Key Takeaways
- A concierge transition affects the whole practice.
Payor contracts, patient relationships, Medicare, and practice structure all need to be reviewed.
- Existing patients need clear communication and a transition plan.
Give patients enough notice to understand the new model and make arrangements for continued care.
- Your legal documents should match your new practice model.
Membership agreements, corporate structures, and other contracts may need to be updated before the transition.
Start Planning the Transition Before Changing Your Practice Model
Moving an established medical practice to a concierge medicine model is different from starting a new concierge practice. You already have patients, payor contracts, employees, vendors, medical records, and other obligations that need to be addressed before the new model takes effect.
Start by creating a transition plan that identifies what will change, when those changes will occur, and what legal documents need to be updated or created. The plan should address payor contracts, existing patients, staffing, membership fees, patient agreements, Medicare, and the structure of the practice.
The transition also needs to account for applicable state laws. Requirements can vary depending on where your practice operates and how you structure the concierge arrangement.
Review Your Existing Payor Contracts
One of the first steps is reviewing every payor contract your practice currently has in place. You should understand the termination provisions, notice requirements, and obligations that apply if you stop participating in a particular plan.
You may decide to terminate some or all of your payor contracts as part of the transition. Alternatively, you may continue working with certain payors while charging a separate membership fee for services included in the concierge model. The right approach depends on your proposed model and the terms of your contracts.
Do not assume that you can simply stop submitting insurance claims and begin charging patients a membership fee. Payor contracts can impose continuing obligations, and charging patients for services that should be covered by insurance can create additional compliance concerns.
Before announcing the transition, determine exactly how insurance will interact with your new model and whether your payor relationships need to change.
Decide What Happens to Existing Patients
Your existing patient population presents another issue that does not arise in the same way when opening a new concierge practice.
You will need to decide whether all current patients will be invited to join the concierge practice, whether some patients will remain under a different arrangement, or whether patients who do not join will need to establish care elsewhere.
Consider the practical details of the transition, including outstanding appointments, referrals, prescriptions, medical records, and ongoing treatment. If some patients will no longer have access to the practice, the transition should be handled in a way that protects continuity of care and complies with applicable patient abandonment rules.
Your plan should also give patients a reasonable opportunity to understand their options and plan for continued care if they choose not to join.
Communicate the Change Clearly and Early
Patients should not learn about a major change to their care relationship at their next appointment. Give them enough notice to understand what is changing and when the new model will begin.
Your communications should explain the effective date, membership fee, payment schedule, included services, and services that are not covered by the membership. Patients should also understand how insurance will be used, if applicable, and whether they need separate health insurance for services outside the concierge arrangement.
Written communications, website content, FAQs, and patient agreements should be consistent. Marketing the new model before the legal terms are finalized can create confusion and may result in representations that do not match the actual services provided.
Restructure the Practice for Concierge Medicine
Changing the payment model may also require changes to the underlying structure of your practice.
Review whether your existing entity remains appropriate and whether ownership, management, employment, and administrative arrangements need to change. Depending on the structure, corporate practice of medicine rules may also need to be considered.
If you are working with a management company or management services organization (MSO), review the arrangement before changing how patients pay for services. The management agreement, administrative fees, and other financial arrangements should be structured carefully to avoid fee-splitting, Anti-Kickback Statute violations, and other regulatory concerns.
The transition may also require new or amended employment agreements, vendor agreements, billing arrangements, and other operational documents.
Create a Concierge Membership Agreement
A concierge practice should have a written agreement that clearly establishes the financial and service relationship between the practice and each member.
The membership agreement should explain what the patient pays and what the patient receives in return. Depending on the model, it may address the membership fee, payment schedule, included services, excluded services, cancellation and termination, refunds, and what happens if the practice relationship ends.
This agreement is different from informed consent and other clinical documents. It establishes the business terms of the patient relationship rather than documenting consent to medical treatment.
Because membership arrangements can raise state-specific legal issues, the agreement should be drafted for the states where the practice operates. If you are considering expanding the practice, address those issues before using the same agreement in another state.
Address Medicare Before the Transition
Medicare requires particular attention when an existing practice moves to concierge medicine. Physicians participating in Medicare need to understand which services may be included in a membership arrangement and which services remain subject to Medicare requirements. Physicians who opt out of Medicare have additional requirements, including private contracts with Medicare patients.
A concierge membership agreement should not be treated as a substitute for complying with Medicare requirements. Before transitioning, determine whether the practice will continue participating in Medicare, opt out, or use another structure, and make sure the patient agreements and billing practices match that decision.
Check State Laws Before Launching the New Model
Concierge medicine can raise state-law issues beyond the terms of the patient membership agreement.
Depending on the structure and location of the practice, you may need to consider fee-splitting restrictions, state insurance laws, corporate practice of medicine rules, patient abandonment requirements, advertising rules, and cash-pay disclosure requirements.
The way a membership fee is structured can also matter. A fee that covers a defined set of services may present different legal considerations from a fee that effectively functions as payment for insurance or unlimited medical services.
Before implementing the new model, review the structure under the laws of each state where you practice. A concierge arrangement that works in one state may require changes before it can be used elsewhere.
Plan for Multi-State Concierge Medicine Expansion
If you expect to expand your concierge practice into additional states, build that possibility into the initial legal structure rather than treating expansion as an afterthought.
Multi-state expansion can involve physician licensure, entity requirements, corporate practice of medicine rules, patient membership agreements, fee structures, and state-specific healthcare regulations. Your membership agreement may also need to be revised for each state rather than copied across state lines.
Transition Your Practice With a Legal Plan
Converting an established medical practice to concierge medicine requires attention to payor relationships, existing patients, patient agreements, Medicare, practice structure, and state-specific requirements before the transition takes effect.
Jackson LLP works with physicians and healthcare practices on the legal structure, contracts, and patient-facing documents needed to transition to a concierge model. Schedule a consultation to discuss your planned transition and the legal issues to address before you make the change.
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Frequently Asked Questions About Transitioning a Practice to Concierge Medicine
Can I Convert My Existing Medical Practice to Concierge Medicine?
Yes. An existing medical practice can transition to a concierge model, but the process should account for current payor contracts, existing patients, Medicare requirements, patient agreements, and applicable state laws.
Do I Have to Terminate My Insurance Contracts Before Starting a Concierge Model?
No. But the answer depends on your proposed model and the terms of your payor contracts. Review those contracts before determining whether you will terminate participation, maintain certain payor relationships, or use another arrangement.
Can Existing Patients Continue Seeing Me Without Paying a Concierge Membership Fee?
Yes. But it depends on how you structure the transition. If patients who do not join will no longer receive care from the practice, you should have a plan for appropriate notice and continuity of care.
Does a Concierge Practice Need a Membership Agreement?
Yes. A written membership agreement is an important part of establishing the financial and service relationship between the practice and its patients. It should clearly state the membership terms, fees, included services, exclusions, and termination provisions.
Can I Charge a Concierge Fee to Medicare Patients?
Yes, in some cases. Medicare rules can affect whether and how a physician may charge a membership fee. The answer depends in part on whether the physician participates in Medicare or has formally opted out, as well as what services the fee covers.
Can I Expand a Concierge Medical Practice Into Other States?
Yes. But expanding into another state can create additional legal and regulatory requirements. Physician licensure, entity structure, corporate practice rules, membership agreements, and fee structures should all be reviewed before expanding.
