The American College of Physicians (ACP) recently released an informative policy position paper that assesses how “concierge” and similar direct pay health care arrangements between doctors and patients impact patient care. Our Georgia business and healthcare law firm follows developments in the healthcare industry that affect physicians, medical practices and other healthcare businesses.
“Direct Pay” refers to an important and evolving alternate payment model and health care arrangement between medical practices and patients. Rather than traditional fee-for-service reimbursement models that render physicians and medical practices dependent upon steerage of patients from insurers or other third-party payers, a typical direct pay contracting model utilizes a flat fee, often paid monthly or annually, which the patient pays out of pocket and “direct” to the doctor (as opposed to through an insurance transaction) to compensate the physician for access to a contractually-agreed menu of health care services. The hallmark of direct pay practices is, for the patient, greater access to the physician and, for the doctor, less red tape and a more rewarding professional experience focused on providing care. Direct pay physicians, of necessity, typically limit the number of patients they see, compared to a traditional, third-party payer based model.
Direct pay contracting practice models are often described as “concierge,” “specialty care,” “retainer-based,” “cash pay,” and “boutique,” though the particulars of such arrangements can vary significantly. Formerly, concierge practices were viewed as (and often were) designed for affluent patients only, providing greater access for a few patients who could afford Cadillac access to the concierge doctor but wholly inaccessible to the average patient. Now, however, typical direct pay contract models are not only more affordable than prior concierge models, they are often a more affordable option than comprehensive traditional insurance plans, particularly those with very high deductibles. Therefore, increasingly patients are looking to direct pay practices to meet their needs. Sometimes, patients may seek to pair a direct pay primary care option with catastrophic health insurance coverage to meet more expensive health care needs, such as hospitalization.
The ACP’s position paper examines this trend and, especially, “patient care implications” of the direct pay model. Specifically, the position paper examines the following aspects of direct pay models:
- Direct pay model characteristics
- Prevalence of direct pay models
- The Affordable Care Act vis a vis direct primary care
- Direct pay models’ effect on access to health care
- Direct pay models’ effect on the cost of health care
- Direct pay models’ effect on the physician workforce
- The value of personalized direct pay services
- Ethics and professionalism issues associated with direct pay models
The ACP then makes nine specific statements and recommendations regarding direct pay models. While the ACP acknowledges “pressures on physicians and patients that are undermining traditional medical practices” served by a third-party payer reimbursement model, the ACP expresses concern about whether the rising trend of direct pay medical practices will limit access to care. Among its nine statements/recommendations, the ACP asserts:
- Physicians in practices that choose to downsize their patient panel for any reason should consider the effect these changes have on the local community, including patients’ access to care from other sources in the community, and help patients who do not stay in the practice find other physicians.
- Physicians who are in or are considering a practice that charges a retainer fee should consider the effect that such a fee would have on their patients and local community, particularly on lower-income and other vulnerable patients, and ways to reduce barriers to care for lower-income patients that may result from the retainer fee.
- Physicians participating, or considering participation, in practices that do not accept health insurance should be aware of the potential that not accepting health insurance may create a barrier to care for lower-income and other vulnerable patients. Accordingly, physicians in such practices should consider ways to reduce barriers to care for lower-income patients that may result from not accepting insurance.
- Physicians should consider the patient-centered medical home as a practice model that has been shown to improve physician and patient satisfaction with care, outcomes, and accessibility; lower costs; and reduce health care disparities when supported by appropriate and adequate payment by payers.
Other schools of thought view direct pay practice models as a way to enhance – not limit –patient access to care, while focusing on wellness and prevention and improving the overall care experience for patients. The Direct Primary Care Coalition, for example, espouses accessibility as a hallmark of direct pay practices, including the following two specific principles:
- Advocacy: DPC providers are committed advocates for patients within the healthcare system. They have time to make informed, appropriate referrals and support patient needs when they are outside of primary care. DPC providers accept the responsibility to be available to patients serving as patient guides. No matter where patients are in the system, physicians provide them with information about the quality, cost, and patient experience of care.
- Stewardship: DPC providers believe that healthcare must provide more value to the patient and the system. Healthcare can, and must, be higher-performing, more patient-responsive, less invasive, and less expensive than it is today. The ultimate goal is health and wellbeing, not simply the treatment of disease.
Though like many issues in health care, the trend toward direct pay practices is subject to challenges as it unfolds and seeks its proper place in the healthcare industry, the trend appears destined to grow and improve patient and physician satisfaction for those who participate in such arrangements. If you have questions about this post, please contact the author.
Disclaimer: Thoughts shared here do not constitute legal advice. Please consult with an attorney to discuss your legal issue.