Physician Services: Concierge Care Characteristics and Considerations for Medicare
Published: 2005-08-12T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
section_title: What GAO Found
paragraphs: 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.

section_title: Letter
paragraphs: 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.
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 Medicare- covered item or service. A few states are monitoring concierge care to  ensure compliance with state insurance laws.
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.  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,  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.
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.
subsections: section_title: Background
paragraphs: Physician practices that charge membership or retainer fees and provide  enhanced services or amenities are referred to as concierge care or retainer-based medicine. 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. 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. In accordance with the Medicare participation  agreement, these physicians receive reimbursement directly from the  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.
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. 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.
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. 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. Contracts between opted-out physicians and their  beneficiary patients allow them to make their own financial  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. 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.
Physicians who impose charges on beneficiaries beyond the Medicare  limits may be subject to civil monetary penalties. 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.
section_title: Characteristics of Concierge Care
paragraphs: 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.
subsections: section_title: Concierge Physician Location and Specialty
paragraphs: 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. The 146 concierge physicians we identified practiced in 25 states,  with the greatest numbers in metropolitan areas on the East and West  Coasts. 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) 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.
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 more than 10 times in the past 5 years (see fig. 2). 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.
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.
section_title: Characteristics of Practice Design among Surveyed Concierge Physicians
paragraphs: 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.
subsections: section_title: Amount of Annual Membership Fee
paragraphs: 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. About one in eight  of these physicians reported waiving the fees for 20 percent or more of  their concierge patients.
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.
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  concierge and conventional practice, or to see patients as part of a  subspecialty practice. 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.
section_title: Features Offered
paragraphs: 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.
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.
section_title: Interaction with Patient Health Insurance and Medicare
paragraphs: 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 one- fourth 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.
section_title: Aspects of Concierge Care of Interest to Medicare and Its Beneficiaries
paragraphs: 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.
subsections: section_title: Compliance with Medicare Requirements
paragraphs: 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.
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. For example, concierge care membership  fees may constitute prohibited additional charges if they are for Medicare- covered 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.
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.” 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  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. 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  from other sources, including private attorneys, the Society for Innovative  Medical Practice Design, and concierge care consultants (see table 3).
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.
section_title: Information on Medicare Beneficiary Access to Physician Services
paragraphs: 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.
subsections: section_title: Medicare Beneficiary Patients of Surveyed Concierge Physicians
paragraphs: Estimates provided by 105 of the respondents indicated that about two- thirds of the estimated 19,400 Medicare beneficiaries who were patients of  these physicians in October 2004 were considered concierge patients. 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).
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.
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.
section_title: Nationwide and Community Indicators of Beneficiaries’ Access
paragraphs: 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.
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. 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. 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.
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.
section_title: Information about Experiences of Individual Beneficiaries
paragraphs: 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  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. 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. This contractor  established the tracking code in response to our inquiry about concierge  care in February 2005. 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, including AARP and the Medicare Rights Center. 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.
section_title: Concluding Observations
paragraphs: 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.
section_title: Agency and Other Comments
paragraphs: 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  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.
section_title: Scope and Methodology
paragraphs: 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.
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  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:  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  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.
section_title: Summary of Physician Responses to GAO Concierge Care Survey
paragraphs: 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).
section_title: Comments from the Department of Health and Human Services
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: 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.