Legal Implications of Concierge Medical Practice for Health Plan Providers and > 알뜰쇼핑

During the past several years, an increasing number of health care providers have
been redesigning the financial and contractual relationships between themselves and third
party payors and their patients to engage in one form or another of what is variously
known as “concierge,” “boutique,” “retainer” or “VIP” medicine, a development that may
have significant implications for the legal relationship between health plans and their
enrollees and contracted and non-contracted providers. This trend has been driven partly
in response to downward pressure on health plan provider reimbursement and physician
frustration with real or perceived increases in health plan contractual and administrative
burdens that may be seen as detracting or interfering with the physician patient
relationship, and partly in response to demands from patients, particularly the chronically
ill, for a more responsive and personalized treatment relationship with their physicians.
The economic and lifestyle issues for physicians can be compelling – a physician
may be able to maintain the same income by covering several hundred patients that they
formerly made while covering thousands, with significantly fewer administrative
obligations and virtually no bad debt. Concierge practices can currently be found
operating in some form in about half of the States. There is an association for such
practices that has recently changed its name from the “American Society of Concierge
Physicians” to the “Society for Innovative Medical Practice Design”
(www.conciergephysicians.com).
Some critics of these arrangements contend that the physicians are taking
advantage of vulnerable patients who fear abandonment or feel compelled to pay the
retainers in order to continue receiving necessary medical care. Others argue that they
are catering to the “healthy wealthy,” pulling local physician capacity offline and
increasing the burden on the remaining providers in the area and providing a level of
dedicated care management to a relatively few well off patients that should be available
to everyone who needs it.
There are a variety of models of concierge medicine currently in operation, and
they may offer a wide range of value added benefits to their patients. In exchange for an
annual or monthly membership fee, the physician generally agrees to limit the number of
patients they accept in their practice and to offer more personalized services to their
members, including annual physicals or wellness exams, same or next day appointments,
telephone physician advice, including review of labs and tests, preventive services and
counseling, house calls, guaranteed response time on patient call backs, referral and
prescription requests, access by email, completion of medical history and referral forms,
scheduling with referral providers, publication of a patient newsletter, availability during
non-business hours, etc.
The most prevalent model involves the payment of an annual fee (ranging from
$1500 to $4000 per year for an individual) and an agreement by the patient to make
immediate payment for services based on a fee schedule developed and maintained by the
practice. The physician agrees not to bill the patient’s insurance, although the patient
may be expected to maintain any coverage that they do have in order to cover
hospitalization and specialty and catastrophic care. In the second model, the patient may
pay a lower fee and the physician does continue to bill insurance at contracted or out of
plan rates, and the fee charged is only for the value added services not otherwise covered
by the third party payor. The third model is similar to traditional fee for service practice,
where the physician bills the patient for all services rendered and the patient submits
claims to their health plan with the knowledge that some services rendered may not be
covered by their plan.
The American Medical Association has issued guidance supporting the
development of concierge medical practice as consistent with the AMA’s traditional
support of pluralism in the delivery and financing of health care and establishment of
trust-based physician patient relationships. See American Medical Association, Policy H-
140.893. The AMA does caution its members, however, to: be careful not to apply undue
pressure on patients to enter into such an arrangement, particularly vulnerable patients
who may fear abandonment; be mindful of any implications the arrangement has for the
patient’s insurance coverage; exercise care in transitioning patients to other providers and
to clearly articulate the difference between special services and amenities and
reimbursable medical services. See AMA Code of Ethics E-8.055. The AMA has also
reinforced its traditional positions that physicians should refrain from providing
unnecessary care just because there is a patient demand for the service and they should
strive to provide some level of care to patients regardless of the individual’s ability to
pay.
Legal Issues for the Provider
Contracts. A physician making the transition to concierge practice will typically
terminate his or her contracts with all commercial third party payors in an effort to avoid
the restrictions of contracted reimbursement, submission to utilization review and
application of the patient hold harmless clause. The physician will also typically enter
into some form of Patient Agreement, whereby the patient agrees to pay the annual fee in
advance and all fee schedule charges at the time of service in exchange for access to a
specific menu of enhanced services. The patient may also acknowledge that the
physician does not participate in any third party payment plan and either agrees not to
submit any claims to their plan or to accept whatever level of reimbursement their plan
may provide. The agreement may state whether the physician is refusing to process or
submit any claims to third party payors, which may be necessary to maintain private
contracting status with Medicare or for commercial populations in some jurisdictions, or
whether they are specifically offering to perform that service for patients as part of the
annual fee. A physician may also be legally obligated to reimburse the health plan for
any amounts that are inadvertently being billed to the plan by either the patient or the
physician’s office. See Opinions of the Maryland Attorney General 00-030, 03-005.
Insurance Licensure. Some state laws, such as the California Knox Keene Health
Care Service Plan Act, may prohibit arrangements whereby physicians undertake to
arrange for the provision of health care services on a prepaid or periodic charge unless
the provider has an HMO license or other form of state licensure or certification allowing
the provider to assume risk. The Office of the Insurance Commissioner of Washington
issued Draft Advisories challenging the receipt of a retainer as the acceptance of risk
without appropriate licensure and as constituting illegal “access fees” for the receipt of
covered insurance benefits.
As a result, some concierge arrangements are structured so that the retainer is
characterized as a flat fee for specific services, or the arrangement is billed in arrears to
avoid the application of state laws prohibiting prepayment in the absence of appropriate
licensure. Legal practitioners representing concierge practices will need to help structure
the arrangement in a manner that avoids characterization as an unlicensed insurance
arrangement. This may not be a problem in jurisdictions that make the regulatory
distinction between “insurance risk” (assumption of risk for both services rendered by the
provider and for certain specified referral services) and “service risk” (assumption of risk
only for services directly rendered by the practitioner). This same distinction prevents
physicians accepting capitated arrangements for personally performed primary care and
other professional services from being characterized as impermissible insurance
arrangements in some jurisdictions.
Hold Harmless/Balance Billing Enforcement. An additional insurance regulatory
issue at the state level is the application of the patient “hold harmless” clause, which
generally prohibits balance billing patients for the costs of non-covered services. See
generally, Maryland Opinion of the Attorney General 98-018. Providers with third party
payor participation agreements may be prohibited from billing the patient for any
amounts not reimbursed by the plan, unless the services are contractually excluded (e.g.,
cosmetic and experimental procedures, etc.). The Maryland statutory hold harmless even
applies to non-contracted providers, Maryland Health General Code § 19-710(i), so the
hold harmless is still an issue even where a physician has terminated all payor
participation arrangementsi. However, the Maryland Attorney General has opined on
several occasions that physicians and patients may enter into “private contracts” outside
an HMO coverage arrangement, provided that the HMO does not authorize the service,
refer the patient to the practitioner or receive any claim for payment. Opinions of the
Maryland Attorney General 00-030, 03-005. The Attorneys General of Texas and
Arkansas have also issued opinions on balance billing issues.
In light of the facts that violation of the ban on balance billing is a fairly frequent
complaint among MCO members, and that enforcement of the hold harmless clause is
one of the relatively few areas where state insurance regulators may have direct statutory
jurisdiction over licensed health care professionals, physicians should make significant
efforts to understand the application of the hold harmless rules in their jurisdiction and to
work with their patients to avoid violations and enforcement actions.
Accessing Patient Third Party Coverage. Even if a physician terminates all
formal contractual relationships with third party payors, they may continue to have
unavoidable interaction with the health plans providing other benefits to their patients.
Physicians may agree to perform the billing function and assist their patients in
submitting claims to the carrier. They may be billing the plan themselves as an out-ofnetwork
provider or under the applicable terms of a non-Preferred Provider or Point of
Service arrangement. Patients may still need physician orders for covered ancillary
services (lab, imaging, pharmacy, DME, home care, etc.), referrals to specialists, hospital
admissions and physician orders to other covered services requiring physician
authorization. Providers need to understand the terms of their individual patient’s
coverage and be willing to work with them to maximize their access to covered benefits
and avoid unnecessary coverage denials and balance billing issues.
Medicare. Section 1802 of the Social Security Act already gives physicians and
fee for service Medicare beneficiaries the option of “private contracting” outside of the
Medicare program for the receipt of services at privately negotiated rates not subject to
the Medicare limiting charges. Once the physician “opts-out” of Medicare participation
by submitting an appropriate affidavit to the Medicare carrier, the patient agrees to accept
full financial responsibility for the cost of the services rendered and not to submit a claim
to Medicare for the privately contracted services. The physician agrees not to bill
Medicare or accept capitation from a Medicare Advantage organization for any service
(except for certain emergency or urgent care services) for any Medicare patient for two
years from the date the affidavit is signed. See generally 42 C.F.R. §405.400 et seq.
However, there are a number of federal issues for physicians who desire to bill
Medicare for some of their patients or for some portion of the services provided pursuant
to a retainer arrangement. Like some state insurance regulators, the federal Centers for
Medicare and Medicaid Services (CMS) has expressed a concern that the annual retainer
may be considered an insurance policy, since it may cover services that Medicare does
not -- such as an annual physical -- and thus violate the Medicare supplemental insurance
provisions of the Medicare statute, which establishes minimum standards for Medigap
policies and requires them to comply with all applicable state laws regulating such
policies.
A second area of concern for CMS is that the additional fee paid by the patient
may violate the Medicare limiting charge and assignment rules if the retainer agreement
includes covered services billed to the Medicare program. The limiting charge rules
prohibit a physician from charging a Medicare beneficiary more than a fixed percentage
over the Medicare physician fee schedule for covered services. Under the assignment
rules, Medicare participating physicians agree to accept the Medicare fee schedule rate as
payment in full for covered services. Thus, if the retainer agreement includes features
that enhance or waive applicable copayments for covered services, the agreement may
violate either the limiting charge or assignment rules. There may also be a False Claims
Act (31 U.S.C §§ 3729-3733) issue if physicians fail to include the cost of the annual fee
when billing Medicare – the physician may be seen as illegally misstating the true
amount charged to Medicare beneficiaries.
Based on the legal concerns and anecdotal complaints that Medicare beneficiaries
who did not pay the retainer fees were being dropped by their physicians, a variety of
measures have been introduced at the federal level containing provisions that would
essentially criminalize any practice design that charges a monthly fee to Medicare
beneficiariesii. These statutes would provide for sanctions and exclusions for physicians
charging an “extraneous or incidental” fee to a Medicare beneficiary or requiring a
patient to purchase an item or services as a pre-requisite to receiving other covered
services. Thus far, there has not been significant legislative traction for these measures,
due in part to a low number of Congressional sponsors and the existence of larger
Medicare-related issues on the legislative agenda.
Legal Issues for the Patient.
The legal issues facing the patient will primarily center around the execution of a
Patient Agreement with their physician and the interface with any third party payor
coverage that they would otherwise have access to. There may also be issues of common
law abandonment if a physician terminates a treatment relationship with a patient who
declines to enter into the Patient Agreement if they are undergoing a course of treatment
and the physician has not made clinically appropriate arrangements for transfer of the
patient’s care to another qualified provider.
Patient Agreements. Is any portion of the retainer refundable if the patient
terminates after a partial year or otherwise leaves the practice prior to receiving some of
the specified services (e.g., annual physical)? Is the patient being improperly induced to
accept the agreement through promises of higher quality care and/or perceived threats of
abandonment? Has the impact on the patient’s otherwise available insurance coverage
been fully disclosed and documented? If a patient has contractually agreed to refrain
from billing their health plan to avoid triggering a hold harmless provision, how does the
agreement cover situations where claims may have been intentionally or negligently
submitted to the carrier? Are there unreasonable penalties for opting out of the
arrangement at some point during the contract year?
Legal Issues for Health Plans
Health Plans may have to recognize that a certain percentage of their enrollees
will inevitably opt to participate in concierge medicine practices and that some of their
contracted physicians may terminate their existing arrangements with the Plan to
participate in such practices. Depending on the number, locations and specialties of the
physicians involved, the Plan may have to adjust its network configuration to
compensate. Although there is a general bias on the part of Health Plans for enrollees to
receive services from within the contracted provider network, there may also be cost
savings if a significant number of relatively high utilizing patients opt to receive services
under arrangements where they pay out of pocket and agree to refrain from billing the
plan for the services.
In addition, Plans should consider developing internal policies and procedures for
handling claims from physicians or patients in concierge practices and hold
harmless/balance billing enforcement. Adequate arrangements should also be made for
an orderly and appropriate transition of patients whose physicians terminate their
agreements with the plan to the care of another contracted provider in situations where a
patient declines to join the physician’s concierge practice and elects to continue receiving
physician services through the plan’s contracted network.
Conclusion
Concierge medicine is a growing phenomenon and it remains to be seen whether
it is a short term reaction to market and other forces, or whether it will play a significant
part in the future delivery of professional medical services. There are a variety of
significant legal issues that will need to be worked out at the state and federal levels and
additional regulation may be in the offing as regulators continue to examine these
arrangements more closely. Legal practitioners will need to assist physician and health
plan clients in working their way through the fairly detailed administrative issues that
need to be addressed.