What is Concierge Medicine?

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?

Rick’s Tips:

• 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.
⁵ Is a ‘Boutique’ Doctor for You? By Nissa Simon. AARP Healthy Living, January 2013