Oregon requires concierge physicians to register with insurance department

Doctors who offer a suite of services for a flat fee must share their business plan, financial history and practice information.

By — Posted Feb. 1, 2012

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Oregon physicians who work as concierge or retainer-based doctors are now required to register their practices with the state's insurance department.

The rule took effect Jan. 1, but there is no deadline or fee for physicians to register.

Oregon is at least the second state to approve a registration rule for concierge physicians, following neighboring Washington, which enacted a similar law in 2007.

The intent of the law was to allow physicians who offer all their services for a flat monthly or annual fee the flexibility to do so without having to follow the rules that insurers do.

The Oregon Dept. of Consumer & Business Services Insurance Division requested the new rules based on the spike in the number of calls it was receiving asking about any state rules governing concierge practices. As of mid-January, only two practices had submitted paperwork, insurance division spokeswoman Cheryl Martinis said.

"This regulation is new, and we'll be watching over time to determine whether the rules are appropriate, or whether they impose unintended barriers to practice," said Betsy Boyd-Flynn, spokeswoman for the Oregon Medical Assn. "We worked with the insurance division, which proposed this legislation, to amend the legislation to make the language clear, and have worked extensively with them on the administrative rules to make them as appropriate as possible for patients and physicians."

Like insurers, concierge practices promise that care will be available for a upfront fee, and they accept the risk that the cost of care will exceed that fee. But supporters of the concierge concept say they're not insurance companies, so it doesn't make sense for practices to be regulated like insurers.

According to a 2010 report prepared for the Medicare Payment Advisory Commission, other states have considered how best to regulate concierge physicians, with divergent conclusions. Florida and Maryland determined that concierge practices were not legally equivalent to insurers. Washington and West Virginia decided that such practices could be subject to insurance law, but subsequently created "safe harbor" rules and programs allowing retainer practices to create an exception allowing them to operate without having to meet the same requirements as insurers. Under the Patient Protection and Affordable Care Act, federal law will allow retainer-based primary care practices to sell their services on state-based health insurance exchanges, offering an alternative to traditional coverage.

Lester Baskin, MD, a Portland internist who runs a concierge primary care practice, believes Oregon's rules turned out to be needlessly burdensome, though he said he is glad there is now a legal framework for his clinic and other practices.

"Up until this point, retainer medical practices have really been operating under the radar," he said.

He testified before Oregon lawmakers as they considered the legislation, hoping to encourage a straightforward set of regulations. He said establishing the new rules started out well, with the idea that they would allow physicians to operate without the burden of regulation meant for insurance companies. But "during the rulemaking, it became a much different animal," Dr. Baskin said.

In mid-January, he was just filling out his application, reading through the detailed disclosures required. The application states that a physician must list the experience that qualifies him or her to run a practice, and to include a business plan and any marketing materials for the practice. It also asks applicants to disclose financial history, including any bankruptcies in the past 25 years, and to explain how the practice would repay patients' money if it were unable to provide promised services.

"In my opinion, it goes far beyond what was necessary," Dr. Baskin said.

One benefit to the registration, as Dr. Baskin noted, will be a good estimate for the number of concierge practices operating in the state. After its registration rule was approved, Washington has been able to produce an annual report detailing the number and type of practices there. At last count, there were 24 practices serving 10,525 patients -- and zero complaints.

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