Latest / Off the Chart: A Business of Medicine Podcast / S1 Ep166: Considering concierge? Know the legal traps first, with Ericka Adler, J.D.
Transcript
- Speaker 1 0:00 You still need to make sure, for your particular specialty, that you're, you're getting all your boxes checked on on your consent forms, your documents. There is no cutting corner, simply because you're now calling yourself a concierge practice, you Austin Littrell 0:26 So welcome to Off the Chart, a business of medicine podcast featuring lively and informative conversations with healthcare experts, opinion leaders, and practicing physicians about the challenges facing doctors and medical practices. My name is Austin Luttrell. I'm the associate editor of Medical Economics, and I'd like to thank you for joining us today. In today's episode, Medical Economics Managing Editor Todd Shryock sat down with Erica Adler, practice group manager of healthcare for Rexel and Andrus, to talk through the legal considerations behind concierge medicine. Seems like every year, more and more physicians are weighing a move to concierge or hybrid concierge practices as a way to shrink their panels, steady their finances, but the switch carries legal exposure that's pretty easy to miss until it becomes a problem. Erica walks through why a membership fee has to be tied to a service insurance doesn't already cover, how Medicare and commercial contracts can quietly prohibit what a practice is planning, and what physicians need to put in writing, so patients are never left feeling like they have to pay up or find a new doctor. She also lays out the planning and market research that it takes to make the transition actually work, but with that said, Erica, thank you for joining us. Let's get into the episode. Speaker 2 1:33 I'm here with Erica Adler, the Healthcare Practice Group Manager with Retzel and Andrus, to talk about the legal considerations for Concierge Medical Practices. Erica, thanks for joining me. Speaker 1 1:43 My pleasure. Speaker 2 1:45 Okay, are there some entities that work better than others, or is it strictly defined by what the state laws say? Speaker 1 1:53 Yeah, so like any other medical practice, you should be choosing an entity that meets your needs, right? So, in a particular state, only certain types of entities are allowed. You may choose an entity based on kind of what your future plans are. So, when we're talking to our clients about whether they want to use a corporation or an LLC, we need to look at the state. Does the state require to be a professional corporation or professional LLC? If so, then that's what they need to choose, and of course, there are other types of professional entities that can be chosen within that type of entity. You would then choose what type of tax status is available or desirable, and for that, you would talk to your accountant. Now, when we're looking at professional entities, we're also looking to see who's going to be part of your practice, so if we're talking about just, you know, primary care doctors that are working together, then really there's not going to be an issue. If you're looking to co-own it with other types of licensed professionals, then you may need to choose a professional entity that allows that to happen. So it's very fact-specific, but generally these type of decisions are no different than they would be for a regular medical practice. Speaker 2 3:07 Are there any differences between a hybrid concierge model that also accepts insurance compared to a cash only practice from a legal perspective? Speaker 1 3:18 Well, for sure, I mean, in a, if you're a cash-only practice, the idea would be that you're going to perform all of your services, and you're not accepting insurance at all, and you're just charging cash. In a hybrid practice, the idea is that you're accepting cash for something, and you're otherwise also accepting insurance, right? So, in a hybrid practice, it's a much more complicated arrangement, because you are accepting insurance, and you need to be very aware of what your insurance contracts say, in terms of, hey, I've agreed to render services to your beneficiaries, these are the type of services I've agreed to provide, and I will continue to do so. And then the question becomes, in a hybrid practice, what are you charging for then, right? And so what we work with our practices on is understanding if you're accepting insurance, what exactly are you charging for that makes you a cost shares practice, and we need to really work closely to figure out what those are, and that's where we get into a really sensitive legal situation. We've got to make sure that if you're charging some type of membership fee or some type of concierge fee, it has to be for items or services that are not covered by those policies of insurance, right? Are those the type of tests that are so new that insurance isn't covering it? Are they for items and services that you know a particular set of insurance policies are not going to cover? So, when we're working with practices that aren't accepting insurance, that concierge fee has to be something. Something that is a non-covered item or service, and that's really where that legal guidance is important, not only to review your contracts and identify what those items or services are, but also on an ongoing basis to provide you with updates, because contract change over time, right? Tests that are considered novel and not covered now might be covered next year, right? So it is an ongoing process that really needs to be updated continuously, because what's not covered can change. Speaker 2 5:36 That sounds like one of those things a physician making this transition wouldn't even necessarily think about, are there other things that the physicians tend to overlook when transitioning to a concierge model. Speaker 1 5:50 Well, I think you know, first of all, if you are going to pure concierge, which is cash only, and you're not accepting insurance anymore, you need to make sure you're following the right steps. You're letting the carriers know you're giving proper notice of terminating those contracts, particularly with Medicare. You might be opting out of Medicare if you're going to be. You should be opting out if you're going to do a cash-based practice. And then you obviously want to let your patients know if they think they're going to a doctor that's in network. They may no longer be going to a doctor that's in network, and then, of course, you want to make sure you have very clear contracts with your patients, understanding this is what I'm now going to be charging you for. I am no longer accepting your insurance, you know, and this is what I will and will not provide. This is when it's starting. This is what's going to happen if you start with me, but you change your mind and don't want to be here anymore. So, there's a lot of contractual understandings that need to be put in place. If you're switching to a hybrid concierge practice, then you also need to think about this very carefully. You may or may not be opting out of insurance contracts, maybe you're cutting down on the ones that you accept, maybe you're staying with commercial insurance, but you're not taking Medicare anymore, so there's some decisions that need to be made. Right? I think it's very important, though, that you need to give patients the option of what they want to do. If you continue to accept insurance, but you have patients that don't want to pay your new concierge fee, you cannot simply kick those patients out of the practice, right? Because probably under most insurance contracts, you said I'm going to treat all my patients that I accept in my practice the same, so to say yes, I'm accepting insurance, but only if you pay me an extra fee is likely going to violate your contract. So you need to be very careful if you're switching to a hybrid practice, you need to be careful if only some of the doctors in your practice are trying to switch to hybrid and not others, and you need again to lay out very clearly in writing what your contract with your patients is going to be. What are you doing for this extra fee, having them understand, knowing how to treat patients who decline to pay that fee, but still want to be part of your practice, right? So, there's a lot of nuances that you need to be aware of, so that you don't find yourself in trouble, both in terms of violating the law, but also violating your contract. So, we've had patients call up their carriers and say, "Hey, I was told if I don't pay this fee, I can't be part of this practice anymore. And then what happens is the carrier calls the practice and says, hey, we're kicking you out, we're terminating your contract, you violated it, right? Sometimes there's ACOs that practices may be part of, or other PPOs, or other type of arrangements that say, hey, if you try and charge some kind of concierge fee, you can't be part of our arrangement anymore, right? So, there's lots of things that can happen that if you're going to start charging a concierge fee, but you intend to remain part of these arrangements, you really need to do your homework and know what you're getting into. Speaker 2 9:02 What about with Medicare? If you wanted to keep taking Medicare patients, you know what's involved with that process. Speaker 1 9:10 Well, if you want to take Medicare patients, you better be extra, extra certain that whatever you're charging extra for is not covered anymore. So, I mean, the scrutiny, you know, from the Medicare side of things is, you know, obviously more intense always than it is for commercial, but for example, you know, when we started doing these, the annual physical was not a covered item or service, so a lot of concierge doctors would charge an extra fee, and they would say it's for an annual physical, because, you know, Medicare doesn't cover that, but Medicare actually does cover that now, right? And so do a lot of other insurance practices. So, if you're a 10 year practice, been doing this for a long time, and you never even look to see what your participation, your concierge, or membership documents say, you might actually be charging for something they. Not allowed to charge for anymore, right? So Medicare, in particular, is one that you really want to stay on top of. They do tend to keep up with new and evolving technologies, right? So at some point, for example, PET scans weren't covered, or maybe other types of imaging weren't covered, and so that was something that Medicare doctors really kind of were able to hone in on and charge extra fees for. Even with Medicare, right now, you know, a lot of practices, they, you know, without necessarily talking to legal counsel, think, hey, you know what, I'm going to charge this membership fee, which is 24/7 access to a doctor or faster appointment, etc. You've got to be very careful, because a lot of contracts, including Medicare, require 24/7 access, particularly for chronic care type patients, and may specifically otherwise say, "Hey, we expect you to treat our patients like everyone else, so if you're giving other patients 24/7 access, you give ours 24/7 access. You're giving our patients appointments as quickly as you're giving everybody else appointments. So, if you're just relying on that kind of general language, you might find yourself in trouble, and particularly with Medicare, Medicaid, they do have some new codes where for chronic care conditions, where they have specifically said you need to be available 24/7 if you're going to be billing these kinds of codes, so you know that's something you really need to pay attention to if you are going to be continuing to accept not only medicare but other commercial insurances in terms of what you claim your concierge practices, offering Speaker 2 11:43 you mentioned the patient contract with the concierge practice. Are there particular provisions that you've seen that cause the biggest legal headaches when they're either missing or poorly written? Speaker 1 11:56 You know, I would say that you need to really kind of pretend that you're the patient going into the practice, so you want to be clear. What exactly is the fee? What is the fee covering? When is the fee due? And then what I like to see in there is what happens if a patient leaves the practice, is the fee prorated? What happens if somebody dies, right? Somebody moves, you know, do they lose their fee, right? So those kinds of things are where we tend to see some types of disputes, particularly if the membership fee is quite significant, right? If it's, you know, broken down into a couple $100 a month, you know, we don't tend to see disputes, but there are practices out there, 10, $20,000 a year, right, and I'll mention that a lot of practices, the type of extras they're charging for things that really aren't covered, so it could be, you know, membership fees for a health club, it could be wellness services, med spa type esthetic services, so when you get into practices like that, they're very clearly defining items and services that are clearly not going to be covered, right, and that's where we see those larger fees when we're talking about practices that are just trying to make a little bit more money, they're trying to cover some of their administrative fees, they tend to be a little bit less clear or less legally concise with regard to exactly what they're charging for and what the patient rights are, you know, sometimes they're borrowing a form or downloading it online, or, you know, using AI to write it for them, right, and then they really just are not hitting those target issues that tend to come up or that tend to protect them from having a legal dispute, or you know, a payor investigation at a later time. So, you know, those are kind of some of the issues that we see. It's not hard, and it doesn't cost a lot to have a lawyer put this together or review it for you. And I can tell you that kind of the financial and legal repercussions of not doing it right cost you a lot more. Speaker 3 14:12 Hey there, Keith Reynolds here. And welcome to the p2 Management Minute. In just 60 seconds, we deliver proven real-world tactics you can plug into your practice today, whether that means speeding up check-in, lifting staff morale, or nudging patient satisfaction north. No theory, no fluff, just the kind of guidance that fits between appointments and moves the needle before lunch. But the best ideas don't all come from our newsroom, they come from you. Got a clever workflow hack, an employee engagement win, or a lesson learned the hard way? I want to feature it. Shoot me an email at K reynolds@mjlifesciences.com with your topic, quick outline, or even a smartphone clip. We'll handle the rest and get your insights in front of your peers nationwide. Let's make every minute count together. Thanks for watching, and I'll see you in the next p2 management minute. Speaker 2 15:03 What other documents are legally essential for concierge practice? Is it similar to a regular practice, where you have to have the HIPAA authorization, you know, informed consent, and all those types of forms? Speaker 1 15:15 You always need informed consent. We're always looking to get, you know, financial intake forms meet HIPAA requirements. If you're charging a credit card, you want to get, you know, that particularly signed up, you know, up for in advance as well. If a patient accepting cash, we're always worried about making sure we're meeting the good faith estimate requirements, and you know, but basically I would say, you know, the type of forms we're talking about are going to look very similar to a regular practice, of course. So, you don't get to cut corners necessarily, you're still meeting all the privacy requirements, and you know, you know, we're seeing a lot of concierge practices and hybrid concierge in many different specialties, so it was a lot of primary care, but now you know we've got mental health practices, obgynny practices, you know, urology practices, cardiology practices, everybody's trying to get in on it, it really is probably where we're going to see a lot more, you know, action. It's really the direction that healthcare is going at this time. So we're seeing a lot of specialties getting involved, and you still need to make sure for your particular specialty that you're, you're getting all your boxes checked on on your consent forms, your documents, etc. There is no cutting corner, simply because you're now calling yourself a concierge practice. Speaker 2 16:48 Are there legal risks that are unique to concierge medicine that don't typically affect traditional practices? Speaker 1 16:54 You know, I would say, if you're a pure concierge practice, you know, and not all concierge practices are, you know, there's cash practices, and then there's concierge practices that are cash based practices. So, I would say if you're just a cash based practice, you're going to be the same as every other cash based practice out there, whether you're concierge or not, right? And you know, the risks are the ones, you know, that obviously in a cash-based practice, you're, you're somewhat at, you know, far less administrative paperwork, a little bit less risk, because you're not dealing with carrier paperwork anymore, pre-offs, you know, Medicare, Medicaid, so the risk is is less in some cases because of that, but that doesn't mean that you don't need to stay on top of requirements. I mean, you still need to meet consent if you're doing telemedicine. If you're still supervising, you still need to have all the supervision paperwork taken care of properly. You still need to meet all the state law requirements, right? So, just being a cash-based practice doesn't mean you don't need to meet those requirements anymore, right? So, yes, it's less requirements, and perhaps a somewhat less risk in some ways than a practice that's accepting insurance, or a hybrid concierge that's accepting insurance, but I would say both practices still need to be aware of, you know, what the law requires, so in some cases, you know, less risk, but in other cases it might be introducing, you know, laws that apply to cash practices that you weren't even aware of before. A Speaker 2 18:30 lot of concierge practices market under that 24/7 access or same day appointment. Do you have to be careful there with providing some legal exposure, and how those are worded. You have to have some caveats, I guess. You know, is there any exposure there when you advertise that type of access? Speaker 1 18:50 I mean, you could certainly advertise that kind of access, but that should not be the basis of calling yourself a particularly a hybrid concierge, right? So, if you're a cash-based concierge practice, and your entire marketing plan is we only take cash, will be available for you 24/7 Great, right? That's that's a pure call. Pure concierge practice can do that. If you're a hybrid concierge, that cannot be the basis of what you're charging a membership fee for, right. Remember, you've got to charge for something that is not otherwise covered by the plans in which you participated, and just saying you're making yourself available 24/7 is not going to be enough, because most plans require you to offer the same treatment to their patients that you offer to any others, right. And in some cases, as I mentioned before, if you're dealing with chronic care condition 24/7 access may be a requirement of being able to bill those kinds of services, so I. Um, in a cash-based practice, you want to say what we're selling is 24/7 access to our providers, cash only, great, but in a concierge hybrid practice, that cannot be the only thing you're selling, all right, and by the way, for other things that you might try and cash on, like, oh, well, this type of fee is so, well, we'll, we'll fill out all your forms for free, right? If you have any forms that you need filled out, you know that's what you're getting by paying this extra fee to us. You know, again, a lot of pay or contracts out there don't allow you to do that, so you've got to check your pay or contracts, and when we talk with doctors about doing a hybrid, you know, the most frustrating thing for them is the concept that we actually need to look at those payer contracts, right? A lot of them have never read their contract, they may not even have copies of them, so you know, in terms of getting a hybrid concierge practice set up, this can be, you know, one of the biggest barriers is taking the time and making the effort to actually look at your contracts and see what they say, finding those contracts and having them reviewed, but really that is the biggest problem legally that you're going to face if you're not carefully reviewing those and you're not very specifically offering a service that you know absolutely is not a covered item or service. Speaker 2 21:25 What else do physicians need to know about concierge or hybrid that maybe they wouldn't think about? Speaker 1 21:31 I would think that, you know, there is some planning, right? You, if you're switching from a practice where you're taking insurance to one that's not, you've got a plan for terminating contracts and letting Medicare know, even if you're only switching to hybrid, you've got to give yourself plenty of runway to get set up, not only with the documentation, but to let patients know. Patients may not want to be part of a practice that is going pure concierge or hybrid concierge, they may not want to pay those fees, they may need the time to find another practice. We do not want patients to be abandoned. Obviously, if you're in the midst of treatment with a patient, or you're a particular specialty, where it could be hard to find another doctor that offers those services, you have to be very careful and work with counsel to provide appropriate notice to patients, so nobody is abandoned. We don't want anyone making claims with the state that they were not properly informed, and we obviously don't want patients to feel like they were told, you know, either pay this fee or get out, right? So then we get plenty of complaints being called in to your, your existing managed care companies that you do business with, and and they'll be dropping you, right. So lots of planning is needed that could be also for not only getting contracts in order and pay your contracts reviewed, but marketing, right. So if you're going to lose some of your patient base, and you're going to want to be out there marketing to bring in patients that are interested in either hybrid concierge or concierge, you're going to need time for marketing, and that can actually take quite a bit of time. A lot of practices see other practices doing this successfully, and they don't necessarily look at the market they're sitting in to say, am I sitting somewhere where patients can afford to pay me these types of fees? right, you've got to have those patients that can afford it, if you're charging, you know, and I would say in Chicago, I see on average about 35,030 500 a year up to 10,000 or maybe there's some practices that are literally over 20,000 a year for hybrid or hybrid con, you know, full concierge practices. So, you've got to have enough patient base where you're picking up those patients that can afford whatever the fee is that you're charging, right? Because one of the reasons doctors do this is so they can decrease their panel of patients, so instead of seeing, you know, 6000 patients, they're now going to see 500 right, but those 500 have to be able to afford the fees that you're looking to get paid. Are you sitting somewhere geographically where patients can afford this, right? Are you choosing the right amount to be charging, or are you, you know, letting patients go, saying, "Hey, we're charging this amount now, and you're never going to fill your panel, right? So, there's some market research that's needed, and obviously we're seeing an abundance of these practices being very successful in those cities and those communities with more affluent patients right now, right now, the not opposite, but a different type of practice would be the direct primary care, which is not exactly the same as a concierge, because really they're providing a full range of services for lower fees on a monthly basis, but the type of fees they're charging are. Are really much lower than what we're seeing for a concierge, which, as I mentioned, here in Chicago, I rarely see less than $3,500 a year for a hybrid concierge, where they're also accepting insurance, right? So it's really important to know your markets. Very good. I have to pause here for one second. Oh, that's Speaker 2 25:20 fine. Speaker 1 25:20 Sorry, I'm recording a call. Go, guys, get out of here. Sorry, dog walker. There, Speaker 2 25:29 no problem. No, I was just gonna say, like, like most things, there's a lot more to it than you might first think, and it sounds like physicians thinking about this need to definitely talk to their legal counsel, and maybe their accountant as well. Speaker 1 25:44 Yeah, I mean, you, there needs to be some planning. You need to know how much money am I looking to collect. What is my patient base need to be? Am I in the right community? And that's a financial analysis that needs to be done. Can I drop some of these payors? Could I be out of network, right? And so this is definitely something to be talking about with your financial planners. Then you talk to your marketer, right? How am I going to market this? How long is it going to take me to market? How long will it take me to track the patients I'm looking for? Then you're talking with your lawyer, I need to make sure my contracts allow me to do this. Let's get rid of those contracts that don't allow me to do this, right? Let's make sure I have great financial, you know, contract set up that are legally protective and appropriate. So definitely there are steps to be taken here, and you need to make sure that you're following all of those steps along the way, and if you don't plan ahead, you may have dropped a bunch of patients, and then find yourself in a worse financial situation, you know, than you originally planned. There are some really, you know, good consultants that work on this kind of stuff now. As I mentioned, this really is looking like the future of health care in some states, in particular, we have set up, you know, so many of these practices over the past couple of years, and the demand is simply growing. We're seeing private equity interested in helping build these practices, and in acquiring these types of practices, and you know when private equity is interested, that's a trend that we're going to see increasing. So, for those that are considering doing either concierge concierge or hybrid concierge, I really urge you to talk to somebody who's familiar with these practices, make sure it's right for you before you, you put, you know, too many resources into it. And one final thing that I'll mention is that if you're the type of practice that's not going to accept Medicare, whether you're doing hybrid concierge or full concierge, you need to be careful if you're using part-time doctors, because a doctor that works for you, and you don't want them accepting Medicare, or you want them opted out, but they have a part-time job working at a hospital, for example, where they have to have Medicare, that's not going to fly, right? So you also need to make sure that your providers working within your practice are going to match up with your vision for your practice going forward. Speaker 2 28:27 Very good, Erica. Thanks for joining me. Speaker 1 28:30 Oh, my pleasure. Anytime you Hi, Austin Littrell 28:42 once again, that was a conversation between Todd Shryock, managing editor of Medical Economics, and Eric Adler, practice group manager of healthcare for Rexella and Andrus. My name is Austin Luttrell, and on behalf of the whole medical economics and physicians practice teams, I'd like to thank you for listening to the show, and ask that you subscribe, so you don't miss the next episode. As always, be sure to check back on Monday and Thursday mornings for the latest conversations with experts, sharing strategies, stories, and solutions for your practice. You can find us by searching Off the Chart wherever you get your podcasts, and if you'd like the best stories that Medical Economics and Physicians Practice publish, delivered straight to your email six days of the week, subscribe to our newsletters@medicaleconomics.com and physicianspractice.com Off the chart, a Business of Medicine podcast is executive produced by Chris Mazzolini and Keith Reynolds and produced by Allison Latrell. Medical Economics and Physicians Practice are both members of the MJH Life Sciences family. Thank you. Transcribed by https://otter.ai