Physicians and other healthcare professionals who labor under the decreasing reimbursement and increasing administrative burden of insurance companies and government healthcare programs, especially Medicare, may wonder if there is a way to accept payment directly from patients and avoid the obstacles presented by billing third-party payors.
While a strictly cash-pay or “concierge” practice is not a viable business model for many providers, for certain providers responding to the needs of certain patient populations, it can be a highly successful model that avoids many of the costs, delays, and administrative issues created by the need to bill third-party payors and comply with payors’ endlessly complex and shifting rules. Practice structures and pricing models can be highly variable and customizable to the needs of the practice and its patients. State law and licensing rules may in some cases limit certain structures or activities, but these would apply to a provider regardless and are generally far less burdensome than the restrictions imposed by payors.
Some practices may choose a more limited route and choose to accept commercial insurance plans, while not accepting Medicare or Medicaid plans. This approach can often limit many of the worst downsides of accepting third-party payment, while still leaving the practice open to a large patient population.
Regardless of business model, the most significant regulatory issues are often Medicare’s “opt out” rules. In general, a provider who furnishes services that are included in a Medicare benefit to a Medicare beneficiary is required to submit those claims to Medicare. This is because the Medicare program is structured as a set of benefits to which the beneficiary is legally entitled. Medicare’s concern is that, if a provider billed the beneficiary directly for a service that is a Medicare benefit, the beneficiary would be entitled to file a claim with Medicare for those services and Medicare would be required to pay without exercising any control over the provider.
Therefore, for a provider who wishes to furnish a service that is a Medicare benefit to a Medicare beneficiary and not bill the Medicare program, the provider is generally required to “opt out” of the Medicare program and enter into a private contract which each beneficiary before furnishing the service. Medicare requires both the opt out affidavit and the private contract to contain certain elements, but the core function is that both the provider and the beneficiary agree to not bill Medicare for the service, thus removing the legal entitlement that the beneficiary would otherwise have. Not all providers are eligible to “opt out” of Medicare, and those that are, such as physicians, must “opt out” as to all Medicare beneficiaries and all services.
For over 40 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to concierge medicine or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.