concierge medicine: complying with medicare regulations, state...
TRANSCRIPT
Concierge Medicine: Complying With
Medicare Regulations, State Laws and
Anti-Kickback/Anti-Referral Laws
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WEDNESDAY, OCTOBER 17, 2018
Presenting a live 90-minute webinar with interactive Q&A
Alan H. Einhorn, Of Counsel, Foley & Lardner, Boston
James J. Eischen, Jr., Member, McGlinchey Stafford, Irvine, Calif.
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STRAFFORD PRIVATE DIRECT
MEDICINE MODELS: A BRIEF
HISTORY & INTRODUCTION
October 17, 2018
© Jim Eischen 2018
James J. Eischen, Jr., Esq.
❖ Jim Eischen is a California attorney with nearly 30 years of experience representing commercial interests
locally, nationally, and internationally. His clients have included life science companies, national healthcare
enterprises, medical groups/physicians, software/IT companies, health plans, industrial enterprises, financial
institutions, real estate developers/managers, and telecommunications conglomerates. He has extensive
experience managing all facets of business representation, from formation to contractual relations and
managing disputes and transitions.
❖ Since 2009, Jim has worked with clients in matters involving health care and privacy licensing and regulatory
issues, including Medicare compliance and physician compensation and private direct fee business modeling
and compliance. Jim has experience structuring physician practice purchase and employment structures, and
assisting companies delivering wellness products or programs, to ensure reimbursement and privacy
compliance.
❖ Graduated from the University of California at Davis School of Law in 1987.
❖ Professional Memberships: Chair, ABA Tort Trial & Insurance Practice Section Medicine and Law
Committee, Vice-Chair, TIPS Health and Disability Insurance Law Committee, Dispute Resolution
Committee, San Diego County Bar Association Law & Medicine Section, Attorney-Client Relations
Committee, American Academy of Family Physicians healthcare compliance educator.
© Jim Eischen 2018 6
Private Direct Medicine Models: What’s out there?
© Jim Eischen 2018 7
A VERY SHORT HISTORY OF PRIVATE
DIRECT MEDICINE
➢Late 1990s Washington/Florida: Qliance, MD2, MDVIP
➢Qliance/DPC/Dr. Bliss: low monthly fees for essential primary care, opted out of Medicare/plan network, lobby Washington State insurance laws
➢Early MD2/Dr. Marron: substantially higher monthly/annual fees for more high-end “concierge” care for small panel, also opted of Medicare
➢Early MDVIP: annual fee, Medicare/private plan participatory, fee for non-covered service—the Tommy Thompson/HHS letter
➢Administrative “MSO” regional/national models: MDVIP, MD2, Qliance (now gone), Med Lion, Access Choice, Concierge Choice, Signature MD, Cypress, Special Docs, Iora, OneMedical
© Jim Eischen 2018 8
A VERY SHORT HISTORY CONTINUES . . .
➢Private Direct Medicine: Fee for service =misaligned, under-compensates primary care, delays and budgets intervention, delays and fails to reimburse for prevention and health education
➢Medicare & Private Plans:o Reforming toward disconnecting primary care from fee for
serviceo Trying to better compensate primary careo Enabling care coordination, patient connection, CCMo But physicians remain dispirited by plan requirements
➢Private Direct Medicine: Remains Relevant & Workable Now
© Jim Eischen 2018 9
Private Direct Medicine Branding
• “Concierge”
• “Direct Primary Care/DPC”
• ”Cash Practice”
• “Functional Medicine” or “Integrative”
• ”Connected Care” (or none of the above….)
© Jim Eischen 2018 10
Fee For Non-Covered Service ModelsIf Medicare Participatory:
• Allocate private patients fees to only those services NOT covered by Medicare
• Bill Medicare for what Medicare covers (Social Security Act requires it)
• If private plan in-network: may bill private plans for what those plans cover (and may bill plans as out of network)
• May be primary care, or disclaim primary care
• Examples: MDVIP, Cypress, Concierge Choice, Special Docs, Nextera (and many integrative/FM practices….)
© Jim Eischen 2018 11
So, What Is Not Covered By Medicare?
• Annual routine regardless of condition physicals (or “checkups”) not delivered based on medical necessity
• Integrative or “Complimentary” services—remain outside Medicare if not bundled with allopathic covered care
• Exams or tests or services in excess of Medicare frequency or requirements
• “Health coaching” or “health data support” or software/platform subscriptions—basically services that do not constitute “practice of medicine”
• Communication services/amenities directly connected to non-covered services (versus those covered or bundled with covered services)
© Jim Eischen 2018 12
What Does Medicare Cover That Might Surprise Physicians?
• Expanded Care Coordination (includes electronic communication)
• CCM/Chronic Care Management—separate written patient agreement no longer required (includes varying levels of electronic communication and access to physician)
• 24/7 electronic communication that may include communications to schedule or follow-up covered services
• “Access” to Medicare participatory physicians: can’t charge an “access” fee
© Jim Eischen 2018 13
Anticipated Medicare Coverage Expansions
• CCM/99490: only 1% US adoption despite favorable reimbursement per GAO
• anticipate further expansion with easing regulations
• worth evaluating & can be compatible with private direct models
• MIPS/MACRA: anticipate further delays with roll-out ($30K or less….)
• Telehealth: unlikely to significantly expand federal coverage in 2017/2018, still focusing on rural health
• Fee for service: rapid evolution to bundled reimbursement may slow with US healthcare regulatory confusion and new HHS leadership
© Jim Eischen 2018 14
Can’t Physicians Carve-Out Medicare Eligibles?
• No
• Carve-Outs: OIG disfavors
• Models that purport to treat federal payor patients and non-federal payor patients differently to achieve federal compliance raise significant risks of non-compliance. ocs/advisoryopinions/2013/AdvOpn
• Happy 65th Birthday/Happy 62nd Birthday (early Social Security elector)/Sorry About Your Disability/Sorry About Your End Stage Renal Failure: You’re Kicked Out Of My Cash Practice?
© Jim Eischen 2018 15
Medicare Opt-Out/Cash(Free At Last?? Or Not?)
• Must formally opt out of Medicare via filed affidavit
• Sometimes branded “Concierge” and more often branded “DPC” or “Direct Primary Care” (could be integrative/FM practices)
• Sometimes branded “Cash”
• Examples: Qliance (gone), Access Health, Most DPC-branded practices, MedLion, MD2
© Jim Eischen 2018 16
Medicare Opt-Out/Cash Models
• Allocate private fees to virtually all healthcare, no allocation needed to avoid Medicare assignment violation
• But: must take care to avoid allocating private fees to emergent or urgent healthcare (covered), or to electronic health records access (federal and statement restrictions)
• Watch opt-out requirements (quarterly windows to opt out)
• Watch opt-back requirements (30 day window every two years)
• May not provide services billed to Medicare
© Jim Eischen 2018 17
Opt-Out Patient Agreements
• Must include HHS/CMS specifically mandated terms for opted-out physicians.
• Must maintain opt-out compliant written agreements with all Medicare eligibles.
• Recommendation: Use one patient agreement for allpatients.
© Jim Eischen 2018 18
Drafting Recommendations: Opt-Out Patient-Physician Contract
• Ensure All Opt-Out Mandated Terms Are Included
• Avoid Promising Emergent Care Services (furnished within 12 hours in order to avoid the likely onset of an emergency medical condition.
© Jim Eischen 2018 19
Opted-Out & Mixed Models
• Possible to combine opted-out physicians with participatory physicians?
• HHS/CMS guidance is limited, requires careful structuring.
© Jim Eischen 2018 20
Medicare Participatory Models: Must Private Direct Physicians Opt Out? No!
• Not all physicians opt-out (avoid advocating opt-out absent compelling need)
• Roughly 80% of all private direct practices remain medicare participatory
• Orthodoxy versus practicality—carefully weigh pros & cons
• Many physicians cannot easily opt-out
• Since late 1990s: fee for non-covered service model generally compliant with property structuring
• Avoid simplistic risk-adverse guidance on this issue!
© Jim Eischen 2018 21
What about Medicaid and HMO?
• Cannot opt out of Medicaid
• State laws generally prohibit added patient fees for healthcare provided to HMO/Medicaid eligibles
• “Connected Care” may work……. (services/products not constituting practice of medicine)
© Jim Eischen 2018 22
Connected Care: Not Branding “Concierge” or “DPC” But Charging Added Fees
• Medicare/plan participatory
• Not “concierge” or “DPC” branded
• Allocate private fees to “not healthcare” such as health coaching, technology services, online platform/communication system subscription
• Examples: IORA, OneMedical, Oak Street, Omada, Docent, ChenMed, WellMed, Mosiac, Aledade, Arivale (not practicing medicine: genomic testing plus health coaching)
• Medicaid & HMO eligibles may participate
© Jim Eischen 2018 23
Fitbit launches new enterprise platform for health and disease management
© Jim Eischen 2018 24
https://medcitynews.com/2018/09/fitbit-launches-new-enterprise-platform-for-health-and-
disease-management/?mc_cid=beae9f35a8&mc_eid=646e68768f
Forks In The Road
• In-plan or out
• Is it healthcare
• Employer funding
• HSA/FSA/HRA eligible
© Jim Eischen 2018 25
HSA/FSA/HRA & Employer Funding
• I.R.C. § 167(d) & Pub. 502
• Physicals
• Diagnostic services
• Health data/communication plan to facilitate physician/patient communication?
• NOT: Concierge or DPC branded models (absent new legislation)
• Employer funding: watch ERISA, IRC/ACA
© Jim Eischen 2018 26
I.R.C. § 71-282 & Publication 502
• IRC Ruling Section 71-282 provides amounts paid by a person for the “storage and
retrieval of personal medical information by a computer data bank” are deductible by
the person, or if paid by an employer, are not income to the employee.
• Publication 502 states that “amounts paid to a plan that keeps medical information in
a computer data bank and retrieves and furnishes the information upon request to an
attending physician” are medical expenses.
© Jim Eischen 2018 27
https://www.irs.gov/pub/irs-pdf/p502.pdf
HSA/FSA/HRA: What's Possible?
• Tracks IRC Section 167(d) and IRS Publication 502
• Watch out for "wellness" versus "diagnostic" health services - - impacts eligibility
• Take care with marketing lacking legal guidance: can unintentionally frustrate HSA/FSA/HRA eligibility
• Strongly consider helping patients utilize tax-advantaged funding sources
© Jim Eischen 2018 28
HHS/CMS Defines Lawful“Concierge Care”
© Jim Eischen 2018 29
https://www.medicare.gov/coverage/concierge-care.hml
© Jim Eischen 2018 30
https://oig.hhs.gov/compliance/physician-education/index.asp
Navigating Medicare Compliance: Basic Historical Guidance
• Medicare Assignment
• CMP
• Three OIG Alerts
© Jim Eischen 2018 31
Medicare Compliance: OIG Alert #1
• In 2004, a physician from Minneapolis, Minnesota paid $53,400
under the Civil Monetary Penalties Law. The physician charged
a yearly contract for services characterized as "not covered" by
Medicare: (1) coordination of care with other providers; (2) a
comprehensive assessment and plan for optimum health; and
(3) extra time.
• Some services deemed covered by Medicare.
© Jim Eischen 2018 32
Medicare Compliance: OIG Alert #2
• In 2007, North Carolina physician paid $106,600 to resolve Civil Monetary Penalties
Law liability. The practitioner and patients entered into a membership agreement for
a patient care program for an annual fee, providing: (1) annual comprehensive
physical examination; (2) same day or next day appointments; (3) support personnel
dedicated exclusively to members; (4) 24 hours a day and 7 days a week physician
availability; (5) prescription facilitation; (6) coordination of referrals and expedited
referrals, if medically necessary; and (7) other service amenities as determined by the
practitioner.
• Some services deemed covered by Medicare.
© Jim Eischen 2018 33
Medicare Compliance: OIG Alert #3
• In 2013, a practice in South Carolina agreed to pay $170,260
for allegedly violating the Civil Monetary Penalties Law. The
practice implemented a mandatory non-allocated “admin fee”
for forms, other services not reimbursed by plans. OIG alleged
that the medical practice knowingly presented or caused to be
presented to Medicare beneficiaries requests for payment that
were in violation of Medicare assignment.
• Mandatory admin fee charged for covered or bundled services.
© Jim Eischen 2018 34
Can’t Opt Out Solve This Problem?
• Must watch state law issues!
• State insurance laws
• State consumer protection
• Medicaid/HMO
• Medical records access fees: watch out
• Opting out of Medicare triggers other risks and limitations
© Jim Eischen 2018 35
More Electronic Communication: Watch Data Privacy
• Consumers want privacy protection, particularly with health records
• Many federal and state agencies focusing on data privacy regulation/enforcement
• HIPAA: can still apply to practices with infrequent or no plan billing (and related laws impose similar requirements anyway)
© Jim Eischen 2018 36
HIPAA
• The Health Insurance Portability and Accountability Act of 1996 (HIPAA)
• Electronic personalized health information
• HIPAA Privacy Rule and the HIPAA Security Rule
• Office for Civil Rights (OCR) enforcement
© Jim Eischen 2018 37
Track Basic HIPAA Compliance Documents
• Notice of Privacy Practices (NPP)
• Business Associate Agreement (BAA)
• Internal Risk Analysis Memo
oWritten internal procedures and processes for ePHI
oEvaluate risks, adopt reasonable standards
oUpdate
© Jim Eischen 2018 38
Business Regulatory Compliance: Watch Out For…..
• Referral compensation
• Cross-marketing between practices and physician-owned businesses
• Excessive marketing on “discounting” or co-pay/deductible avoidance
• Corporate practice of medicine/CPOM
• Substantiated marketing
© Jim Eischen 2018 39
© Jim Eischen 2018 40
Questions??
Thank You!JAMES "JIM' EISCHEN, ESQ.
MCGLINCHEY STAFFORD
18201 Von Karman Avenue, Suite 350
Irvine California 92612
D: 949-381-5925
F: 949-271-4040
@JimEischenEsq
© Jim Eischen 2018 41
Strafford
Private Direct Medicine-Legal/Compliance Considerations and Structures: Walking the Tightrope
Alan H. Einhorn, Esq.
Foley & Lardner, LLP
111 Huntington Avenue, Boston, MA 02199
[email protected]; (617) 342-4094 October 17, 2018
Characteristics of Private Direct Medicine
▪ 2 BIG ones (for purposes of this discussion):
–Dynamic
–Evolving
▪ This is due to a number of factors, including:
▪ Innovative concepts being implemented by innovative thinkers
▪New/changing technologies that offer new approaches to care, and care “enhancement”
▪Ever-changing laws, regulations, payment models and payorrestrictions
I will focus on this last point, and talk about how Direct Care providers have responded to the changing legal/regulatory landscape
43
Characteristics of Private Direct Practice Models
Generally, Private Direct Practice Models include:
-a direct payment for “services”
-a limited (in numbers) patient panel (often one that has been pared down from a larger patient panel)
Sometimes, these practice models also include active participation by non-clinician administrators or managers
44
Characteristics of Private Direct Practice Models
▪These characteristics are among the primary reasons that physicians and patients are attracted to Private Direct Practices in the first place.
–For physicians:
▪a limited panel allows for more time to be spent with each patient,
▪ the fee offers an additional source of revenue to offset the diminished patient flow, and
▪ the administrative support further enables them to spend their time with patients, and not on administration and documentation
45
Characteristics of Private Direct Practice Models
–For patients, a smaller panel means:
▪an end to impersonal, assembly-line care,
▪ the ability to make timely appointments with their provider of choice,
▪ the elimination of wait-time at the office, and even, in most cases,
▪ the ability to access their provider without an appointment, and without having to go to the office.
46
Characteristics of Private Direct Practice Models
▪ For regulators, networks, and payors, however, these characteristics raise questions. E.g.,
– Do these models diminish access to primary care providers?
– Do they encourage two-tiered care?
– Do the fees result in duplications of payment for the same services?
– Will direct practices cause adverse selection, such that providers who don’t participate in direct care will be left with sicker, more complicated patients?
– How/will payor and provider networks accommodate direct care patients—particularly those whose providers don’t accept insurance—and still ensure
adherence to their chosen performance and quality protocols?
These questions implicate a broad range of laws, regulations, and ethical considerations which must be considered and addressed by those entering the Direct Practice “space”.
47
Ethics Statements
▪AMA Ethical Standards-CEJA (Council on Ethical and Judicial Affairs) Report on Retainer Practices, 3-A-03
▪Annals of Internal Medicine, Position Paper--“Assessing the Patient Care Implications of ‘Concierge’ and Other Direct Patient Contracting Practices: A Policy Position Paper From the American College of Physicians”; December 15, 2015
48
CMS
▪GAO Report, 05-929: no adverse impact on Medicare access; consistent with Medicare requirements as long as fee is not for any Medicare covered service
– CMS no-action position; but
– OIG Alert about Added Charges for Covered Services; and
– enforcement actions against physicians who charged a membership fee for Medicare covered services
49
Insurance Regulation
▪Contracts of Service vs. Contracts of Insurance
–Need to structure direct payment arrangements as service contracts, not contracts of insurance
▪No state regulatory prohibitions, though some states prohibit HMOs from doing business with concierge/retainer practices–Washington Insurance Commission requires “direct practices” to submit
annual statements regarding the practices and to adhere to a range of requirements regarding how those practices are operated, but the practices are deemed exempt from insurance regulation (RCW 48.150)
▪ Some other states have introduced legislation exempting direct primary care
practices
–Concierge/retainer practices are affirmatively permitted by MA Division of Insurance with disclosure in insurers’ provider directories
50
Physician Licensing
▪State Physician Licensing Boards
– No outright regulatory prohibitions, but
▪ in MA and Ohio, those who opt-out of Medicare cannot bill in excess of Medicare allowable
– Other medical board considerations/concerns:
▪ patient abandonment, particularly in circumstances where the Private Direct practice is converting from a larger traditional practice
▪ Fee-splitting, primarily in practices managed by business entities
▪ Corporate practice of medicine, in some states if practice is not wholly physician owned, or is managed aggressively by a business entity
51
Payor Considerations
▪Most payors will do business with concierge practices; some will not
–Some national payors have/have had anti-concierge policies, particularly for managed care products:
▪ Generally left to regional enforcement and often not enforced
–Payor contract terms—some include
▪ anti-concierge language
▪ anti-discrimination provisions/barrier to entry prohibitions
▪ patient panel considerations (premature/improper closure)
▪ anti-abandonment
52
Anti-referral, CMP laws
▪ In any arrangement involving medical practices and payments, one should consider the Stark Law, federal anti-kickback statute (“AKS”), and state analog laws
– Stark-requires (i) a financial relationship between a physician or family member and the practice, and (ii) the ordering of Medicare designated health services (“DHS”). If it applies, an exception must be satisfied or the DHS can’t be billed
▪ In many of these arrangements, there will be few, if any, DHS referrals
▪ In any event, most private directpractices will likely be able to rely on the in-office ancillary exception to avoid Stark penalties
– AKS-any remuneration that appears to be in exchange for the referral of (or recommendation of a referral for) federal health program business can raise AKS concerns
▪ Particular care must be exercised in connection with the structuring of, e.g., vendor arrangements and marketing agreements
53
Privacy, Security Laws
▪ To the extent that these practices, and particularly their contracted practice managers and vendors will have access to protected health and financial information, HIPAA, the HITECH Act, and other federal and state laws relating to privacy and security must be adhered to.
▪ In most instances, the steps that need be taken are the same as for a traditional medical practice, but
– If there is a corporate or contractual affiliation with non-clinicians and/or vendors (particularly those new to medicine), heed should be paid to the need to utilize BAAs and BA sub-agreements, as appropriate, and/or patient authorizations
– If personally identifiable health information is collected by a non-practice entity that is not acting as a BAA (or subject to authorization), the data is not protected
54
Private Direct Practice Models
▪Two preliminary questions when structuring a Private Direct Practice model;
–To opt out (of insurance participation) or not?
–For “opt in” (or “stay in”) practices, should we use a one or two entity approach?
55
Private Direct Practice Models
▪ Opt out model
▪ Practices can opt-out of Medicare and commercial insurance, and (often) balance bill-Medicare
▪ Under an Opt-Out model, membership fees may be reimbursable by health spending accounts to the extent payment is for “eligible medical expenses”
▪ But,…
▪ Those who opt-out may be subject to Medicare allowable charge limits (MA, Ohio)
▪ Opting-Out may impair the marketability of the practice
▪ Payment by Medicare under care coordination and comprehensive care pilot programs makes the opt-out decision more complicated
▪ Nonparticipating physicians can’t serve as PCP gatekeepers (e.g., cannot authorize in-network referrals)
▪ Nonparticipating physicians will generally be treated as out-of-network providers, whose services may be subject to higher copays
▪ Non-participating physicians are at increased risk of exclusion/isolation with growth of limited, tiered and narrow networks, and may be excluded from ACOs/integrated delivery systems
56
Private Direct Practice Models
▪Participation Model Options
–Participate and charge direct fee for non-covered amenities only (and not for professional services)
▪E.g., communication/internet tools, non-medical items (discounted health club memberships, exercise testing by trainer, nutritious snacks)
–Participate and charge direct fee for non-covered amenities and non-covered professional services
▪ Including, e.g., screening exams, phone/email consults
–Participate and charge direct fee for non-covered professional services
57
Private Direct Practice Models▪ One Entity vs. Two:
– One Entity (provides professional services and “other services”)
▪ Familiar and simpler
▪ Less paper work/formation documents/filing requirements
▪ Less explanation
– Two Entities (one for professional services, one to provide/arrange/manage “other services” (and reduce corporate practice concerns))
▪ Separates non-clinical from clinical services
▪ Re-enforces reality that direct payments are for providing/arranging non-clinicaland/or non-covered services
▪ Re-enforces reality that entity receiving the direct payments is not the practice, but a distinct business entity performing business functions, and that the payment is not a duplicative payment to the practice, but a payment for the stated functions
▪ It is the form that was the subject of CMS, several state, and numerous commercial payor “no action” determinations
58
Private Direct Practice Models▪ Other Business Models/Considerations (NOT exhaustive)
– Private Direct Pay Panel Only, or “Hybrid” (for “participating” practices)
▪ Hybrid model may be required by certain payors to maintain participation
– Multiple tiers: different prices for different bundles of services
– Practice management and network models
▪ “Membership” fee paid to manageco or network with professional services/amenities support purchased from practice (in non-CPOM states)
▪ “Membership” fee paid to practice with management services and/or amenities purchased from manageco/network (in CPOM states)
▪ Friendly PC model: financial consolidation
– Joint Venture models (equity/value opportunity)
▪ “Membership” fee paid to JV manageco, w/profes/amenity support services purchased from practice
▪ “Membership” fee paid to practice, w/management services purchased from JV manageco
▪ “Membership” fee paid to JV manageco, which receives distributions only for contribution of management services/amenities
59
Self-Conversion: Two Entity/Participation Model
60
Patient/
Member
MD(s)
Business
Entity
Practice
Entity
Membership
Agreement
Doctor/Patient
Relationship
Administrative
Agreement
■ Not authorized to
practice medicine
■ Provides amenities
■ Charges retainer fee
■ Professional Services
■ Accepts insurance
payment as payment
in full, subject to copay,
co-insurance, deductibles
60
Management Model: Non-CPOM States
61
Patient/
Member
MD(s)
ManageCoPractice
Entity
Membership
AgreementDoctor/Patient
Relationship
■ Charges retainer fee
■ Conversion assistance
■ Management services
■ IT platform
■ Marketing
■ Lobbying
■ Operational/overhead
expenses
■ Accepts insurance
payment as payment in
full, subject to copay, co-
insurance, deductibles
■ ManageCo pays physician a portion
of membership fee
■ 5-10 year commitment
■ Post-termination non-compete
■ Efforts to identify successor/purchaser
61
Management Model: CPOM States
62
Patient/
Member
MD(s)
ManageCo
Practice
Entity
Membership
Agreement
Doctor/Patient
Relationship
■ Physician pays a portion of
membership fee as
management fee
■ Conversion assistance
■ Management services
■ IT platform
■ Marketing
■ Lobbying
■ Operational/overhead
expenses
■ Accepts insurance
payment as payment in
full, subject to copay, co-
insurance, deductibles
■ Physician charges retainer fee
■ 5-10 year commitment
■ Post-termination non-compete
■ Efforts to identify successor/purchaser
62
Friendly PC Model
63
Patient/
Member
MD
Designee
LLC
PartnerMD
PC
Membership
Agreement
Doctor/Patient
Relationship
Management and Purchase Agreements
Deficit Funding Agreement
Concierge
Physicians■ Charges retainer fee
■ Conversion assistance
■ Management services
■ IT platform
■ Marketing
■ Salaried employee/comp based on # of members
■ No financial risk of operations for employed MDs
■ PC accepts insurance payment as payment in full,
subject to copay, co-insurance, deductibles
Employment
63