Key Takeaways
- Concierge medicine does not automatically remove Medicare obligations. Your Medicare participation status determines how you can bill Medicare patients and structure your fees.
- Opting out of Medicare is different from simply not accepting insurance. Physicians who opt out must follow specific federal requirements and use private contracts with Medicare beneficiaries.
- The transition to concierge medicine or direct primary care (DPC) requires careful planning. Physicians moving an existing practice to concierge medicine need to address Medicare status, patient contracts, billing, and patient communications before the change takes effect.
Understanding Medicare and Concierge Medicine
Concierge medicine lets physicians change how they deliver and finance care. Instead of relying entirely on insurance reimbursement, a practice may charge patients a recurring membership or retainer fee for specified services, access, or other benefits.
For physicians who treat Medicare beneficiaries, however, Medicare rules still govern the membership model. The way the practice handles Medicare-covered services depends on whether the physician participates in Medicare, is non-participating, or has formally opted out.
Can a Concierge Physician Continue Treating Medicare Patients?
A physician can operate a concierge practice while continuing to see Medicare patients. One possible model is to continue participating in Medicare while charging a separate membership fee for services that Medicare does not cover. In that situation, the practice must maintain a clear distinction between what the membership covers and what Medicare covers.
Medicare pays physicians for covered services under applicable payment rules, including the Medicare Physician Fee Schedule.
Rather than stating that the patient is paying a monthly fee for “all medical care,” the membership agreement should identify the membership’s services and benefits and explain how Medicare-covered services are handled.
For example, a concierge practice might charge a membership fee for enhanced access, extended visits, communication services, or other offerings that are not themselves Medicare-covered services. The practice would still need to bill Medicare when it provides a service that Medicare covers unless the physician opts out.
If you are considering concierge medicine, DPC, or a change in Medicare participation, Jackson LLP’s healthcare attorneys can review the structure and agreements before you implement the new model. Contact us for a free consultation today.
Medicare Participation, Non-Participation, and Concierge Fees
Medicare status is one of the first issues a physician should address when considering a concierge model. CMS’s Physician Fee Schedule materials distinguish between participating and non-participating physicians:
- Participating physicians agree to accept Medicare assignment for covered services.
- Non-participating physicians have not entered into that agreement for all Medicare claims, but they remain subject to Medicare’s rules governing covered services and applicable limits on what they may charge beneficiaries.
A physician may decide not to accept commercial insurance while continuing to participate in Medicare. Alternatively, the physician may choose to leave Medicare altogether through the formal opt-out process.
Those choices have different legal consequences. The practice’s website, patient agreement, billing policies, and patient communications should accurately reflect which approach the physician has selected.
Opting Out of Medicare
An eligible physician who opts out of Medicare generally uses private contracts with Medicare beneficiaries instead of billing Medicare for covered services. CMS requires an opt-out affidavit and imposes specific requirements on physicians who use this arrangement. The opt-out period is generally two years and automatically renews unless the physician takes the required steps to end the renewal.
The private contract is a central part of the arrangement. In general, the physician must have a private contract with any Medicare beneficiary for services that Medicare would normally cover, with exceptions for emergency and urgently needed care. The contracts must contain the required disclosures and acknowledgments.
A concierge physician considering Medicare opt-out should review the timing of the affidavit, the required private-contract language, and the practice’s patient agreements before making the change.
Transitioning an Existing Practice to Concierge Medicine
Medicare becomes particularly important when a physician is transitioning an existing practice to concierge medicine. An established practice may already have Medicare patients, Medicare enrollment, commercial payor contracts, and a billing system built around insurance reimbursement. Changing the financial model without addressing those existing relationships can create problems.
Before announcing the transition, the physician should determine:
- Whether they will continue participating in Medicare
- Whether they will become non-participating or opt out
- How they will handle existing Medicare patients
- What services the membership fee will cover
- How they will bill Medicare-covered services, if applicable
- Which private contracts or other patient agreements are required
- How they will notify patients about the change
The transition timeline matters as well. A physician who plans to opt out cannot simply begin collecting private fees from Medicare patients and assume that the opt-out is effective immediately. CMS provides specific rules governing when an opt-out takes effect based on the physician’s existing Medicare status and when the affidavit is submitted.
The practice should also make sure that its patient-facing materials match its actual Medicare status. A website that says the practice “does not accept insurance” may not adequately explain a physician’s Medicare arrangement, particularly if the physician remains enrolled in Medicare.
Concierge Medicine, DPC, and HSA Rules
Federal law also distinguishes between concierge medicine and qualifying direct primary care arrangements for health savings account (HSA) purposes.
Certain direct primary care service arrangements receive specific treatment under federal HSA rules. An otherwise eligible individual enrolled in a qualifying DPC service arrangement may remain eligible to contribute to an HSA, and HSA funds may be used for qualifying DPC fees.
But the rule does not apply automatically to every practice that charges a membership fee. The law requires the arrangement to provide only qualifying primary care services from specified primary care practitioners for a fixed periodic fee. It also imposes monthly fee limits.
This distinction matters for physicians who use the terms “concierge medicine” and “DPC” interchangeably. The labels themselves do not determine whether an arrangement qualifies under federal tax law.
Federal Laws Can Still Apply to Concierge Practices
Moving to a private-pay or concierge model does not place a practice outside federal or state healthcare laws.
For example, a physician considering a management services organization (MSO) arrangement as part of a concierge practice should still evaluate applicable federal requirements governing financial relationships and referrals. The fact that patients pay a membership fee does not eliminate potential issues under laws such as the Stark Law or the Anti-Kickback Statute when the practice has other Medicare-related financial relationships.
What Should Physicians Do Before Changing Their Medicare Model?
Before launching or changing a concierge practice, physicians should make Medicare status one of the first issues they resolve.
A physician who plans to remain in Medicare needs a model that separates membership services from Medicare-covered services and complies with applicable billing requirements. A physician who plans to opt out needs to complete the federal opt-out process and use compliant private contracts.
The practice should then make sure its patient membership agreement, Medicare documentation, billing procedures, website, and patient communications all describe the same arrangement.
Jackson LLP’s healthcare attorneys can review your Medicare status, patient agreements, and proposed membership structure before you make the change. We provide a complimentary consultation. Book yours today.
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Frequently Asked Questions About Concierge Medicine and Medicare
Can a Concierge Physician See Medicare Patients?
Yes. A concierge physician can continue treating Medicare beneficiaries, but the applicable Medicare requirements depend on the physician’s participation status and how the membership arrangement is structured.
Can a Concierge Physician Opt Out of Medicare?
Yes. Eligible physicians can opt out of Medicare and privately contract with Medicare beneficiaries. The process requires an opt-out affidavit and compliance with federal private-contracting requirements.
Is Not Accepting Insurance the Same as Opting Out of Medicare?
No. A physician can stop accepting commercial insurance while remaining enrolled in Medicare. Opting out of Medicare is a specific federal process with its own requirements.
Can a Concierge Physician Charge Medicare Patients a Membership Fee?
Potentially. The answer depends on what the fee covers and the physician’s Medicare status. Physicians should not use a membership fee to charge Medicare beneficiaries privately for services subject to Medicare’s billing requirements.
Are Concierge Membership Fees Eligible for HSA Payment?
Not automatically. Federal law now provides specific HSA treatment for qualifying DPC service arrangements, but not every concierge membership meets the federal definition.
What Happens When an Existing Medicare Practice Becomes Concierge?
The physician must decide how Medicare patients and Medicare-covered services will be handled under the new model. Depending on the physician’s chosen approach, this may involve continuing Medicare participation, changing participation status, or completing the Medicare opt-out process and using private contracts.
