Over the past few years, medical practices have been feeling the squeeze of lower insurance reimbursements and the burdensome of administrative compliance to chase those dollars. Direct care, or retainer-based medicine, is an emerging and alternative way for doctors to serve their patients.
Under direct care, a medical practice provides services in a manner that effectively bypasses insurance companies. The result is lower costs to the patients, lower overhead costs to the practice, and an increase to practice profitability. Additionally, it eliminates the uncertainty of whether insurance companies will pay or not. Cutting out the time spent dealing with insurance compliance allows medical practices to spend more time providing a higher quality of care to their patients.
Doctors using a direct care model do not accept insurance. Direct care medical practices typically charge patients a recurring fixed fee that entitles the patient to a specified group of services. These services generally include better access to the doctor, such as same day or next day appointments, longer appointment time, and home visits. In addition to this fee, the practice may charge a per visit fee similar to a co-pay. Patients can also find some practices that offer both direct care and traditional insurance-based relationships.
In addition to providing new offerings to patients, a direct care practice can negotiate with employers to provide services to all of its employees. As the cost of insurance continues to rise, employers are increasingly looking for innovative ways to reign in policy costs. Direct care can offer them cost saving opportunities while giving employees certainty of cost.
Direct care is not the same as concierge medicine, which emerged in the mid-1990’s. Concierge medicine is similar to traditional insurance-based medicine, with the exception that patients pay a fixed fee for a higher quality service. The cost of office visits and medical services provided remain the same. In the past, concierge medicine allowed doctors to decrease their patient load while making up any lost revenue through concierge fees.
Like concierge medicine, direct care enables practitioners to lighten their patient load and provide a higher quality of care. In comparison, direct care is more affordable for patients then concierge medicine and eliminates the burden of insurance compliance.
Could the direct care model be in your practice’s future? Please contact Aronson’s Professional Services Industry Group to have your practice’s profitability reviewed and learn how an alternate approach may boost your bottom line. Partner Larry Rubin, who focuses on medical professionals, can be reached at firstname.lastname@example.org or 301.222.8212.
The IRS recently released the 2017 annual deduction limits for health savings accounts (HSA), which are typically adjusted each year for inflation.
The 2017 limits are $3,400 for an individual with self-only coverage and $6,750 for an individual with family coverage. Such deductible contributions can only be made to an HSA that is maintained in conjunction with a high-deductible health plan.
A high-deductible plan is defined as a plan with an annual deductible of $1,300 or more for self-only coverage, or $2,600 or more for family coverage. The corresponding maximum out-of-pocket expenses are $6,550 and $13,100, respectively.
Health savings accounts continue to be a powerful tool in combating the rise in health costs especially for young healthy people. Employers should continue to evaluate their effectiveness as part of an overall health benefits strategy.
If you have any questions or would like more information, please contact Mark Flanagan of Aronson’s Compensation and Benefits Practice at 301-231-6257.
The IRS recently released the 2016 annual deduction limits for a health savings account (HSA). These limits are typically adjusted each year for inflation.
The 2016 limits are $3,350 for an individual with self-only coverage and $6,650 for an individual with family coverage. Such deductible contributions can only be made to an HSA that is maintained in conjunction with a high-deductible health plan (HDHP).
An HDHP plan is defined as a plan with an annual deductible of $1,300 or more for self-only coverage or $2,600 or more for family coverage. The corresponding maximum out-of-pocket expenses are $6,550 and $13,100, respectively.
Health savings accounts continue to be powerful tools in combating the rise in health costs especially for young healthy people. Employers should continue to evaluate their effectiveness as part of an overall health benefits strategy.
Beginning January 1, 2014, as a result of Patient Protection and Affordable Care Act (ACA), most individuals are required to have health insurance coverage.
The ACA requires that an applicable individual and any dependent must maintain a “minimum essential coverage” (MEC) for each month during 2014. Most individuals who now have coverage through an employer-sponsored plan (including COBRA coverage) or a government-sponsored program (e.g., Medicare, Medicaid, TRICARE, Children’s Health Insurance Program, etc.) will meet the MEC requirements. However, those individuals without MEC can purchase it in the Marketplace (formerly referred to as the “Exchange”).
Certain individuals are exempt from the ACA coverage requirements:
For some exemptions to be recognized, an application with supporting documentation must be submitted to the Marketplace to obtain an exemption code required for 2014 tax return filing.
Individuals that do not have MEC coverage and do not qualify for one of the above exemptions will be subject to the shared responsibility payment (“penalty”), which is reported and due with the 2014 tax return of such individuals. For 2014, the penalty is the greater of:
The maximum penalty cannot exceed the annual premium cost of the national average bronze-level health plan. For 2014, the average annual premium for a bronze-level health plan available through the Marketplace is $2,448 per individual ($204 per month per individual), and $12,240 for a family with five or more members ($1,020 per month).
For more information on how the Affordable Care Act affects your tax situation, please contact your Aronson advisor or Anatoli Pilchtchikov of Aronson’s Personal Financial Services Group at 301.231.6200.