• &quotBoutique" Medical Practices -- Premium Care for a Premium Price
  • May 1, 2003 | Author: Jane E. Garfinkel
  • Law Firm: Thompson Hine LLP - Cincinnati Office
  • A new day is dawning for physicians and patients. Or is it? Perhaps we are back to the good old Marcus Welby days when primary care physicians had unlimited time to spend counseling patients, responding to telephone calls and making house calls. Now, "boutique" medical practices, also known as "premium" or "platinum" practices, offer, for an annual fee, premium medical care to patients. In exchange for the annual fee, a physician limits the number of patients in the practice (usually to between 500-600) and provides special access rights such as 24/7 cell phone, fax and e-mail access and same-day appointments with a maximum 15 minute waiting time. In addition, the physician acts as the liaison between the patient and specialists, coordinating medical care among several doctors if necessary. Depending on the state, annual fees can range from $1,500 to $20,000.

    Proponents contend the annual fees are justified, giving physicians more control over their schedules and thereby allowing them to spend more time with fewer patients and to provide a higher level of medical care. Most boutique practices specialize in primary care and typically accept insurance, requiring patients to pay the difference between what their insurer pays for covered services and what the practice charges for those services. In addition, the annual fee typically is not applied to services covered by Medicare or private insurance. The boutique practice concept is growing, primarily because two independent franchisers in Seattle (where the boutique practice began in 1996) and Florida are recruiting franchisees nationwide.

    Not surprisingly, critics complain that boutique medical practices are simply another way to limit the delivery of medical services to more affluent Americans. Supporters, like the American Medical Association, contend that "[r]etainer practices will generate higher costs for those patients who are willing and able to pay for higher levels of service, but not necessarily for those patients who cannot afford those higher levels of service." Proponents also point to the tiered system of medical care which already exists in the United States and which, they claim, has not reduced the supply of physicians or limited access to affordable health care. They also say that boutique practices even may lead to an overall improvement in the quality of health care as conventional practices strive to meet the competition by improving services to their patients.

    The legal risks of these arrangements currently are difficult to assess. The Florida Department of Insurance and the Centers for Medicare and Medicaid Services (CMS) have investigated boutique practices in Florida. The focus of these investigations was on access to care and discrimination against patients who cannot afford to remain with their own physicians. CMS has not issued any formal rulings, but an internal CMS memorandum does suggest that, if structured properly, boutique practices will not result in a violation of applicable health care regulations.

    Legal challenges also may be avoided if the annual fee is limited strictly to services which are not covered by private insurance or governmental reimbursements and if former patients of now-converted boutique practices are not simply abandoned but are afforded a reasonable time to find a new physician.

    However, legislation has already been introduced to limit boutique practices. Senator Bill Nelson (D-Florida) has introduced a bill to deny federal Medicare and Medicaid funding to any physician who charges a retainer. In addition, in March 2002 Representative Henry Waxman (D-California) asked Tommy Thompson, Secretary of Health and Human Services, to consider a prohibition against the charging of membership fees to Medicare patients. According to Waxman, the fee violates limits on charges for services and violates the False Claims Act by understating the true charges. The Waxman initiative and the proposed legislation should be a warning to physicians to proceed cautiously in establishing a boutique medical practice and to have an exit strategy should the concept later be prohibited.

    It is not possible at this point to assess the long term impact of boutique practices on the cost of medical care or to predict whether access to care will be limited as the model becomes more widely accepted. Some critics point to a possibility that proficiency will suffer as doctors see fewer patients. The controversy is bound to escalate as patients are notified that, in order to stay in the same practice, a "membership" fee will be required. In addition, some patients may not understand why they are now forced to pay for a level of care that they expect to get at no additional charge.

    It also is important to note that the practitioner who chooses to practice "premium" medicine may well be raising the standard for quality in terms of malpractice liability. In other words, a physician who holds himself (or herself) out as providing premium 24/7 care may well find himself on the receiving end of a lawsuit in the event he or she does not immediately - and successfully - respond in each and every instance. In this same vein, malpractice carriers may be reluctant to insure providers who promise more than they may be able to deliver.

    In conclusion, the boutique practice may have gained wide acceptance in certain parts of the country, but the concept is in its infancy here. Any physician who is considering reducing his patient population and becoming a pioneer in this area should carefully weigh all of the risks as well as the public relations implications of notifying patients that they can no longer see their chosen physician if they don't pay the annual fee.