In follow-up to our prior blog post, Concierge Medicine – Is it for you?, we recognize that while a concierge or direct-pay practice might be a good choice for a physician or physician practice group, patients do not necessarily feel the same way. When patients hear that a medical practice is a “concierge” or “direct-pay” practice, they often think of prohibitively high out of pocket costs. One way for a concierge or direct-pay practice to be more enticing to patients is to structure its billing methods so patients may be able to obtain reimbursement from their health savings account (HSA) or flexible spending account (FSA) for some of the associated costs. Generally, access fees will not be reimbursable through either a HSA or FSA. But costs incurred for qualified medical services actually rendered to the patient may be. Here are some quick rules of thumb for when HSA and/or FSA reimbursement may be applicable to cover such costs:
Fees for Qualified Medical Services: Any fees charged for qualified medical care (generally defined under the Internal Revenue Code to include the diagnosis, cure, mitigation, treatment or prevention of disease) are generally reimbursable under a HSA or FSA, to the extent not reimbursed by the patient’s insurance.
Access Fees or Subscription Fees: Fees related solely to having access to a physician will not be reimbursable under either a HSA or FSA. This is because they are not fees for qualified medical services, but rather are more akin to insurance premiums (which are also not reimbursable under a HSA or FSA). Such non-reimbursable fees would include fees for admission as a patient, monthly retainer fees, fees for a reduced wait time, fees for 24 hour access to a physician, or any other fees not directly related to the rendering of medical services.
Prepaid Fees for Qualified Medical Services: If an access fee or subscription fee includes a prepaid fee for a qualified medical service (for example, the annual fee includes the cost of a comprehensive physical examination), any costs attributable to that medical service that are not reimbursed by insurance may be reimbursable under a HSA or FSA, but not until such time as the service is actually rendered to the patient.
In order for patients to be able to take advantage of reimbursement from their HSA or FSA, they must have appropriate supporting documentation for the qualified medical service. Documentation should include the patient’s name, the date of service, the type of service, and the fair market value charge attributable to just the medical service portion of the patient’s bill.
In sum, concierge and direct-pay practices can work for physicians on account of the upfront fees paid by patients. However, if such fees include prepayment for medical services, it will not only encourage patients to take advantage of preventative care but may also enable them to recoup part of their upfront costs from their HSA or FSA once such services have been rendered.
Next week, look for the release of Medical Marijuana 102, a follow-up blog post to Veronique Urban’s Medical Marijuana 101: The State of the Law in NY. This will be the second blog post in a series of articles discussing the current state of the law in New York regarding medical marijuana.