Concierge Physicians Issue Response to Insurance Commissioner

On December 19th, Ralph Tyler, the Maryland state insurance commissioner, held hearings to determine whether concierge medicine met the state’s definition of “insurance.” The commissioner subsequently issued a 10-page report, recommending – among other things – that doctors contemplating opening a concierge practice should consult with his office first. Interestingly, concierge medicine was investigated by the Commissioner without a single complaint from a consumer, or a single violation by a practicing concierge doctor.

The obvious reason for even loosely defining concierge medicine as “insurance” is that it would allow the Commissioner to regulate the practices of private doctors. In fact, the calling of this hearing was so onerous to one Maryland group of five internists that they canceled their plans to open a concierge practice, despite the fact that hundreds of patients had already signed on to the new program.

As a result of what doctors consider serious overreaching by the commissioner, there has been a professional outcry from private doctors across the country, including the Society for Innovative Medical Practice Design (SIMPD), the national organization that represents concierge doctors.

“Our greatest objection to Commissioner Tyler’s efforts is the ignorance of the singular attribute afforded by concierge medicine. We hold no faith in emulating any part of the insurance system. In fact, it is our frustration with insurers continuously interfering with our ability to practice good medicine that led us to the concierge medicine model,” notes Dr. Thomas LaGrelius, president of the Society for Innovative Medical Practice Design (SIMPD), the national organization which represents concierge doctors.

Physicians in Maryland and elsewhere have joined to issue a response to the Report of the Maryland Insurance Administration on “Retainer” or “Boutique” or “Concierge” Medical Practices and the Business of Insurance.

Highlights of the report include:

o There Is No Justification for the Commissioner’s Hearing or Report: The Maryland Insurance Administration did not identify, or document, any abusive practices by concierge physicians, nor made no findings that any concierge physician had engaged in wrongdoing or improper practices of the sort Insurance Administrations are uniquely suited to regulate. No justifications were suggested for why concierge physician practices should be subjected to the cost, expense, and administrative burdens of complying with the plethora of regulations and requirements that have been instituted to avoid and remedy misconduct by insurers and health care insurance plans except for the possibility that subjecting concierge doctors to such regulations will effectively discourage them from ever becoming concierge physicians.

o Concierge Practices as “Insurers:” Different Conclusions in Washington and Maryland: The State of Washington began a review of concierge care prior to formulating draft regulations in 2003, and ultimately adopted a specific statutory scheme in 2007. The statute imposes nondiscrimination, contractual, disclosure, and reporting obligations on concierge care doctors, but concludes that concierge doctors are not insurers. The Washington Legislature also concluded that concierge medical practices: “represent an innovative, affordable option which could improve access to medical care, reduce the number of people who now lack such access, and cut down on emergency room use for primary care purposes, thereby freeing up emergency room facilities to treat true emergencies.”

 o Concierge, or Direct Practice Medicine, Is Not Just Healthcare for The Rich: In many cases a patient’s participation is less than $1,000 per year. Additionally, use of a concierge medical doctor does not preclude use of traditional insurance.

o The Objective of the Commissioner’s Actions was to Discourage Growth of Concierge Medicine:  As acknowledged by MIA, the objective of the effort to apply “insurance” regulations to concierge practices is to discourage “[t]he growth of retainer practices [because they] may decrease the number of primary care physicians available to those who cannot afford to pay an annual fee.” Report at 5. This conclusion is inescapable. It is confirmed by the fact that the MIA does not specify any abusive or harmful acts by concierge physicians that need a remedy within the scope of the Insurance Administrator’s authority and by the fact that the best MIA can do in the effort to characterize concierge doctors as insurers is to identify a few isolated parallels between concierge care agreements and insurance contracts that “could” justify “treating” those the contracts as “insurance agreements.”

o Concierge medicine Is Essential to Solving One of the Nation’s Most Critical Health Care Crisis; Exodus of Primary Care Physicians:  In a 2008 Physicians Foundation survey of U.S. primary care physicians, nearly half the respondents said that they would seriously consider getting out of the medical business within the next three years if they had an alternative. Similarly, according to a survey published in the Journal of the American Medical Association in September 2008, “only 2 percent of the medical school class of 2007 plans to make a career in internal medicine primary care.”  As such, SIMPD agrees that the dwindling numbers of primary care doctors in Maryland is at the heart of the MIA investigation of concierge care. However, efforts to discourage concierge care – which is what we believe is at the core of the MIA investigation – will only exacerbate the underlying cause of physician exodus from primary care and distract the MIA and other concerned agencies from identifying and solving the real underlying problems.

o Concierge Medicine Does Not Adopt Any of the Principles of Traditional Insurance: The modest and insignificant parallels between the direct care agreements used by most of our members and the business of insurance are too inconsequential to support the effort to characterize concierge care as “insurance.” To the extent there are risks that concierge doctors might engage in improper practices (such as overcharging, taking on more patients that can be served, abandonment, or coercion), there is already a plethora of applicable legal and ethical restrictions and no shortage of individuals and
interest groups to assure that these appropriate restrictions are enforced.

o Conclusion: “In conclusion, the MIA effort to enlarge the definition of “insurer” to cover concierge medicine doctors is wrong as a matter of law and unnecessary, distracting, and counterproductive as a matter of fact. It is big government latching onto an easily available tool (insurance administration oversight) to address a problem to which that tool is not suited (the exodus from primary care), while avoiding the real problem (the stifling, frustrating, oppressive, and parsimonious system for the delivery of primary health care).