a

GAO

United States Government Accountability Office

Report to Congressional Committees

August 2005 PHYSICIAN 

SERVICES

Concierge Care 

Characteristics and 

Considerations for 

Medicare

GAO-05-929
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-929.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact A. Bruce 

Steinwald at (202) 512-7119 or 

steinwalda@gao.gov. 

Highlights of GAO-05-929, a report to 

congressional committees 

August 2005

PHYSICIAN SERVICES

Concierge Care Characteristics and 

Considerations for Medicare 

Concierge care is practiced by a small number of physicians located mainly 

on the East and West Coasts. Nearly all of the 112 concierge physicians 

responding to GAO’s survey reported practicing primary care. Annual patient 

membership fees ranged from $60 to $15,000 a year, with about half of 

respondents reporting fees of $1,500 to $1,999. The most often reported 

features included same- or next-day appointments for nonurgent care, 24-

hour telephone access, and periodic preventive care examinations. About 

three-fourths of respondents reported billing patient health insurance for 

covered services and, among those, almost all reported billing Medicare for 

covered services. 

Two principal aspects of concierge care are of interest to the Medicare 

program and its beneficiaries: compliance with Medicare requirements and 

its effect on beneficiary access to physician services. HHS has determined 

that concierge care arrangements are allowed as long as they do not violate 

any Medicare requirements; for example, the membership fee must not 

result in additional charges for items or services that Medicare already 

reimburses. Some concierge physicians reported to GAO that they would 

like more HHS guidance. The small number of concierge physicians makes it 

unlikely that the approach has contributed to widespread access problems. 

GAO’s review of available information on beneficiaries’ overall access to 

physician services suggests that concierge care does not present a systemic 

access problem among Medicare beneficiaries at this time. In comments on a 

draft version of this report, HHS agreed with GAO’s finding on concierge 

care’s impact on beneficiary access to physician services and indicated it 

will continue to follow developments in this area. 

Location of Concierge Physicians Identified by GAO 

Source: GAO analysis.

1 to 2 3 to 4 5 to 10 11 or more

Concierge care physicians

Concierge care is an approach to 

medical practice in which 

physicians charge their patients a 

membership fee in return for 

enhanced services or amenities. 

The recent emergence of concierge 

care has prompted federal concern 

about how the approach might 

affect beneficiaries of Medicare, 

the federal health insurance 

program for the aged and some 

disabled individuals. Concerns 

include the potential that 

membership fees may constitute 

additional charges for services that 

Medicare already pays physicians 

for and that concierge care may 

affect Medicare beneficiaries’ 

access to physician services. The 

Medicare Prescription Drug, 

Improvement, and Modernization 

Act of 2003 directed GAO to study 

concierge care and its relationship 

to Medicare. 

Using a variety of methods, 

including a nationwide literature 

search and telephone interviews, 

GAO identified 146 concierge 

physicians and surveyed concierge 

physicians in fall 2004. GAO 

analyzed responses from 112 

concierge physicians. GAO also 

reviewed relevant laws, policies, 

and available data on access to 

physician services and interviewed 

officials at the Department of 

Health and Human Services (HHS) 

and representatives of Medicare 

beneficiary advocacy groups. 
Page i GAO-05-929 Concierge Care

Contents

Letter 1

Results in Brief 3

Background 4

Characteristics of Concierge Care 9

Aspects of Concierge Care of Interest to Medicare and Its 

Beneficiaries 17

Concluding Observations 26

Agency and Other Comments 26

Appendixes

Appendix I: Scope and Methodology 28

Appendix II: Summary of Physician Responses to GAO Concierge Care 

Survey 32

Appendix III: Comments from the Department of Health and Human 

Services 42

Appendix IV: GAO Contact and Staff Acknowledgments 44

Tables Table 1: Limits on Physician Charges for Medicare-Covered 

Services 8

Table 2: Features Offered by Concierge Physicians, October 

2004 15

Table 3: Concierge Physicians’ Views on HHS Information about 

How Medicare Requirements Might Affect the Practice of 

Concierge Care, October 2004 20

Table 4: Patients from Physicians’ Conventional Practices Who 

Joined Physicians’ Concierge Practices 23

Table 5: Characteristics of Concierge Physicians and Their 

Practices, October 2004 32

Table 6: Estimated Number of Patients in Individual Practice, 

October 2004 36

Table 7: Actions Concierge Physicians Reported They Took to Help 

Medicare Patients Who Did Not Join the Concierge 

Practice Find New Physicians 39

Table 8: Concierge Physicians’ Views on the Information Available 

from HHS about How Medicare Requirements Affect 

Concierge Care, October 2004 40
Contents

Page ii GAO-05-929 Concierge Care

Table 9: Concierge Physicians’ Views on Remaining in Medical 

Practice and Treating Medicare Beneficiaries if Physicians 

Were Unable to Practice Concierge Care 41

Figures Figure 1: Location of Concierge Physicians Identified by GAO, 

2004 10

Figure 2: Yearly Growth in Number of Concierge Physicians 11

Figure 3: Annual Membership Fee for Individuals, October 2004 13

Figure 4: Number of Concierge Patients under the Care of 

Individual Concierge Physicians, October 2004 14

Figure 5: Medicare Participation Status of Concierge Physicians 

Surveyed by GAO, October 2004 17

Figure 6: Medicare Beneficiary Patients of Concierge Physicians, 

October 2004 22

Figure 7: Physicians’ Goals for Total Number of Concierge 

Patients, October 2004 37

Figure 8: Annual Membership Fees Charged by Physicians Who 

Did and Did Not Bill Patient Insurance, October 2004 38

Abbreviations

AMA American Medical Association

CMS Centers for Medicare & Medicaid Services

HHS Department of Health and Human Services

MSA metropolitan statistical area

OIG Office of Inspector General

PMSA primary metropolitan statistical area

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Page 1 GAO-05-929 Concierge Care

United States Government Accountability Office

Washington, D.C. 20548

A

August 12, 2005 Letr

The Honorable Charles E. Grassley

Chairman

The Honorable Max Baucus

Ranking Minority Member

Committee on Finance

United States Senate

The Honorable Joe Barton

Chairman

The Honorable John D. Dingell

Ranking Minority Member

Committee on Energy and Commerce

House of Representatives

The Honorable William M. Thomas

Chairman

The Honorable Charles B. Rangel

Ranking Minority Member

Committee on Ways and Means

House of Representatives

Concierge care is an approach to medical practice in which physicians 

charge their patients membership fees in exchange for enhanced services 

or amenities. Concierge physicians typically care for fewer patients than do 

doctors in conventional practice, and they are more readily available to 

member patients, for example, by cell phone or same-day appointments. 

The approach has attracted media attention in recent years. Critics contend 

that concierge care makes health care more lucrative for a few physicians 

and more convenient for some patients, but less accessible to patients who 

cannot or choose not to pay a membership fee. Proponents, in contrast, 

describe concierge care as both a rational response to patient demand for 

more personal care and a way for physicians to regain control of their 

medical practices and their lives. They say the approach allows concierge 

physicians to spend more time with their families, enhance their incomes, 

and spend more time on research and other professional activities. 

Because concierge care has gained attention only recently, little is known 

about how many concierge physicians there are or about how the approach 

could affect access to physician services.
Page 2 GAO-05-929 Concierge Care

Concierge care has also generated attention within Congress, the 

Department of Health and Human Services (HHS), and state governments. 

Federal attention has centered on how membership fees might affect 

beneficiaries of Medicare, the federal health insurance program for 

individuals aged 65 and older and certain persons with disabilities. Of 

particular concern is the potential that membership fees may constitute 

additional charges for services that Medicare already pays physicians for 

and that concierge care may affect Medicare beneficiaries’ access to 

physician services. Members of Congress introduced bills that, if enacted, 

would have prohibited physicians from imposing membership fees on 

Medicare beneficiaries as a condition for the provision of a Medicarecovered item or service.1

 A few states are monitoring concierge care to 

ensure compliance with state insurance laws.2

Given the concerns about how concierge care might affect Medicare 

beneficiaries, the Medicare Prescription Drug, Improvement, and 

Modernization Act of 2003 required us to study and report on the practice.3

As discussed with the committees of jurisdiction, this report addresses the 

following questions:

1. What are the characteristics of concierge care?

2. What aspects of concierge care are of interest to the Medicare program 

and its beneficiaries?

To obtain information on the characteristics of concierge care, we surveyed 

concierge physicians about their practices and the types of services and 

financial arrangements they offer. Because no comprehensive directory of 

concierge physicians was available, we identified concierge physicians 

through a variety of methods, including a nationwide literature search, 

1

See for example, the Medicare Equal Access to Care Act of 2003, H.R. 2423, 108th Cong., and 

the Equal Access to Medicare Act of 2003, S. 345, 108th Cong. 

2

In Washington, for example, the Office of the Insurance Commissioner is monitoring 

concierge care and has considered requiring that physicians who charge a set fee in 

exchange for comprehensive primary care meet all the requirements that apply to health 

maintenance organizations. The basis for this requirement is that an agreement to provide 

unlimited health services in exchange for a fixed fee results in the assumption of insurance 

risk.

3

Pub. L. No. 108-173, § 650, 117 Stat. 2066, 2331. The conference report for the Consolidated 

Appropriations Act, 2004, Pub. L. No. 108-199, 118 Stat. 3, also directed GAO to study 

concierge care. H.R. Conf. Rep. No. 108-401, at 806 (2003). 
Page 3 GAO-05-929 Concierge Care

telephone interviews, and referrals from other concierge physicians. We 

identified as concierge physicians those who (1) had established a direct 

financial relationship with patients in the form of a membership or retainer 

fee and (2) provided enhanced services or amenities, such as same-day 

appointments or preventive services not covered by patient health 

insurance. We located a total of 146 concierge physicians practicing in the 

United States. We received survey responses from 112 physicians who 

practiced concierge care in October 2004. Because these 112 respondents 

were not selected at random from a larger population of known concierge 

physicians, the information they provided cannot be projected to any other 

concierge physicians. We did not attempt to verify the accuracy of their 

responses.4

To review the aspects of concierge care that are of interest to the Medicare 

program and its beneficiaries, we reviewed documents and interviewed 

officials from two HHS entities responsible for administration and 

oversight of the Medicare program: the Centers for Medicare & Medicaid 

Services (CMS) and the Office of Inspector General (OIG). We also 

reviewed relevant sections of Medicare law and regulations; interviewed 

concierge physicians and their representatives; and in our survey, asked 

concierge physicians for their views on the guidance available from HHS on 

concierge care. To assess what is known about how concierge care may 

affect Medicare beneficiary access to physician services, we reviewed 

nationwide sources of information on Medicare beneficiaries’ overall 

access to physician services, for example, reports by the Medicare Payment 

Advisory Commission. While we did not contact Medicare beneficiaries 

who were patients of physicians who converted to concierge practices, we 

contacted organizations that Medicare beneficiaries were likely to call with 

concerns or questions about concierge care, such as the 1-800-MEDICARE 

call line. We conducted our work in accordance with generally accepted 

government auditing standards from May 2004 through July 2005. 

Results in Brief Concierge care is practiced by a small number of physicians located mainly 

on the East and West Coasts. Nearly all of the 112 concierge physicians 

who responded to our survey reported practicing primary care. They 

differed, however, on the characteristics of their concierge practices, such 

as the membership fee charged, features offered, and whether they billed 

4

See app. I for details on our scope and methodology.
Page 4 GAO-05-929 Concierge Care

patient health insurance. For example, the amount of the concierge care 

membership fee ranged from $60 to $15,000 a year for an individual, with 

about half of respondents charging individual annual membership fees of 

$1,500 to $1,999. The most frequently reported features offered by 

concierge physicians responding to our survey included same- or next-day 

appointments for nonurgent care, 24-hour telephone access, and periodic 

preventive-care physical examinations. In addition, about three-fourths of 

the respondents reported billing patient health insurance for covered 

services and, among those physicians, almost all reported billing Medicare 

for covered services.

Two principal aspects of concierge care are of interest to the Medicare 

program and its beneficiaries: compliance with Medicare requirements and 

its effect on beneficiary access to physician services. HHS has determined 

that concierge care agreements are permitted as long as the arrangements 

do not violate any Medicare requirements; for example, the membership 

fee must not result in additional charges for items or services that are 

already reimbursed by Medicare. Various strategies for concierge care 

practice design have been developed to help concierge physicians avoid 

potential Medicare compliance problems, but most of our survey 

respondents expressed a need for more information from HHS to guide 

them. Although no national data directly address the impact of concierge 

care on beneficiaries’ access to physicians, the information available as of 

2004 on overall beneficiary access to services indicates that access has 

been good. The small number of concierge physicians makes it unlikely 

that the approach has contributed to widespread access problems. In 

addition, information from beneficiary advocacy organizations and on 

physician supply in communities where more concierge physicians 

practiced does not indicate that concierge care was contributing to any 

systemic access problems. In commenting on a draft of this report, HHS 

agreed with our finding about the effect of concierge care on Medicare 

beneficiary access to physician services, and also noted that it remains 

interested in concierge care and will continue to follow developments in 

the area. 

Background Physician practices that charge membership or retainer fees and provide 

enhanced services or amenities are referred to as concierge care or
Page 5 GAO-05-929 Concierge Care

retainer-based medicine.5 The origins of this practice approach are often 

traced to a medical practice founded in Seattle, Washington, in 1996. 

Physicians in this practice provide comprehensive primary care to no more 

than 100 patients each and currently charge annual retainer fees of $13,000 

for individuals. These physicians do not bill any form of patient health 

insurance. As more physicians have begun concierge practices, concierge 

care has become more diverse, comprising physicians who bill patient 

insurance, charge lower membership fees, and see more patients than the 

original Seattle practice.

The American Medical Association (AMA) has described concierge care as 

one of many options that patients and physicians are free to pursue. AMA 

in 2003 adopted ethics guidelines for physicians who have concierge care 

contracts—which AMA calls retainer contracts—with their patients.6

 These 

guidelines specify, for example, that physicians should facilitate the 

transition to new physicians for patients who choose not to join their 

concierge practices and that they must observe relevant laws, rules, and 

contracts.

The Medicare program was established by title XVIII of the Social Security 

Act, which governs how physicians bill for services that the program 

covers. Limits on what physicians may charge their Medicare patients 

depend on (1) the relationship between the physician and the Medicare 

program and (2) the type of service provided.

Physicians who provide services to Medicare beneficiaries may choose one 

of three ways to relate to the program: participating, nonparticipating, or 

opted out.

• Participating: Participating physicians agree to accept Medicare’s fee 

schedule amount as payment in full for all covered services they provide 

to beneficiaries.7

 In accordance with the Medicare participation 

agreement, these physicians receive reimbursement directly from the 

5

We use the term concierge care because the statutory provision that mandated our work 

used this term.

6

AMA Web site at http://www.ama-assn.org/ama/pub/category/print/11967.html, downloaded 

on March 16, 2005.

7

Medicare’s payment amount for physician services generally is determined by a fee 

schedule and includes 80 percent payment from the program and 20 percent beneficiary 

coinsurance, once the beneficiary’s annual deductible has been met.
Page 6 GAO-05-929 Concierge Care

Medicare program and agree to charge beneficiaries only for any 

applicable deductible or coinsurance. More than 90 percent of the

physicians and others who billed Medicare agreed to participate in 

Medicare in 2004.8

• Nonparticipating: Nonparticipating physicians do not agree to accept 

the Medicare fee schedule amount paid to participating physicians as 

payment in full for all covered services they provide to beneficiaries. 

They are still subject to limits on what they may charge, however, and 

those limits depend on whether they seek reimbursement directly from 

Medicare. When a nonparticipating physician files a claim to be 

reimbursed directly from Medicare, he or she must accept the Medicare 

fee schedule amount for nonparticipating physicians, which is 95 

percent of the fee schedule amount for participating physicians, as 

payment in full and may charge the beneficiary only for any applicable 

Medicare coinsurance or deductible.9

 When a nonparticipating 

physician does not request reimbursement directly from Medicare, he or 

she may charge the Medicare beneficiary up to 115 percent of the fee 

schedule amount for nonparticipating physicians.10

• Opted-out: Physicians who opt out of Medicare are not subject to any 

limits on what they may charge their Medicare beneficiary patients, even 

for services that Medicare would otherwise cover.11 Physicians who opt 

out of Medicare must agree not to submit for 2 years any claims for 

reimbursement for any of the services they provide to Medicare 

beneficiaries.12 Contracts between opted-out physicians and their 

beneficiary patients allow them to make their own financial 

8

Medicare Payment Advisory Commission, Report to the Congress: Medicare Payment 

Policy (Washington, D.C.: March 2005).

9

42 U.S.C. § 1395w-4(g)(2)(C) (2000).

10A beneficiary may be reimbursed no more than 80 percent of the fee schedule amount for 

nonparticipating physicians, regardless of how his or her nonparticipating physician 

chooses to bill. 

11This option became available through the Balanced Budget Act of 1997, which amended 

the Social Security Act to specify that physicians may enter into private contracts with 

Medicare beneficiaries. Pub. L. No. 105-33, § 4507, 111 Stat. 251, 439 (codified at 42 U.S.C. § 

1395a(b) (2000).

12Reimbursement may be made in cases where opted-out physicians provide emergency or 

urgent care to beneficiaries with whom they do not have private contracts.
Page 7 GAO-05-929 Concierge Care

arrangements for services that would otherwise be covered by 

Medicare, effectively taking those services outside the program. These 

contracts must be in writing and they must clearly state that the 

beneficiary also agrees not to submit claims to Medicare and assumes 

financial responsibility for all services provided by that physician. 

In addition to a physician’s Medicare participation status, the type of 

service provided also determines whether limits apply to physician 

charges. Physicians and beneficiaries are free to make private financial 

arrangements for the provision of services that Medicare does not cover.

• General standard for Medicare coverage: Medicare law states that, to 

be covered, services must be reasonable and necessary for the diagnosis 

or treatment of illness or injury or to improve the functioning of a 

malformed body member.13 The scope of coverage and the exact type of 

service that may be reimbursed depend on the circumstances of each 

case. This medical necessity standard can result in situations where the 

same service—for example, a comprehensive office visit—is considered 

medically necessary and reimbursable by Medicare in some 

circumstances but not others.

• Specific inclusion in Medicare coverage: Medicare law also establishes 

coverage for certain specific services. For example, Medicare covers an 

initial preventive physical examination for beneficiaries who become 

eligible for Medicare on or after January 1, 2005. Other examples of 

specific preventive benefits established by statute include 

immunizations against pneumonia, hepatitis B, and influenza and 

periodic screening tests for early detection of certain cancers.

• Specific exclusion from Medicare coverage: Medicare law specifically 

excludes certain items or services—for example, personal comfort 

items, purely cosmetic surgery, hearing aids, and routine physical 

checkups except for the initial preventive examination for newly eligible 

beneficiaries.

Table 1 summarizes the limits on physician charges depending on their 

Medicare participation status and the type of service provided.

1342 U.S.C. § 1395y(a)(1)(A) (2000). 
Page 8 GAO-05-929 Concierge Care

Table 1: Limits on Physician Charges for Medicare-Covered Services

Source: GAO analysis.

a

Items or services provided by opted-out physicians to their beneficiary patients under private 

contracts are not covered by Medicare. 

Physicians who impose charges on beneficiaries beyond the Medicare 

limits may be subject to civil monetary penalties.14 The Secretary of HHS 

has delegated enforcement of Medicare limits to two different entities 

within HHS. CMS, which administers the Medicare program, has 

enforcement authority over the limits that apply to nonparticipating 

physicians. HHS OIG has enforcement authority over participating 

physicians’ compliance with the terms of the participation agreement. 

The Medicare law’s limits on physician charges protect beneficiaries from 

additional charges for services they are entitled to receive under Medicare. 

The law does not, however, provide that a beneficiary has the right to 

receive services from any particular physician. Physicians are free to 

choose how they will interact with the Medicare program. They may decide 

to close their practices to new Medicare patients or decline to treat any 

Medicare beneficiaries at all.

Physician status Medicare-covered services Limits on physician charges

Participating Medically necessary items or services and 

specific preventive or other benefits.

Medicare fee schedule amount for participating 

physicians. The beneficiary may be charged applicable 

deductible and coinsurance only.

Nonparticipating Medically necessary items or services and 

specific preventive or other benefits.

Reimbursement claimed directly from Medicare: Medicare 

fee schedule amount for nonparticipating physicians, 

which is 95 percent of the amount for participating 

physicians. The beneficiary may be charged applicable 

deductible and coinsurance only.

Reimbursement not claimed directly from Medicare: No 

more than 115 percent of the Medicare fee schedule 

amount for nonparticipating physicians. The beneficiary 

may be charged this entire amount and may be 

reimbursed 80 percent of the fee schedule amount for 

nonparticipating physicians.

Opted-out None, except when emergency or urgent care is 

provided to a beneficiary with whom the 

physician does not have a contract.a

No statutory limits apply. The amount of payment is 

determined by contracts between physicians and patients. 

1442 U.S.C. § 1320a-7a (2000).
Page 9 GAO-05-929 Concierge Care

Characteristics of 

Concierge Care 

Concierge care is practiced by a small number of physicians, located 

primarily in urban areas on the East and West Coasts. Although nearly all of 

the concierge physicians who responded to our survey reported practicing 

primary care, they differed in many of the characteristics of practice 

design, including the annual membership fee charged, number of patients 

treated, features offered, whether they billed health insurance, and their 

relationship to the Medicare program.

Concierge Physician 

Location and Specialty

Concierge physicians are few in number and located primarily in urban 

areas on the East and West Coasts. Since the first Seattle practice was 

founded in the mid-1990s, the number of concierge physicians has been 

rising but remains small. We were able to locate 146 concierge physicians 

in the United States as of 2004—a small number compared with the more 

than 470,000 physicians who regularly submitted claims to Medicare in 

2003.15 The 146 concierge physicians we identified practiced in 25 states, 

with the greatest numbers in metropolitan areas on the East and West 

Coasts.16 California had the highest number, with 26 concierge physicians, 

followed by Florida with 22, Washington with 21, and Massachusetts with 

17. We identified 1 to 8 concierge physicians in 21 other states, though most 

of these other states had 5 or fewer. All but 2 of the concierge physicians 

we located practiced in metropolitan areas. We found the highest numbers 

of concierge physicians in the metropolitan statistical areas (MSA)17 of 

Seattle (19); Boston (17); and West Palm Beach–Boca Raton, Florida (13). 

Figure 1 presents the locations of 144 concierge physicians we identified 

who practiced in MSAs throughout the nation.18

15Medicare Payment Advisory Commission, Report to the Congress: Medicare Payment 

Policy (Washington, D.C.: March 2005). 

16Other groups which have estimated the number of concierge physicians include the 

Society for Innovative Medical Practice Design (formerly the American Society of Concierge 

Physicians), which estimated that about 200 concierge physicians practice in the United 

States. AMA’s Institute for Ethics located 144 concierge physicians, using the same 

identification approach that we followed, for its own study in 2003.

17An MSA is a geographic region consisting of a central county or counties that contains an 

urban area with a population of at least 50,000 plus any adjacent counties having a high 

degree of social and economic integration with the central county

18Two concierge physicians, both in Washington, were not located in MSAs.
Page 10 GAO-05-929 Concierge Care

Figure 1: Location of Concierge Physicians Identified by GAO, 2004

Notes: This figure presents the practice locations of the 144 concierge physicians we identified who 

were located in MSAs. It does not include the 2 physicians located outside MSAs. We did not identify 

any concierge physicians in Alaska or Hawaii.

The number of physicians practicing concierge care has increased in recent 

years. Among the 112 concierge physicians who responded to our survey, 

the cumulative total number practicing concierge care has increased by

Number of concierge physicians

11 or more

5 to 10

3 to 4

1 to 2

Source: GAO analysis.
Page 11 GAO-05-929 Concierge Care

more than 10 times in the past 5 years (see fig. 2).19 About two-thirds of the 

responding physicians reported that they began to practice concierge care 

in 2003 or later. The number of responding physicians starting to practice 

concierge care rose each year after 2000, except in 2004, although we did 

not include physicians who began practicing concierge care after October 

2004.20

Figure 2: Yearly Growth in Number of Concierge Physicians

19Converting a conventional practice to a concierge practice may take time. Our data on new 

and established concierge practices included physicians responding to our survey who 

charged membership fees and offered enhanced features to at least some of their patients in 

October 2004, although some of these physicians may have still been seeking additional 

concierge patients and continuing to treat some nonconcierge patients.

20Because our survey included only physicians who practiced concierge care during October 

2004, it does not account for physicians who may have started and discontinued concierge 

practices before that date, or physicians who started to practice concierge care after 

October 2004.

0

20

40

60

80

100

120

Before

2000

2000 2001 2002 2003 2004

New concierge physicians

Established concierge physicians

Number of physicians

Source: GAO survey of concierge physicians.
Page 12 GAO-05-929 Concierge Care

Notes: n = 112 concierge physicians practicing as of October 2004. Data for 2004 do not include 

physicians who began practicing concierge care after October. The earliest year in which a physician 

in our survey reported beginning to practice concierge care was 1997.

Nearly all of the physicians who responded to our survey reported 

practicing primary care and most were not new to medical practice. 

Physicians reported practicing the primary care disciplines of internal 

medicine (about three-fourths of respondents) and family practice (about 

one-fourth of respondents). Survey respondents reported being in various 

stages in their medical careers, from relatively new to practice to decades 

of experience. More than two-thirds reported having been in medical 

practice for 15 years or more. The average length of time in medical 

practice was 19 years, and about one-fourth of the respondents reported 

being in practice for 25 years or more. See appendix II for additional 

information provided by survey respondents.

Characteristics of Practice 

Design among Surveyed 

Concierge Physicians

Concierge physicians responding to our survey reported a variety of 

practice characteristics. These included the amount charged to be a 

concierge patient, practice size, features offered, whether they billed 

patient health insurance, and their relationship to the Medicare program.21

Amount of Annual Membership 

Fee

The annual membership fee for an individual to join a concierge practice 

ranged from $60 to $15,000 among the physicians responding to our survey. 

As shown in figure 3, more than 80 percent of respondents reported annual 

fees from $500 to $3,999; the most frequently reported annual fee was 

$1,500. Three-fourths of our respondents reported that they waived the 

membership fee for some of their concierge patients.22 About one in eight 

of these physicians reported waiving the fees for 20 percent or more of 

their concierge patients.

21About one-third of our respondents were affiliated with a consulting firm that helps 

physicians establish and maintain concierge practices. This firm recommends that 

concierge physicians offer a program oriented toward preventive care, limit patients to no 

more than 600 for each physician, and submit claims to insurers for covered services.

22Our survey distinguished between concierge patients granted waivers of the membership 

fee but still offered the enhanced features of concierge care, and “nonconcierge” patients 

who were neither charged a membership fee nor offered the features associated with 

concierge care.
Page 13 GAO-05-929 Concierge Care

Figure 3: Annual Membership Fee for Individuals, October 2004

Notes: n = 111 concierge physicians practicing as of October 2004; 1 respondent did not provide this 

information. The maximum reported annual individual membership fee charged was $15,000.

Practice Size Concierge physicians responding to our survey reported, on average, 491 

patients under their care as of October 2004—significantly fewer than the 

average of 2,716 patients they reported for the year before beginning to 

practice concierge care. Of the total patients they reported in October 2004, 

an average of 326 were concierge patients—that is, patients who either 

paid the membership fee or had the fee waived, and were offered the 

enhanced services or amenities associated with membership.

Nearly two-thirds of responding physicians reported having fewer than 400 

concierge patients (see fig. 4). Concierge physicians also reported seeing 

fewer patients per day: the average number of patients physicians reported 

seeing on a typical day fell to 10 in October 2004 from 26 in the year before 

they began practicing concierge care.23

0

10

20

30

40

50

60

0–499 500–

1,499

1,500–

1,999

2,000–

3,999

4,000+

Amount of annual fee, in dollars

Number of physicians

Source: GAO survey of concierge physicians.

23Information on the number of patients seen per day was provided by 101 of the 103 

physicians who reported that they established their concierge practices in the same 

community in which they had practiced before converting to concierge care.
Page 14 GAO-05-929 Concierge Care

Figure 4: Number of Concierge Patients under the Care of Individual Concierge 

Physicians, October 2004

Notes: n = 109 concierge physicians practicing as of October 2004; 3 respondents did not provide this 

information. The maximum reported number of concierge patients was 980.

Many respondents reported that they were still establishing their concierge 

practices and had set targets for the number of concierge patients in their 

care. Respondents reported target numbers for concierge patients ranging 

from 10 to 1,300; the two most frequently reported goals were 300 and 600 

concierge patients (reported by 23 and 30 respondents, respectively). 

About 80 percent of respondents reported that they had not yet reached 

their target number of concierge patients as of October 2004. About 1 in 2 

of the respondents who began concierge care in 2001 or earlier reported 

having met their goal for the number of concierge patients in their 

practices, compared with about 1 in 7 of those who reported starting their 

concierge practices on or after January 1, 2002.

Concierge physicians may continue, for various reasons, to treat some 

nonconcierge patients. Thirty-six, about one-third of survey respondents, 

reported that their individual practices included some nonconcierge 

patients, while about two-thirds had practices consisting entirely of 

concierge patients. Physicians who continued to see nonconcierge patients 

reported doing so for various reasons: to ensure continuity of care for 

patients who did not join the concierge practice, to maintain a combined 

0

5

10

15

20

25

30

35

40

1–199 200–399 400–599 600–799 800 +

Number of concierge patients

Number of physicians

Source: GAO survey of concierge physicians.
Page 15 GAO-05-929 Concierge Care

concierge and conventional practice, or to see patients as part of a 

subspecialty practice.24 Less frequently reported situations in which 

respondents reported seeing nonconcierge patients included seeing family 

members of their concierge patients occasionally as a courtesy or when 

urgent needs arose, and covering for other doctors who were out of town.

Features Offered The concierge physicians responding to our survey reported offering a 

variety of features, some of which were offered by nearly all the 

respondents, others by relatively few (see table 2). The most frequently 

reported features were same- or next-day appointments for nonurgent care, 

24-hour telephone access, and periodic preventive-care physical 

examinations.

Table 2: Features Offered by Concierge Physicians, October 2004

24Subspecialties for which concierge physicians reported seeing nonconcierge patients 

included pulmonary medicine, endocrinology, and nephrology. 

Feature

Percentage of

respondents offering

feature

Same- or next-day appointments for nonurgent care 99

24-hour telephone access 99

Periodic preventive-care physical examination 99

Extended office visits 96

Access to physician via e-mail 94

Access to physician via cell phone or pager 93

Wellness planning 93

Nutrition planning 82

Coordination of medical needs during travel 82

Patient home or workplace consultations 78

Smoking cessation support 77

Preventive screening procedures 72

Newsletter 71

Stress reduction counseling 67

Private waiting room 63

Mental health counseling 60

Online or other electronic access to personal medical records 42
Page 16 GAO-05-929 Concierge Care

Source: GAO survey of concierge physicians.

Note: n = 112 concierge physicians practicing as of October 2004.

When asked to list the most important features of concierge care that were 

not routinely available to their nonconcierge patients, respondents most 

frequently cited features related to increased time spent with patients, 

direct patient access to the physician at any time, same- or next-day 

appointments, and comprehensive preventive and wellness care. 

Interaction with Patient Health 

Insurance and Medicare

Concierge physicians responding to our survey reported different ways of 

interacting with patient health insurance and the Medicare program. 

Eighty-five, approximately three-fourths, of respondents reported that they 

billed patient health insurance for covered services. Of these 85 physicians, 

79 reported they billed Medicare and 6 reported they did not. About onefourth of the concierge physicians responding to our survey reported that 

they did not submit any claims to patient health insurance, including 

Medicare.

About three-fourths of our survey respondents reported that they were 

Medicare participating physicians, and about one-fifth had opted out of 

Medicare as of October 2004 (see fig. 5). Nationwide, relatively few 

physicians—approximately 3,000 in 2004—have opted out of the Medicare 

program.

Accompaniment to specialist appointments or medical 

procedures 38

Home delivery of medication by physician or office staff 31

Priority for diagnostic tests in affiliated medical facilities 27

Other (e.g., visits to homebound patients, lecture series on 

wellness and nutrition, assistance for patients’ family 

members, or an on-site assistant to help patients with 

insurance) 31

(Continued From Previous Page)

Feature

Percentage of

respondents offering

feature
Page 17 GAO-05-929 Concierge Care

Figure 5: Medicare Participation Status of Concierge Physicians Surveyed by GAO, 

October 2004

Notes: n = 111 concierge physicians as of October 2004; 1 respondent did not provide this information. 

Percentages do not add to 100 due to rounding. 

Aspects of Concierge 

Care of Interest to 

Medicare and Its 

Beneficiaries

Two principal aspects of concierge care are of interest to the Medicare 

program and its beneficiaries: its compliance with Medicare requirements 

and its effect on beneficiary access to physician services. HHS has 

established general policy on concierge care and alerted physicians to 

areas of potential noncompliance. Although concierge physicians have 

followed various strategies to ensure compliance with Medicare 

requirements, most physicians responding to our survey indicated more 

HHS guidance would be helpful. Available measures of access to care as of 

2004, while not directly addressing concierge care, indicate that Medicare 

beneficiary access to physician services has been good. The small number 

of concierge physicians makes it unlikely that the approach has 

contributed to widespread access problems. 

Compliance with Medicare 

Requirements

HHS has established general policy on concierge care and has alerted 

physicians to areas of potential noncompliance. Concierge physicians have 

expressed the need for additional guidance and have taken various steps—

such as structuring their practices in an attempt to avoid associating their 

membership fees with Medicare-covered services or opting out of 

Medicare—to avoid compliance problems.

76%

4%

Participating

Nonparticipating

21% Opted out

Source: GAO survey of concierge physicians.
Page 18 GAO-05-929 Concierge Care

CMS outlined its position on concierge care in a March 2002 memorandum 

to CMS regional offices that CMS officials told us remains current as of 

June 2005. The memorandum states that physicians may enter into retainer 

agreements with their patients as long as these agreements do not violate 

any Medicare requirements.25 For example, concierge care membership 

fees may constitute prohibited additional charges if they are for Medicarecovered items or services. If so, a physician who has not opted out of 

Medicare would be in violation of the limits on what she or he may charge 

patients who are Medicare beneficiaries.26

HHS OIG has addressed the consequences of noncompliance with 

Medicare billing requirements. In March 2004, HHS OIG issued an alert “to 

remind Medicare participating physicians of the potential liabilities posed 

by billing Medicare patients for services that are already covered by 

Medicare.”27 The alert stated that “charging extra fees for already covered 

services abuses the trust of Medicare patients by making them pay again 

for services already paid for by Medicare.”As an example, the alert referred 

to a Minnesota physician who paid a settlement and agreed to stop offering 

personal health care contracts to patients for annual fees of $600. 

According to HHS OIG, these contracts included at least some services that 

were already covered and reimbursable by Medicare. The alert advised 

participating physicians that they could be subject to civil monetary 

penalties if they requested payment from Medicare beneficiaries for those 

services in addition to the relevant deductibles and coinsurance charged 

for these services. In addition, the alert noted that nonparticipating 

physicians may also be subject to penalties for overcharging beneficiaries 

for covered services.

Unless a concierge physician opts out of Medicare, the question of 

Medicare coverage is central to whether a concierge care agreement 

complies with the program’s limits on patient charges. HHS OIG’s March 

25HHS refers to concierge care contracts as “physician-patient retainer agreements.”

26The memorandum also states that retainer agreements could be problematic if they 

attempt to substitute for Medicare supplemental insurance policies. CMS officials reported 

encountering problems with physicians offering unregulated supplemental policies in the 

mid-1990s. In June 2005, CMS officials told us that, while such substitutions are not allowed, 

they are no longer concerned that retainer arrangements are being used as substitutes for 

Medicare supplemental insurance.

27Office of Inspector General, OIG Alerts Physicians about Added Charges for Covered 

Services (Washington, D.C.: Department of Health and Human Services, Mar. 31, 2004).
Page 19 GAO-05-929 Concierge Care

2004 alert provided three examples of services offered by the physician in 

Minnesota: coordination of care with providers, a comprehensive 

assessment and plan for optimum health, and extra time spent on patient 

care. HHS OIG did not indicate which, if any, of those three services were 

already covered by Medicare. The resulting uncertainty, about which 

features of the Minnesota physician’s concierge agreement formed the 

basis for HHS OIG’s allegation that he violated the Medicare program’s 

prohibition against charging beneficiaries more than the applicable 

deductible and coinsurance, generated concern among some concierge 

physicians.

According to HHS OIG officials, HHS OIG has not issued more detailed 

guidance on concierge care because its role in this area is to carry out 

specific delegated enforcement authorities, not to make policy. HHS OIG 

addresses each situation in its specific context. Physicians with questions 

about their own concierge care agreements may obtain guidance specific to 

them from HHS by requesting an advisory opinion. HHS OIG’s Industry 

Guidance Branch issues advisory opinions on matters that fall within its 

enforcement authority. It covers provisions of Medicare law that prohibit 

knowingly presenting a beneficiary with a request for payment in violation 

of a physician’s participation agreement.28 Consequently, any participating 

physician who operates or is considering starting a concierge practice 

could request an advisory opinion. Advisory opinions are legally binding on 

HHS and the requesting party as long as the arrangement is consistent with 

the facts provided. The process involves a written request that meets 

certain requirements, plus a fee. Advisory opinions are not available for 

hypothetical situations, “model” situations, or general questions of 

interpretation. Officials with HHS OIG reported that as of May 2005, the 

Industry Guidance Branch had received very few inquiries regarding 

advisory opinions about concierge care agreements, and no opinions have 

been issued on this subject.

Most of the physicians who responded to our survey indicated that more 

guidance from HHS on how Medicare requirements might affect concierge 

care is needed. Although about one-fourth of respondents said that the 

information available from HHS was clear and sufficient, more than half 

reported that it was not. Of those who reported that the guidance was not 

clear and sufficient, about one-third stated that information was available 

2842 U.S.C § 1320a-7a(a)(2) (2000). 
Page 20 GAO-05-929 Concierge Care

from other sources, including private attorneys, the Society for Innovative 

Medical Practice Design, and concierge care consultants (see table 3).

Table 3: Concierge Physicians’ Views on HHS Information about How Medicare 

Requirements Might Affect the Practice of Concierge Care, October 2004

Source: GAO survey of concierge physicians.

Note: n = 111 concierge physicians as of October 2004; 1 respondent did not provide this information.

Medicare compliance is an important consideration in how concierge 

physicians set up their practices. For example, concierge physicans should 

avoid including services covered by Medicare in their concierge 

agreements to ensure that no additional charges are associated with those 

services. Different strategies have been undertaken to accomplish this. One 

such strategy emphasizes the convenience and availability of concierge 

physicians as the primary benefit of membership. Another strategy is to 

focus on preventive care, linking the membership payment only to 

screening that Medicare does not cover. Some concierge physicians opt out 

of Medicare, thus avoiding potential compliance problems; opting out 

requires physicians to forgo all Medicare reimbursement for 2 years.

Information on Medicare 

Beneficiary Access to 

Physician Services

Most of the concierge physicians responding to our survey reported having 

patients who were Medicare beneficiaries; however, the numbers of 

beneficiary patients they reported as part of their concierge and previous 

nonconcierge practices are very small compared to the more than 40 

million Medicare beneficiaries. Surveys and national sources of 

information on beneficiary access to care do not address the impact of 

concierge care directly. In the absence of direct measures of the impact of 

concierge care on Medicare beneficiaries’ access to physician services, we 

reviewed available nationwide data and other indicators about 

beneficiaries’ experiences overall. These sources showed that overall 

access to physician services has not changed substantially in recent years. 

View

Percentage of

physicians

The information available from HHS is clear and sufficient 26

The information available from HHS is not clear and sufficient, but 

clear and sufficient information is available from other sources

18

The information available from HHS is not clear and sufficient, and 

clear and sufficient information is not available from other sources

34

Don’t know/no opinion 22
Page 21 GAO-05-929 Concierge Care

Medicare Beneficiary Patients of 

Surveyed Concierge Physicians

Estimates provided by 105 of the respondents indicated that about twothirds of the estimated 19,400 Medicare beneficiaries who were patients of 

these physicians in October 2004 were considered concierge patients.29 The 

rest were nonconcierge patients who were neither charged a fee nor 

offered enhanced services. Physicians who continued to see nonconcierge 

patients reported doing so for various reasons, including to ensure 

continuity of care for individuals who had not yet found a new physician 

and to maintain a practice consisting of both concierge and nonconcierge 

patients.

On average, Medicare beneficiaries represented about 35 percent of the 

total number of patients—concierge and nonconcierge—that responding 

concierge physicians reported having in their care as of October 2004. 

Eight of the 105 physicians who provided this information reported having 

no Medicare beneficiaries in their practices at all; 36 reported treating 

some, but fewer than 100 Medicare beneficiaries among their patients; and 

12 reported having 400 or more Medicare beneficiaries under their care 

(see fig. 6). 

29The term concierge patients includes all patients who are offered enhanced services or 

amenities, including those whose membership fees have been waived.
Page 22 GAO-05-929 Concierge Care

Figure 6: Medicare Beneficiary Patients of Concierge Physicians, October 2004

Notes: n = 105 concierge physicians as of October 2004; 7 respondents did not provide this 

information. Includes Medicare beneficiaries who were nonconcierge patients of concierge physicians. 

The highest number of Medicare beneficiary patients reported was 2,825.

Concierge physicians who responded to our survey reported that, on 

average, Medicare beneficiaries in their previous nonconcierge practices 

joined their concierge practices in about the same proportion as their 

patients overall. When physicians begin practicing concierge care, existing 

patients may choose not to become concierge patients. Patient counts 

provided by responding physicians indicate that, on average, Medicare and 

non-Medicare patients who were under their care before they began 

concierge care chose to join as concierge patients in roughly similar 

proportions. 

Table 4 shows the average numbers of Medicare and non-Medicare patients 

responding physicians reported were in their practices before and after 

their conversion to concierge care. The numbers of beneficiaries that 

responding concierge physicians reported in their practices are relatively 

small—for example, the total number of Medicare beneficiaries that 88 

responding physicians reported treating before conversion to concierge 

care was fewer than 100,000—compared to the nation’s more than 40 

million Medicare beneficiaries. 

0

5

10

15

20

25

30

35

40

0 1–99 100–199 200–299 300–399 400 +

Number of Medicare beneficiary patients

Number of physicians

Source: GAO survey of concierge physicians.
Page 23 GAO-05-929 Concierge Care

Table 4: Patients from Physicians’ Conventional Practices Who Joined Physicians’ 

Concierge Practices 

Source: GAO survey of concierge physicians.

Notes: Although there were 112 unique respondents who practiced concierge care in October 2004, 

not all respondents answered each question. This table presents information about the patients who 

became members of the physicians’ concierge practices. It does not count individuals who may have 

remained under the care of their physicians as nonconcierge patients. 

Respondents reported engaging in a variety of activities to help Medicare 

beneficiaries choosing not to join the physician’s concierge practice find 

new physicians. These activities included designating a staff person to help 

with transition questions, referring patients to other physicians within a 

group practice, calling new physicians to discuss a patient’s medical 

history, and remaining available to treat all patients until they had found a 

new primary care physician. Additional activities reported include bringing 

a new physician into the practice to take on the concierge physician’s 

previous patients and speaking individually with each patient. We did not 

contact Medicare beneficiary patients of the concierge physicians in our 

survey to determine how many of them had sought or found new 

physicians. See appendix II for additional details on actions physicians 

reported taking to help Medicare patients who did not join their concierge 

practices to find new physicians.

Nationwide and Community 

Indicators of Beneficiaries’ 

Access

The number of concierge physicians, and the number of Medicare 

beneficiaries the physicians reported in their previous nonconcierge 

practices, are relatively small, and therefore national surveys of samples of 

Medicare beneficiaries are not likely to include many beneficiaries who 

come into contact with concierge care. In the absence of data to directly 

assess the impact of concierge care on Medicare beneficiaries’ access, 

however, national surveys can provide general information about the 

availability of physicians and beneficiary access to care. Overall, national 

surveys showed that Medicare beneficiary access to physician services has 

been good, in some cases better than access for individuals with private 

health insurance. 

Status of practice

Average number of patients

Total Medicare Non-Medicare

Before conversion to concierge 

care

2,716 (n = 97) 1,069 (n = 88) 1,632 (n = 88)

After conversion to concierge 

care

301 (n = 94) 138 (n = 85) 157 (n = 85)
Page 24 GAO-05-929 Concierge Care

Surveys targeting both Medicare beneficiaries and physicians revealed that 

overall access to physician services has not changed substantially in recent 

years. Most beneficiaries surveyed reported that they have not had a 

problem finding a primary care physician. Of those who did report a 

problem, only a small percentage attributed their difficulty to physicians’ 

refusing to take new Medicare patients. Most beneficiaries attributed 

problems to transportation barriers or their difficulty finding a physician 

they liked, not to a shortage of primary care physicians who accepted 

Medicare. Of physicians surveyed, most reported accepting at least some 

new Medicare patients.30 Analysis done by the Medicare Payment Advisory 

Commission of Medicare claims data also revealed that the number of 

physicians who treated Medicare patients grew at a more rapid pace than 

the Medicare beneficiary population from 1999 to 2003.31 Results from our 

review of Medicare claims data from April 2000 and April 2002 indicated 

increases throughout the country in both the percentage of beneficiaries 

who received physician services and the number of services provided to 

beneficiaries who were treated.32

Physician supply data from the Seattle, Boston, and Southeast Florida 

metropolitan areas, where we found concierge care is relatively prominent, 

suggested that physicians there were relatively plentiful. The ratio of 

physicians to overall population in each of these metropolitan areas 

exceeded the nationwide average for all metropolitan areas in 2001. 

Because concierge physicians treat fewer patients than do physicians in 

conventional practices, a community needs other available physicians to 

take on Medicare beneficiaries who choose not to join a concierge practice. 

Even in communities where the concierge physician population was 

largest, however, the number of concierge physicians we identified was 

small compared with the physician population as a whole. 

Information about Experiences 

of Individual Beneficiaries

CMS officials informed us that CMS has not established a special tracking 

system for beneficiary complaints about concierge care because the 

practice is not sufficiently widespread to raise concerns about access to 

care. Similarly, officials with call centers for 1-800-MEDICARE and CMS 

30See app. I for a list of the sources we reviewed.

31Medical Payment Advisory Commission, Report to Congress, Medicare Payment Policy

(Washington, D.C.: March 2005).

32GAO, Medicare Fee-for-Service Beneficary Access to Physician Services: Trends in 

Utilization of Services, 2000 to 2002, GAO-05-145R (Washington, D.C.: Jan. 12, 2005).
Page 25 GAO-05-929 Concierge Care

contractors handling beneficiary inquiries and complaints reported that 

they have received a small number of calls from beneficiaries about 

concierge care. Because of the low volume of calls on this subject, the 

majority of these call centers do not have tracking codes for responses to 

calls about concierge care.33 Of the 15 CMS contractors who process claims 

for physician services and responded to our inquiry, only 1 reported 

establishing a code to track concierge care inquiries.34 This contractor 

established the tracking code in response to our inquiry about concierge 

care in February 2005.35 As of April 2005, none of this contractor’s call 

centers reported receiving any beneficiary calls about concierge care.

Because of the relatively high number of concierge physicians in the Seattle 

metropolitan area, CMS’s Seattle regional office has been following 

concierge care, but so far it has not identified an impact in Medicare 

beneficiaries’ access to care. The Seattle office’s efforts are part of an 

agencywide effort to monitor beneficiary access to care through reports in 

the media and from the CMS divisions that interact with beneficiaries. 

According to CMS officials in the agency’s Seattle regional office, that 

office has received a small number of calls about concierge care from 

physicians and beneficiaries, mainly asking whether concierge care is 

permitted under Medicare law. Seattle regional office officials said they 

respond in accordance with CMS guidelines: they do not review specific 

concierge care agreements but help beneficiaries by providing a list of local 

physicians who participate in Medicare. The CMS Seattle regional office 

has not found indications that beneficiaries who choose not to pay their 

physician’s membership fees have had problems locating new primary care 

physicians.

We did not contact Medicare beneficiaries who were patients of physicians 

who converted to concierge care to determine how many of them had 

sought or found new physicians. We did, however, contact organizations 

that Medicare beneficiaries might call with problems or concerns,

33It is possible that some beneficiaries have called Medicare claims contractors about 

concierge care and had their inquiries identified more generally, for example, as 

“miscellaneous.”

34Fifteen contractors responded to our inquiry out of a total of 18 contractors who process 

Medicare claims for outpatient physician services. 

35This contractor processes claims for physician services for California, Maine, 

Massachusetts, New Hampshire, and Vermont.
Page 26 GAO-05-929 Concierge Care

including AARP and the Medicare Rights Center.36 Like CMS, officials with 

these organizations reported receiving a few calls from beneficiaries about 

concierge care, and none reported complaints from beneficiaries about 

finding a physician or about access to services because of concierge care. 

Officials with these groups also reported that they have not developed a 

formal system to track the issue. According to officials from these 

organizations, calls from beneficiaries about concierge care are usually 

requests for help interpreting the letters from their physicians explaining 

the physicians’ conversion to concierge care.

Concluding 

Observations

Although the number of physicians practicing concierge care has grown in 

recent years, the total number remains very small. Available measures of 

Medicare beneficiaries’ overall access to care, while not directly addressing 

concierge care, indicate widespread availability of physicians to treat them. 

The small number of concierge physicians at the time of our review, along 

with information from available measures of access to services, suggests 

that concierge care does not present a systemic access problem for 

Medicare beneficiaries at this time.

Agency and Other 

Comments

We provided a draft of this report for comment to HHS. In its comments, 

HHS agreed that concierge care has had a minimal impact on beneficiary 

access to physician services at this time. HHS noted, however, that the 

agency is interested in developments in concierge care and will continue to 

follow this area and to evaluate whether any further steps are indicated. 

See appendix III for HHS’s written comments. HHS also provided technical 

comments, which we incorporated where appropriate. 

We also provided a draft to the Society for Innovative Medical Practice 

Design, formerly the American Society of Concierge Physicians, which had 

no comments. 

We are sending copies of this report to the Secretary of HHS, the Inspector 

General of HHS, the Administrator of CMS, and appropriate congressional 

committees. We will also provide copies to others upon request. In 

36See app. I for a list of the organizations we contacted. 
Page 27 GAO-05-929 Concierge Care

addition, the report is available at no charge on the GAO Web site at 

http://www.gao.gov. 

If you or your staff members have any questions about this report, please 

contact me at (202) 512-7119 or steinwalda@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff who made major contributions to this 

report are listed in appendix IV. 

A. Bruce Steinwald

Director, Health Care
Page 28 GAO-05-929 Concierge Care

Appendix I

Scope and Methodology AAppenednxidexiIs

To obtain information on the characteristics of concierge care, we surveyed 

concierge physicians about their practices and the types of services and 

financial arrangements they offer. Because no comprehensive directory of 

concierge physicians was available, we compiled our own list of concierge 

physicians to survey. We focused our survey on physicians who, as of 

October 2004, (1) had established a direct financial relationship with 

patients in the form of a membership or retainer fee and (2) provided 

enhanced services or amenities, such as same-day appointments or 

preventive services not covered by patient health insurance.1

We identified concierge physicians through a variety of methods, including 

a nationwide literature search, telephone interviews, and referrals from 

other concierge physicians. With the assistance of a contractor, we 

compiled an initial list of potential survey participants, contacted them to 

confirm that they met the criteria for inclusion in our survey, and requested 

referrals to additional concierge physicians. We used a variety of sources to 

establish our initial list of potential survey participants, including a 

nationwide Internet search of articles in newspapers, business journals, 

and medical publications; attendance at the first annual meeting of the 

American Society of Concierge Physicians (now known as the Society for 

Innovative Medical Practice Design); and a list of physicians affiliated with 

a consulting firm that helps physicians establish and maintain concierge 

practices. This process yielded a final mailing list of 187 individuals.

We mailed the questionnaires in November 2004, after pretesting it with 

concierge physicians and incorporating suggestions from several reviewers 

familiar with concierge care; we followed up with nonrespondents during 

December 2004 and January 2005. Two questionnaires were returned as 

undeliverable; we removed those names from our total count of potential 

concierge physicians. The total we used to calculate the response rate for 

our survey was therefore 185. 

We received responses to our survey from 129 physicians, yielding an 

overall response rate of 70 percent. Of the respondents, 112 physicians 

confirmed that they practiced concierge care—that is, they reported that 

they charged a retainer or membership fee for enhanced services or 

1

The scope of our work did not include physicians who imposed additional charges solely to 

cover the costs of routine administrative services, such as filling out forms. In addition, our 

results do not include the views of nonconcierge physicians or physicians who may have 

once practiced concierge care but no longer do.
Appendix I

Scope and Methodology

Page 29 GAO-05-929 Concierge Care

amenities—as of October 2004. We analyzed only the information provided 

by these 112 physicians. Because these 112 respondents were not randomly 

sampled from a larger population of known concierge physicians, the 

information they provided cannot be projected to any other concierge 

physicians. We did not attempt to verify the accuracy of their responses. 

In addition to the 112 physicians practicing concierge care in October 2004 

and responding to our survey, we confirmed—through, for example, 

telephone interviews conducted by us or our contractor—the concierge 

status of an additional 34 physicians who did not return our questionnaire. 

This process yielded a total of 146 confirmed concierge physicians. To 

analyze the geographic practice locations of these 146 physicians, we 

assigned the physicians’ zip codes to larger geographic units called 

metropolitan statistical areas (MSA) or primary metropolitan statistical 

areas (PMSA), as defined in 1999 by the Office of Management and Budget.

To review the aspects of concierge care of interest to the Medicare program 

and its beneficiaries, we reviewed relevant provisions of Medicare law and 

documents from the Department of Health and Human Services (HHS), 

including Centers for Medicare & Medicaid Services (CMS) policy manuals 

and internal memorandums, information posted on the CMS Web site, an 

alert published by the HHS Office of Inspector General (OIG), and 

correspondence between interested parties and HHS officials regarding 

concierge care. We also interviewed CMS officials at CMS headquarters and 

in the Seattle regional office, officials with HHS OIG, and concierge 

physicians and their representatives and, in our survey, asked concierge 

physicians for their views on the guidance available from HHS on concierge 

care. 

To assess what is known about how concierge care might affect Medicare 

beneficiary access to physician services, we reviewed national surveys and 

reports on overall Medicare beneficiary access. Because so few physicians 

and beneficiaries are affected by concierge care, concierge physicians or 

their patients are unlikely to be randomly chosen to participate in surveys 

on access to physicians by Medicare beneficiaries. National surveys and 

analysis on beneficiary access to physician services are also not sufficiently 

detailed to address concierge care, but they can provide information about 

physician availability and beneficiary access to care overall. The sources 

we consulted targeted beneficiaries, physicians, or both and included the 

following:
Appendix I

Scope and Methodology

Page 30 GAO-05-929 Concierge Care

• Bernard, Shulamit, et al. Medicare Fee-for-Service National 

Implementation Subgroup Analysis. Prepared for the Centers for 

Medicare & Medicaid Services. Research Triangle Park, N.C.: Research 

Triangle Institute, 2003.

• Center for Studying Health System Change. Community Tracking 

Study (CTS) Section Map. Washington, D.C.: October 2004. 

http://www.hschange.org/index.cgi?data=10 (downloaded October 

2004).

• Centers for Medicare & Medicaid Services. Medicare Current 

Beneficiary Survey. Baltimore, Md.: September 2004. 

http://www.cms.hhs.gov/MCBS/default.asp (downloaded October 2004).

• GAO. Medicare Fee-for-Service Beneficiary Access to Physician 

Services: Trends in Utilization of Services, 2000 to 2002. GAO-05-

145R. Washington, D.C.: January 12, 2005.

• Lake, Timothy, et al. Results from the 2003 Targeted Beneficiary 

Survey on Access to Physician Services among Medicare 

Beneficiaries. Prepared for the Centers for Medicare and Medicaid 

Services. Cambridge, Mass.: Mathematica Policy Research, Inc., 2004.

• Medicare Payment Advisory Commission. Report to the Congress: 

Medicare Payment Policy. Washington, D.C.: 2005.

• Schoenman, Julie, et al. 2002 Survey of Physicians about the Medicare 

Program. Prepared for the Medicare Payment Advisory Commission. 

Bethesda, Md.: Project HOPE Center for Health Affairs, 2003.

Because concierge physicians generally treat fewer patients than 

physicians in conventional practices, we assessed community-level data on 

physician supply to see if other physicians might be available to take on 

Medicare beneficiaries who choose not to join a concierge practice. We 

calculated physician-to-population ratios in communities where we found 

the highest numbers of concierge physicians and compared them to the 

average ratio for all metropolitan areas in the United States. To calculate 

this ratio, we used data from a 2003 HHS Health Resources and Services 

Administration database known as the Area Resource File. This database 

included county-level data on active, nonfederal, office-based, patient-care 

physicians from the 2001 American Medical Association Physician 
Appendix I

Scope and Methodology

Page 31 GAO-05-929 Concierge Care

Masterfile database and county-level resident population data from the U.S. 

Census Bureau for 2001, which we aggregated by MSA and PMSA. 

We did not contact Medicare beneficiaries who were patients of physicians 

who converted to concierge practices. We obtained information from 

organizations likely to receive calls from Medicare beneficiaries to 

determine whether individual beneficiaries were reporting concerns about 

concierge care or difficulty finding new physicians. We obtained and 

analyzed information from officials at CMS, call centers for 1-800-

MEDICARE, and 15 of 18 CMS contractors that process Medicare claims 

for outpatient physician services. We spoke with representatives of AARP, 

the American Bar Association’s Commission on Law and Aging, the Center 

for Medicare Advocacy, the Health Assistance Partnership of Families USA, 

and the Medicare Rights Center.

We conducted our work in accordance with generally accepted government 

auditing standards from May 2004 through July 2005.
Page 32 GAO-05-929 Concierge Care

Appendix II

Summary of Physician Responses to GAO 

Concierge Care Survey ApendxiI

This appendix summarizes the results from questions we asked physicians 

who practiced concierge care as of October 2004. We sent surveys to 185 

physicians with valid addresses whom we had identified as potential 

concierge physicians. We obtained responses from 129 individuals, for an 

overall response rate of 70 percent, and analyzed the responses from 112 

physicians who practiced concierge care in October 2004.

The following tables and figures present information on reported 

characteristics of the 112 concierge physicians who responded to our 

survey and their practice settings (table 5), the estimated number of 

patients in their individual practices (table 6), goals for the total number of 

concierge patients when physicians’ practices are fully established (fig. 7), 

annual membership fees charged by physicians who did and did not bill 

insurance (fig. 8), actions concierge physicians reported taking to help 

Medicare beneficiaries who did not join their concierge practices find new 

physicians (table 7), concierge physicians’ views on the sufficiency of HHS 

guidance on concierge care and Medicare (table 8), and concierge 

physicians’ views on remaining in medical practice and treating Medicare 

beneficiaries if concierge care were not an option (table 9). 

Table 5: Characteristics of Concierge Physicians and Their Practices, October 2004

Characteristic Category Respondents

Year physician began 

concierge care

1997 2

1998 0

1999 1

2000 3

2001 11

2002 22

2003 41

2004 32

Total responses 112

Years physician in medical 

practice

1–9 14

10–19 44

20–29 45

30 and above 9

Total responses 112
Appendix II

Summary of Physician Responses to GAO 

Concierge Care Survey

Page 33 GAO-05-929 Concierge Care

Physician specialty Internal medicine 84

Family practice 24

Other (e.g., emergency medicine) 1

Total responses 109

Practice setting Solo 41

Group 65

Other (e.g., partnership, 

management group, and integrated 

delivery system) 6

Total responses 112

Number of physicians in group 

practicea

1–9 51

10–19 6

20–29 1

30–39 1

40–49 2

50 and above 3

Total responses 64

Number of concierge physicians in 

group practicea

1 10

2 30

3 24

4 4

5 4

Total responses 72

Status of transition to concierge

care

All physicians

Complete 22

In progress 90

Total responses 112

Physicians who began concierge 

care during 2001 or earlier

Complete 9

In progress 8

Total responses 17

Physicians who began concierge 

care during 2002 or later

Complete 13

In progress 82

Total responses 95

(Continued From Previous Page)

Characteristic Category Respondents
Appendix II

Summary of Physician Responses to GAO 

Concierge Care Survey

Page 34 GAO-05-929 Concierge Care

Treated some nonconcierge 

patients 

Yes 36

No 76

Total responses 112

Reasons for seeing 

nonconcierge patientsb

To ensure continuity of care for 

patients who did not join concierge 

practice 14

As part of a combined concierge and 

conventional practice 11

As part of a subspecialty practice 

(e.g., pulmonology, nephrology, 

endocrinology, cardiology, and sleep 

medicine) 11

Other (e.g., occasionally as a favor for 

family members of concierge patients, 

to treat indigent and Medicaid 

patients, and to cover for other 

physicians) 13

Practice accepting new 

concierge patients 

Yes 101

No 11

Total responses 112

Practice open to new Medicare 

concierge patients

Yes, only those who pay the 

membership fee 62

Yes, and would consider waiving the 

membership fee 33

No 3

Total responses 98

Billed patient health insurance for 

covered services

Yes 85

No 26

Total responses 111

Of those who billed patient health 

insurance, billed Medicare for 

covered services

Yes 79

No 6

Total responses 85

Relationship to Medicare Participating 84

Nonparticipating 4

Opted-out 23

Total responses 111

(Continued From Previous Page)

Characteristic Category Respondents
Appendix II

Summary of Physician Responses to GAO 

Concierge Care Survey

Page 35 GAO-05-929 Concierge Care

Source: GAO survey of concierge physicians.

Notes: Although there were 112 unique respondents, not all respondents answered each question. 

The total number of responses expected for each question varied; for example, only physicians who 

stated that they were accepting new patients were asked whether they were accepting new Medicare 

patients. 

a

Totals include the responding physicians. The responses for group practice include some physicians 

who responded to the “other” category for practice setting and nonetheless provided information about 

multiphysician practice settings.

b

Physicians could select more than one response to this question.

Age ranges of concierge patients Percentage of patients aged 20 or 

younger

0 26

1–24% 76

25–49% 3

50–74% 1

75% and above 0

Total responses 106

Percentage of patients aged 21 

through 64

0 0

1–24% 4

25–49% 36

50–74% 42

75% and above 24

Total responses 106

Percentage of patients aged 65 or 

older

0 3

1–24% 28

25–49% 34

50–74% 37

75% and above 4

Total responses 106

(Continued From Previous Page)

Characteristic Category Respondents
Appendix II

Summary of Physician Responses to GAO 

Concierge Care Survey

Page 36 GAO-05-929 Concierge Care

Table 6: Estimated Number of Patients in Individual Practice, October 2004

Source: GAO survey of concierge physicians.

Notes: Although there were 112 unique respondents, not all respondents answered each question. 

Physicians were asked to provide their best estimates if specific patient counts were not available.

Patients Total number of patients

Number who were 

Medicare beneficiaries

Concierge patients Minimum: 3 Minimum: 0

Maximum: 980 Maximum: 590

Mean: 326 Mean: 129

Mode: 600 Mode: 0

Total responses: 109 Total responses: 105

Nonconcierge patients Minimum: 0 Minimum: 0

Maximum: 4,000 Maximum: 2,800

Mean: 166 Mean: 57

Mode: 0 Mode: 0

Total responses: 109 Total responses: 105

Total patients Minimum: 20 Minimum: 0

Maximum: 4,035 Maximum: 2,825

Mean: 491 Mean: 185

Mode: 200 and 600 (multiple 

modes exist)

Mode: 0

Total responses: 109 Total responses: 105
Appendix II

Summary of Physician Responses to GAO 

Concierge Care Survey

Page 37 GAO-05-929 Concierge Care

Figure 7: Physicians’ Goals for Total Number of Concierge Patients, October 2004

Notes: n = 111 concierge physicians practicing as of October 2004; 1 respondent did not provide this 

information. Physicians were asked their individual goals for the number of concierge patients in their 

care. The largest reported goal for number of concierge patients was 1,300. 

0

5

10

15

20

25

30

35

40

1–199 200–399 400–599 600–799 800–999 1,000 +

Number of concierge patients

Number of physicians

Source: GAO survey of concierge physicians.
Appendix II

Summary of Physician Responses to GAO 

Concierge Care Survey

Page 38 GAO-05-929 Concierge Care

Figure 8: Annual Membership Fees Charged by Physicians Who Did and Did Not Bill 

Patient Insurance, October 2004

Notes: n = 110 concierge physicians as of October 2004; 2 respondents did not provide this 

information. Fees represent those charged for an annual individual adult membership.

0

10

20

30

40

50

60

70

0–499 500–1,499 1,500–

1,999

2,000–

3,999

4,000 +

Amount of annual fee, in dollars

Billed patient insurance

Did not bill patient insurance

Percentage of physicians

Source: GAO survey of concierge physicians.
Appendix II

Summary of Physician Responses to GAO 

Concierge Care Survey

Page 39 GAO-05-929 Concierge Care

Table 7: Actions Concierge Physicians Reported They Took to Help Medicare Patients Who Did Not Join the Concierge Practice 

Find New Physicians

Source: GAO survey of concierge physicians.

Notes: Percentages do not necessarily add to 100 because of rounding. Although there were 112 

unique respondents, not all respondents answered each question.

Action

Percentage of physicians who 

reported each action, for 

approximately how many patients

None Some Most All

Designated a staff person to help patients in transition (n = 81) 15 3 5 78

Forwarded patient medical records to new physicians (n = 83) 6 13 11 70

Remained available to treat all patients until they had found a new physician (n = 84) 7 11 15 67

Referred patients to physicians within group practice (n = 81) 19 16 25 41

Provided patients with a list of area physicians who accept new Medicare patients (n = 80) 28 26 8 39

Referred patients to physicians outside the practice who accept new Medicare patients (n = 83) 13 51 8 28

Coordinated with patients’ insurance companies to verify that all patients chose new physicians 

(n = 77)

66 17 7 10

Referred patients to their insurance or managed care organizations for physician lists (n = 77) 61 30 3 7

Called new physicians to discuss patient history (n = 81) 12 80 3 5

Wrote individual letters on behalf of patients to new physicians (n = 76) 46 49 3 3
Appendix II

Summary of Physician Responses to GAO 

Concierge Care Survey

Page 40 GAO-05-929 Concierge Care

Table 8: Concierge Physicians’ Views on the Information Available from HHS about 

How Medicare Requirements Affect Concierge Care, October 2004

Source: GAO survey of concierge physicians. 

Note: Although there were 112 unique respondents, not all respondents answered each question.

Subject Responses Number of physicians

The information available from 

HHS is clear and sufficient

Yes 29

No, but clear and 

sufficient information is 

available from other 

sources 20

No, and clear and 

sufficient information is 

not available from other 

sources 38

Don’t know/no opinion 24

Total responses 111

More official guidance is needed 

from HHS on how Medicare 

requirements might affect 

concierge care

Yes 67

No 20

Don’t know/no opinion 24

Total responses 111
Appendix II

Summary of Physician Responses to GAO 

Concierge Care Survey

Page 41 GAO-05-929 Concierge Care

Table 9: Concierge Physicians’ Views on Remaining in Medical Practice and Treating 

Medicare Beneficiaries if Physicians Were Unable to Practice Concierge Care

Source: GAO survey of concierge physicians.

Notes: Although there were 112 unique respondents, not all respondents answered each question. 

Only physicians who stated they would have definitely or probably continued in the clinical practice of 

medicine were asked how they would treat Medicare beneficiaries if they were unable to practice 

concierge care. 

Subject Responses

Number of

physicians

If not able to practice 

concierge care, would 

have continued in the 

clinical practice of 

medicine

Definitely yes 11

Probably yes 34

Don’t know/no opinion 16

Probably no 32

Definitely no 18

Total responses 111

Of those physicians who 

would have remained in 

medicine without 

concierge care, 

interaction with Medicare 

beneficiaries 

Would have treated Medicare 

beneficiaries as a participating 

physician 25

Would have treated Medicare 

beneficiaries as a nonparticipating 

physician 5

Would have treated Medicare 

beneficiaries under private contracts 

and opted out of Medicare 7

Would not have treated Medicare 

beneficiaries 1

Don’t know/no opinion 7

Total responses 45
Page 42 GAO-05-929 Concierge Care

Appendix III

Comments from the Department of Health and 

Human Services ApendxiI
Appendix III

Comments from the Department of Health 

and Human Services

Page 43 GAO-05-929 Concierge Care
Page 44 GAO-05-929 Concierge Care

Appendix IV

GAO Contact and Staff Acknowledgments ApendxiIV

GAO Contact A. Bruce Steinwald (202) 512-7119 or steinwalda@gao.gov

Acknowledgments In addition to the person named above, key contributors to this report were 

Kim Yamane, Assistant Director; Ellen W. Chu; Jennifer DeYoung; Linda Y. 

A. McIver; Perry G. Parsons; Suzanne C. Rubins; Craig Winslow; and 

Suzanne Worth.

(290363)
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