Concierge medicine1 is a type of doctor/patient relationship in which patients pay an annual retainer fee to their doctor in exchange for more personal care. The doctor can then limit their total number of patients, which allows them to offer more time and availability. Actual practices vary widely in structure, payment requirements, and form of operation. Concierge medicine has been around since 1996 and there are an estimated 5,000-6,000 physicians2 who are using this practice structure in the U.S.
The concept of concierge medicine has been growing as consumer demand has increased in recent years. In addition, the younger generation of doctors has shown interest in adopting the model. Traditional care physicians manage about 2,000 patients. Concierge physicians typically have 500-1,000 patients. Participating physicians say this allows them to spend more time on preventative care. Many concierge practices include an in-depth comprehensive physical and screenings within the annual retainer. The retainer also generally covers unlimited patient visits.
The general perception has been that concierge medicine was for the wealthy. Many concierge practices charge fees of $125-$220 per month3. However, the rising cost of healthcare is beginning to close the price gap between concierge medicine and more traditional health insurance. The main reason most patients choose concierge medicine remains more personal care with a focus on preventative care. Most patients state that when a health event does occur, their concierge doctor gets them a faster diagnosis and treatment.
Concierge doctors typically still coordinate with traditional insurance providers and networks. Many remain affiliated with insurance networks and can refer patients to specialists who are within the patient’s network. The annual retainer generally cannot count towards the patient’s deductible or toward an insurance’s annual out-of-pocket maximum expense. However, any copays or related health costs can be deducted if the concierge physician is in-network.
Concierge Retainer Fees and Reimbursement
A Health Flexible Spending Account or Flexible Spending Arrangement (FSA) is an employer-sponsored benefit program that allows employees and eligible family members to receive tax-free reimbursement of qualified medical expenses. FSA funds can only be used for those expenses that have not been reimbursed by insurance or other benefit plans. A Health Savings Account (HSA) is a medical savings account that allows employees to save pre-tax like a 401(k) for medical expenses. Only qualified medical expenses that are not covered by insurance or other benefit plans may be paid or reimbursed with tax-free HSA funds.
Generally, concierge retainer fees are charged for access and convenience, which would not make them eligible for reimbursement from FSA or HSA accounts. Some concierge fees may cover routine medical services. In this situation, only the portion of the fee which is associated with the medical service and not otherwise covered by insurance is eligible for coverage out of FSA or HSA accounts. The patient should retain supporting documents to prove that medical services were received. The concierge practice must provide details on the fee and indicate what portion was used for medical services and what was for convenience, concierge access, and non-medical services.
The IRS takes a similar approach to the tax deductibility of retainer fees when it comes to itemized deductions. If the retainer fee is paying for medical services that are not reimbursed through insurance, the retainer is tax deductible on Schedule A. Keep in mind that only the portion of total medical expenses that exceed 10% of a taxpayer’s adjusted gross income are deductible. Furthermore, the taxpayer’s total deductions must exceed the standard deduction4 before any tax savings are achieved. If the retainer is only providing access, the fee is not deductible. Retainer fees that provide some of both should be documented as mentioned earlier for FSA or HSA reimbursement.
Is Concierge Medicine Right for You?
Concierge medicine may be a good option for someone who is frustrated with long waits in a doctor’s office. The emphasis on enhanced preventive screenings offered through most concierge practices may also be very appealing to some people. Those patients who already have a strong relationship with a trusted doctor may not find concierge medicine of much benefit. Anyone deciding to pursue concierge care should begin by interviewing the doctor and asking these questions5:
- Do you take insurance, and will you file claims for me?
- What services does the fee include?
- Do you offer preventive care?
- Do you admit your patients to the hospital yourself or do you use a hospital-based doctor?
- Can I schedule same-day appointments?
- Can I contact you by email or phone with routine questions?
- Will you coordinate my care if I need one or more specialists?
- Do you make house calls?
- Traditional care physicians manage about 2,000 patients while concierge physicians typically have 500-1,000 patients.
- Concierge medicine typically provides more personal care with a focus on preventative care.
- Any portion of the retainer fee for concierge medicine that is allocated to providing access would not be tax deductible.
1 Also known as retainer medicine, membership medicine, and direct care.
2 Concierge Medicine Today, Stats and Facts, 2018-2019
3 Concierge Medicine Today, What is Concierge Medicine? April 2019.
4 For 2019, the standard deduction is $24,400 per couple and $12,200 per single filer. Both amounts are higher for filers over the age of 65.
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