell you, and this is one of the conversations I had with one of our physicians, because they weren't participating in advanced primary care, you know, just accepting traditional Medicare, and so we had a little debate, and I might My advice to him was the same as yours. Err on the side of caution, right? You really want to get yourself in a predicament with Medicare. Let's shift a little bit to the commercials. We do quite a bit of contract negotiations on behalf of many physicians or medical groups and so forth, and I've seen in the contracts from a lot of the commercials, there's added language in there that, you know, again, it's not directly addressing concierge services, but what it is doing is it's basically saying the same as, you know, as we just talked about for Medicare, that if there are services that are being provided the physician or the group is not allowed to bill the patient for those services. And there's also language in there that's basically saying, hey, we have the option of amending this and changing it and saying what's billable and not billable, and we don't even have to notify you. 

 

Christina Kuta:  

Exactly, and if we do have to notify you, we're gonna give you maybe 30 days back, and that's it. 

 

Daniel Marino:  

Right, right. So it puts these practices in a really tough predicament. How are you working through that on understanding, kind of, the commercial angle with the practices? 

 

Christina Kuta:  

Yeah, so we're being very cautious with commercial contracts, and telling all the providers we work with, you've got to read your contracts in detail. And that's because the commercial insurers are getting a little wise to the hybrid concierge practice, and they really are trying, to some extent. to minimize impact. And, you know, there's the most obvious where we cover this code, so you can't bill for this code cash. However, there's a little bit more subtle contract language we've seen. So we have seen language that says you can't treat our patients any different than any other patient for purposes of scheduling or priority appointments. So, when you read that language, okay, well, if I offer a concierge component to my practice, and patient A says, yeah, I'm gonna pay this, and I'm gonna take it, and one of the perks of it is you get priority appointments. Well, you've just violated, potentially, your insurance contract if, you know, the patient is  beneficiary of that insurance doesn't want to be a concierge practice. We've also seen language called, no access fee language, where it will say, you cannot charge our patients an access fee to receive services. So, I can give you a real-world example. We work with a practice, in the Chicago area that specifically was telling all patients, look, we're instituting this concierge component to the practice, you're going to pay X amount of dollars per month, and to do that, we're going to make sure the practice is limited in we're going to give you a 24-7 hour access line. There were some administrative-type perks, nothing related to the actual provision of services. But you had to agree to this to stay with the practice. Well, one of the patients called their insurance and complained. The insurance called the next day and said, we're terminating your contract, because your contract says You can't charge an access fee. 

 

Daniel Marino:

Right. 

 

Christina Kuta:  

You agree to be our provider, you agree to see our patients, you can't charge them money just to be able to be part of your practice.  

 

Daniel Marino:  

Then the practice came back and probably said, hey, you know, we're providing even more services around access than would even be allowed under the contract, but the payer probably came back and said, we don't care an excess fee. 

 

Christina Kuta:  

That's exactly what happened. We were able to smooth it over and say, okay, we'll make it voluntary, and they agreed not to drop the provider, but this was the provider's 70% of their patient beneficiaries had this insurance. So it would have been devastating to their practice. You know, another thing that we've seen is, I'm sure a lot of your audience is familiar with, physician hospital organizations, where the PHO negotiates insurance contracts for PHO participants. I actually saw a PHO, a very large PHO, actually. I saw their contract, and they added language that says, if any participant has any concierge practice component or charges anything extra for services, they can't be part of the PHO. 

 

Daniel Marino: 

Oh, wow. 

 

Christina Kuta:  

I know. 

 

Daniel Marino:  

Restricting, yeah. So is that did that come from the PHO, or did it come from the payer through the PHO? 

 

Christina Kuta:  

The PHO. The PHO said, you can't even participate with us, even before we get to the insurance contracts you can't participate with us if you're going to have a concierge practice component at all. And I'll tell you, a lot of providers don't read their PHO contracts fully, and if they do, they read them one time, and then it goes in a drawer somewhere, and it never gets looked at again. And this particular provider had really sort of established already a concierge to my practice, and I said, give me all your contracts. I got to take a look at them, I looked at it, and right there, and they have to be part of that PHO, there's no way they can survive otherwise. So, he had to unwind. And it's already spent a lot of time and money on this, setting up this practice, had to really unwind everything to be able to stay in the PHO. So, really important, when you have a commercial insurance contract, you are signing a contractual commitment to something. Doesn't matter what the law says, doesn't matter anything else. If you make a contractual commitment, you have to abide by that commitment. 

 

Daniel Marino:  

You have to abide by what's in the contract. If you're just tuning in, I'm Daniel Marino, and you're listening to Value-Based Care Insights. I'm here today with Christina Kuda from Rotel and Andrews. She's a partner, with the law firm. We are having a fascinating discussion on requirements on concierge medicine and, and really the hybrid practices. So, Christina, let me dive into that a little bit further, and let's talk about the membership agreements. It seems to me that, you know, as these as the practices are thinking about what they can and can't do around Medicare, if they choose to continue to accept Medicare, what they can and can't do with regards to the commercials, if they choose to stay in those programs. Makes it very difficult. For to be able to outline those in the membership agreement. So, how do you balance that in terms of being able to clearly state the services that you want to provide to the patients but not have it so complicated within a 15-page agreement that it scares the patient. Where's the balance? 

 

Christina Kuta:  

Yeah, it's tough, I will say. Because you're right, no patient's going to look at a 15-page agreement and say, I'm going to read this and sign it. You know, as a lawyer, I'm used to 15-page agreements. Not the case for most people. So, you have to be succinct. but clear. So I always say, look, you need to make sure whatever you are going to provide for the fee you are charging, focus on that clearly in the agreement. State it out in bullet point form, say this is what you're getting. And this is what I'm charging for that. So patients understand, because, one of the best ways to prevent a dispute later is to try to not have a miscommunication at the beginning. True. Yeah, if it's very clear, I always tell people who practice, like, in litigation areas, if I do my job as a contract lawyer right, maybe I'll never need you, because there won't be a dispute, because it will be so clear. It'll be very clear. No one can challenge it. So you want to be very clear, and you want to make sure, when you're talking about the fee. The fee is very clear. What it is, what is covered, what is expected to be a pain. If you're offering discounts, what are the discounts for? You know, sometimes people will say, if we have people living in the same home that are going to sign up for this, we'll do a contractual discount. Make that all very clear up front for patients, so they understand what they're getting and what's expected of them in that agreement. 

 

Daniel Marino:  

Yeah, yeah, and again, I think that's just such great advice. I think the clearer you could be on the front end, it just makes it all the way, makes it easier, right? In terms of what the patient to expect, and in the event that this came back for a review and audit, you know, it's clearly stated. For hybrid practices, for physicians that are thinking about this, you know, I guess it depends upon what the payer mix looks like. Are you seeing more and more of the physicians opting out of Medicare? And if so, I mean, is that you know, I know the opt-out process could be quite cumbersome. Are you seeing more of that a trend, or are they trying to manage both? 

 

Christina Kuta:  

So I think the majority of our providers still are trying to manage both. And a lot of that is because, when people start a concierge-type practice, particularly a hybrid practice, oftentimes they may have other jobs or other commitments, they're not sure exactly how this is going to work out. Is it going to financially make sense? Are they going to get enough patients? So they usually work somewhere else, or maybe do something a few times a week somewhere else that requires them to be in Medicare. And one of the things to consider is, if you opt out of Medicare, you opt out of Medicare entirely. You can't just opt out for Practice A and opt in for Practice B. And a lot of providers are not aware of this. They think they can say, oh, well, for this practice, I just won't enroll in Medicare. You're in Medicare, you're in Medicare for everything. So, we still see a lot of providers trying to manage, and what they may do is, for Medicare patients, they offer a smaller package of services, because they know there are things that aren't covered by Medicare. Some will just say they don't open their, you know, they're not opening that practice to Medicare patients. Because they can't really do what they want to do and charge what they want to charge unless they're opt-out. But we are seeing more providers over the last year or so that are choosing to opt out, that are saying, we're just going to get out of Medicare entirely, we'll do the opt-out process, and once you've opted out, you have no restrictions on charging cash to a Medicare patient for any service, even if Medicare colors it. 

 

Daniel Marino:  

It's a lot cleaner if you opt out, but to your point, there's a lot of implications there, and I do think you have to really give it a lot of thought and consideration, because it could potentially impact other areas of your practice, or other, maybe, places that you are choosing to practice. 

 

Christina Kuta:  

Yeah, and once you're opted out, with a very limited exception, once you're opted out, you're opted out for 2 years. So it's not like you can say, I'll try this for 6 months, if it doesn't work, I'll jump right back in. So you have to really if you opt out, you really got to commit to that and understand what that means for your practice and your profession in general. 

 

Daniel Marino:  

Yeah, no, I agree. So, when maybe we could talk a little bit about some advice for some of our some of our physician listeners and folks that are thinking about this. When we've been approached by many physicians, as I mentioned earlier, you know, we start with the business plan, and we kind of, you know, and it's really a way to both educate physicians. On the different aspects of concierge medicine, but it's also to help them to make some decisions around what they want to do and what they don't want to do. Where do you start with physicians? What's the place that you would recommend them going as they start to think about how do they structure this, and is a concierge practice really right for them? 

 

Christina Kuta:  

Sure. So one of the first things we always do is sort of discuss what they're thinking of doing from a perspective of a full concierge, a true, or a hybrid model. They may have reasons they have to stay in insurance or have to stay in Medicare, so the hybrid's the only thing that works for them. So, we talk through the pros and cons of that, and sort of try to set a little bit on what their expectation is. Then we always discuss with them, have they run numbers? Have they had a financial analysis? Because, you know, going into a true concierge model can be a little scary if you don't know how many patients you can really expect to get. Do you live in an area where people have means to be able to pay out of pocket? You know, that really can depend on what patient population is available to you. Are you in a current practice that you know your patients are going to come with you to a new practice. So, those are considerations. I mean, you want to start this new venture, you want to have this concierge practice, but you also need to be able to pay your bills, right? And have it make sense. 

 

Daniel Marino:  

Well, and you're spot on. The economic model is critical, and kind of getting back to what we were talking about before, it all sort of comes together, right? Because the economic model has to be based on the services you want to provide. The services you want to provide has to be, has to be really based on your structure of either accepting some insurance or not accepting insurance. So, all of those elements sort of build on one another. 

 

Christina Kuta:  

Exactly, and you know, I find that a lot of providers, when they do that financial analysis, that's when they sort of realize, okay, I have to stay hybrid. Like, at least for a while. I have to see how this is going to shake out and then I can transition to maybe a full concierge. And, you know, once they've done that, and they've got a model set, they've got a good financial indication, then we talk about making sure they have appropriate legal advice. Looking at state laws, there are some states that impact. California, for example, has an impact on certain types of concierge practices. Making sure you've met the laws, and making sure you have proper and good patient documentation. Explaining the process, explaining your fees, explaining your policy for collecting payments, you know, how payments can be refunded, all the things that you want to think of in a business component of a practice. Once you've got your model and you've got your number set, then you move towards, really, the black and white drafting aspect of the practice. 

 

Daniel Marino:  

Yeah, absolutely, absolutely. Well, along with, you know, having some good business support, you have to have good legal support, and I want to thank you, Christina, for coming on. This has been this has been great. If any of our listeners are interested in talking with you, finding out a little bit more, can you share your information? How can they get ahold of you? 

 

Christina Kuta:  

Yeah, absolutely. So you can email me anytime at CKUTA, that's ckuta@ralaw.com, or you can go to our website for Roetzel and Andress at ralaw.com, and, look me up there. 

 

Daniel Marino:  

Wonderful. Well, thank you again for coming on. This has been a this has been a great discussion, a lot of a lot of great information. I really appreciate your time, and good luck to you in your practice. 

 

Christina Kuta:  

Thanks, and thanks for having me! 

 

Daniel Marino:  

And I want to thank our listeners for tuning in. If any of our listeners are interested in learning a little bit more about concierge medicine, this topic, or maybe other topics that we've talked about on Value-Based Care Insights, please, go to luminaHP.com. You can also contact me at dmarino@LuminaHP.com. Again, I want to thank everyone for listening until our next Insight. I am Daniel Marino, bringing you 30 minutes of value to your day. Take care. 

About Value-Based Care Insights Podcast

Value-Based Care Insights is a podcast that explores how to optimize the performance of programs to meet the demands of an increasingly value-based care payment environment. Hosted by Daniel J. Marino, the VBCI podcast highlights recognized experts in the field and within Lumina Health Partners