With increased consolidation of traditional medical practices and declining reimbursement rates, many physicians are turning to alternative models like concierge medicine to preserve their independence. Concierge medicine allows physicians to offer personalized, high-quality care to patients in exchange for a membership fee. This model is governed by private service agreements that outline the relationship between the patient and healthcare provider, detailing the services provided, terms of access, and financial obligations. Unlike traditional practices, concierge medicine operates with a smaller patient panel, fewer insurance constraints, and a focus on improved patient access.

Patients are attracted to concierge medicine for its tailored services, reliability, and the strong provider-patient relationships it fosters. However, transitioning to this model requires careful legal planning. Below are five key legal considerations for physicians contemplating a shift to concierge medicine.

1. Complying with Pricing and Regulatory Requirements
   • Unlike traditional practices, concierge practices must navigate a complex landscape of state laws governing direct primary care (DPC) models, retainer fees, and medical memberships, which can vary significantly across jurisdictions.
   • Concierge practices must ensure that their marketing arrangements and methods for attracting patients strictly adhere to federal and state laws on anti-kickback, anti-referral, and fee-splitting to avoid legal pitfalls.
   • Some states restrict which services may be included in a membership fee, requiring concierge practices to clearly delineate between covered and non-covered services. Additionally, if a practice serves Medicare or Medicaid patients, it should note that federal programs do not reimburse membership fees, and have specific prohibitions against charging beneficiaries of those programs for services covered by Medicare. Concierge practices that do not opt out of Medicare and Medicaid must carefully structure patient agreements to avoid running afoul of these prohibitions.
   • Physicians considering whether to opt out of Medicare should fully understand the consequences of doing so, as this election initiates a two-year exclusionary period from Medicare participation. Such election may limit opportunities to moonlight with practices that serve Medicare patients or make it more challenging to transition back to a traditional medical practice.
   • Practices should also understand the consumer protection laws applicable in their state, and as a general rule, provide patients with clear, upfront disclosures of all membership fees and service charges to prevent any potential claims of deceptive or unfair business practices.
2. Structuring Contracts, Marketing Materials, and Policies
   • It is essential to clearly define which services are included in the membership and which are not. Clearly delineating the scope of services helps to reduce regulatory risk and to avoid reputational damage or other liability that may result from misunderstandings with patients.
   • Marketing materials for concierge practices must accurately represent the membership offering and clearly disclose all fees, service exclusions, and limitations in compliance with applicable laws including, advertising and privacy laws. Care must also be taken to avoid using patient information for marketing purposes (as opposed to use for treatment purposes), as HIPAA does not permit such use.
   • Effective policies for early contract termination are critical. These policies should outline the refund process, notice requirements, and any legal obligations that arise when a contract is terminated early.
3. Deciding Whether to Accept Commercial Insurance
   • A concierge practice must decide whether to participate in commercial insurance networks for certain services or remain entirely independent. This foundational choice will impact billing protocols, reimbursement structures, and regulatory compliance obligations.
   • A practice that chooses not to accept insurance (often referred to as the “direct primary care” model) will experience less of an administrative burden because it can avoid complex insurance billing and may not be required to comply with HIPAA (although state privacy laws will still apply). However, many startup concierge practices do accept insurance in order to appeal to a wider patient base and ensure financial stability during initial growth. For practices that choose to accept insurance, it is critical to clearly delineate between services covered by the membership fee and those that may be eligible for insurance coverage, such as diagnostic tests, procedures, or specialty services. Agreements with commercial insurers often prohibit practices from charging a patient for covered services.
   • Compliance with insurance contracts and regulatory standards requires consistent staff training, clear billing protocols, and periodic audits – such as annual reviews.
   • Staying informed of relevant federal and state regulations is essential, as rules governing billing and insurance relationships tend to vary significantly by jurisdiction and evolve over time.
4. Ensuring Data and Privacy Compliance Related to Enhanced Communication, Remote Patient Monitoring and AI
   • A key component of concierge practices is providing patients with 24/7 access to physicians through various communication channels, such as calls, texts, and video chats. Such communication methods must comply with HIPAA’s security and privacy requirements and state privacy laws to protect patient information.
   • If offering telemedicine services or remote patient monitoring, patient data transmitted electronically should be encrypted and stored in accordance with both federal and state privacy laws. Prior to implementing telemedicine or remote patient monitoring, practices should thoroughly vet all technology vendors and platforms for HIPAA and state law compliance, and ensure contracts clearly define data protection responsibilities.
   • Integrating AI-powered chatbots and virtual assistants can enhance patient communication and streamline administrative tasks. However, practices must routinely review and update protocols for deployment and use of AI tools to safeguard against data leakage and maintain compliance with regulatory and privacy requirements, including HIPAA. Further, practices should exercise careful diligence when engaging third-party AI vendors, including thoroughly assessing their security and privacy protocols and scrutinizing services agreements to ensure the practice’s data will remain secure.[1]
5. Identifying Your Practice’s Insurance Needs
   • In addition to typical insurance coverage, concierge practices may require malpractice insurance that covers additional services, such as home visits or extended patient access, which are not typically included in standard policies.
   • Many concierge practices offer expanded telemedicine services for patient convenience, increasingly relying on digital tools and communication platforms. As a result, maintaining business interruption insurance and cyber liability coverage are essential to safeguard against potential operational disruptions or data breaches.

Final Thoughts

Concierge medicine models offer an exciting opportunity for physicians to enhance patient care while maintaining greater independence beyond traditional healthcare systems. However, this model is governed by a unique and complex legal framework that requires careful structuring to ensure regulatory compliance and avoid legal pitfalls. Involving legal and healthcare regulatory experts early in the process will enable you to proactively address crucial considerations – including pricing and regulatory compliance, service contracts, billing practices, patient communications, and insurance needs. With the right legal strategies in place, concierge physicians can build a sustainable, compliant, and patient-centered practice that allows them to focus on delivering personalized, high-quality care.

Footnotes

[1] Kathleen O’Neill, et al., Key Considerations Before Negotiating Healthcare AI Vendor Contracts, Sheppard Mullin: Healthcare Law Blog (May 7, 2024), https://www.sheppardhealthlaw.com/2025/03/articles/artificial-intelligence/key-considerations-before-negotiating-healthcare-ai-vendor-contracts/.