Boutique medicine may run afoul of Medicare rules

Letter from congressmen asks administration to investigate "concierge" physician practices that charge a membership fee.

By Markian Hawryluk, AMNews staff. April 8, 2002.

Washington -- Lawmakers are challenging the legality of so-called "concierge" or "boutique" physician practices that charge an annual membership fee but bill Medicare for covered services.

In a letter to the Bush administration, five Democratic members of Congress asked for a review of boutique practices such as MDVIP, based in Boca Raton, Fla., to determine whether their practice of charging membership fees violates Medicare balance billing rules.

Physicians who join MDVIP require patients to pay a $1,500 annual fee in exchange for an annual screening that becomes the basis for a wellness program, which includes preventive health care benefits not covered by Medicare. Patients who do not pay the charge are dropped. Because each physician limits his or her practice to 600 patients, the practice can offer same-day appointments; 24-hour, seven-days-a-week access to doctors; and other conveniences.

The arrangement has elicited complaints that boutique practices discriminate against lower-income beneficiaries. "This practice of 'pay-for-privilege' health care undermines the ability of people to get affordable health care from doctors they know and trust," said Robert Hayes, president of the Medicare Rights Center, a beneficiary advocacy group. "It is in essence a physician end run around federal and state limits on their charges."

Under current law, physicians who do not choose to accept the Medicare fee schedule can bill or collect a fee for a covered service to a beneficiary of no more than 115% of the Medicare rate. The annual membership fee charged by boutique practices constitutes illegal additional billing, according to the lawmakers who signed the letter -- Reps. Henry Waxman (D, Calif.), Fortney "Pete" Stark (D, Calif.), Ben Cardin (D, Md.) and Sherrod Brown (D, Ohio), and Sen. Richard Durbin (D, Ill.). [...]