Legal Issues Involved in Concierge Medical Practices

Copyright 2005 American Health Lawyers Association, Washington, D.C.
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I. Introduction

Before one can adequately address the legal issues involved in concierge¹ medical practices, an effort needs to be made to define the term. Common appellations like "concierge," "boutique," and "retainer" are frequently used rather loosely to describe a variety of practices, some of which are actually far removed from the model most closely associated with the classic "concierge" label. However, it is important to be considerably more precise when discussing the legal principles involved in these practices, since the issues may vary from model to model.

This article will also touch on the social issue inherent in these kinds of practices. This issue arises in light of the common thread that runs through all concierge models:  The patient must pay something extra for enhanced or preferred access to the services the physician has to offer, a requirement that naturally discriminates against those who cannot afford the price.

II. Models

There are three basic models that legitimately can be called concierge medical practices. Although they differ in their economic approaches, they all have two things in common: (i) in one way or another they change the way patients access the physician and (ii) they have fewer patients than traditional practices.

1. Model I: Periodic Fee for Enhanced or Preferred Access. The classic concierge medical practice is one in which the physician accepts an annual or other periodic fee in exchange for granting the patient special access to the physician. A practice might, for instance, require patients to pay $250 per month (or an annual payment of $3,000) for special or privileged access, such as freedom to call the physician's private phone or pager (day or night) or to make a contact via e-mail (and expect a timely response). Same-day or no-wait appointments, and even house calls, might be included in the special access package. Physicians in this model typically continue to accept insurance payments in the normal fashion and to participate in preferred provider organizations and other private insurance panels. While many of these practices try to include certain elements of medical care in their concierge packages, it is advisable (as explained below) that the special things for which the patient pays the concierge fee be limited to elements of access only and that no medical services be included.
   
   Most practices using this model have transformed from traditional medical practices. Since the more access the concierge patient has to the physician the less time the physician has available to spend with other patients, something has to give, and that give is reflected in a considerable reduction of the physician's patient load, perhaps from as many as 3,000 patients in the traditional practice to 600 or fewer in the concierge model. How this patient load reduction is handled has significant legal, ethical, and social implications.
   
   It is not difficult to see the appeal of this model to the overworked practitioner who perceives herself making too little money while being able to spend less and less time with each patient of a seemingly ever-expanding practice. The revenues generated by the concierge payments allow the physician to shrink her overall patient load while earning the same or even more income, and a reduced workload allows the physician to spend more time with patients and engage in wellness activities for which overworked physicians in the traditional office settings may have little time.
   
   
2. Model II: Periodic Fee for Access and Medical Services. The purest form of the classic concierge model is the practice that, in exchange for a set annual or other periodic fee, will not only provide enhanced or preferred access but also primary medical care as well.² Although medical care is provided as part of the concierge fee, this model typically does not accept private insurance and does not participate in Medicare, leaving the patients to deal as best they can with their own insurance companies for the submission of claims for specific medical expenses. These practices typically recommend that patients maintain medical insurance to cover hospital bills, specialist care, and other medical services that the practice itself cannot provide.
   
   This model is currently under considerable pressure from the Washington State Insurance Commission, the complaint being that a practice operating in this model is essentially acting as an insurance company. The theory is that the medical practice has agreed to provide all the primary medical care the patient needs during a set period of time in exchange for a fee, much like the payment of a medical insurance premium insures coverage of the patient's medical needs during the policy period. To counteract this argument, these practices often require the patient to deposit the concierge fee in a separate fund to which the patient continues to have access and over which she retains control. Only after a certain time has passed, a month for instance, will money be released from the fund to cover the period just ended. The practice then argues that the concierge fee is not paid for future medical services but for services already rendered.³
   
   
3. Model III: Per-Visit Access Fee. A relatively new but growing variant of the concierge medicine concept is the per-visit fee. In this model the practice may or may not bill the patient's insurance company, but it requires the patient to pay a flat sum for the office visit, at the time of the visit, in addition to billing the patient (or an insurance company) for the medical services rendered during the visit. For instance, the practice might charge $150 per visit, payable in advance at the time of the visit, in addition to charging for the medical services rendered during the visit. The $150 gets the patient virtually immediate access to the physician and possibly other amenities, like a nurse or assistant arranging for other needed medical and laboratory appointments.
   
   If it were not for the troublesome insurance issues (discussed below), this model is not much different than the pre-Medicare private pay-as-you-go medical office common in the middle of the last century. And the physician's patient load can be adjusted simply by adjusting the per-visit fee. If the physician has too many patients, she can simply increase the per-visit charge, and the market will eventually bring her to the desired patient load.

III. Social Issue

Those who have tried to find a more appropriate word to attach to concierge practices⁴ have discovered what appears to be a basic truth:  the only word that describes adequately the attribute common to all concierge models - "access" - suggests the essential social criticism of the concierge concept. In each model, the patient is given enhanced or preferred access to medical services in exchange for an extra fee.

It was probably inevitable that concierge medical practices would develop in a traditionally free-market environment in which such dramatic nonmarket forces were injected. Free-market theory would suggest that a private provider of medical services should be able to charge private consumers whatever the market will bear. Since the adoption of the Medicare program in 1965, however, the economics of the private practice of medicine have been driven less and less by free-market forces. The economic rules that most physicians have to follow when treating Medicare patients are made not by private parties on each side of the same transaction but by government agencies tying to attain national public policy objectives. The Medicare physician is expected to provide medical services in exchange for fees set by the government, not by consumer demand. To charge more, at least under most circumstances, is illegal.

Two other intrusions into the free-market environment of the private practice of medicine came with the advent of HMOs in the 1970s and of preferred provider organizations (PPOs) a decade later. The former allowed large providers of medical services to shop among physicians to find those willing to accept fees lower than normal fees in exchange for patient volume. Those not willing to accept the HMO's fee schedule were not allowed on the HMO panel and largely excluded from treating the HMO's patients. Similarly, PPOs assured a steady stream of patients to those willing to accept discounted fees.

A final element thrown into the mix in recent years is the HMO "capitation" system. In the capitation model, physicians agree to provide medical care to a set number of patients in exchange for a flat per-patient fee, no matter what the level of service each patient requires. While usually economically viable for an HMO, the logical result for the private physician is that the more patients she has in her capitation panel, and the less time she spends with each one, the more money she makes. In most practices this translates to more patients, less time to spend with each, and more stress. These are the factors most often cited by concierge physicians as reasons for converting their traditional practices to concierge models.

It is difficult to blame physicians who are making less money than they think they should and enjoying their practices less when they try to find a way to improve their lot. It is not surprising that they might seek a form of practice in which they can maintain their income level but have more time to spend with their patients. Nor should it come as a surprise that patients, who want to spend more time with their physicians and do not like waiting for an appointment (or waiting in a reception room after they have made an appointment), would like to find a way to increase their access to their physicians. The free-market rules would suggest that these patients should be allowed to spend their way out of their problem if they could find physicians who, in exchange for a direct payment, would agree to see them earlier or under preferred circumstances.

The emergence of concierge medicine is fundamentally a result of market forces exerting themselves in what has evolved into a non-free-market setting. On the supply side, the physician can maintain the same income level, reduce stress, and spend more time with patients. On the consumer side, patients who can afford the payment can buy access that is not otherwise available to them. Against this is the growing social expectation that health care should be made available to those who need it on an equitable basis without reference to economic means. The tension between this social expectation and the reemergence of free-market forces in the private practice of medicine will tend to impede the development of concierge medicine.

IV. Medicare

Partly because of the severity of the punishment in the event of a violation, in the early stages of concierge medicine the most troublesome legal problem facing a concierge physician was compliance with the Medicare rules. These rules generally provide that a physician cannot charge a Medicare patient an amount greater than Medicare allows for the particular medical service (other than co-pays and deductibles, which the patient is required to pay).

These Medicare problems were explained in a now infamous March 4, 2002, letter to Tommy G. Thompson, the Secretary of Health and Human Services. The letter, written by Congressmen Henry A. Waxman, Pete Stark, and three of their House colleagues, complained that the Model I-type practice violated the Medicare rules because it essentially required Medicare patients to pay more than the allowed rate for Medicare-covered services.⁵

The Waxman letter was inspired by the activities of MDVIP, a Florida company then hard at work organizing concierge practices. In converting traditional practices with thousands of patients to concierge practices with around 600 patients, it commonly notified patients, many of whom were Medicare patients, that they would have to pay the concierge fee or find other physicians. The Congressmen argued that this practice amounted to conditioning the furnishing of future Medicare-covered services upon the payment of the concierge fee, the equivalent, they asserted, of charging the Medicare patient more than the Medicare rules allowed. The physicians argued that the concierge fee was for the performance of services that were not covered by Medicare.

Secretary Thompson responded to the Waxman letter on May 1, 2002. He took the position that, so long as the physicians were really only providing non-Medicare services for the concierge fee, the Medicare rules did not appear to be violated. He concluded that the provisions of the Medicare rules limiting how much a physician could charge:

do not directly affect charges for noncovered services. Insofar as the retainer fee under such an agreement is truly for noncovered services, such fees would not appear to be in violation of Medicare law.

The key to avoiding the Medicare problem, at least as to Model I, is therefore to make sure that the concierge fee is NOT paid in exchange for medical services. A physician using this model can indeed more easily avoid the Medicare problem, since it is relatively easy to make sure that the concierge fee is charged for enhanced or preferred access only and not for medical services. But there are problems with Model III, for it may be difficult to argue that having to pay a flat charge per visit is not part and parcel of a fee paid for the medical services rendered during the visit itself. In the example used above in connection with the discussion of Model III, could it not be argued that the patient was billed $250 for the office visit, $100 for the medical services and $150 for "access"? Can the physician show what exactly was given or supplied for the $150 fee? Coffee in the waiting room? A receptionist who offered unusual help to patients?

There is often a misconception, even among some physicians, about how many ways a physician can relate to Medicare. Some believe there are only two:  "participating" and "nonparticipating." There are actually three. A physician who agrees to participate in Medicare agrees to "accept assignment" of the Medicare-approved amount for a particular medical service. This physician is limited to the Medicare-approved amount (other than deductibles and co-pays). A physician who does not participate in Medicare is still limited as to what she can charge for Medicare services, but the limit is 115% of the Medicare-allowed rate. As mentioned above, a Model I practice should be able to comply with the Medicare rules whether its physicians are participating or nonparticipating. Conversely, physicians in Model III will have difficulty no matter in which of the two categories its physicians fall.

But there is a third way that a physician can relate to Medicare, and that is by "opting out" of it entirely. If a physician "opts out" of Medicare, then she can charge Medicare patients whatever the traffic will bear and is not limited to the 115%. All the physician must do is have the patient sign a written agreement in which he or she acknowledges that the physician has opted out of Medicare and agrees to pay the physician whatever the physician wants to charge, presumably a market rate for the services. The pain for the physician in opting out of Medicare is that once she does so she cannot participate in Medicare again for two years. The physician in either Model II or Model III practices can therefore avoid the Medicare problem altogether simply by "opting out" of Medicare. Perhaps a rather drastic step, but an effective one.

V. State Insurance Commissioners

Although the Waxman effort to retard the proliferation of concierge practices has largely failed, another protagonist emerged last year in the form of state insurance commissioners. The most active in this regard has been in the State of Washington, where in July of 2003 the Insurance Commissioner issued drafts of two proposed Technical Assistance Advisories dealing with concierge medical practices. One advised practitioners that charging a typical concierge fee might be illegal under Washington law and suggested four circumstances in which such a fee would be permissible, at least in the eyes of the Commissioner.⁶ The second advisory recommended that a registration procedure be implemented whereby concierge practices would have to file formal papers with the Insurance Commissioner. Neither advisory was met with much enthusiasm and, instead, the Insurance Commissioner inspired the introduction of legislation in the Washington State Legislature. This legislation, which would essentially codify the content of the two advisories, has been opposed by the Washington State Medical Society and is still pending.

There is little risk that a Model III practice will experience serious attacks from insurance commissioners, since it lacks all of the three characteristics that typically smack of insurance products: (i) the payment of a fee in advance in exchange for a promise to render medical services (ii) in the future (iii) under circumstances where risk is shifted to the party to whom the payment is made. At most, Model III practices simply require a per visit access fee that is far from anything approaching either a payment for a promise to render undefined health care services in the future or the shifting of any risk to the physician.

Model I, which will fall within the proposed legislation (and which did fall within the Insurance Commissioner's two advisories) should likewise be free from serious insurance commissioner attack if the concierge fee is paid for nonmedical services only.⁷ As mentioned above, there are three issues that insurance commissioners are typically concerned about, and the central one is that the thing for which the advance fee is being paid is a medical service. A practice that accepts the risk that the advance payment will be sufficient to cover the cost of the health care needs of the patient over a defined period of time does indeed seem to be engaged in the insurance business. If a Model I practice requires a fee to be paid in advance for nonmedical services (that is, for enhanced or preferred access only), it is not likely that an insurance commissioner would find much to be concerned about. So long as the Model I practice can show that the annual fee (whether paid in advance annually, quarterly, or monthly, or even retrospectively) is for something other than medical service, the insurance risk should not be material.

The practices that are most at risk from the insurance commissioners are those that offer medical services in exchange for the concierge fee, essentially Model II practices. For instance, assume that a practice requires a patient to pay $400 per quarter, in advance, in exchange for which the practice agrees to provide whatever medical care the patient needs (that is, that medical care that the practice itself can provide). In this case the payment is for actual medical services, not simply for enhanced or preferred access, and the risk of providing the needed medical services in the future has been shifted to the physician. The patient could become very ill and require thousands of dollars of medical services, and the physician would be required to provide it for the $400 quarterly payment.

One way to reduce the risk for a Model II practice is to have the patient pay the concierge fee in arrears, so that the practice can take the position that the payment is not for future medical services but for medical services rendered before the payment. This position takes on added force if the patient can stop the payments at any time before the end of the period to which the payment relates. And this is one of the thrusts of the proposed Washington State legislation, as it permits concierge fees so long as they are deposited in a trust or escrow fund and disbursed to the practice only after the period during which the medical services were to be rendered.

VI. Private Insurance Companies

There is some irony in the proposition that, whereas the forces that have now given rise to concierge medicine may be the result of the injection forty years ago of Medicare economics into the private practice of medicine, the main obstacle now facing concierge practices⁸ may be elements of the private sector -- private health plans. These plans present a number of challenges to the proliferation of certain kinds of concierge practices.

One of the challenges presented by private health plans is that there are so many of them, each with its own decision-making body applying different standards to a variety of insurance products. The attitude expressed about concierge practices by one state's Blue Cross Blue Shield insurer, for instance, may differ substantially from the attitude of another BCBS insurer in another state. And it is likely that more than one position will be taken within the same state by different HMOs. One physician may even be on the panel of one health plan that looks kindly on concierge practices and on another plan that does not.⁹ Juggling the views of all the health plans affecting a new concierge practice can be burdensome at best.

Before a physician operating a traditional medical office converts to a Model I or III concierge practice, she should examine each of her health plan contracts to make sure there is nothing in them that might prohibit charging concierge fees to members of the plan. If there is, the physician should consider approaching the plan to make sure she understands the position the plan will take if the physician starts charging the concierge fee.

If part of what the physician is agreeing to do in exchange for the concierge fee is the furnishing of services that are covered by the health plan, the physician should expect an answer that she is not going to like. She should expect to hear that the insurance company and the physician have already agreed upon a fee for the services and that the physician should not be allowed to charge an additional fee. When meeting with a health plan for these purposes, the physician should be able to show that the concierge fee is being paid for something OTHER than a service covered by the health plan.

Even when pains are taken to specify that only non-covered services are provided in exchange for the concierge fee, ultimately the private insurance company's view of concierge medicine will be based on business and philosophical considerations, not contract language. One state's BCBS has taken the position, for instance, that the concierge concept was in violation of the physician's contract with the company, even though the physician was charging the concierge fee for 24-hour-a-day, 7-day-a-week personal phone and pager access. The insurance company took the position that it had always expected its panel of physicians to be available to patients around the clock and therefore it (and the physician) had already established the fee for that service. Not only did the insurance contract not specifically provide for such 24-7 access, no physician would realistically think that this was really what she signed on to do when signing the BCBS contract.

Another argument used by private insurance plans to discourage the proliferation of concierge practices is to claim a violation of their provider contract because it prevents the physician from discriminating against any of the plans' members. The argument is that, by requiring a concierge fee from these patients, the physician is discriminating against plan members who do not pay the additional fee and are then jettisoned from the practice or somehow assigned a second-class position. In other words, plan members are discriminated against if they are not willing to pay or cannot pay the concierge fee.¹⁰

It is a bit difficult to understand why some private insurance companies object to concierge medicine, often going out of their way to construct rather strained arguments against them. They have physicians on their panels who want to engage in such practices, and they have insureds (customers) who want to become concierge patients. The insureds who object, of course, are those who are faced with the payment of a concierge fee when they thought their insurance premium was sufficient. Certainly the more successful a concierge practice is the fewer patients the physician can take care of, which reduces the number of physicians available (or, to put it differently, increases the number of physicians the health plan will need in order to take care of the same number of patients). The more common concierge practices become, however, the more pressure there will be on health plans to accommodate them. Indeed, one may wonder why health plans, including HMOs, would not create these practices themselves and include them as part of their general product offering.

VII. AMA Guidelines - Ethical Issues

While ethical issues normally do not rise to the level of legal concerns, the law surrounding concierge practices is so new that its formation over the coming years will certainly be influenced by how these practices are seen from an ethical perspective. It is therefore important to review the current status of the ethical standards that relate particularly to concierge medicine.

The major ethical standards are included in the AMA's Council on Ethical and Judicial Affairs' report adopted by the AMA's House of Delegates in the summer of 2003. While the Council concluded that concierge practices, or "retainer" practices as they are called in the Report, "appear to be consistent with a system based on pluralistic means of financing and delivery of medical care," it also listed five areas that needed attention when establishing and operating retainer practices.

    1. Any concierge practice, including Model III practices, needs to have written agreements with patients that clearly describe what the patient is paying and what the practice is providing in exchange for the payment. The Report stresses that the agreement should be fair in all respects and clear in its terms.

When entering into a retainer contract, both parties must be clear about the terms of the relationship and must agree to them. Physicians must present the terms of the contract in an honest manner, and must not exert undue pressure on patients to agree to the arrangement. If a physician has knowledge that the patient's health care insurance coverage will be compromised by the retainer contract, the information must be discussed with the patient before reaching an agreement on the terms of the retainer contract. Also, patients must be able to opt out of a retainer contract without undue inconveniences or financial penalties.

Concern for quality of care the patient receives should be the physician's first consideration. However, it is important that a retainer contract not be promoted as a promise for more or better diagnostic and therapeutic services. Physicians must always ensure that medical care is provided only on the basis of scientific evidence, sound medical judgment, relevant professional guidelines, and concern for economic prudence. Physicians who engage in mixed practices, in which some patients have contracted for special services and amenities and others have not, must be particularly diligent to offer the same standard of diagnostic and therapeutic services to both categories of patients. All patients are entitled to courtesy, respect, dignity, responsiveness, and timely attention to their needs.

    3. Model I practices are particularly vulnerable to the third concern of the Report:  possible abandonment of patients. As mentioned above, most Model I practices established so far have converted from traditional office practices. The Report points out that:

. . . the ethical imperative that physicians not abandon their patients, physicians converting their traditional practices into retainer practices must facilitate the transfer of their nonparticipating patients to other physicians, particularly their sickest and most vulnerable ones. If no other physicians are available to care for non-retainer patients in the local community, the physician may be ethically obligated to continue caring for such patients.

    4. The Report also ensures that the financial aspects of operating a concierge practice are included in the ethical framework. The Report says that:

Physicians who enter into retainer contracts will usually receive reimbursement from their patients' health care plans for medical services. Physicians are ethically required to be honest in billing for reimbursement, and must observe relevant laws, rules and contracts. It is desirable that retainer contracts separate clearly special services and amenities from reimbursable medical services. In the absence of such clarification, identification of reimbursable services should be determined on a case-by-case basis.

    5. Lastly, the Report makes reference to the possible social inequities inherent in concierge practices:

Physicians have a professional obligation to provide care to those in need, regardless of ability to pay, particularly to those in need of urgent care. Physicians who engage in retainer practices should seek specific opportunities to fulfill this obligation.

While these ethical standards are not binding on individual practitioners, they are powerful principles and will undoubtedly have a significant impact on the development of the legal rules that are eventually formed to govern these practices. Concierge practitioners who follow these ethical guidelines will be well-positioned to deal with the legal rules as they evolve.

VIII. Corporate Practice of Medicine

Several states, including New York and California, have laws precluding the "corporate practice of medicine." Essentially, these laws require that an entity formed for the purpose of practicing medicine must be a professional corporation ("PC") and cannot be a standard business or nonprofit corporation. Moreover, PC statutes typically restrict the ownership of stock of medical PCs to physicians only. These two restrictions are important in two situations.

The first is where a hospital wants to operate a concierge practice. If the idea is to have the hospital own a corporate subsidiary that will employ the concierge physicians, the rule limiting corporations formed to practice medicine to PCs would prevent the hospital from forming either a nonprofit or profit corporation as its subsidiary. There may be some creative ways to accomplish the essential equivalent of this structure,¹¹ but the basic idea of having the hospital own the concierge practice subsidiary would be blocked by the corporate practice of medicine doctrine.

The second is where nonphysician business people want to establish concierge practices for business purposes. Since a nonphysician cannot become a stockholder of a professional corporation (or professional limited liability company) that employs physicians to practice medicine, the ownership of the nonphysician business people might be confined to a sister business corporation entwined contractually with the professional corporation. In this model a professional corporation owned by the concierge physicians and a separate profit corporation would be connected by contractual arrangements that accomplish indirectly the goals of the business people. Due to a myriad of federal and state antikickback, anti-referral, and anti-fee-splitting laws, such an arrangement must be structured very carefully.

IX. New HIPAA Referral Issues

The health care industry was required to comply with the provisions of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") by April of 2003. While most within the industry are familiar with the HIPAA requirements as they relate to medical records and other privacy issues, many are not familiar with another thrust of the Act, namely its antikickback provisions. In certain situations, these provisions can affect concierge medical practices.

HIPAA's antikickback provisions make it illegal to promise or to provide any remuneration that induces the referral of medical services that are to be paid by a federal health program. For instance, it is illegal for a health care provider (concierge physicians, for instance) to promise anything of value to a prospective patient that is likely to influence the patient in her selection of a health care provider. Is the promise to be available 24 hours a day by phone, in exchange for a concierge fee, illegal under these rules? Is the furnishing of a spa-like atmosphere or plush robes and towels illegal under these rules? Not likely. But concierge physicians, who are normally advised (particularly under the Model I format) to specify carefully the extra services that are provided in exchange for the concierge fee, should be cautioned to limit these "extra" things to things that would NOT be considered "remuneration" under the HIPAA antikickback rules (like gifts, for example). This HIPAA issue should not ultimately present much of a problem for concierge physicians, but it is nonetheless something that should be on their collective radar screen when creating and operating a concierge practice.


NOTES

¹The use of the word "concierge" to describe the type of medical practice to be discussed here is almost universally disliked. The author and others have tried without success to find a better, less pejorative word. This article will continue to use the word, but only for lack of a better one.

²This model was originally developed by MD2 in Washington State.

³This argument loses some of its force when one realizes that the patient is expected eventually to release that period's portion of the escrowed fee irrespective of how much medial care, if any, was actually rendered during the period. Looked at in this light, one may suggest that this escrow arrangement is merely a transparent effort to get around the troublesome insurance premium analogy.

⁴The author and some associates, including public relations experts, held an hour-long brainstorming session in an effort to find a more acceptable word. No consensus could be reached.

⁵The Congressmen also argued that this model violated the False Claims Act. Such a violation is derivative of their basic argument, however, since without the physician's charging the patient more than the allowed Medicare rate there would be no false claim. The essence of their complaint was simply that the patients were being charged more than the allowed Medicare rate.

⁶The four are when: (i) the provider is not contracted with the patient's health carrier, (ii) the provider does not participate in any health carrier's network, (iii) the patient is covered under an indemnity-type insurance policy, or (iv) the patient is uninsured.

⁷The proposed Washington legislation defines medical services to be "primary care services," which are in turn defined as being "basic health services, including screening, assessment, diagnosis, and treatment for the purpose of promotion of health and detection of disease or injury." Most Model I practices include annual "wellness" physicals and health assessments as part of the concierge fee, services that are not covered by Medicare and by most (many) health plans. Even if a Model I practice excluded the annual physical and assessment, developing a simple wellness plan for a healthy patient, something that is certainly not covered by health plans, would bring the practice under the purview of the proposed legislation.

⁸Model II practices, which do not accept insurance and whose physicians do not generally serve on private insurance panels, are not affected by the private insurance problem. Only Models I and III are affected.

⁹The author is personally aware of one private insurance company that gave two different answers to the same question.

¹⁰Recall that this is the same argument used in the Waxman letter as to why MDVIP was discriminating against Medicare recipients who could not afford to or who were not willing to pay the concierge fee.

¹¹One way may be to have the entity be a PC owned by a physician who is contractually bound to do whatever the hospital wants with respect to the entity. Great care needs to be taken in organizing such a structure, however.


John R. Marquis is a partner in the Holland office of Warner Norcross & Judd specializing in concierge medical practices, business and tax law, health care law and closely held businesses. He may be reached directly at 616.396.3054. Because each situation is different, this information is intended for general information purposes only and is not intended to provide legal advice.

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For more information on concierge medicine, go to the Society for Innovative Medical Practice Design Web site at http://www.simpd.org.