Leaving Insurance-Based Practice….Legally!

Faced with ever-growing bureaucracy and continued declines in reimbursement, a record number of practitioners is contemplating a shift into some form of direct-pay or retainer practice.

Holistic Primary Care's 2010 physician survey suggests as many as 1 in 5 doctors are now contemplating such a shift.

The move out of insurance-based practice and into a direct-pay or retainer-based model is not without medicolegal risks, and it needs to be done very carefully, says Alan Dumoff, JD, a lawyer specializing in integrative practice issues. Mr. Dumoff was a featured speaker at HPC's  Heal Thy Practice Transforming Primary Care 2011 conference in Long Beach, CA. The conversion from insurance to direct-pay was one of many topics he covered in a 2-hour medicolegal marathon.

"Starting a retainer-style practice doesn't exempt physicians from caring for those in need, especially those in need of urgent care," says Mr. Dumoff. "Doctors must help transfer—at no charge—non-participating patients to others. If no others are available, a doctor may be ethically obligated to continue caring for such patients."

Creating a Patient Safety Net

If you are setting up a cash-pay or retainer-based practice, you must provide all your patients with 30 days' written notice of the change. This must include appropriate referrals, and you must ensure that no patient will be left in unstable condition or in the middle of a significant course of treatment at the time of the conversion.

Retainer or "concierge" practice models depend upon a direct contract between you as the practitioner and patients who are willing and able to pay the fees required to be members of the practice. Therefore you must be able to prove that patients have entered into such contracts without duress, unfair persuasion, and with full disclosure that includes any knowledge you, as their physician, have regarding their insurance coverage.

Judicious Marketing

Mr. Dumoff strongly advised against pitching the benefits of the membership model in terms of "more or better diagnostic and therapeutic services." To claim that your practice will now offer better medicine to direct-paying patients is to invite medicolegal trouble because it implies that you have been prividing "substandard" or "lower quality" care to your insured patients all along.

Each patient who joins a retainer-based practice needs to be very clear about the terms of the arrangement, the services covered (and not covered), and the renewal and termination policy.

Mr. Dumoff recommended putting all of this on paper, and asking each patient who joins your retainer-based practice to sign an agreement that:

• Clearly specifies the scope of services covered by the retainer fee.
• Specifies whether the concierge practice will accept Medicare and/or other insurance.
• States that retainer fee is paid in addition to and not in exchange for any co-payments, deductibles or co-insurance.
• Specifies duration of membership, when fee must be paid, whether all or any portion is refundable or non-refundable.
• Specifies terms of renewal (i.e., automatic renewal or one-year term after which patient must notify practice of renewal).
• Permits the patient to terminate the relationship without financial penalties or undue burden.

This agreement must be in plain English and easy for patients to understand. It is prudent to have a practice staff member walk each patient through key terms of agreement. It is prudent to have a practice staff member walk each patient through the key terms of the agreement. There should be no ambiguity or misunderstanding--either on your end or your patients'--about the terms of the arrangement and the spectrum of services covered.

Want more medicolegal guidance and "preventive lawyering?" Purchase the download of Mr. Dumoff's enitre medicolegal intensive! The MP3 file comes complete with a PDF of the lecture slides.

Stay tuned for news about Heal Thy Practice 2012. We're returning to the Renaissance Long Beach......Nov. 9-11, 2012. Save the dates!