Access fees have physicians moving cautiously
From the April ACP Observer, copyright © 2004 by the American College of Physicians.
By Bonnie Darves
In the mainstream media and the trade press, physicians who charge patients access fees for nonbillable services or personalized service have received a great deal of attention. From newspaper articles to television coverage, the media have made these new fees out to be the next new wave in health care.
But even among physicians who have the most to gain from charging such fees—doctors battling stagnant reimbursements and climbing overhead—relatively few practices appear to be actually asking their patients for additional fees. And physicians who have started to charge access fees, as well as those who are seriously considering instituting them, all say that they are moving cautiously.
Physicians say they have good reason to take a wary view of access fees. From obvious concerns about how patients will react to more complex questions about whether these arrangements are legal, the topic of access fees raises many unknowns for practicing physicians.
Here is an overview of some of those concerns, as well as a look at how a handful of practices are proceeding with the idea.
A cautious approach
When it comes to charging patients additional fees for services, the range of options runs the gamut, from the thousands of dollars a year that relatively few physicians are charging individual patients for "concierge medicine" to the $50 "access fees" that some doctors want to charge patients to pay for administrative services that insurers don't cover.
At the extreme end of the spectrum are programs like MD2, based in Seattle, which charges upwards of $10,000 a year for "premium" care that includes all services typically rendered in an office setting, as well as some medications. In addition, MD2 physicians will make house calls as requested—and will arrange and accompany patients on visits to specialists. A handful of other companies around the country now charge between $1,500 and $2,000 a year for less comprehensive concierge-type services.
At the other end of the spectrum is general internist Harry Oken, FACP, of Columbia, Md. He and the five other internists at Milles, Oken & Seals have been considering access fees for a while, but they are still on the fence.
The group is considering charging patients an annual fee of perhaps $50 for services Dr. Oken deems "nonbillable" and time-consuming—such as completing some forms—that payers don't consider already covered by reimbursement for office visits or other services.
'What we have been trying to do is to get a lot of people to [charge fees] at once to draw local attention to it. But that hasn't happened.'—Harry Oken, FACP
However, Dr. Oken's group is reluctant to "get off the dime" for several issues. For one, the group is hesitant to become a trend leader, and few local practices have indicated they're ready to make a similar move. Dr. Oken has been hoping that the grassroots discussions that have occurred among members of ACP's Maryland Chapter would spark more interest than he has seen to date.
"We've been looking at this for two or three years," he explained. "It's a big step, and what we have been trying to do is to get a lot of people to do it at once and to draw local attention to it. But that hasn't happened."
Surprisingly, one obstacle Dr. Oken's group expected to surface hasn't yet become a factor: patient opposition to the notion of some sort of supplemental fee. The group's physicians have talked openly to several patients about the idea, and to date, none has reacted negatively.
"There's been no pushback," he said. "What I hear is, 'You deserve the extra fee.' We live in a demographic area where people understand, when they receive their Medicare statements, how much we've been paid."
Harry Oken, FACP, says he and his colleagues can't get a definitive answer on whether charging modest access fees violates state or federal laws.
Still, Dr. Oken acknowledged that for patients, talking about a hypothetical fee and actually paying a bill are two different things. "We'll see what happens when the rubber meets the road," he said.
About 10 years ago, infectious disease specialist Janelle A. Rhyne, FACP, found out the hard way that it can be risky to lead a trend when it comes to charging fees to patients.
In the early 1990s, her practice, Wilmington Health Associates in Wilmington, N.C., began charging for time-consuming phone calls related to such issues as cholesterol medication adjustments. "There was a big uproar from our patients, and as a result we stopped charging the fees," recalled Dr. Rhyne, who is Governor for ACP's North Carolina Chapter.
But the practice learned some valuable lessons about patient demand, one of which Dr. Rhyne suggested practices should consider before charging access fees. The group formed a patient advisory council whose members now evaluate prospective changes in the practice and generate suggestions for improving service, such as including cancer screening guidelines and vaccination reminders in patients' bills.
"What started out as a negative situation has turned out to be a positive experience," Dr. Rhyne explained.
On the other hand, GreenField Health System in Portland, Ore., which in 2001 was among the first internal medicine practices in the country to charge patients an annual membership fee, has not experienced much negative reaction. The group began charging patients an annual fee of $350 to help defray costs of providing innovative services such as direct patient e-mail access to physicians.
General internist Charles Kilo, FACP, the group's president, said that most patients who join the group know they'll be paying the annual fee. They also understand that the GreenField model, which incorporates open access and uses technology to streamline care and remove barriers to patient-physician communication, is innovative. In addition, most of GreenField's patients join the practice as a result of word-of-mouth referrals.
"The difference between us and other concierge-type practices is that we're orders of magnitude less expensive," Dr. Kilo pointed out. "Still, I think the average mindset of individuals is that they pay enough for health care and aren't willing to pay more. For that reason, I think the marketplace in general for these [concierge] practices is fairly limited."
Dr. Kilo also noted that GreenField doesn't charge all of its patients the annual fee, and that 10% of the practice's patients have Medicaid, not private insurance. "I think there are mechanisms of merging your social responsibility with this type of practice," he said.
While patient reaction is a big concern, physicians considering access fees face other questions. One critical issue: Will charging access or administrative fees violate state or federal laws?
Dr. Oken's group has posed exactly that question to its state medical society and several other entities, but it has yet to receive a definitive answer. While the group was close to charging an annual fee, he said, "We backed off because we still haven't gotten the legal input."
William F. Jessee, MD, chief executive officer of the Medical Group Management Association (MGMA) in Englewood, Colo., urged medical practices considering levying extra fees to make sure they won't get into hot water with commercial or government payers or regulatory entities. Groups may need legal counsel to review the prospective program, he said, and physicians and the practice's attorneys should read the fine print in all payer contracts.
"My advice to members who inquire about these structures is to be very cautious about the concept because it has the potential to run afoul of contractual arrangements with insurers, and possibly even some of the Medicare regulatory requirements," Dr. Jessee said. He added that from his perspective, Medicare has been "frankly ducking the issue. They've studiously avoided it."
In an exchange between Rep. Henry Waxman (D-Calif.) and HHS Secretary Tommy Thompson on the issue of charging patients fees, Mr. Thompson wrote that "physicians should be able to proceed with such agreements, as long as they are in accord with a reasonable interpretation of the law" and the fees are not charged for Medicare-covered services.
A memorandum from the Centers for Medicare and Medicaid Services (CMS) issued by CMS official Thomas Grissom, however, stated that "if the annual fee includes payment for covered services, the agreement may result in duplicate payment and/or result in violation of Medicare's limiting charge or assignment rules." But in the same memo, Mr. Grissom indicated that Medicare would not be issuing advisory opinions to practices contemplating such arrangements. Instead, he advised physicians to seek legal counsel before implementing additional-fee structures.
Private insurers react
Even if Medicare is refraining from taking a firm stand, some insurers are actively addressing the practice or have already taken a stance. Last year, for example, Massachusetts-based Harvard Pilgrim Health Care announced it would no longer contract with physician groups that charge access fees. The insurer, which has a network of 21,000 providers, made the decision in the wake of an outcry from some health plan members who said they could not afford the extra fees.
"We don't believe that the practice model as described is compatible with our mission or our contracting model, so we made a policy decision not to contract with groups that charge fees," said Harvard Pilgrim spokesperson Sharon Torgerson. She added that the insurer talked to physicians on both its advisory and ethics panels, as well as brokers and employers, before adopting its position.
To date, she said, four physician practices have dropped out of the network as a result, in what she said was a "mutual agreement" between the practices and the insurer to terminate their relationship.
Oregon's Dr. Kilo, on the other said, said his group has not run into opposition from insurers, primarily because he and his colleagues met with all payers before they started the practice. "They also know that there is a substantive difference between what we are doing and what most practices are doing," he explained. "We're a bit of a research and development shop for health care, and we can't find the external funds for the work we're doing."
Not all payers are taking a clear pro or con stance. In Washington state, for instance, Premera Blue Cross has side-stepped the issue by stating that contracted practices may charge fees for "value-added services"—as long as the services are optional. Officials with the state's insurance commissioner's office, however, intend to take a definitive position.
Those officials are now drafting new legislation on what it terms "concierge medicine" that would allow practices to charge retainer fees, provided certain consumer protections are present. Insurance commissioner spokesperson Stephanie Marquis said that although the bill's language is not final, the legislation will likely require practices charging fees to spell out in writing what services are covered by special fees. She also said that the insurance commissioner is considering a further requirement that fees remain in trust accounts—and that physicians refund unused fees to patients.
"We want to make sure that if the doctor and the patient say this kind of arrangement is working and the patient is amenable to paying [the fee], that consumers are protected," said Ms. Marquis.
She added that while some consumers have complained about being charged retainer fees, others who have joined "boutique- or concierge-type" practices have asked the insurance commissioner to refrain from taking a position. "Some patients have said, 'Don't interfere with this. If I'm willing to pay for these extra services, that's my decision,' " Ms. Marquis said.
The ethical view
Patients' objections to being charged access fees appear to have more to do with economics. Most who have publicly complained have claimed that they either cannot afford the fees, or that they're already paying a hefty sum for health care and that extra fees add insult to injury.
While some patients may not mind the idea of paying additional fees, some medical ethicists and industry observers fear that charging patients for "add-on" services or as a condition of continuing to receive care in a certain practice is philosophically misaligned with medical professionalism. Some suggest that the movement, if it were to become widespread, could exacerbate the worsening primary-care access problem emerging in many areas.
Daniel Sulmasy, FACP, PhD, chair of the ethics department at St. Vincent's Hospital in New York and director of the bioethics institute at New York Medical College, said that he is "leaning against" the practice.
"If someone were to ask whether this is an evil practice that should be banned, most people would answer 'no,' " he explained. "But if you ask if this exemplifies the deepest and noblest aspirations of the profession, most would say, 'not exactly.' Would Albert Schweitzer charge access fees? I think not."
He added that during a time when access to primary care has become a pressing issue, "anything that moves us in the direction of more inequality in access raises serious moral questions."
Despite that stance, Dr. Sulmasy—who is on the College's Ethics and Human Rights Committee—said he understands that market factors have led some physicians to consider charging extra fees. He said he also understands that patient satisfaction might be improved if the fees allow physicians to spend more time with patients or provide services that enhance the quality of care.
Still, he concluded that the movement toward charging fees to address reimbursement or administrative woes isn't ultimately the most effective way to solve the dilemma. "It's more important to focus on [physicians] becoming more political to change the root cause of what is leading to our dissatisfaction, rather than acting individually and just fiddling with the edges," Dr. Sulmasy said. "The motives are correct, but it's a 'right church, wrong pew' situation."
Dr. Jessee from the MGMA said he doesn't see any ethical conflict, but he nonetheless thinks that practices need to think through their motives and the structure of any prospective fee arrangement before proceeding. "The key issue for practices is this: What are you billing for, and how do you portray the fee to your patients?"
He added that many practices have long charged fees for nonreimbursable services such as completing school sports-physical forms, a practice most patients accept. But if practices begin charging fees on what he calls "general principles, because their expenses are going up and the revenue is not," they could experience some backlash.
Bonnie Darves is a freelance writer in Lake Oswego, Ore., specializing in health care.
Along with extensive media attention, physicians who practice "concierge" medicine—charging patients hefty annual fees in exchange for more personalized service—now have their own professional organization: the American Society of Concierge Physicians (ASCP). The group, with a base of 30 practices representing about 200 physicians nationwide, aims to expand the concierge medicine movement by providing advocacy, information and support.
The group's first conference, slated for May 27-28 in Denver, will host discussions about the legal, ethical, regulatory and social issues facing clinicians who practice concierge medicine, said John A. Blanchard, MD, ASCP's president and co-founder. While there is significant interest in the model, many physicians are hesitant to enter what is essentially uncharted territory.
"This is still so far outside the box that for a lot of physicians practicing the traditional model, it's not really a viable option," said Dr. Blanchard, a family physician who also founded Premier Private Physicians in Detroit. "It is still unclear what the future holds because policy and regulation haven't really caught up with the development of the model."
Physicians face a high risk of losing patients and income when they first switch to a retainer model, Dr. Blanchard said. To deal with this problem, his four-physician practice transitioned to using both models, giving patients the option of paying a fee for more services or staying in the traditional setting.
Monthly fees for the concierge model start at $85 for an individual, increasing to $155 for a couple or $200 for a family of four. In return, patients are guaranteed on-time appointments, long visits, annual wellness exams and health maintenance plans, and direct access anytime to their physicians.
"The main thing people are buying is intangible," said Dr. Blanchard. "It's that one-on-one personal attention that just can't be delivered in a traditional setting."
Combining new and old models in one practice ensures continuity of care, he added, thus complying with AMA guidelines and deflecting criticism that concierge medicine is exclusionary.
"It's an important consideration for any physician thinking about doing this," he pointed out. "We need to make sure that we're not abandoning patients."
So far, the concept appeals mainly to affluent patients. But Dr. Blanchard said he hopes that will change as the emerging model gains support and people start to reassess the value of primary care.
"I hope this movement will bring about some fundamental changes in how we spend the health care dollar," he said. "Right now, we're spending so much on high-end services while we fail to provide basic primary medical care."
The goal of the new society is to clarify some of the questions surrounding concierge medicine so more physicians will feel comfortable switching to the new model, Dr. Blanchard said.
"Everyone has been doing their own thing and there was a lot of fear about whether they were doing things right," he said. "We want to help people become fully informed before stepping into it."
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