Show #296 Airing Sunday, 5/8/05
Mr. and Mrs. Rogers can’t afford their long-time family doctor anymore. Here’s what happened.
They just received a letter from their physician, announcing: “I want to make you aware of an upcoming change in the structure of my medical practice.” He then describes his new “cutting edge practice model which incorporates a higher level of availability by the physician.” By limiting the number of patients, he could eliminate long waits for appointments, and he could have more time to spend “to develop a clearer picture of the health and welfare of each individual patient in an unrushed setting.”
So far, all this sounds good. Who wouldn’t want more time with their doctor?
But the next paragraph contained the bad news. If the doctor just limited the number of his patients, his income would drop. So to compensate, he says, “My new practice model will incorporate an annual retainer fee of $2,000 per individual.” For Mr. and Mrs. Rogers, that’s an extra $4,000 a year, which they just don’t have.
The Rogers are not alone. Throughout the country, a small but growing number of patients are receiving letters like this. We’re seeing a trend toward what’s called concierge or boutique practices.
Is this legal? Can a doctor require a sizable retainer, an up-front fee, and still bill for individual services?
The answer is yes, if the doctor does not accept Medicare and private insurance. Just like your landscaper, or accountant, or plumber, anyone can charge whatever people are willing to pay.
But if a doctor accepts Medicare and private insurance, the rules are different. And most doctors do take payments from Medicare and insurance. These payment sources cap what doctors can charge patients. Let’s take Medicare. There’s a big book listing all the services physicians provide, and each service has been assigned an amount that doctors can charge. That’s the cap. Medicare pays most of that, typically 80 percent, and you or your insurance pay 20 percent.
The Medicare law and private insurance contractors say if a doctor accepts Medicare and insurance, they can’t charge more. So how can they charge an annual retainer?
The doctors say the retainer only covers services which are not covered by Medicare or insurance. For example, Medicare pays for only one general physical exam. In a concierge practice, the annual retainer may cover wellness visits every year.
But critics say that charging an annual retainer is an illegal overcharge designed to avoid the Medicare and insurance caps. And, they argue, this will create a two tier system of medicine, with the poor and middle class losing out.
Whether it’s legal or not, Mr. and Mrs. Rogers believe it’s unfair. Here’s what they told me: “Between Medicare deductibles and premiums, [and our insurance], we pay almost $4,000 annually...we can’t afford more!”
If your doctor tells you that you’ll have to pay an annual retainer, and you don’t think it’s fair, call the Office of the Inspector General of the U.S. Department of Health and Human Services, 1-800-447-8477. Until the rules are clarified, it seems your choices will be to either pay or find yourself a new doctor. want to make you aware of an upcoming change in the structure of my medical practice.”
