Concierge and Direct Primary Care (DPC) Physician Practices

In the trade-off between more patients and more personalized care, many primary care physicians are choosing the latter. And in an era of increasing productivity demands, regulatory complexity, and a pandemic that’s shaken healthcare to its core, it’s not surprising.

For the family physicians and general practitioners, internists, pediatricians, and geriatricians who want to transition to a Direct Primary Care model, what is surprising is that “simplifying” one’s practice requires a considerable amount of work. That’s especially true when it comes to creating a compliant framework that doesn’t run afoul of state and federal fraud and abuse laws.

At Hendershot Cowart P.C., our health and medical law team deals with these matters daily. We regularly help physicians refine and establish medical practices in compliance with applicable laws, Medicare rules, and state insurance regulations, and consult with DPC physician owners on all aspects of compliance and employment as they transition from standard models of care to more flexible alternatives.

Whether you’re transitioning from traditional practice, already operating a Direct Primary Care or concierge practice, or considering a hybrid model, we can help.

What Is the Difference Between Direct Primary Care and Concierge Medicine?

Both Direct Primary Care and Concierge Care are alternatives to the traditional fee-for-service reimbursement model. Their defining characteristic is the delivery of more individualized, accessible, and comprehensive primary care services in exchange for a flat retainer fee usually billed to patients on a monthly basis. There are key differences between the two models as well that impact the regulatory set-up of these practices:

• Direct Primary Care (DPC) is retainer-based primary care practice framework that generally bypasses health insurance. While DPC patients may have private insurance or Medicare to cover hospital stays or diagnostic tests, DPC providers are prohibited from billing insurance for their services. DPC practices also generally charge lower retainer fees than concierge providers.
• Concierge Care is a subset of the retainer-based primary care model. Unlike other DPC physicians, concierge providers generally do bill insurance providers. They also typically charge a higher monthly fee in exchange for often unlimited access to the physician. These higher fees cover services – such as more face-to-face time with the physician – not reimbursed by third-party insurance carriers.

Setting Up or Transitioning to Direct Primary Care and Concierge Practice Models

Providers looking to set up a Direct Primary Care or concierge practice have multiple legal and regulatory aspects to consider. Some are unique to DPC; some apply only to Concierge Care. Issues that apply to both models include:

• Entity Selection. What is the best legal structure for your Direct Primary Care or concierge practice? In Texas, your options include limited liability partnerships (LLPs), professional limited liability companies (PLLCs), or professional associations (PAs). Your choice of entity should take into consideration issues of regulatory and legal compliance, flexibility, favorable tax treatment, and proper risk-management.
• Corporate Practice of Medicine Doctrine. Per Texas law, corporations and non-physicians are prohibited from employing a physician to provide healthcare services in the state. This prohibition will impact your choice of entity, ownership structures, operations, and agreements. Violations of the Corporate Practice of Medicine doctrine are severe and can result in disciplinary action including fines and medical license suspensions.
• Medicare Considerations: Providers who collect retainer fees under a DPC or concierge model and also bill Medicare for enrolled patients could be committing False Claims Act violations. Experienced counsel can help physicians evaluate the implications of serving Medicare beneficiaries and available strategies for reducing exposure. This can include controlling provider enrollment status, patient population, or payment process.
• Patient Contracts and Forms: Physicians who wish to open a DPC practice or offer concierge services should create a written medical services agreement that clearly outline the fees due, services provided by the practice, and other important considerations. These contracts must be structured in compliance with applicable laws and in consideration of your patient population. Failure to delineate fees and services may violate fraud and abuse laws. Make sure patient forms are also updated to align with the medical services agreement and any new legal entities.
• Advance Beneficiary Notice. Almost all insurance providers will require Direct Primary Care physicians to give patients advance notice of non-covered services prior to providing services using a form similar to an Advanced Beneficiary Notice (ABN). While not required, Concierge physicians may also want to give new patients advance notice of non-covered services – in this case, the monthly retainer fee – prior to providing services, using an ABN-like form.
• HIPAA Compliance: HIPAA compliance must always be top of mind when structuring practice operations and processes. A hybrid model that offers both concierge and non-concierge services operating as separate entities, or a practice that contracts with a Management Services Organization, should consider necessary agreements, including a business associate agreement, to maintain patient privacy.
• Compliance with Patient Notification Requirements: Providers moving to DPC or concierge models must also consider their existing patient population and how to inform them of ongoing transitions and make efforts to find new primary care providers for those who choose not to participate. Be mindful of state or insurance providers requirements to notify patients of

Legal Considerations Specific to Direct Primary Care:

In addition to the legal matters above, Direct Primary Care providers and practice managers must also consider:

• Direct Primary Care Statute. Texas does not define direct primary care as an insurance plan, so it operates outside of Texas Department of Insurance (TDI) regulations. Texas codified this rule in 2015 to improve access to direct primary care. Under this statute, physicians may not bill a third-party insurer for direct primary care paid under a retainer-based medical services agreement. The law also protects physicians and patients from being penalized by third-party insurers for participating in direct primary care.

Legal Considerations Specific to Concierge Care:

• Private Insurance. Insurance companies don’t want to alienate member employers and their insureds by filling their network with concierge providers. As a result, most insurance plans discourage the practice of charging additional fees beyond required copayments and coinsurance. They may also require that patients who do not pay the monthly fee receive the same treatment and access to care as patients who do pay the monthly retainer. Providers transitioning to a Concierge Care model should carefully review the provider manuals for their private payors to determine the compliance of the new model with any existing agreements.

What Are the Advantages of Direct Primary Care or Concierge Medicine?

Both types of medical practices offer benefits to primary care providers and their patients. These include:

• Patient-focused care. Primary care physicians account for less than a third of all physicians in practice but handle more than half of all physician office visits. For many providers who practice under standard models of care, this means spending more time on administrative and regulatory record-keeping aspects of practice rather than actually treating patients. With DPC and concierge models, physicians can focus more time and attention on a smaller group of patients.
• Simplification of the patient-physician relationship. Transitioning to a DPC or concierge model requires time and effort, but it can ultimately allow providers to simplify the physician-patient relationship. In a world where health care has become increasingly complex, and payments are increasingly divided and diverted elsewhere in the system (for things like administrative expense, technology, equipment, and other providers), many primary care physicians are attracted to the idea of cutting out the middleman and keeping a higher percentage of each dollar paid. These same attributes also make the DPC model appealing to various types of patients, including high-income earners and those with high-deductible health insurance plans who seek more attentive preventative and routine care while having coverage for catastrophic events.
• Better patient outcomes. More frequent primary care visits and longer face-to-face time with the primary care physicians are associated with longer life expectancies and better health outcomes.

Set Up Your Direct Primary Care or Concierge Care Practice With Confidence. Call Hendershot Cowart P.C.

DPC and concierge models offer many tangible benefits to providers and patients, but they also come with considerable risks. If you are a physician exploring options for transitioning to direct primary care, working with experienced counsel is critical to ensuring regulatory compliance, effectively controlling risk, and creating the foundation for a successful practice.

Our attorneys at Hendershot Cowart P.C. leverage decades of experience to help providers navigate a complex legal and regulatory landscape when establishing and running retainer-based practice models. To speak with an attorney about your particular practice, call (713) 909-7323 or contact us online.