5 Key Medicare Considerations Before Opening a Direct Primary Care Practice

iStock-1056799938-e1684354865672Both concierge medicine and direct primary care practices have become popular alternatives to the traditional insurance medical practice model.  Direct Primary Care (“DPC”) practices generally cut insurance companies out from the provider-patient relationship.  Medicare offers unique considerations because participating and non-participating providers maintain certain responsibilities regarding Medicare beneficiaries, and many providers are hesitant to “opt out” of Medicare.  With this post, we intend only to highlight a few points to consider before accepting private pay from Medicare beneficiaries outside of copays.  If you have questions regarding this blog post or starting a concierge practice, you may contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@littlehealthlaw.com. You may also learn more about our law firm by visiting www.littlehealthlaw.com.

 

Point 1- A Medicare-participating provider violates Medicare requirements by accepting private payment from a Medicare beneficiary for services that in whole or part constitute “covered services” as defined by Medicare.

Point 2- The federal Department of Health and Human Services (“HHS”) has established that requiring payment for non-covered services does not violate Medicare requirements. In fact, the HHS Office of Inspector General (“OIG”) states on its website: “It is legal to charge patients for services that are not covered by Medicare.”

Point 3- A complicating aspect of the seemingly simple rule is that whether a service is a “covered service” is determined solely by CMS, not by you.  Therefore, including language in a patient agreement such as “this fee does not cover any covered services”, though perhaps adequate to express an intention, does not prevent a practice/provider from being found to have violated Medicare rules. In other words, good intentions do not necessarily insulate you. A 2004 OIG alert underscores this point. The physician in the alert was found to have violated Medicare requirements by presenting patients in a concierge practice – including Medicare beneficiaries – with a “Personal Health Care Medical Care Contract” with a $600 annual direct-pay fee.  Even though the physician characterized the services to be provided under the contract as “non-covered,” OIG reviewed the actual services offered and determined that at least some of them were already covered and reimbursable by Medicare.  OIG determined therefore that each patient contract constituted a request for payment for Medicare “covered services” and was a violation of the physician’s assignment agreement with Medicare.  The physician agreed to pay a settlement amount to OIG and to stop offering those contracts to his patients.  This outcome underscores a critical area of risk:  It is not the concierge contract (nor any label utilized therein) that determines whether items or services offered are “covered” or “non-covered.”

Point 4- It is not always clear what may be considered a partially covered service.  The full statement on the OIG’s website mentioned above is: “It is legal to charge patients for services that are not covered by Medicare. However, charging an ‘access fee’ or ‘administrative fee’ that simply allows them to obtain Medicare-covered services from your practice constitutes double billing.”  This underscores the point that offering increased access or efficient administration through membership (although a true benefit to your patients), could place you adverse to Medicare requirements.  To provide additional examples, in the 2004 alert mentioned above, the OIG found the provider engaged in double billing when the membership included: “coordination of care with other providers,” “a comprehensive assessment and plan for optimum health,” and “extra time” spent on patient care.  In 2007, the OIG took issue with another membership-based medical practice where membership was in exchange for: (1) an annual comprehensive physical examination; (2) same day or next day appointments; (3) support personnel dedicated exclusively to members; (4) 24 hours-a-day and 7 days-a-week physician availability; (5) prescription facilitation; (6) coordination of referrals and expedited referrals, if medically necessary; and (7) other service amenities as determined by the physician.

Point 5- The penalties for violating Medicare requirements can be draconian, including treble damages under the False Claims Act and potential exclusion from the Medicare program.

 

These points reveal the complexity in complying with Medicare rules as a provider.  If you have questions regarding this blog post or wish to discuss the process of migrating to a direct primary care or concierge practice, you may contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@littlehealthlaw.com. You may also learn more about our law firm by visiting www.littlehealthlaw.com.

 

*Disclaimer: Thoughts shared here do not constitute legal advice.

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