Post by: Robert S. Stroud, Esq.

The sweeping health care reform legislation enacted on March 23, 2010, known as the Patient Protection and Affordable Care Act (the “PPACA”), as amended on March 30, 2010 by the Health Care and Education Reconciliation Act of 2010, has significant implications for “concierge” or “boutique” medical practice business models. Most significantly, the PPACA limits ordering of durable medical equipment (“DME”) and home health services for Medicare beneficiaries to Medicare enrolled physicians or eligible professionals.  This limitation applies to all written orders and certifications made on or after July 1, 2010.  In addition, the Secretary of the DHHS has the authority to expand this requirement to other health care items and services prescribed or referred by a physician.  This will impact all concierge doctors who have opted out of Medicare by serving as a de facto mandate on enrolling in Medicare, notwithstanding the American Medical Association’s claim that it was successful in eliminating mandatory physician participation in Medicare and Medicaid.  If a DME supplier or home health agency processes an order for said services from a physician who is not enrolled in Medicare, the DME supplier or home health agency will now be deemed to have received an overpayment upon submission of the claim.  Therefore, physician practices that have opted out must re-examine their business model and determine if one or all physicians must enroll in Medicare.  In addition, such practices should analyze their current practice-patient contracts and restructure as appropriate.

Additionally, the PPACA’s focus on preventative care has resulted in expanded coverage for Medicare beneficiaries, including coverage for an annual wellness visit each year commencing in 2011.  Many concierge medical practices are established utilizing the so-called parallel practice model whereby one entity is established to bill third party payors and Medicare, and another entity is established to bill for membership fees for non-covered services [under Medicare] and amenities, which customarily include one comprehensive annual wellness exam each year.  As a result, these parallel practice models will need to be re-examined and perhaps restructured, along with their current practice-patient contracts.

On behalf of our concierge physician clients, Blalock Walters is developing tailored solutions to the issues discussed in this article, based on such factors as the number of physicians, patient population and current business model.  There are additional implications under the PPACA for concierge medical practices that are not discussed in this article.  If you would like to discuss the impact of the PPACA on your practice, please do not hesitate to contact Robert S. Stroud, a Principal with the law firm of Blalock, Walters, Held & Johnson, P.A., with offices in Sarasota and Bradenton, Florida.  Mr. Stroud represents health care providers and entities nationwide.  He can be reached at 941.748.0100 or rstroud@blalockwalters.com.