Personal Physician Membership Fee

[Guest brobinso]

Would you rule this an allowable expense or not?

Physician is limiting the number of patients in his practice and offering increased access and care.

There is an annual "membership fee" to belong to the physician's practice and receive this care - this charge is in addition to any applicable charge for services and insurance coverage.

My gut feeling is that is is not reimbursable - the cost is not directly attributable to any medical service - you would pay the $1500.00 membership fee every year regardless of whether you had services or not.

I can't find any guidance, however.

Would you reimburse or not? If not, what is the basis of denial?

[Sandra Pearce]

No, we would not reimburse that expense for exactly the reason you stated. There is no service performed.

[E as in ERISA]

I don’t know what the final answer is, but I don't think that it's as clear cut as that. Note that in the IRS' Pub 502, it says that you can "include in medical expenses amounts you pay to entitle you...to receive medical care from a health maintenance organization." You don't have to actually receive any services – you just have to be entitled to receive the services. (The amounts are "treated as medical insurance premiums.") An HMO then usually charges a small “co-pay” at the time of service. I realize that this situation is not the same. But there are some similarities. I also note that Pub 502 says that you can include “amounts paid to a plan that keeps your medical information so that it can be retrieved from a computer data bank for your medical care.” I presume that this doctor is maintaining a medical file on this patient?

[Sandra Pearce]

If this would be like an insurance premium then it would not be reimburseable under an FSA.

[Guest brobinso]

Although the doctor is maintaining a medical file on the patient, the membership fee is not for the maintenance of the file, it is for the access to the doctor's services.

The fee is more like a membership to a health club. It gives you access to the doctor's services, just as a YMCA membership gives you access to the YMCA's facilities and services.

The participant wants to be reimbursed from a Medical FSA, so to consider it as an insurance premium or HMO premium would make it an ineligible expense.