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A Better Partnership


Dec 2006
December 01, 2006

The Politics of Concierge Medicine: The Vulnerability of the FNCS Model

Click here for other Warner articles on concierge medicine.

I.  Introduction

The several hundred1 physicians around the country who have started so-called "fee for non-covered services" ("FNCS")2 concierge practices in the last several years have relied on a 2002 letter from Tommy Thompson, then Secretary of Health and Human Services, as legal authority for their practices. MDVIP,3 a Florida-based company and the largest national player in organizing such practices, was at the heart of the controversy leading up to the issuance of the Thompson letter and may owe its continued existence to the durability of at least one of the principles announced therein. Post-2002 developments, however, would suggest that the Thompson principles may be less a matter of sound legal analysis than social and political philosophy. To this extent, the continued validity of FNCS-style concierge practices ultimately may depend upon unpredictable political winds. This article will explore this political issue, explain the possible vulnerability of the FNCS model, and offer some thoughts about what the future may (or should) hold.

II.  The Waxman-Thompson Exchange - The Issues Are Framed

Concierge medicine is a form of private medical practice where the physician accepts a preestablished periodic fee from a patient in exchange for providing certain services. If the patient happens to be eligible for Medicare, and if the physician has not opted out of Medicare,4 the periodic fee raises potential legal issues due to the limits on what physicians are legally permitted to charge Medicare-eligible patients. This is the central issue that led to the issuance of the Thompson letter.

In 2002, MDVIP was a fledgling company organizing concierge practices, mostly in Florida. The prototype conversion of a regular primary care practice, normally operated by an internal medicine or family practice physician, to an MDVIP practice included sending notices to patients of the impending conversion. The essence of the conversion process was the reduction of the number of patients, often as many as 2,500 to 3,000, to no more than 600, the limit MDVIP placed on the number of patients a practice could have. Medicare patients would frequently complain that they were being forced either to come up with the annual fee or find another physician. These complaints came to the attention of a number of politicians, including Congressman Henry A. Waxman, D-California.

On March 4, 2002, Congressman Waxman, along with one senator and three other congressmen, sent a letter to Secretary Thompson and to Janet Rehnquist, the Inspector General of the Department of Health and Human Services, asking them to "halt a growing national problem of physicians' overcharging senior citizens in the Medicare program." The practice model described in the letter was MDVIP's, and the MDVIP marketing brochure and patient agreement were appended to the letter.

The letter described the MDVIP program as requiring the patient to pay an annual fee of $1,500 in exchange for a series of services, including an annual physical, a preventive care plan, same-day or next-day appointments, around-the-clock access to the physician, e-mail and fax access to the physician, prescription facilitation, coordination of necessary referrals, claims facilitation, travel medical services, and private reception area "replete with amenities." Congressman Waxman complained first that some of these services "may overlap substantially with Medicare benefits" and second that "conditioning the provision of Medicare services on the annual fee means that the patient is paying for the opportunity to receive . . . [Medicare-] . . . covered benefits." The Congressman concluded by asserting that if "physicians can bill Medicare for a covered service and also require their patients to pay a separate fee for a non-covered service, then patients have no financial protection against overcharges."

Although the Waxman letter was at times hyperbolic,5 it was nonetheless thoughtful and comprehensive and presented some cogent arguments why MDVIP's program violated established Medicare law. Secretary Thompson's response, however, issued two months later, was neither comprehensive nor analytical. It was barely one page in length, and both of Congressman Waxman's arguments were disposed of in remarkably short order. The first of the two arguments (that the annual fee in part covered Medicare-covered services) was addressed by Secretary Thompson's statement that "Insofar as the retainer fee under such an agreement is truly for non-covered services, such fees would not appear to be in violation of Medicare law." The second argument (that physicians could not charge an extra or "access" fee for the privilege of receiving Medicare-covered services) was disposed of by the simple statement that ". . . physicians have some discretion regarding patients they choose to accept."

In order to assist the "physicians in their compliance efforts," the Secretary went on to say that the "Centers for Medicare & Medicaid Services has issued the enclosed memorandum to its regional offices to provide guidance on how to respond to queries from physicians" on the issue of concierge practices. The memorandum was dated March 26, 2002, just two weeks after the date of the Waxman letter.

If there were any doubt about the status of the FNCS model from the face of the Thompson letter, it was dispelled by the CMS memorandum. It advised the regional offices that if they received an inquiry from a physician about the legality of this style of concierge medicine, they were essentially to leave the physician guessing, the offices being told to "neither approve nor disapprove them." Instead, the offices were to advise the physician of two factors, the second of which was a simple caveat that the physicians could only include "non-covered" services in a periodic fee arrangement (a reiteration of one of the Thompson principles).

The problem with the memorandum was not so much its conclusion as its introductory paragraph, where CMS defined the characteristics of a practice to which the memorandum was addressed. The first characteristic is where a fee is being charged "before . . . [the physicians] . . . will see the patients or accept them into their practices." The second is where, in exchange for the periodic fee, "the patients receive various services (such as an annual physical) or amenities (for example, same-day or next-day appointments)." Having defined the characteristics of a relevant practice in this manner, one can hardly escape reaching the conclusion that if a physician (i) conditioned the continued rendering of service on the payment of a periodic flat fee, (ii) offered an annual physical as part of the periodic flat fee, and (iii) agreed with the patient that he or she would have same- or next-day appointments, his or her practice would be in compliance with Medicare law. Moreover, CMS concluded with the statement that "Physicians may proceed with agreements of this type." If CMS or the Secretary were inclined to frown on this type of concierge practice, it would have been the perfect time to do it.

No physician or his or her lawyer would reasonably conclude from reading the Waxman-Thompson exchange and the CMS memorandum that the MDVIP model was illegal, or even suspect. Since the MDVIP promotional material and patient contract were both appended to the Waxman letter, the Thompson letter was justifiably taken as an implied endorsement of the essence of the MDVIP model. And the fact that the CMS memorandum specifically referred to "amenities" as a permissible component of a practice seems to cement that conclusion. The legality of the "fee for non-covered services" concierge model was therefore officially affirmed. Since then MDVIP expanded significantly6 and many other doctors around the country not associated with MDVIP, and even some hospitals,7 started these practice models.

III.  The Politics

The premise of this article is that the FNCS-style concierge practice has an unusual and fundamental vulnerability to changes in social and political attitudes. Each of the five signors of the Waxman letter were Democrats, while Secretary Thompson was a long-time Republican politician appointed to his post as Secretary by a Republican President.8 These two factors in and of themselves would certainly not justify a conclusion that something as important as the practice styles of hundreds of physicians would be based on the delicate reed of a political attitude, let alone party affiliation. However, if the legitimacy of an FNCS-style of concierge practice had its roots in a letter written by a political appointee in response to a question from politicians of the other party, it could meet its demise in similar fashion. Most would agree that the political winds are blowing in a decidedly different direction now (fall of 2006) than they were when the Thompson letter was issued in 2002. Both Houses of Congress now have Democratic majorities and the chances that a Democratic Administration will take office in early 2009 are indeterminable. The installation of a Democratic Administration would, of course, be followed shortly by the appointment of a new HHS Secretary.

While it is not reasonable to conclude that the Thompson letter was motivated by politics or party affiliation, there is a good deal of evidence that these influences have played some part in the post-Thompson-letter reaction of a number of institutions to the FNCS-style practices. Since 2002, there have been a number of challenges to concierge medicine in general, and they are described below.9 They might reveal how reasonable it is to conclude that social and political attitude have played a part in the reaction of these institutions.

  a.  New Jersey.

On August 8, 2003, one year after the issuance of the Thompson letter, New Jersey's Department of Health and Senior Services and its Department of Banking and Insurance issued a joint Bulletin dealing with concierge medicine. The purpose of the Bulletin was to set forth the:


Departments' position that it is inappropriate for HMOs and other carriers to have providers in their networks who require patients to enroll in retainer programs in order to obtain access to the provider.

The Bulletin initially referred to the same issue raised first in the Waxman letter (that the periodic fee was really in exchange for services that were already required to be offered to patients in the New Jersey provider network) but went on to deal more broadly with the second Waxman issue:


The Departments' main objection to networks' including physicians who offer retainer agreements is not with whether there is duplication of services. Rather, the Departments' position is that retainer agreements are inconsistent with the requirements that all provider agreements subject to New Jersey law assure that in-network providers do not discriminate in treatment of members or covered persons.

The Bulletin concluded by putting New Jersey carriers on notice that "arrangements that require members or covered persons to pay" a fee to gain "access to a network provider are not acceptable and should be terminated immediately."

Note that the action taken in New Jersey was administrative in nature; no airing of the issues in a legislative forum and no legislative action were required to effect this change in the state's official attitude toward these kinds of physician practices. An administrative stroke of the pen was sufficient.

  b.  New York.

Six months later, on April 16, 2004, New York State's Department of Health issued a letter dealing with concierge medicine and HMOs. The letter started by pointing out that "certain physicians are seeking to offer their HMO enrollee patients 'additional' services for a fee" and concluded that "many of the services . . . are . . . already covered by the HMO enrollee's contract, e.g., a guarantee of 24-hour coverage and case management." The Department concluded that this 24-hour coverage, case management, and referrals to specialists were services already covered by New York's HMOs. The Department then turned to the "discrimination" issue and concluded that the promise of expedited appointments, continuity of care, and better waiting rooms were inherently discriminatory against patients who refused to or could not pay the periodic fee.

As was the case in New Jersey, the New York action was administrative in nature. An administrative stroke of the pen was again sufficient to change the official stance of a state without any effort to get the issues through the legislative process.

  c.  State of Washington.

The Washington State Insurance Commissioner has been on the trail of concierge medicine since 2003. On July 29 of that year the Commissioner issued a draft of a proposed Technical Assistance Advisory dealing with FNCS-style concierge practices. The draft declared that a flat fee required of a patient by a provider in exchange for "improved access" amenities, such as same-day appointments, e-mail access, and around-the-clock access, would be ". . . considered by the . . .  [Commissioner] . . . as an additional charge for providing the health care services covered by the . . . [patient's] . . . health plan."

As to the second argument raised in the Waxman letter (that the required fee was illegal as being a precondition to the receipt of Medicare-covered services), the draft provided that the Washington statute:


. . . allows providers . . . to charge an optional fee for services or amenities not covered by the patient's benefit plan as long as patients may still obtain services without paying the additional charge.

The draft Advisory found little support among the interested parties, including the Washington State Medical Society, and the Commissioner eventually abandoned his administrative efforts in favor of the more direct legislative route. In January of 2006, Substitute House Bill 2404 was introduced in the Washington State House.

House Bill 2404 addressed most directly the "fee for care"10 model of concierge medicine by classifying it as a "retainer practice" required to register with the Commissioner and to abide by certain other operating restrictions. Some authoritative people in Washington do not believe that House Bill 2404 would have applied to the FNCS model, but the author does not share that conclusion. The Act would have applied to practices that accepted a flat fee "as consideration for being available to provide and providing" (emphasis added) primary care medical services and would have prevented such practices from entering "into participating provider contracts" with any insurance carrier or submitting a claim to an insurance carrier, something that almost all FNCS-style practices do. House Bill 2404 failed to make it out of Committee. The author has been advised that some legislators in Washington are prepared to make another effort and to introduce the legislation again after the first of the year.

  d.  Massachusetts.

In 2005, five members of the Democratic caucus of the Massachusetts House introduced legislation (House Bill 3032) that would have effectively put an end to the FNCS-style concierge practices in the state. While the Bill was never enacted, it shows the leanings of at least some political elements in Massachusetts.

The Bill contained two identical parts, one aimed at physicians on HMO panels and one at physicians on PPO panels. The PPO part required that any contractual arrangement between a PPO and a physician contain "a provision prohibiting the provider . . . from charging an access fee" to a person covered by the PPO. This provision would have prevented physicians from charging patients a flat fee and at the same time billing a PPO. This was aimed directly at the FNCS model, as it condemned a periodic fee "regardless of whether such access is bundled with other membership privileges or amenities."

  e.  U.S. Congress.

Proposed Anti-FNCS model legislation has not been the exclusive province of the states. Starting in 2001 and thereafter for a few years, a series of short but deadly Bills was introduced in both the Senate and the House. None has come close to enactment. While the Bills varied in some respects, the most common wording was contained in the 2002 House Bill (the "Medicare Equal Access to Care Act of 2002"):


A physician . . . may not (A) charge a membership fee or any other incidental fee to a Medicare beneficiary . . . or (B) require a Medicare beneficiary . . . to purchase a non-covered item or service, as a prerequisite for the provision of a covered item or service to the beneficiary . . . .


This would have reversed the effect of the Thompson letter by acknowledging that there was such a thing as non-covered services and then preventing the physician from charging a Medicare beneficiary for them as a condition of providing covered services (this is the second of the Waxman arguments).

The distinction between the two arguments made in the Waxman letter is important to remember, since one is far more significant than the other and much more difficult for an FNCS-style practice to avoid. Recall that the Waxman letter first argued that MDVIP's flat fee was in part being paid for services that were also covered by Medicare. The centerpiece of the analysis of this point is factual in nature:  Is or is not a service for which the flat fee is being paid covered by Medicare? It is axiomatic that, if a particular service is not covered by Medicare, then a physician can charge whatever the market will bear for it, and if it is covered, he or she cannot. No one, including Congressman Waxman, has argued to the contrary. As to this Waxman argument, the battle to be fought involves whether the "amenities" that most FNCS practices offer (like 24-7 availability of the physician) are or are not covered by Medicare. The second Waxman argument, however, was not based on such factual determinations, but on the possible existence of a principle that could clearly be the subject of a simple legislative action--that a physician cannot charge a flat fee as a precondition to rendering Medicare services. Note that the above Medicare Equal Access to Care Act of 2002 dealt essentially with this point (declaring illegal any payment being required as a condition to rendering Medicare services).

While the author has never represented MDVIP or offered it any legal advice, one can speculate that it might have recently changed the emphasis of its style of practice in light of the distinction between these two arguments. Recall that the MDVIP contract and promotional material attached to the Waxman letter listed a series of amenities the patient would receive in exchange for the flat fee. The 2006 version of this promotional material refers to these amenities not as the primary items being purchased but as incidental benefits because the physician has far fewer patients in his or her practice than a traditional one. And the current MDVIP patient contract says clearly that "The Program's annual fee encompasses the following services: Annual Preventive Care Physical Examination, Including Comprehensive Wellness Planning based on the Examination [and] Personal Health Record CD-ROM."11 The contract form attached to the Waxman letter provided that "The Program provides the following amenities to persons who sign up as Members," and this is followed by a listing of nine traditional concierge "amenities." While MDVIP's new contract form might have effectively addressed the Waxman "non-covered services" argument,12 it does nothing to affect the second Waxman argument or to escape the potential reach of the Medicare Equal Access to Care Act of 2002 (MDVIP is still requiring "a Medicare beneficiary . . . to purchase a non-covered item or service [in this case the physical], as a prerequisite for the provision of a covered item or service to the beneficiary . . ."). An analysis of any legislation offered to affect FNCS-style practices needs to keep the distinction between these two arguments in mind.

IV.  Administrative Confusion

Along with indications that some politicians and state agencies are generally adverse to the FNCS-style of concierge medicine, there is some evidence that from a federal administrative and enforcement standpoint antagonism exists as well. On March 31, 2004, the OIG dropped what was seen by many in the concierge industry as a bombshell. On that day it issued a Fraud Alert entitled "OIG Alerts Physicians About Added Charges for Covered Services." The first part of the Alert simply reminded physicians and their advisers of the Thompson dichotomy between charging a periodic flat fee for services that are not covered by Medicare (permissible) and for services that are (impermissible). The controversy arose when the OIG offered an example that did not appear to fit the facts and assumptions of the Thompson letter or of the CMS memorandum.

The example was a physician (Dr. Thorsen) in Minneapolis who was operating an FNCS-style practice charging an annual fee of $600. The Alert went on to say that "the OIG alleged that at least some of . . . [the] . . . contracted services were already covered and reimbursable by Medicare" and concluded by pointing out that in order to resolve the allegations Dr. Thorsen "agreed to pay a settlement amount to the OIG, and to stop offering these contracts to his patients."13 Except for the sixth paragraph, there was nothing particularly noteworthy about the Alert; it essentially reinforced the Thompson distinction between covered and non-covered services and the fact that a periodic fee could be charged for the latter. This sixth paragraph, however, sowed confusion about FNCS practices that lingers to this day. Here is the paragraph in its entirety:


While the physician characterized the services to be provided under the contract as "not covered" by Medicare, the OIG alleged that at least some of these contracted services were already covered and reimbursable by Medicare. Among other services offered under this contract were the "coordination of care with other providers," "a comprehensive assessment and plan for optimum health," and "extra time" spent on patient care. OIG alleged that based on the specific facts and circumstances of this case, at least some of these contracted services were already covered and reimbursable by Medicare.


Note that both the first sentence and the last sentence contain the word "these." In the first sentence the antecedent of "these" is clearly the list of services "provided under the contract." The antecedent of the word "these" in the last sentence is not so clear. Is it the three services referred to in the middle sentence? Or the entire list of services in the contract?

Dr. Thorsen's contract included the following specific services:

  1. Twenty-four-hour direct phone contact with the physician.
  2. A comprehensive health assessment and plan.
  3. "Extra time" with the patient, including holistic, emotional, and spiritual aspects.
  4. Health care advocacy in dealing with Medicare and insurance companies.
  5. Coordination of care with other health care providers.
  6. Assistance with development of advance directives and living wills.
  7. Preventive services and annual screening tests.
  8. Co-payments for Medicare-covered services up to $600 per year.
If the OIG had wanted to point out something that this physician was in fact doing wrong, it could have referred to number 8, which amounted to a forgiveness of Medicare co-payments in exchange for the flat fee. The Regional Office Memorandum referred to in the Thompson letter clearly said that Medicare law forbids agreements "that attempt to substitute an annual fee for payment of coinsurance, co-payments, or deductibles." (Emphasis added.) If Dr. Thorsen were to argue that he was not forgiving co-payments since the agreement called for forgiveness only "up to" $600, then he would have to address the implication of the argument that all the other services were worthless.14 Instead, the OIG chose to select the following three services for special mention:


  1. Coordination of care with other providers
  2. Assessment and plan for optimum health
  3. Extra time spent on patient care
The bombshell left by this part of the Alert was because these same three services were impliedly approved by the Thompson letter. Note, for instance, the similarity between these three services and those in the MDVIP material:

OIG Example



Coordination of Care


Coordination of Necessary Referrals *

Assessment and Annual Health Plan


Comprehensive Preventive Care Plan *

Extra Time


Thirty-Minute Scheduled Appointments **

* Third page of MDVIP brochure attached to Waxman letter.
** Although nothing was said specifically in the patient agreement or brochure, in the "What your friends and neighbors are saying" section of the brochure, "friends and neighbors" are quoted as saying " . . . plus 30-minute scheduled appointments" and "my doctor . . . has time to give the personalized service I want."

The confusion was compounded when the OIG said in the last sentence of this paragraph that "at least some of these contracted services were already reimbursable by Medicare." If "these" referred to the three listed services, then which one of them is tainted? All of them? Only one?

The Alert received a great deal of press coverage.15 Either the OIG was surprised at this press attention or felt some criticism, since it very quickly started to clarify what it meant by the Alert. Lewis Morris, Chief Counsel to the Inspector General, in a letter addressed to the author who had sought clarification of the Alert, said that the Alert and the position taken by the OIG "is fully consistent with the Secretary's letter to Congressman Waxman." Jennifer Leonardo, Senior Counsel, Office of Counsel to the Inspector General, in an April 2004 e-mail message allowed that:


. . . this settlement, as well as the OIG's Alert . . . does not state, nor does it intend, that the contract services offered by Dr. Thorsen are per se covered services and . . . neither this settlement nor the OIG alert takes a position on "concierge-care."16


Notwithstanding the OIG's efforts to explain the Alert in a way that does not detract from what most people thought the Waxman-Thompson exchange meant, one cannot escape the possibility that the administrative skepticism of these practices extended to more than just the OIG's office. In the Leonardo e-mail, for instance, she said that "the OIG Alert was approved by members of the CMS." Assuming that the OIG meant what it said in the Alert, and assuming that CMS approved in advance of the Alert, it is not too much of a stretch to conclude that a new Secretary of HHS could administratively reverse the Thompson letter and, with CMS and the OIG standing behind such a reversal, the entire FNCS-style practice could begin to crumble.

V.  Legislative Action

A change at the HHS level is not the only threat to the FNCS-style practice, as a new Congress could approve legislation similar to that introduced in prior sessions. Congress wanted to find out whether concierge medicine actually had an impact on Medicare patients, and in the Medicare Prescription Drug Improvement and Modernization Act of 2003 charged the General Accounting Office with studying the issue and reporting its findings to Congress.17 In essence, the report said that there appeared to be adequate primary care physicians available to provide care to Medicare patients and that the number of concierge physicians is relatively so small that the practice "does not present a systemic access problem for Medicare beneficiaries at this time."18

Note that the GAO's report is both quantitative and temporal. Its conclusions are based not on the actual effect that the FNCS model would have on the Medicare system but upon the fact that there are "at this time" so few as to not make a difference. Such a distinction might not make much difference to Congress.

VI. Possible Administrative Action

If a new Congress adopts legislation similar in effect to the proposed 2002 Medicare Equal Access to Care Act, concierge physicians should not be heard to complain about the process. Although they would certainly not like the result, the new law would have followed the normal, open legislative process. Moreover, it would, of course, be prospective in nature, and the concierge segment of the medical community would certainly have been on alert for weeks if not months that the new law was in the pipeline. In short, the effective date of the new law would have been public information, and there would be no surprises as to when the FNCS model would indeed become illegal.

Administrative action by a new Secretary of HHS, CMS, and the OIG could be another matter entirely. The issuance of an administrative ruling or Thompson-like letter reversing the Thompson view of things could without warning place hundreds of FNCS-style physicians in serious and immediate jeopardy of being in violation of existing Medicare law. If such administrative action simply interprets the Medicare law differently than Secretary Thompson did, one would assume, absent any other factors, that any physician dealing with Medicare in a manner inconsistent with the new interpretation would be acting illegally at the time the interpretation was announced. This new approach would not be the enactment of a new, prospective law but an interpretation of existing law. These FNCS physicians have, either directly or indirectly, relied in good faith on the Waxman-Thompson exchange in investing money in their practices and time in creating concierge-type relationships with patients. To blindside them with an administrative change of direction having an immediate enforcement effect would be fundamentally unfair. If HHS, CMS, or the OIG decides administratively to take a different direction than announced in the Thompson letter, one would hope that they would allow a reasonable grace period to permit FNCS physicians to adjust their practices to bring them into compliance with that new direction.

VII.  Conclusion

The legal validity of the "fee for non-covered services" concierge model has always depended to a large extent on the 2002 Waxman-Thompson exchange. Since that time, however, it has become evident that some political leaders, both at the state and federal level, do not favor concierge practices. Any administrative reversal of the Thompson position could place hundreds of physicians in jeopardy of immediately being in violation of the Medicare laws, and any such administrative change should consider the fact that these physicians have relied on the Waxman-Thompson exchange and should allow them a reasonable time to alter their practices to conform to the new interpretation.



1Actually, no one knows how many concierge physicians are now operating in the United States. The most detailed examination of this was done by the General Accounting Office in 2003-2004. See endnote 17, below. The GAO found 146 such physicians, but the actual number was most certainly much higher. MDVIP (see endnote 6, below) alone has over 100 such physicians. The author believes there are more likely 300 to 400 physicians now operating some form of concierge medical practices.

2There are two basic forms of concierge medicine. One, the so-called "fee for care" model, requires the patient to pay a periodic, preestablished fee in exchange for medical services. The physicians operating these types of practices are required to opt out of Medicare. The second is the FNCS model, explained more fully in this article. And see also Marquis, "Legal Issues Involved in Concierge Medicine," Health Lawyers News, Vol. 9, Number 3, March 2004.


4There is still some confusion, even among physicians, about the three types of relationships a physician can have with Medicare. For an explanation of these three relationships see page 5 of the GAO Report mentioned in endnote 17, below. A physician who "opts out" of Medicare is not limited as to what he or she can charge a Medicare-eligible patient. Unless the physician formally opts out, however, the Medicare rules limit what he or she can charge for a particular service.

5In the second paragraph of the letter, Congressman Waxman said that "doctors can either qualify for Medicare reimbursement or charge excessive fees." Not too many physicians would agree with the proposition that any amount in excess of the Medicare allowed limit is "excessive."

6MDVIP, according to its Web site, now has more than 100 physicians in 21 states operating these kinds of practices.

7Tufts Hospital in Boston and UAB in Alabama have formed these practices. See the following Web sites for information about them:,,

8Mr. Thompson began his political career in 1966 as a representative in the Wisconsin State Assembly. He served as governor of Wisconsin from 1987 to 2001, and then became Secretary of Health and Human Services, where he served until January of 2005. Mr. Thompson is now in the private practice of law and serves as a consultant to MDVIP.

9If any reader is aware of other states or agencies that have indicated a preference one way or the other vis-à-vis concierge medicine, the author would appreciate hearing about them:

10See endnote 2, above.

11The author came into possession of a copy of the MDVIP contract over a year ago; it is possible that the contract has undergone additional changes.

12There might have been another reason why MDVIP has changed its contract and has begun to emphasize the annual physical. A recurring question in the industry is whether the annual concierge fee may be paid from or through a tax-favored source, like the new Health Savings Account. A fee paid for a physical examination has a far better chance of qualifying than a payment simply for a series of "amenities."

13The physician involved was Dr. R. Douglas Thorsen, who agreed as part of the settlement to refund Medicare $53,400. See The New York Times, April 13, 2004, "U.S. Warns About Care Doctors Offer For Extra Fees."

14This is the only concierge patient contract the author has seen where forgiveness of co-payments has been mentioned.

15Including The New York Times article mentioned in endnote 13, above.

16The author came into possession of this e-mail message from a very reliable source, but the addressee of the message was not disclosed in the message. The author cannot therefore attest to the authenticity of the message.


18See page 26 of the GAO Report.


* * *


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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