Concierge and membership models for medical practices are growing in popularity – with providers and patients alike. They give providers the freedom to offer greater care with more options for patients, all while making more money by breaking the shackles of ever-shrinking insurance reimbursements. Different types of concierge/membership practices exist depending on the needs of the practice and its patients. The typical ones are:
- Cash pay per service or procedure
- Annual membership fee that covers all services
- Annual membership that covers most services but requires cash for some additional services
- Billing insurance for covered services while charging a membership or a la carte fee for additional services
These practice models can be a win-win for everyone and are especially beneficial for those offering alternative treatments and approaches, such as functional medicine. However, if these practices are not set up properly, they can violate laws, regulations, and the internal policies of insurance payors. This can lead to serious consequences for the practice, including fines or being dropped by the payors.
The following are the main legal considerations when establishing or transitioning to a concierge/membership model.
Federal Healthcare Programs
Few people know that the Center for Medicare and Medicaid Services (CMS) has a rule that prohibits enrolled providers from charging cash for any services covered by CMS. To make the situation trickier, CMS decides for itself whether a service is covered or not. For example, a practice wants to continue to bill Medicare but also charge a membership fee for augmented services such as longer patient visits and prioritized scheduling. Medicare has made clear that because it reimburses for patient visits, charging a patient a membership or other cash fee for any visits – no matter the length – violates CMS regulations. There are other services that seem separate from what CMS pays for that it still considers “covered.” Charging cash for services CMS claims it covers can result in serious civil penalties, including prosecution under the False Claims Act and the Civil Monetary Penalties Act.
There is no violation for charging patients cash for a membership or service that is not covered by CMS. However, if any of the providers involved are paneled with CMS, and services are covered by CMS, those providers will need to completely opt out of this credentialling. This even applies to providers who own or work in different practices. In other words, if a provider owns a normal practice that takes Medicare, he cannot own another practice that is cash pay only. To put it simply: CMS follows the provider, not the practice. A provider can opt out of CMS by submitting an Opt-Out Affidavit to their CMS MAC 30 days prior to the active opt-out date.
Commercial Payors
While no state or federal law governs cash pay issues for commercial payors, these companies have policies and requirements written into their provider contracts that prohibit charging cash for covered services. As with CMS, the commercial payors decide for themselves what they consider covered services. And these closely mirror those considered covered by CMS.
If a practice violates these commercial payor prohibitions, the company will send a letter to the practice demanding a truthful response to accusations of this prohibited activity. If the practice does not send a response, the company will most likely drop the practice from its panel. If the practice admits to the activity, the company can either drop the practice or demand that it cease its non-compliant activities. If the practice refuses, it will drop the practice from its panel. Disciplinary action from the company can include other measures as well.
Services that Violate Insurance Laws and Policies
- Patient visits, regardless of the nature of the visits
- Longer patient visits, including initial assessment visits
- Prioritized scheduling
- Greater access to providers during regular business hours
- Covered lab tests
- Several others
Services Not Covered by Federal or Commercial Payors
- Access to providers outside of regular business hours
- Non-covered lab tests
- Discounts on supplements and non-covered drugs
- Monthly newsletters or webinars
- Most cosmetic or “alternative” procedures
Other Legal Issues
Owners of concierge/membership medical practices need to comply with other legal requirements, including the following.
Patient Agreement. Owners need to have a legally-compliant agreement with patients, regardless of what form of concierge/membership practice they have. This agreement needs to comply with federal law, state law, and payor requirements, as well as guarantee the practice protections from patient law suits. This agreement is not simply another contract or patient consent but instead must be drafted with specific expertise.
Privacy. Practices must adhere to federal and state privacy laws such as HIPAA the same way traditional practices are required to.
Standard of Care. Practices must offer and perform services at the same level of professionalism as is required to comply with any medical standard of care. This includes any telemedicine visits, prescribing, scientific credibility and efficacy, etc. Practices must also understand whether or not a particular treatment or procedure falls under the definition of “medical.”
Conclusion
Opening or transitioning to some form of concierge / membership medical practice can be a fantastic way of avoiding the restrictions and burdens of dealing with insurance payors and offering patients improved and expanded care. Nevertheless, owners must set up these practices correctly from the beginning to operate safely, compliantly, and successfully.
Contact us today so we can help you set up your practice properly to avoid violations and penalties!