Concierge Medicine: Legal and Ethical Considerations Complying With Medicare Regulations, Insurance Laws and the Anti-Kickback Statute Today’s faculty features: 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10. WEDNESDAY, MAY 22, 2013 Presenting a live 90-minute webinar with interactive Q&A Robert M. Portman, Principal, Powers Pyles Sutter & Verville, Washington, D.C. Julie E. Kass, Principal, Ober|Kaler, Baltimore
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Concierge Medicine: Legal and Ethical Considerations Complying With Medicare Regulations, Insurance Laws and the Anti-Kickback Statute
patients a special fee to provide services that are
not covered by Medicare
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Medicare Reimbursement Issues
Participating physicians
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
Patients seek reimbursement from Medicare
Limiting charge 115% of Medicare
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Medicare Reimbursement Issues
Opting Out
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
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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
Medicare Reimbursement Issues
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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
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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”
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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
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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
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
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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??
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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
Non-Covered Services
Additional or extra-ordinary services
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Non-Covered Services and New Technology
Providing test results faster and through different
mediums?
Providing additional electronic aids to help patients
Additional monitoring services
35
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Government Pronouncements
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
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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
2007 OIG settlement for over $100,000 with physician in North Carolina allegedly violating Civil Money Penalty Law for violating assignment agreement
Government Pronouncements
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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
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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
OIG Roadmap for New Physicians: Avoiding Medicare Fraud and Abuse
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Alleged violation of assignment agreement because
SOME of the services were already covered by
Medicare
Legality of agreement turns on what additional fees
cover
OIG Roadmap for New Physicians: Avoiding Medicare Fraud and Abuse
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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)
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
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Potential State Insurance Requirements If a concierge practice is subject to state insurance regulations, it
could have to meet requirements such as
Capital maintenance
Reserve requirements
Filings
Certificate of authority
In Florida in order to obtain a certificate of authority, an insurer must maintain a surplus of not less than five million dollars for a property and casualty insurer, or $2.5 million for any other insurer.
In Washington in order to obtain a certificate of authority, the insurer must maintain four to five million dollars in combined capital and surplus funds.
State Insurance Law
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Other Potential State Law Limitations
State law might preclude physicians who have contracts with health insurers from collecting anything other than copayments and deductibles from patients.
Some states might also preclude or limit balance billing by out-of-network physicians who have no insurance contracts.
Other states might prevent HMOs and other insurers from contracting with providers whose services are not equally available to all plan members within the same class.
State Insurance Laws
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State of Washington
In 2003, Washington considered requiring concierge practices to obtain a certificate of registration as a healthcare service contractor or HMO.
Instead in 2007, Washington required by law that concierge practices (or “direct practices”) must
Inform patients if the practice does not accept insurance, as well as about the services they provide.
Return any fees held in trust, if the physician/patient relationship ends.
Only raise fees once per year.
Submit annual statements to the Insurance Commissioner.
State Insurance Laws
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State of Maryland Maryland Insurance Administration 2008 report detailed certain
indicators that a practice might be engaging in the unauthorized business of insurance: Annual retainer fee covers unlimited office visits or a limited number of services
that the physician cannot reasonably provide to each patient in his or her panel.
No limitations on the number of patients accepted into the practice.
Annual retainer fee does not represent the fair market value of the promised services.
Physician has substantial financial risk for the cost of services rendered by other providers.
The retainer agreement is non-terminable during the contract year and/or does not provide for pro-rated refunds.
State Insurance Laws
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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.
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?
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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.
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Analysis
MD2 model may be most vulnerable
provides unlimited service for prepaid fee
accepts risk
Way to reduce risk
Put fees in trust or escrow account?
State Insurance Laws
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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
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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
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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
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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
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
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Dr. Steven D. Knope of Arizona In 2008 Dr. Knope gave a high-profile interview about the benefits
of concierge medicine in eliminating the interference of third party payers.
A week later, Blue Cross Blue Shield called Dr. Knope to cancel his 15 year contract stating that he had violated the contract by practicing concierge medicine.
Dr. Knope explained that he does not accept insurance from his concierge patients, but that he still saw 100 regular patients who were covered by BCBS.
BCBS still canceled his contract and his patients were forced to find another doctor.
Private Insurance
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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
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Contracting Issues Business Entity-Practice Contracts
Practice should retain control over physician’s services
Specify that parties are independent contractors and company does not have control over medical services provided by practice to avoid CPM issues
Practice agrees to follow company’s standards and guidelines
Fees in compliance with state AK/fee splitting laws
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Contracting Issues Sample practice contracts provisions:
Liability insurance Mutual indemnification provisions Clearly defined services company will provide for practice (see next
slide) Payment from practice to franchise company Practice model/size Services practice will provide Whether practice will accept insurance Term and termination Non-compete and other restrictive covenants HIPAA BA agreement if entity touches PHI
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Robert M. Portman is a principal in the law firm of Powers Pyles
Sutter and Verville PC in Washington, DC. Mr. Portman
concentrates his practice in health and association law, focusing
on certification law, administrative law, antitrust law, litigation,
transactions, election and lobbying law, and legislation and
regulation in the health care field. He represents a wide range of
non-profit health care organizations including a large number of
national professional societies, trade associations, other health
care associations, voluntary health organizations and certification bodies, as well as numerous individual physicians, physician practice groups and other health care providers.
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