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Texas Health Law Conference October 15, 2012 PowerPoint Presentation
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Texas Health Law Conference October 15, 2012

Texas Health Law Conference October 15, 2012

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Texas Health Law Conference October 15, 2012

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  1. Concierge Medicine:Key Legal ConsiderationsComplying with Medicare Regulations, Insurance Laws and the Anti-Kickback Statute Texas Health Law Conference October 15, 2012 David W. Hilgers, JD Brown McCarroll, L.L.P. Robert M. Portman, JD, MPP Powers Pyles Sutter & Verville, PC

  2. Road Map • Overview of Concierge Medicine and Models • Federal Legal Issues • State Law and Private Insurance Issues • Contracting Issues • Valuation Issues

  3. Concierge Care • a/k/a “boutique” or “retainer” medicine • Reasons for development • lower reimbursement • payment denials, delays • rising malpractice premiums • greater liability risk/regulatory burdens • increasing overhead/paperwork • higher patient loads

  4. Concierge Care • Positive outcomes • Personal care • Professional satisfaction • May make preventative care affordable and accessible • Looks a lot like a family medical home

  5. Concierge Care • Common Characteristics • Primary care • Fixed monthly or annual fee • Limited number of patients—300-800 • Special services/attention • Greater physician access • Plan of care • Amenities • Must pay retainer to receive any services

  6. Services Provided • Typical Services/Amenities • priority/extended/Sat. appointments • nicer, less crowded waiting rooms • 24/7 pager/email/cell phone access • house calls/visits to specialists • preventive/wellness care • telephone/email consultations • Prescription/claims assistance

  7. Services Provided • Premium Services • Unlimited appointments • Same day appointments • All physician office services covered • Transportation • Spa-like amenities (bathrobes/slippers) • “free” x-rays

  8. Practice Models • Non-participation (no insurance)/all preventive and primary care (which can include specialists) • Participation (accepts insurance)/retainer only covers non-covered services • Participation/amenities only

  9. Practice Models • Variations • Hybrid – concierge and non-concierge services within same practice • Direct Care – retainer plus high deductible insurance • Bifurcated corporate structure • Franchise/Practice Management • Direct non-physician ownership – only in states with weak corporate practice of medicine laws

  10. Practice Models • Key Decisions • Participation vs. Non-participation • All concierge vs. hybrid • What services included in the fee • What fees to charge • Size of patient panel • Independent practice or affiliate with franchise or management company

  11. The Numbers • 750-2,000 doctors • 200,000 patients • Retainer fees ranging from $600-30,000 • 100-500 patients • Concierge practices in most states • All but 11 states have concierge practices (per 2010 MedPAC report)

  12. Concierge Care Examples • MD2 – Portland based • Does not accept insurance • Will franchise for $75k plus 5% royalty • Goal is to create international network of similar practices

  13. Concierge Care Examples • MDVIP – • Boca Raton based closed model • Starbucks approach – over 450 physician affiliates in 32 states • $1500-1800 annual fee • 600 patients per physician • Does accept insurance • Will franchise turn-key operation for percentage of franchisee’s concierge fees • Franchisee keeps all insurance reimbursements

  14. Concierge Care Examples • Personal Physician Health Care, LLC/ • Boston based/closed model • Dual corporate structure – LLC and PC • PC accepts Medicare/private insurance • LLC provides concierge services • $5,000 per patient • 300 patients per physician

  15. Concierge Care Examples • Health Access RI • Network of independent medical practices • Monthly membership fee of $25-30 per month • Per visit fee of $5-10 • Provides primary care services • Does not accept insurance

  16. Concierge Care Examples • Qliance Medical Management, Inc. • Seattle-based “Direct Care” – retainer for concierge services backed up by high deductible insurance • Funded by venture capital and other investors • Shows growing interest of venture capital firms in direct care model • Monthly fee of $39-79 for unlimited preventive and primary care

  17. Concierge Care Examples • Other Examples • SignatureMD – Arizona, California, Georgia, Indiana, Missouri, Montana, New York, Oklahoma, Pennsylvania and Washington D.C • Concierge Choice Physicians (National) • PartnerMD – Virginia

  18. Concierge Medicine: Key Legal Considerations Best Practices to Comply with Medicare Regulations

  19. Concierge Medicine Under Medicare • Secretary of HHS, 2002: • Physicians participating in Medicare can charge patients a special fee to provide services that are not covered by Medicare • 2002 – Congress sent letter to HHS and OIG • Alleged that fees charged by MDVIP violated Medicare limiting charge rules and false claims act • HHS response did not call practices illegal as long as charges were for non-covered services • Cautioned that physicians entering arrangements should seek legal counsel

  20. Medicare Reimbursement Issues • Participating physicians • Physician accepts assignment • Medicare pays physicians 80% of fee schedule directly • Physician bills patient co-payment of 20% • 80% plus 20% is payment in full • Non-participating physicians • Patients pay physician directly • Patients seek reimbursement from Medicare • Limiting charge 115% of Medicare

  21. Medicare Reimbursement Issues • OptingOut • Physician has private agreement with Medicare beneficiary and Medicare is not billed by physician or patient for any services provided by physician • Review Medicare’s Opt-Out rules carefully • Be certain to properly opt out before billing any patients • Failure to properly “opt-out” renders any contracts entered into with Medicare beneficiaries void and nullifies the physician’s decision to opt-out

  22. Medicare Reimbursement Issues • Physicians who opt-out may not receive ANY remuneration from Medicare, including sharing in practice income where other practice physicians have not opted out for two years • Other physicians in practice are not required to opt-out • Recognize that opt-out is for two years

  23. Medicare Prohibition • Physicians cannot charge patients for services already covered by Medicare • Applies to participating and non-participating physicians • Violation of assignment agreement and carries civil money penalties • Opt-out physicians are not subject to rule

  24. Medicare Coverage Issues • What does practice bill patient for? • Medicare prohibits billing patients for covered services beyond limiting charges • Unclear distinction between “covered” and “not-covered”

  25. Covered Services • Generally, routine photocopying, routine overhead (including malpractice insurance costs, heating, lighting, staff salaries, etc), supplies, rent, continued education or certification fees • Malpractice fees

  26. Covered Service? • Annual Wellness Physical • Medicare covers annual wellness visit • Is it the same as an annual physical? • Many screening tests now covered • But, covered under specific intervals: cardiology screen every 5 years, pap smears 24 months, colonscopy 10 years • Women’s health issues: screening pap tests, pelvic exams, and mammography • Medicare enrolled physicians with retainer practices must clearly be certain they are well aware of current Medicare coverage guidelines

  27. Non-Covered Services • Same day appointments • Cell phone access • Email consultations/texting • Lectures to patients on wellness • Claims facilitation • Home visits • Access that has been explicitly expanded in measurable ways • Is this enough??

  28. Non-Covered Services • Additional or extra-ordinary services • CDs, booklets, or pamphlets prepared by the physician regarding the patient’s health, well-being, or a plan to achieve either • Testing or treatment that is explicitly not covered by Medicare • Any other services which provide a genuine value and which are not part of a patient’s covered service • Is the retainer fair market value for the services?

  29. Government Pronouncements • 2004 – OIG Alert to physicians about added charges for covered services • 2004 OIG settlement with physician for Personal Health Care Medical Care Contract with $600 annual fee because some covered services were included in the contract services • 2007 OIG settlement for over $100,000 with physician in North Carolina allegedly violating Civil Money Penalty Law for violating assignment agreement

  30. OIG Roadmap for New Physicians: Avoiding Medicare Fraud and Abuse • OIG education materials to teach physicians • Issued in 2011 • Specifically discusses “’boutique, concierge, retainer’” practices • Explains that can’t get paid a second time for a Medicare covered service • IMPORTANT – Explicitly states that it is legal to charge for service not covered by Medicare • Access fees or administrative fees are not allowed where they are to obtain Medicare covered services

  31. OIG Roadmap for New Physicians: Avoiding Medicare Fraud and Abuse • Alleged violation of assignment agreement because SOME of the services were already covered by Medicare • Legality of agreement turns on what additional fees cover

  32. OIG Roadmap for New Physicians: Avoiding Medicare Fraud and Abuse • Specifically notes CMP settlement • Physician paid $107,000 to resolve allegations of charging patients annual fee for Medicare covered services • Fee covered • Annual physical, same or next-day appointments, dedicated support personnel, around the clock physician availability, prescription facilitation, expedited and coordinated referrals, and other amenities at the physician’s discretion

  33. Potential Fraud and Abuse Issues • When dealing with Concierge Practice Management Companies be sensitive to: • State Fee Splitting Prohibition: prevent a physician from sharing any part of their fees with a third-party without the third-party performing certain substantive services • e.g., often payments are appropriate, but need to be tied to the value of the services • Potential kickback issues for marketing; see Advisory Opinion 10-23 (November 4, 2010) • Amenities as inducements that violate antikickback rules

  34. Prognosis for Concierge Care After the ACA • Primary care doctors at a premium • Many more patients • Primary care can opt for the better paying practice methodologies • ACO’s—Can concierge doctors be participating providers if they are seeing Medicare patients.

  35. ACA and Concierge Care • ACA Expanded Medicare Covered Services • Prevention Plans • Annual Wellness visits • Potential Limitations on DME and other prescriptions • Will Medicare restrictions be expanded to exchange policies. • Family Medical Homes

  36. Guidelines for Contracting with Patients • AMA Ethical Guidelines • AMA acknowledges that retainer contracts enhance patient choice and pluralism in the delivery and financing of health care. • However, AMA is concerned that a proliferation of retainer practices might “threaten access to care” • The AMA provides that retainer contracts: • Be entered into without duress, with full disclosure (including any knowledge the physician has regarding the patient’s insurance coverage)

  37. Guidelines for Contracting with Patients • AMA Ethical Guidelines • The AMA provides that retainer contracts: • Must be cancelable without financial penalty or “undue inconvenience” • Cannot promise “more or better diagnostic and therapeutic services” • a guideline which conflicts with the physician’s obligation to provide “more” in return for non-covered service fees • In sum, AMA cautions against a physician’s use unfair persuasion in the contracting process and emphasizes the need to uphold quality of care standards for both retainer and non-retainer patients alike

  38. Guidelines for Contracting with Patients • Where a physician runs a “dual” practice (serving both retainer and non-retainer patients) they must provide the same level of diagnostic and therapeutic service to both • Physician must facilitate transfer of patients to other physicians where necessary, or, if no other physicians are available, they must continue to treat them • Contracts should clearly and specifically describe all “non-covered” services and physicians must always be honest in their insurance or other payor billings

  39. Guidelines for Contracting with Patients • For Medicare beneficiaries • Contracts with beneficiaries must be available for inspection (although not necessarily filed with CMS) • Missed appointment fees may be charged, but you must charge all patients the same at the same rate • Never bill a patient for services covered by Medicare

  40. Concierge Medicine:Key Legal Considerations State LawsPrivate InsuranceContracting Issues

  41. State Insurance Law • Unlicensed insurance companies? • Practices that provide health care services for fixed, prepaid fee may be health plans under state insurance laws (e.g., Knox-Keene Act in California) • No other entity in chain of treatment/payment to accept risk/subject to state regulation (e.g., reserve requirements) • If practice goes under, patients left high & dry • Ex.: Washington medical group offered their own insurance plan that was put in state receivership

  42. State Insurance Laws • State Limitations on Concierge Medicine • West Virginia – Determined that a physician providing care for a flat fee was operating as an unlicensed insurer. • Maryland-2008 warning of insurance concerns • New Jersey – Warned that NJ physicians serving on HMO or PPO panels could not require a concierge fee, because it discriminates against HMO and PPO patients. • New York – Issued an informal warning against double billing for services already covered by private insurance. • Reoccurring Issue: Which services are covered and which are not?

  43. State Insurance Laws • Positive State Trends • WVA legislature has pilot program allowing physicians/health clinics to charge prepaid fee for primary care and preventive services • Florida – Found that MDVIP did not require an insurance license because the concierge fees were not considered insurance. • Massachusetts – Found that Personal Physicians Healthcare did not violate state insurance laws, and the state licensing board for physicians also found that the concierge model was legal.

  44. Other State Laws • Abandonment • Concierge docs must be careful in how they drop patients who do not become members • Must provide adequate written notice and appropriate referrals • Do not leave patients in unstable condition; provide transition care • Check state law

  45. Other State Laws • Corporate Practice of Medicine • For franchise/practice management models, physicians must control medical decision-making • Anti-kickback (all payor)/Fee Splitting • Will affect franchise or practice management fees • Franchise Laws • Check to see if state franchise laws apply if franchise/practice management model is chosen

  46. Private Insurance • Balance Billing and Nondiscrimination • Most provider agreements and some state insurance laws preclude balance billing of covered patients for covered services • Key is to show these are not covered services • However it is not always easy to distinguish what is a covered service and what is not. • Examples: 24/7 doctor availability, physical examinations, and coordination of care with specialists • Notice to patients • Nondiscrimination issue

  47. Negative Reactions Premera Blue Cross in Washington and Blue Shield of Rochester: extra fees violate balanced billing and non- discrimination laws Harvard Pilgrim Health Care in Mass: no longer contracts with physician groups that charge access fees Cigna and United Healthcare in Florida and Texas: physician concierge care practices no longer qualify for their networks Positive Reactions Regence Blue Shield in Washington: extras fees okay as long as for noncovered services BCBS of Mass: will contract with concierge practices as long as they notify patients of nature of practice and fee structure Private Insurance

  48. Contracting Issues • Business Entity-Practice Contracts • If franchise/practice management model chosen, business entity will need to enter into contracts with participating medical practices • Contract will specify whether business entity or practice will collect retainer fees • Practice receives license to use entity’s name and logo

  49. Contracting Issues • Patient Contracts – should contain: • Services covered by the subscription fee • What services/costs are not covered and any out-of-pocket costs • Whether the physician accepts Medicare/private insurance • When the retainer fee is payable/refundable • When services covered by Medicare or private insurance will be billed or collected • How much practice will charge for services not covered by retainer fee

  50. Contracting Issues • Patient Contracts • Contract should specify duration of membership and whether it automatically renews or patient must affirmatively renew • Patient should be able to terminate without financial penalties or excessive inconvenience • Patient must be able to understand the contract and sign it voluntarily – practice staff assistance • Contract should not make exaggerated claims about the quality of care