WIXLIB

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 aMedicare covered service IMPORTANT – Explicitly states that it is legal tocharge for service not covered by Medicare Access fees or administrative fees are not allowedwhere they are to obtain Medicare covered services38www.ober.com

OIG Roadmap for New Physicians:Avoiding Medicare Fraud and Abuse Specifically notes CMP settlement Physician paid 107,000 to resolve allegations ofcharging patients annual fee for Medicarecovered services Fee covered Annual physical, same or next-dayappointments, dedicated support personnel,around the clock physician availability,prescription facilitation, expedited andcoordinated referrals, and other amenities atthe physician’s discretion39www.ober.com

OIG Roadmap for New Physicians:Avoiding Medicare Fraud and Abuse Alleged violation of assignment agreement becauseSOME of the services were already covered byMedicare Legality of agreement turns on what additional feescover40www.ober.com

Potential Fraud and Abuse Issues When dealing with Concierge PracticeManagement Companies be sensitive to: State Fee Splitting Prohibition: prevent aphysician from sharing any part of their feeswith a third-party without the third-partyperforming certain substantive services e.g., often payments are appropriate, butneed to be tied to the value of the services Potential kickback issues for marketing; seeAdvisory Opinion 10-23 (November 4, 2010)41www.ober.com

Concierge Medicine: Key LegalConsiderationsState LawsPrivate InsuranceContracting IssuesRobert M. Portman, JD, MPProb.portman@ppsv.comPowers Pyles Sutter & Verville, PC

State Insurance Law Unlicensed insurance companies? Practices that provide health care services for fixed,prepaid fee may be health plans under state insurancelaws (e.g., Knox-Keene Act in California) No other entity in chain of treatment/payment toaccept risk/subject to state regulation (e.g., reserverequirements) If practice goes under, patients left high & dry Ex.: Washington medical group offered their own insuranceplan that was put in state receivership1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655043

State Insurance Law Potential State Insurance Requirements If a concierge practice is subject to state insurance regulations, itcould 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 mustmaintain a surplus of not less than five million dollars for a propertyand casualty insurer, or 2.5 million for any other insurer.In Washington in order to obtain a certificate of authority, theinsurer must maintain four to five million dollars in combinedcapital and surplus funds.1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655044

State Insurance Laws Other Potential State Law Limitations State law might preclude physicians who have contractswith health insurers from collecting anything other thancopayments and deductibles from patients. Some states might also preclude or limit balance billing byout-of-network physicians who have no insurancecontracts. Other states might prevent HMOs and other insurers fromcontracting with providers whose services are not equallyavailable to all plan members within the same class.1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655045

State Insurance Laws State of Washington In 2003, Washington considered requiring conciergepractices to obtain a certificate of registration as ahealthcare service contractor or HMO. Instead in 2007, Washington required by law thatconcierge practices (or “direct practices”) must Inform patients if the practice does not accept insurance, aswell as about the services they provide.Return any fees held in trust, if the physician/patientrelationship ends.Only raise fees once per year.Submit annual statements to the Insurance Commissioner.1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655046

State Insurance Laws State of Maryland Maryland Insurance Administration 2008 report detailed certainindicators that a practice might be engaging in the unauthorizedbusiness of insurance: Annual retainer fee covers unlimited office visits or a limited number of servicesthat 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 promisedservices.Physician has substantial financial risk for the cost of services rendered by otherproviders.The retainer agreement is non-terminable during the contract year and/or doesnot provide for pro-rated refunds.1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655047

State Insurance Laws State Limitations on Concierge Medicine West Virginia – Determined that a physician providingcare for a flat fee was operating as an unlicensed insurer. New Jersey - Warned that NJ physicians serving on HMOor PPO panels could not require a concierge fee, because itdiscriminates against HMO and PPO patients. New York - Issued an informal warning against doublebilling for services already covered by private insurance. Reoccurring Issue: Which services are covered and which arenot?1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655048

State Insurance Laws Positive State Trends WVA legislature has pilot program allowing physicians/healthclinics to charge prepaid fee for primary care and preventiveservices Florida – Found that MDVIP did not require an insurancelicense because the concierge fees were not consideredinsurance. Massachusetts – Found that Personal Physicians Healthcaredid not violate state insurance laws, and the state licensingboard for physicians also found that the concierge model waslegal.1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655049

State Insurance Laws Analysis MD2 model may be most vulnerable provides unlimited service for prepaid feeaccepts risk Way to reduce risk Put fees in trust or escrow account?1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655050

Other State laws Abandonment Concierge docs must be careful in how theydrop patients who do not become members Must provide adequate written notice andappropriate referrals Do not leave patients in unstable condition;provide transition care Check state law1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655051

Other State laws Corporate Practice of Medicine For franchise/practice management models, physiciansmust 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 iffranchise/practice management model is chosen1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655052

Private Insurance Balance Billing and Nondiscrimination Most provider agreements and some state insurance lawspreclude 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 coveredservice and what is not. Examples: 24/7 doctor availability, physical examinations, andcoordination of care with specialists Notice to patients Nondiscrimination issue1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655053

Private InsuranceNegative ReactionsPositive Reactions Premera Blue Cross in Regence Blue Shield inWashington and Blue Shield ofRochester: extra fees violatebalanced billing and nondiscrimination laws Harvard Pilgrim Health Care inMass: no longer contracts withphysician groups that chargeaccess fees Cigna and United Healthcare inFlorida and Texas: physicianconcierge care practices nolonger qualify for their networksWashington: extras fees okay aslong as for noncovered services BCBS of Mass: will contractwith concierge practices as longas they notify patients of natureof practice and fee structure1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655054

Private Insurance Dr. Steven D. Knope of Arizona In 2008 Dr. Knope gave a high-profile interview about the benefitsof concierge medicine in eliminating the interference of third partypayers. A week later, Blue Cross Blue Shield called Dr. Knope to cancel his15 year contract stating that he had violated the contract bypracticing concierge medicine. Dr. Knope explained that he does not accept insurance from hisconcierge patients, but that he still saw 100 regular patients whowere covered by BCBS. BCBS still canceled his contract and his patients were forced to findanother doctor.1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655055

Contracting Issues Business Entity-Practice Contracts If franchise/practice management modelchosen, business entity will need to enter intocontracts with participating medical practices Contract will specify whether business entity orpractice will collect retainer fees Practice receives license to use entity’s name andlogo1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655056

Contracting Issues Business Entity-Practice Contracts Practice should retain control over physician’s services Specify that parties are independent contractors andcompany does not have control over medicalservices provided by practice to avoid CPM issuesPractice agrees to follow company’s standards andguidelinesFees in compliance with state AK/fee splitting laws1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655057

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 companyPractice model/sizeServices practice will provideWhether practice will accept insuranceTerm and terminationNon-compete and other restrictive covenantsHIPAA BA agreement if entity touches PHI1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655058

Contracting Issues Franchise/Practice Management Services Patient demographic analysis Initial and follow up mailings; other marketing Patient education seminars Processing membership enrollments Staff support Billing & Collections of membership fees Electronic medical records After hours call center Access to lower cost liability insurance and otherproducts/services1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655059

Contracting Issues Patient Contracts- should contain: Services covered by the subscription fee What services/costs are not covered and any out-of-pocket costs Whether the physician accepts Medicare/private insurance When the retainer fee is payable/refundable When services covered by Medicare or private insurance will bebilled or collected How much practice will charge for services not covered byretainer fee1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655060

Contracting Issues Patient Contracts Contract should specify duration of membership andwhether it automatically renews or patient mustaffirmatively renew Patient should be able to terminate without financialpenalties or excessive inconvenience Patient must be able to understand the contract andsign it voluntarily—practice staff assistance Contract should not make exaggerated claims about thequality of care1501 M Street NW Seventh Floor Washington, DC 20002 202-466-655061

Concierge Medicine: Key Legal ConsiderationsGuidelines and TipsMay 22, 2013Julie Kass410-347-7314jekass@ober.comwww.ober.com

Guidelines for Contracting With Patients AMA Ethical Guidelines AMA acknowledges that retainer contractsenhance patient choice and pluralism in thedelivery and financing of health care. However, AMA is concerned that a proliferation ofretainer practices might “threaten access to care” The AMA provides that retainer contracts: Be entered into without duress, with fulldisclosure (including any knowledge thephysician has regarding the patient’sinsurance coverage)63www.ober.com

Guidelines for Contracting With Patients AMA Ethical Guidelines The AMA provides that retainer contracts: Must be cancelable without financial penalty or “undueinconvenience” Cannot promise “more or better diagnostic andtherapeutic services”– a guideline which conflicts with the physician’s obligation to provide“more” in return for non-covered service fees In sum, AMA cautions against a physician’s use unfairpersuasion in the contracting process and emphasizesthe need to uphold quality of care standards for bothretainer and non-retainer patients alike64www.ober.com

Guidelines for Contracting With Patients Where a physician runs a “dual” practice (serving bothretainer and non-retainer patients) they must provide thesame level of diagnostic and therapeutic service to both Physician must facilitate transfer of patients to otherphysicians where necessary, or, if no other physicians areavailable, they must continue to treat them Contracts should clearly and specifically describe all “noncovered” services and physicians must always be honestin their insurance or other payor billings65www.ober.com

Tips to Reduce Risk Charge retainer fees only for noncovered medicalservices Take proper steps to transfer nonparticipating patientsto other competent physicians Fully inform patients which services are covered by theannual fee, which are covered by insurance, and whichwill require additional out-of-pocket payments by thepatient66www.ober.com

Tips to Reduce Risk Follow carefully rules for opting out of Medicare as wellas the termination provisions in agreements withmanaged care and other insurers For those who do not opt out of Medicare or privateinsurance, do not require insured patients to pay aretainer fee as a condition of receiving covered services To avoid bumping up against state insurance laws, donot offer all necessary medical services in exchange for afixed, prepaid fee; rather provide clearly defined servicesfor retainer fee67www.ober.com

www.ober.comPrincipal, Ober Kalerjekass@ober.com410.347.7314100 Light StreetBaltimore, MD 21202Julie E. Kass focuses her practice on the fraud andabuse aspects of Medicare and Medicaid, includingthe federal Stark and antikickback laws, OIGexclusion authorities and civil money penalties. Inaddition, Julie is a leader in the firm's ACO workinggroup, assisting various clients in navigating CMS'ACO rules and application procedures. Sherepresents a variety of health care entities, includinghospitals, large physician practices, physicaltherapy companies, and long-term care facilities.www.ober.com/attorneys/julie-kass

Robert M. PortmanRobert M. Portman is a principal in the law firm of Powers PylesSutter and Verville PC in Washington, DC. Mr. Portmanconcentrates his practice in health and association law, focusingon certification law, administrative law, antitrust law, litigation,transactions, election and lobbying law, and legislation andregulation in the health care field. He represents a wide range ofnon-profit health care organizations including a large number ofnational professional societies, trade associations, other healthcare associations, voluntary health organizations andcertification bodies, as well as numerous individual physicians,physician practice groups and other health care providers.Robert M. PortmanPrincipalPowers Pyles Sutter &Verville PC1501 M Street NWSeventh FloorWashington, DC 20005202-466-6550 Main202-872-6756 DirectRob.Portman@ppsv.com1501 M Street NW Seventh Floor Washington, DC 20002 202-466-6550

Concierge Care Examples MD2 - www.md2.com Seattle based/closed model started in 1996 Original concierge practice Now has offices in Portland, Chicago, and Dallas Mercedes medicine All the primary care you want for 13.5-20K/year Plus spa-like amenities, physician escort for specialist visits, prescription drug pickup/drop-off service