Concierge Medicine Field Guide: Part 3 (The Insurance Issue)

December 18, 2023

Concierge medicine has been around for over two decades but has recently exploded in popularity. Overwhelmed with high patient volume, high administrative costs, and low reimbursement rates from third party payors, primary care physicians are turning to the concierge model to provide better care to their patients without risking loss of income. The concierge model’s fee structure allows physicians to reduce their patient volume and in turn allows them to spend more time on patient care and less time on the administrative and billing tasks associated with the traditional model. However, as with anything in the heavily regulated health care industry, concierge medicine faces regulatory issues and compliance concerns.

This field guide is a four-part series and will cover the issues and concerns associated with concierge medicine physicians must navigate to set up a compliant model:

The Insurance Issue Defined

For physicians contemplating a concierge medicine model, one of the most pivotal questions to consider is how insurance will (i.e. commercial payors or Medicare) be involved, if at all. As discussed in Part 1 and Part 2, while some concierge medicine models may only be supported by patient paid membership fees, some concierge medicine practices choose to continue to bill insurance for patient care. This creates an issue for the practice.

Opting Out of Third-Party Reimbursement

Before looking at the insurance issue, we need to provide context of the relationship providers can have with commercial payors and Medicare.

Commercial Payors

Commercial payors include large scale publicly traded insurance companies such as UnitedHealthcare, Aetna, and Humana. Physicians can choose to sign a contract with a commercial payor and be considered an “in-network provider.” The relationship between them (i.e. billing and reimbursement) is then governed by both state law and the contract that sets the fees for services. However, physicians that do not have a contract with the commercial payors are considered “out-of-network.” Because there is no direct contractual relationship with the commercial payor, there is no obligation to bill for any service provided to a patient.


When it comes to Medicare, there are three relationships physicians can have with Medicare. These are known as a participating provider, non-participating provider, or opt-out provider. Participating providers accept Medicare and always take assignments. Taking assignment means that the provider accepts Medicare’s approved amount for health care services as full payment. Non-participating providers accept Medicare but do not agree to take assignment in all cases (they may on a case-by-case basis). This means that while non-participating providers have signed up to accept Medicare, they do not accept Medicare’s approved amount for health care services as full payment.

Providers can also choose to opt-out of Medicare. Opt-out providers do not accept Medicare at all and have signed an agreement to be excluded from the Medicare program. This means they can charge whatever they want for services but must follow certain rules to do so. A physician who opts-out of Medicare must do so for a period of two years and cannot be terminated early unless the physician is opting out for the first time and the opt-out is terminated within 90 days after the effective date of the opt-out period. Physicians and practitioners may not opt-out if they intend to be a Medicare Advantage (Part C) provider or furnish services covered by traditional Medicare fee-for-service (Part B).

If a physician chooses to opt-out of Medicare, the physician must enter into a contract to provide services to a Medicare beneficiary that would otherwise be covered by Medicare. The contract must be in writing, signed by both the provider and the beneficiary, and clearly state that the physician is excluded from Medicare. If the physician fails to properly opt-out, the contact is deemed null and void. For some physicians, opting out is a financial decision. While opting out means they can set their own prices for services they render, Medicare accounts for a significant portion of reimbursements in many practices. The decision to opt-out is also a personal one for physicians, based on their desire to make it easier for their patients to receive care and avoid the hassle of delineating between covered and non-covered services. These considerations should be weighed accordingly when deciding whether to opt-out of Medicare.

The Insurance Issue

When a physician chooses to go in-network with commercial payors or not to opt-out of Medicare, they must understand the compliance issues associated with concierge medicine. A key risk associated with concierge medicine is billing patients directly for services covered by their insurance, a concept referred to as “double billing.”

Generally, commercial payor agreements prevent an in-network provider from charging a patient directly for services covered by the third-party payor. What makes this more complicated with commercial payors is that each one may have different policies on concierge practices. For example, UnitedHealthcare requires that in-network providers give members the choice of paying the concierge membership fee and even if they choose not to pay, the provider must continue seeing the patient.

Under federal law, Medicare beneficiaries may not be charged for services covered by Medicare.

Therefore, concierge practices choosing to accept Medicare must be diligent when determining which services it offers as part of the monthly concierge fee. In 2004, the Office of the Inspector General (“OIG”) settled with a physician who was alleged to have been charging patients for services already covered by Medicare. The physician had entered into a contract with the patient which provided, among other things, “coordination of care with other providers,” “a comprehensive assessment and plan for optimum health,” and “extra time” spent on patient care. If a concierge practice accepts Medicare, it must follow all Medicare rules and be mindful of the services it provides for the membership fee to ensure they are not already covered by Medicare. Additionally, the practice cannot treat Medicare patients differently than other populations (e.g. better access, better services, etc.).

As a result, if a practice plans to bill insurance, the membership contract should include information detailing what services will be billed, billing practices, and the procedures followed in clear and simple language. Importantly, the contract should be drafted to avoid double billing of services covered by insurance. Regardless, concierge practices must bill commercial payors and Medicare for covered services and ensure patient’s membership fees only cover non-covered services.

Contact ByrdAdatto if You Are Thinking About or Have a Concierge Practice

This field guide explores the different aspects of Concierge Medicine. It is important to understand the benefits and risks associated with starting a concierge medicine practice.

In Part 4 of this series, we will discuss additional compliance concerns for Concierge Medicine practices. If you have any questions or would like to learn more about concierge medicine, please contact us at

ByrdAdatto attorney Jay Reyero

Jay D. Reyero

Jay has mastered the art of communication, leaving clients with both an understanding of their business risk and the path to solution.