Starting a concierge medicine or direct primary care practice involves more than choosing a fee structure and opening your doors. Your entity, ownership, payment model, Medicare status, patient disclosures, and management arrangements must all work together.
Jackson LLP advises physicians launching or restructuring concierge and DPC practices, with legal guidance tailored to the model you want to build. We can handle many of these matters on a flat-fee basis, so you know what to expect before work begins.
Why Physicians Choose Concierge Medicine and DPC
Concierge medicine and direct primary care give physicians an alternative to traditional insurance-driven practices. Both models can support smaller patient panels, more predictable revenue, and a practice structure centered around direct relationships with patients.
The legal considerations depend on how your practice will operate. A concierge practice may continue billing insurance for certain services while charging a separate fee for enhanced access or other services. A DPC practice generally relies more heavily on direct patient payment for primary care services.
Before launching, you need to determine exactly what patients are paying for, which services are included, whether insurance will be billed, and how your practice will handle Medicare patients.
Legal Structure for a Concierge or DPC Practice
The business structure you choose affects ownership, control, taxes, management relationships, and your ability to grow. For a physician-owned practice, the legal structure also needs to account for state restrictions on who can own or control a medical practice.
Entity Selection
Depending on your state and circumstances, your practice may need to operate through a professional corporation (PC), a professional limited liability company (PLLC), or another permitted professional entity. Choosing an entity is not simply a matter of selecting the structure with the lowest filing cost.
We consider your ownership, state requirements, anticipated growth, tax considerations, and whether you plan to operate alongside a separate management company. The goal is to establish the clinical practice correctly before you begin signing patient contracts or collecting fees.
Physician Ownership
Concierge and DPC practices must preserve the physician’s control over clinical decisions. If a practice has multiple owners, we can also address ownership percentages, governance, buy-sell provisions, and other arrangements that affect control of the practice.
These issues become particularly important when a non-physician investor, business partner, or management company is involved.
Corporate Practice of Medicine
Corporate Practice of Medicine (CPOM) laws restrict who can own or control medical practices in many states. The rules differ significantly by jurisdiction, so a structure that works in one state may not work in another.
For physicians starting a concierge or DPC practice, CPOM analysis should happen before you form the entity or enter into a management arrangement. The structure needs to preserve physician control over clinical matters while allowing appropriate administrative support.
MSO/Management Arrangements
Some concierge and DPC practices use a Management Services Organization (MSO) to provide non-clinical services such as staffing, technology, billing, marketing, or administrative support.
An MSO can be useful, but the arrangement must clearly separate clinical decision-making from business operations. Management fees, control rights, funds flow, and the services provided by the MSO should be reviewed for CPOM and fee-splitting concerns, particularly when non-physicians own the MSO.
Designing Your Membership or Direct-Pay Model
Your payment model is one of the most important legal decisions you will make when starting a concierge or DPC practice. The documents and policies should accurately reflect what patients receive in exchange for their fees.
Fees
You may charge monthly, quarterly, or annual fees, depending on your model. The legal issue is not simply how much you charge, but what the fee covers and how the payment interacts with insurance and Medicare rules.
We can review your proposed pricing structure and identify potential concerns before you begin enrolling patients.
Services Included
Your patient-facing materials should clearly identify what the recurring fee covers. That might include routine primary care, longer appointments, communication access, preventive services, care coordination, or other defined services.
Avoid promising unlimited services or access without establishing reasonable boundaries. Your policies should match the actual care your practice can consistently provide.
Services Outside Membership
Your model should also address services that are not included in the recurring fee. Depending on the practice, these may include laboratory testing, imaging, procedures, specialist services, medications, or other services.
Clearly separating included and additional services can reduce patient confusion and billing disputes while making it easier to determine when insurance or another payment source may apply.
Patient Agreements
Your practice should have a written agreement with each patient that clearly explains the financial and service terms of the relationship. The agreement should spell out what the patient pays, what services are included in the membership or direct-pay fee, what services are outside the model, and other important terms governing the arrangement.
This agreement is separate from your consent to treat, informed consent, or Medicare private contract. Those documents serve different legal purposes. Jackson LLP drafts and reviews patient agreements for concierge and cash-pay practices, with terms tailored to the way your practice operates.
Cash-Pay Disclosures
Patients should understand what they are paying for, what is not included, whether insurance will be billed, and what additional charges they may incur.
Cash-pay practices can also face federal and state disclosure requirements, including requirements that may apply to uninsured and self-pay patients. Your patient-facing documents and billing workflows should reflect the actual services and charges your practice uses.
Patient Documentation
Your patient documentation should support the model you are actually operating. That includes clear terms regarding fees, services, cancellations, termination, communications, and patient responsibilities.
Service Area
For practices operating across multiple states, the legal analysis becomes more involved. Our healthcare attorneys can provide concierge medicine guidance on multi-state patient agreements to address state-specific issues that arise when your practice serves patients in multiple jurisdictions.
Medicare, Insurance and Billing Considerations
Deciding whether you will participate in Medicare, opt out, remain non-participating, or limit your practice to services that are not covered by Medicare can fundamentally affect your model.
Medicare Participation
A concierge practice that accepts Medicare cannot simply treat its membership fee as an additional charge for Medicare-covered services. Medicare states that membership fees for concierge care are not covered, and physicians who accept assignment cannot charge patients extra for Medicare-covered services through the membership fee.
Your fee structure therefore needs to distinguish between the services patients receive through the membership and services that Medicare covers.
Medicare Opt-Out
Physicians who do not want to participate in Medicare may be eligible to opt out. The process requires an affidavit and private contracts with Medicare patients for covered services, subject to specific federal requirements.
If Medicare patients will be part of your concierge or DPC practice, your Medicare strategy should be established before you begin collecting fees.
Private Contracts
An opt-out physician must use the required private-contract framework for Medicare-covered services furnished to Medicare beneficiaries, except in circumstances such as emergency or urgent care. These requirements are separate from the ordinary patient-facing documents used to establish your practice’s direct-pay model.
Covered vs. Noncovered Services
A service being paid directly by a patient does not automatically mean Medicare or another insurer can be ignored. The legal treatment of a service depends on whether it is covered, whether you have a payer relationship, your participation status, and the applicable federal and state rules.
We can review your proposed services and payment structure to identify where these distinctions matter.
Compliance Considerations
A cash-pay model does not eliminate healthcare regulation. Concierge and DPC practices remain subject to professional licensing requirements, privacy laws, fraud and abuse rules, consumer protection requirements, and other laws governing the practice of medicine.
Fee-Splitting
State fee-splitting laws can restrict how patient-care revenue is shared with non-physicians. This becomes particularly important when an MSO, marketing company, investor, or other outside business receives compensation from the practice.
Management fees and other payments should be structured around the actual services provided and the laws of the applicable state.
Anti-Kickback Statute
The federal Anti-Kickback Statute can apply when remuneration is offered or paid in connection with referrals involving federally reimbursable healthcare services. Even practices that primarily operate on a cash basis should consider AKS issues if they continue to see Medicare or other federal healthcare program beneficiaries or enter referral-related arrangements.
Patient Abandonment
Changing from an insurance-based practice to concierge or DPC does not eliminate your obligations to existing patients. If patients will no longer receive care under the old model, you need a legally appropriate transition plan that addresses notice, continuity of care, records, and access to alternative care when necessary.
The timing and communication of the transition matter. A practice should not simply stop seeing patients because those patients cannot or will not enroll in the new model.
State Insurance Issues
Some states may treat certain prepaid healthcare arrangements as insurance or impose additional requirements based on how the practice structures its fees and services. The distinction can depend on the specific services promised, payment structure, risk assumed by the practice, and state law.
A legal review before launch can identify whether your proposed DPC or concierge model creates state-specific insurance concerns.
HIPAA
A direct-pay practice remains responsible for protecting patient health information. Your HIPAA policies, patient communications, technology agreements, records practices, and workforce procedures should reflect how your concierge or DPC practice operates.
Marketing
Your website and marketing materials should accurately describe what patients receive for their fees. Claims about access, availability, outcomes, services, pricing, or physician responsiveness should be consistent with your actual practice.
Referral arrangements, testimonials, promotions, discounts, and relationships with outside businesses can also raise additional healthcare compliance concerns.
Transitioning an Existing Practice
Moving an established insurance-based practice to concierge medicine or DPC involves more than changing how patients pay. You also need a plan for communicating the change, addressing existing patient relationships, reviewing payer obligations, and establishing the new operational model. Our attorneys provide guidance and support for practices transitioning to a concierge medicine or direct-pay model.
How Jackson LLP Works With Concierge and DPC Practices
Launching a concierge or DPC practice requires decisions that cross corporate, regulatory, contractual, and operational lines. We approach those issues together rather than treating each document as an isolated project.
Jackson LLP can advise you on:
- Forming the appropriate professional entity
- Reviewing physician ownership and governance structures
- Evaluating CPOM requirements
- Structuring MSO and management arrangements
- Designing membership and direct-pay fee models
- Reviewing Medicare participation and opt-out strategies
- Drafting and reviewing patient-facing documents
- Addressing cash-pay disclosure requirements
- Reviewing HIPAA policies and operational procedures
- Evaluating fee-splitting and Anti-Kickback concerns
- Advising on patient transition and termination issues
- Reviewing marketing and referral arrangements
- Planning for multi-state expansion
Many of these matters can be handled on a flat-fee basis. Before work begins, we can discuss the scope of the project and provide a clear quote for the legal services you need.
Ready to discuss your concierge or DPC practice? Schedule a consultation with Jackson LLP to discuss your model, structure, and legal requirements.
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Frequently Asked QuestionsÂ
How do I start a concierge medicine practice?
Start by defining your clinical and payment model, then address entity formation, physician ownership, CPOM requirements, Medicare and insurance considerations, patient fees, required disclosures, and practice policies. Getting the legal structure in place before enrolling patients can prevent costly changes later.
How do I start a direct primary care practice?
Starting a DPC practice requires planning the professional entity, physician ownership, direct-pay services, patient fees, documentation, Medicare strategy, and regulatory compliance. The legal requirements vary by state, so your structure should be reviewed for the jurisdiction where you practice.
What are the legal requirements for a direct primary care practice?
Direct primary care practices remain subject to applicable professional licensing, CPOM, fee-splitting, patient abandonment, HIPAA, consumer protection, and other healthcare laws. Depending on your model and patient population, Medicare, insurance, and state-specific requirements may also apply.
Can a concierge medical practice accept Medicare?
Yes, but the answer depends on the practice’s Medicare participation status and what the membership fee covers. Medicare does not cover concierge membership fees, and physicians must follow Medicare rules concerning covered services, billing, participation, or opt-out status.
What is the difference between a concierge medicine and DPC practice model?
Both models use direct payment from patients and can support smaller patient panels, but their payment and insurance structures can differ. Concierge practices may continue billing insurance for certain services, while DPC practices generally rely more heavily on recurring direct payments for primary care.
Can a non-physician own a concierge or DPC practice?
It depends on the state and the structure of the practice. States with CPOM restrictions may limit non-physician ownership or control of a medical practice, making a physician-owned professional entity and, in some circumstances, a separate MSO structure necessary.
Related Resources
Non-Physician Owned Medical Practice: What Entrepreneurs Need to Know
Many states restrict direct ownership of medical practices by non-physicians. This article explains the Corporate Practice of Medicine doctrine, the MSO-PC model, and the key legal considerations for entrepreneurs and investors entering the healthcare industry.
How Does Money Flow Through an MSO? A Healthcare Compliance Guide
A practical guide to MSO fee structures, funds flow compliance, and how both licensed providers and non-physician investors structure compliant MSO arrangements.
What Is a Management Services Agreement (MSA) in Healthcare?
A management services agreement (MSA) defines the relationship between a healthcare practice and a management services organization (MSO). This guide explains how MSAs work, how management fees are structured, and what healthcare professionals should know about CPOM, compliance, disputes, and termination.