Essential provisions of retainer contracts

Physicians who elect to try concierge medicine in an attempt to be free of health plan contracts, should remember that they are not completely free of formal arrangements with payers.

It's just that the payers are now your patients.

Whatever you call your arrangement -- "concierge medicine," "retainer medicine," "boutique medicine," "executive health program," "platinum practice," "personalized health care" or "luxury health care" -- a formal contract with patients is key to ensuring that what you will give patients for their annual and/or monthly fee is spelled out clearly.

In 2003, the American Medical Association issued ethical guidelines for retainer contracts. According to these guidelines, the physician and the patient should understand and agree upon the terms of the relationship.

The patient should not be subject to undue pressure from the physician or the physician's staff to enter into the agreement. Also, the retainer contract should not be promoted as a promise for more or better diagnostic and therapeutic services.

There are three provisions that should be included in every concierge medicine retainer agreement: services, fees and termination.

Services

The retainer agreement should clearly define which services are covered and which are excluded.

Services that are typically covered are same-day or guaranteed next-day appointments; 24-hour pager, cell phone and/or home phone access to the physician; and limited waiting times.

Each arrangement is unique, and the included services should be specifically described to ensure there are no misunderstandings.

Moreover, if the services provided are already covered by Medicare or other third-party payers, a poorly drafted retainer agreement could violate Medicare's rules or the physician's existing contracts with payers. In the event of such a violation, the physician could be subject to civil monetary penalties and/or exclusion from Medicare and other federal health care programs.

The AMA suggests that in order to avoid such a violation, the agreement should distinguish special services and amenities covered under the retainer contract from services that are subject to reimbursement from Medicare or the patient's health plan.

Fees

The retainer agreement also should contain a provision clearly explaining fees and payment terms. Payment can be on an annual, monthly or another periodic schedule, depending on the physician's practice. In general, an annual fee would be payable upon execution of the retainer agreement.

Regardless of the amount of the fee or the precise payment schedule, the terms must be clearly defined in the agreement to ensure compliance by the patient.

Termination

The AMA guidelines provide that a patient who has entered into a concierge medicine retainer agreement should be able to opt out without undue inconvenience or financial penalties. Therefore, the contract should contain a provision that allows both the patient and physician to terminate the agreement upon written notice within a specified time.

As with any termination of the physician-patient relationship, it should be handled in an appropriate, professional manner and with adequate notice so as not to be considered patient abandonment.

In a standard concierge medicine retainer agreement with a one-year term and automatic one-year renewals, the agreement should provide that either party may terminate upon 30 days prior written notice.