States With Laws On Retainer Practice

By Doug Trapp, amednews staff. | Source: AMEDNews | Posted Aug. 1, 2011.

Some of the measures were in response to rulings by insurance commissioners that retainer care had to be regulated as insurance.

  • WEST VIRGINIA, 2006:
    Allowed physicians to provide primary and preventive health care for a prepaid fee through a three-year pilot project that began in 2007. The pilot was extended for one year and expired on June 30, but the three existing retainer practices were allowed to continue.
  • WASHINGTON, 2007:
    Permitted retainer practices but specified that these practices cannot submit claims or discontinue care to patients based solely on health status. Practices can turn away patients if they reach capacity and can accept payment from some third parties, such as employers.
  • OREGON, 2011:
    Exempted retainer practices from meeting insurance code regulations if the practices are certified by the state. Certification in part requires that the practice cannot have been licensed as an insurer, must provide only primary care, and must disclose to patients that the practice is not insurance.


Direct Primary Care Model: Cutting Out The Insurer
A provision in the health reform law might provide a big boost to a little-known type of primary care.

By Doug Trapp, amednews staff. | Source: AMEDNews | Posted Aug. 1, 2011.

AUGUST 1, 2011 – A small but enthusiastic minority of primary care physicians believe they have found a practice model that can save money, improve patients’ long-term health and drastically reduce administrative hassles: direct primary care.

Direct primary care practices are an offshoot of the retainer care model, which provides unlimited or less-restricted access to physicians for a set fee. Under direct primary care, patients pay a monthly fee — sometimes less than $100 — for unlimited access to a range of primary care services, possibly as complex as minor surgeries and x-rays. Patients at these practices are encouraged to have basic health insurance to pay for specialist and hospital care, otherwise uninsured patients pay out of pocket for care outside the practice.

Physicians running direct primary care practices say there’s no reason for health insurers to be involved in primary care. Most people’s needs for such care are predictable. The monthly fees mean doctors can maintain much smaller patient populations, spend less time billing payers and more time providing care, and communicate with patients more by phone and email.

“What you have is a patient and a doctor and nobody in the middle,” said John Muney, MD, president of AMG Medical Group in New York, a direct primary care practice that charges between $79 and $129 a month per patient.

Direct primary care practices remain a small niche in the private health care market. Between 50,000 and 100,000 people are in such practices, according to an estimate by the Direct Primary Care Coalition, an informal industry association in Washington state.

But the model could become more popular in a few years. Under a provision in the health system reform law, direct primary care practices will be able to participate in health insurance exchanges that will launch by 2014. Those marketplaces are expected to provide coverage choices for tens of millions of uninsured people, as well as for many others who get their coverage from other sources now.

To qualify to offer their products on exchanges, direct primary care practices must provide medical homes and be packaged with wrap-around health plans for noncovered services. Lower-income individuals who choose such combination plans will be eligible for federal subsidies to help cover the cost.

The direct primary care model is attractive to doctors who are frustrated with the amount of time they spend on administrative work relative to patient care, said internist Garrison Bliss, MD, co-founder and chief medical officer for Qliance Medical Management, a chain of three practices in Seattle with plans to open clinics around the country. “The expansion of coverage to over 30 million Americans means that it is more critical than ever to find ways to re-attract clinicians into primary care. Direct primary care practices do just that,” he said.

The practices still face significant obstacles to expanding. For example, many employers offer only traditional health insurance, which makes employees reluctant to pay more out of pocket for primary care, especially if they’re healthy.

“People don’t like the idea of paying for something that they haven’t received,” said Jared M. Hendler, MD, a family physician with a direct primary care practice in Bainbridge Island, Wash., near Seattle.

But employers increasingly are looking for other options to deal with rising health insurance premiums. Direct primary care practices hope to become one such attractive alternative.
Back to the future

Although many people today might not have heard of the concept of direct primary care, employers for decades relied on very similar practices. “It’s basically how health care was paid for before health insurance companies came in and changed the model,” said Lester Baskin, MD, an internist who operates a direct primary care practice in Portland, Ore.

Dr. Baskin’s grandfather, also a physician, worked at the Western Clinic in Tacoma, Wash., several decades ago. It was the nation’s first retainer care practice, offering basic health care to lumber mill employees for 50 cents a month.

Today, retainer care practices vary in terms of services offered and costs to patients. Higher-end boutique practices can charge $10,000 a year or more for consumers to be part of patient panels as small as 50 people and for additional perks such as monogrammed bathrobes. Direct primary care practices charge much less but still might have panels that are a third the size or smaller of the typical 2,000-person panel.

Perhaps fewer than 1,000 physicians worked in direct primary care practices nationwide at the end of 2009. But that would be several times as many as in the late 1990s, according to an October 2010 report by the National Opinion Research Council at the University of Chicago.

The following is a response to the October 2010 Opinion Issued By The Concierge Medicine Research Collective, August 2, 2011 and is not part of the article above but should be considered when analyzing the confirmed and verified number of direct primary care and concierge physicians across the U.S.:

The Concierge Medicine Research Collective is a research and data depository created by Concierge Medicine Today. It has data-mined and, more importantly, ‘verified’ hundreds of concierge healthcare practices across the U.S. Our research over the past few years tells us that there are approximately 1,312 verifiable physicians practicing in a concierge medicine practice model across the U.S. We believe there may be a significant number of additional physicians practicing that are yet to be identified. An additional 815 number of verified physicians operate cash practices.

NOTE: This number accounts for only internal medicine/primary care and family medicine physicians. An interesting point about these numbers is that approximately 66% of them are internal medicine concierge medical practices. The remaining 34% are family practice concierge physicians. We are beginning to see concierge medicine business or practice models open up in dermatology; dental; cardiology; and nephrology as well as other specialties. Also, a very small but increasing number of concierge pediatrics practices are opening as well.

It’s important to add that there has been a significant amount of estimated numbers of concierge physicians given to the media over the past few years. Some are exaggerated and others much too low, as reported in the MedPAC (Medicare Payment Advisory Commission) Report in September 2010 by the National Opinion Research Center (NORC) at the University of Chicago and Georgetown University. They were only able to identify 756 physicians across the U.S. who have entered into what they termed retainer-based arrangements, commonly called “boutique” or “concierge” medicine. At the time of their study we believe there were well over 900-1,200 concierge physicians practicing nationally.

We are also in agreement with the following statement published in the Daily Breeze on April 7, 2011 by Dr. Thomas LaGrelius of Torrance, CA. He states, “While it is true that concierge practice is on the rise, the current number of such doctors is not just in the hundreds but in the thousands, perhaps tens of thousands. Most are below the radar. They work quietly and are never counted by bureaucrats.”

“I’d be hard-pressed to call it a large evolving trend,” said Roland Goertz, MD, president of the American Academy of Family Physicians. Still, he knows of family physicians who have switched to direct primary care and report that they are happy with the decision.

Trouble severing the insurance cord

Some direct primary care practices continue to accept patients with traditional health insurance. These physicians concede that such a hybrid practice is not ideal, but their economic situations require compromise.

Urgent care specialist and geriatrician Vic Wood, DO, runs two clinics in West Virginia and one in Ohio that provide a range of primary care services for monthly fees of $83 per person or $125 for families. About 500 people were signed up for his services as of late June.

But Dr. Wood also averages more than 14,000 annual visits from non-direct primary care patients at his clinics, most with private insurance. He’s hoping more of them will switch to the direct primary care side. If they do, his administrative work would decrease and he could spend even more time on chronic disease management.

Dr. Muney, a general surgeon in New York, also sees more privately insured patients than not, but only from one major insurer with whom he has a good relationship. “I’m quite sure by the end of this year or next year that balance will change” in favor of direct primary care, he said.

Dr. Baskin said direct primary care practices are most efficient when they rely exclusively on retainer care pay. “Hybrids provide none of the benefits and all of the disadvantages of the direct model.”

Unlike health insurers, some direct primary care practices have found that they actually fare better financially when they attract sicker patients. These patients require more office time but often prove more willing to pay for enhanced access over the long term, physicians said.

The lure of enhanced access

Dr. Baskin worked for Kaiser Permanente in Portland, Ore., for six years before starting his own direct primary care practice in 2005. “The aspects of medicine that I really liked I couldn’t sustain in a conventional model.”

Dr. Baskin charges adults $150 a month, and spouses or partners are an additional $100. Employees at the same business pay $79 a month if at least five sign up. Children’s care is about $40 a month.

Patients say they love being able to communicate with Dr. Baskin by email and phone. “That almost sells the practice by itself,” he said. Sometimes they email or text him photos that can help identify medical problems. He personally sees about 12 patients a day, half the number of a typical physician with privately insured patients, and his practice is at its limit of 300 patients.

Other direct primary care physicians have had more difficulty building their patient bases. Dr. Hendler, the solo family physician on Bainbridge Island, is losing money despite being only a 30-minute ferry ride from Seattle. That’s mostly because he has just 80 patients, each of whom pay monthly fees that range from $90 for children to $225 for people 70 and older. Twenty-five more enrollees and he would break even. He said he would close his patient panel at 200 people.

The biggest obstacle to growth is the high rate of privately insured people in the area who are satisfied with their coverage, Dr. Hendler said. “All I can say is that it’s not working yet, but we are making progress.”

Hopes for more regulatory backing

Dr. Wood and Dr. Hendler said they ran afoul of their state insurance commissioners not long after starting their direct primary care practices. Regulators ruled that they were offering health insurance and would have to be regulated as such.

So physicians in these states lobbied their legislatures, which adopted measures allowing direct primary care practices with certain requirements, including that they explain the limits of the coverage. The laws and other actions by state regulators helped blaze a path for the practices. U.S. Sen. Maria Cantwell (D, Wash.) and other members of the Washington state delegation helped insert the direct primary care provision into the health system reform law.

Direct primary care champions such as Dr. Bliss, of Qliance, are eagerly awaiting HHS regulations defining exactly how the practices will merge with wraparound coverage and be sold in exchanges.

The first HHS proposed rule on the exchanges, released July 11, indicated the department would prefer a single payment for the direct primary care and the wraparound coverage.

Dr. Bliss said this fee should simply pass through health insurers to the direct primary care practices, otherwise health plans could have some control over the practices’ finances.

Not everyone is sold on the idea yet.

Direct primary care might not be viable on a large scale, said Robert Berenson, MD, a senior fellow at the Urban Institute and a member of the Medicare Payment Advisory Commission. For example, some people still will need to see specialists and go to hospitals, increasing the chances that there will be gaps in care unless the wraparound plans are very well integrated with the primary care.

Dr. Baskin acknowledged that the jury is still out on whether spending more on primary care actually saves money in the long run. Also unclear is how much the combination plans will cost consumers.

But Dr. Bliss said experience shows that the math might prove relatively simple. “You don’t have to load down all the doctors with huge panels in order to make this work economically.”

What To Consider Before Making The Leap

The American Academy of Family Physicians advises doctors who are considering converting to a direct primary care or other type of retainer practice to ask themselves a number of questions, including:

  • Do I have a plan to transition my patients who won’t pay the fee?
  • Am I willing to be on call 24 hours a day, every day?
  • What services do I plan to offer?
  • If I still accept health insurance, with which health plans will I continue to participate?
  • Is it mandatory to have patients sign a waiver informing them of their financial responsibilities?
  • If transitioning to a full retainer practice, what type of advanced notice is contractually required by health plans and Medicare?
  • How many members do I need at the set fee to meet my overhead?
  • During the transition, what financial outlay will be required to stay solvent?

Source: “Retainer Fee Discussion Paper,” American Academy of Family Physicians, 2006 (www.aafp.org/online/en/home/practicemgt/specialtopics/designs/retainer.html)

MDs building concierge, cash businesses with
patient-friendly promises
By dbeaulieu | Fierce Practice Management

06/22/2011 – 06:18 – From longevity to 24/7 physician access, the promises from a growing crop of concierge and direct-pay practices are not just grabbing headlines, but also the attention of an impressive clientele of patients willing to pay retainer fees out of pocket. And if a Senate bill proposing to roll back recent restrictions on HSAs and FSAs passes, the market for high-touch services, such as extended-length consultations and wellness counseling, may expand even further.

The change would come as welcome news to Drs. Michael B. Wald and Nilay Shah of Integrated Medicine [1] in Mount Kisco, NY, who recently told Westfair Online that the strained economy has bumped the ranks of its charity care patients from 25 percent to 35 or 40 percent. Part of the reason the cash-only practice can subsidize nutritional treatment for such a large part of its patient base may be the $3,000-fee that regular customers pay for a “longevity package,” which includes constant monitoring and correcting of metabolic issues that could potentially affect a patient’s life span. Yet another segment of Integrated Medicine patients pay $15,000 per year for enhanced personal service, which includes around-the-clock cell phone access to Wald and Shah, as well as house calls.

Wald told the newspaper that about 95 percent of the practice’s patients prepay for care, while patients might get reimbursed for approximately one-third of the group’s services when filing direct claims with health plans.

Meanwhile, in Virginia, the recently opened Direct Access Internal Medicine [2] is looking to build a hybrid concierge clinic that will ultimately serve 2,500 to 3,000 traditional patients in addition to 800 to 1,000 who would pay an annual fee of $300 to $1,650 per year, depending on age, for specialized services, including 24/7 access to Dr. Ronald Haggerty and his partner, Katherine Beamer, a board-certified family nurse practitioner.

“Our goal is to be much more accessible than the average physician,” Haggerty told the Daily Press. “Usually you just don’t have the time to sit down and listen to the patient, to do some research if necessary, and have a good conversation about everything that may be affecting their health. We want to be able to provide that.” Both Haggerty and Beamer told the newspaper that the practice was growing slowly but steadily.

According to American Medical News, The Family and Retirement Health Investment Act of 2011, introduced by Sen. Orrin Hatch (R, Utah) in late May, would clearly allow HSAs, FSAs, and other tax-exempted accounts to be used to pay for direct primary care, concierge care, and other similar retainer care services. With confusion reining thus far on the issue, plan administrators have been making the final expense eligibility determinations and have not reached a consensus, said Norm Wu, president and CEO of Qliance Medical Management Inc., a Seattle-based practice that offers medical homes with unlimited primary care for a monthly fee.

In U.S., Employer-Based Health Insurance
Declines Further
Percentage of uninsured adults edges up slightly

By Elizabeth Mendes | Source: GALLOP | June 23, 2011

WASHINGTON, D.C. — Forty-five percent of American adults reported getting their health insurance from an employer in January through May of this year. This is down from 45.8% in 2010, and has been steadily declining since Gallup and Healthways started tracking health insurance sources in 2008.

The issue of health insurance in the United States is far from fading into the background. Currently, 26 states are seeking to overturn the new healthcare law in court. At the same time, nearly every state is scrambling to figure out to how to fund and implement the law amid tough economic times and congressional lawmakers are debating the future of Medicare and Medicaid. The confluence of these issues makes who is covered and how they get their coverage more relevant than ever.

There are two major forces that are affecting where Americans get their health coverage: One is President Barack Obama’s Patient Protection and Affordable Care Act and the other is high unemployment and underemployment. As only certain parts of the new healthcare law have been implemented, the latter issue appears to be the more influential one at this time, with steady declines since 2008 in the percentage of Americans who get their health insurance from an employer.


Healthcare Leaders Worry That Boutique Medicine Will Exacerbate Physician Shortage
Written by Rachel Fields | April 18, 2011

More physicians are moving into boutique practice, in which patients pay an annual fee on top of insurance in exchange for more personal care and better access to their physicians, according to a Boston Globe report.

According to a survey commissioned by a congressional agency last year, there were 756 concierge physicians in the country, an increase of 610 since 2006. By choosing boutique practice, physicians generally shrink their workloads and collect compensation in the form of the annual fee, which offsets losses from decreased case volume. The move to concierge medicine is driven in part by decreasing reimbursement and the necessity of long hours, according to the report.

Some healthcare leaders worry that more physicians will choose boutique medicine as reimbursement drops. When one physician moves to boutique practice, hundreds of patients are left without a physician — a problem considering the already existing shortage of providers.

Read the Boston Globe report on boutique medicine.

Concierge Medicine Could Create
“Insurance Caste System”, Critics Say
Written by Rachel Fields | April 04, 2011

The spread of concierge medicine, where patients pay a fixed fee to their physician in return for specialized attention and round-the-clock service, could pose a threat to Medicare by creating “tiers” of healthcare, according to a National Public Radio report.

If concierge medicine becomes increasingly popular, those unable to afford $1,000-a-year retainers could be forced onto a lower tier of healthcare, with longer wait times and less face time with physicians, according to the report. Medicare patients are especially vulnerable: As reimbursements decline, physicians are starting to rethink their participation in Medicare, exacerbating an already significant shortage of primary care providers.

The NPR report forecasts the divide as “a kind of insurance caste system.” While concierge physicians and their patients benefit from a more personal connection and better preventive care provision, patients in lower-than-middle-class households could see their choice of physicians drop drastically. According to the report, when one primary care physician switches to concierge practice, several hundred Medicare beneficiaries must find another provider.

Read the NPR report on concierge medicine.

July 23, 2010
Suggested Modifications To FFNCS Concierge Practice(s) As A Result of Healthcare Act

By John R. Marquis (jmarquis@wnj.com)

Warner Norcross & Judd LLP

After the publication of my recent article about the new Patient Protection and Affordable Care Act (the “Act”), some concierge physician clients have discussed with me how best to handle the new annual Personalized Prevention Planning Services (“3P Services”) created by the Act. I suggested in that article one method (which I will explain in more detail here) to accommodate these new wellness/preventive services within the normal structure of a “fee-for-non-covered-services” (“FNCS”)ii practice, but it would require a fundamental change in the financial structure of these practices.iii

From a legal standpoint, FNCS practices are based on the principle that a physician may bill Medicare only the approved rate for a given service and cannot charge the patient anything for the service other than an applicable co-pay and deductible. Of course, this rule applies only to
services that are actually covered by Medicare; it does not apply to services that are not covered.

The concluding element of this legal syllogism is that if the service for which a fee is paid is not covered by Medicare, the physician is not restrained by the Medicare laws as to what she can charge the patient.

Most FNCS practices today are built around an annual wellness physical (that is, one prompted not by any injury or malady but one simply scheduled on a periodic basis) and a personalized wellness plan. The following is language used in typical agreements:


June 25, 2010, CMS issued proposed rules relating
to the new Health Care Act and the new
3P Services for Medicare patients.

Click HERE for the rules.

Is the pending healthcare legislation “pro” or “anti” concierge medicine?

Source: Jack Marquis and Warner Norcross & Judd LLP | LINK | ShareThis

A LinkedIn acquaintance told me the other day that the new healthcare plans being considered in Washington were pro-concierge medicine. I asked him what he based that conclusion on and, essentially, here’s a paraphrase of what he said: wellness, overall care, etc. are being endorsed and encouraged in all aspects of the healthcare delivery. Endorsements for any preventative care are being talked about. Personalized healthcare models are one of the few opportunities and options to afford patients the overall care they need.

I don’t question his points, but I have not seen anything yet in either the House Bill or the Senate Bill that leads me to believe that the end result will be a boon to concierge medicine. In fact, I think there is plenty in these Bills that would point in the other direction. Here are some examples.

1. The contribution amounts to HSAs and other pre-tax acronym plans are being reduced. The less money going into these plans the less will be there to pay concierge medicine periodic fees.

2. Taxes on so-called “Cadillac” health insurance policies are being considered. The definition of these plans may eventually include high-deductible plans that would otherwise benefit concierge medicine.

3. The definition of what is acceptable private health coverage is going to fix a “not-greater-than” deductible amount. That would hurt fee-for-care concierge doctors in fitting their fees into the deductible portion of high-deductible plans.

4. Tax rates are going to go up on high income people, making it somewhat less likely they will want to spend their after-tax money on concierge fees. (See, for example, the Senate Bill’s increase in the Medicare portion of FICA and self-employment income tax.)

Source: Jack Marquis and Warner Norcross & Judd LLP | LINK

Cigna To Allow Young Adults To Remain On Parents’ Policies Starting June 1.
Source: NAHU

The AP (4/27) reports that on April 26, Cigna Corp. announced that “it will allow young adults up to age 26 to remain on their parents’ policies starting June 1.” The company now joins WellPoint, UnitedHealth Group, Inc., Aetna, Inc., and Humana, Inc. in extending such coverage. According to Cigna, “its new rules apply to dependent adults who would be ineligible for coverage under their parents’ plans because they live elsewhere or are in college.”

$2,500 Annual Limit on FSA Contributions (11-10-09)

SOURCE: http://wmol.com/jrm/fsa.html | Jack Marquis’ Concierge Medicine Postings Index

A Flexible Spending Arrangements (FSA) is a fund, normally part of an employer’s cafeteria plan, that allows an employee to pay healthcare expenses with pre-tax money. The employee directs some of his or her pay into the FSA and the amount contributed is not taxed to him or her. The employee can also use the FSA money to purchase over-the-counter drugs. The employer places a limit on how much an employee can divert to his or her FSA – the government does not impose such a limit, at least for now. Here is part of Section 532(a) of HR 3962 (the House-passed Healthcare Bill):

(i) LIMITATION ON HEALTH FLEXIBLE SPENDING ARRANGEMENTS. IN GENERAL.—For purposes of this section, if a benefit is provided under a cafeteria plan through employer contributions to a health flexible spending arrangement, such benefit shall not be treated as a qualified benefit unless the cafeteria plan provides that an employee may not elect for any taxable year to have salary reduction contributions in excess of $2,500 made to such arrangement.

In short, this turns a no-limit-on-contributions, or at least one set by the employer only, not by the government, into an FSA contribution limit of $2,500 per year.

Section 531 of HR 3962 also allows payments from FSAs, MSAs, and HSAs for “expenses incurred for a medicine or a drug…only if such medicine or drug is a prescribed drug or is insulin.” Over-the-counter drugs could no longer be reimbursed under HR 3962.

Read More at: http://wmol.com/jrm/

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.