doctor's annual practice fees

[Guest lindapanzo]

Hi: I'm wondering whether the annual practice or membership fees some doctors charge to give a person the right to be a patient of that doctor/office can be reimbursed by a health FSA. I've sometimes seen these fees called physician access retainer fees or boutique practice fees.

It seems to me that these would be more in the nature of an insurance premium, rather than a fee for service, and so would not be reimbursable by a health FSA but I'm hoping that someone else has a more definitive answer.

Thanks.

[leevena]

Sorry, not allowed. These fees are insurance premiums, nor are they for medically necessary expenses.

[Guest Quicksilver]

I would like to re-visit this issue. More and more doctors are going to this boutique practice I agree that these fees seem more like premium than medical fees, so if the premium plan allows outside policies, I would allow that as a premium.

I have not been able to find any IRS discussion of the issue, on the FSA side band aids and other OTC items are allowed, you do not wait to buy them only when medically necessary, but have them on hand for use when needed, exactly the same for this doctor.

[GBurns]

I think that leevena meant Not insurance premiums. Notice the use of "nor" following the words.

Where did you find that band aids and OTC items that are being kept until you need them (reserve stock) are reimburseable under an FSA ?

[Guest Quicksilver]

From IRS Pub 502

Bandages

You can include in medical expenses the cost of medical

supplies such as bandages used to cover torn skin.

Rev Rule 2003-102 Section 105(b) specifically refers to "expenses incurred by the taxpayer for . . . medical care," as defined in § 213(d). There is no requirement in § 105(b) that the expense be allowed as a deduction for medical care under § 213(a) or that only medicines or drugs that require a physician's prescription be taken into account.

Accordingly, the amount expended by Employee A to purchase the antacid, allergy medicine, pain reliever, and cold medicine without a physician's prescription is an expenditure for medical care. Employer N's health FSA reimbursement of Employee A's cost for these items is therefore excludable under § 105(b), even though the cost would not have been deductible under § 213(a). However, the dietary supplements (e.g., the vitamins) are merely beneficial to Employee A or Employee A's spouse or dependents' general good health. Therefore, the cost of the dietary supplements is not an expense for medical care and is not reimbursable or excludable under § 105(b).

I am not seeing a lot of blood on the floor at Walgreen's- I assume people are prepared for the accident.

[QDROphile]

Access fees are still not eligible for FSA payment.

[masteff]

Actually, I'd say leevena's "nor" was a follow on to the "not allowed".

This newsletter has an answer to this question which was originally published in the EBIA newsletter: http://www.fbmc-benefits.com/quarterlyreview/april2006.pdf

So, in general, not allowed for FSA nor deductible by the individual, but you can look at each component of any payment to the doctor to see if it partially qualifies.

Also note that the Federal FSA program does not allow physician retainer fees, aka boutique or concierge practice membership fees. https://www.fsafeds.com/forms/OPM-FSA-OVTF-10-031.pdf

[Guest Quicksilver]

Below is link to Dr. Bob

http://www.drbobtaylor.net/concierge.html

He is gearing this to the HSA market, and in fact will pay back to his patients any insurance reimbursement he receives. This fee still smells like premium to me and potentially allowable under the prem. part of the 125 plan.

[GBurns]

Quicksilver

You miss the point in Pub 592. "bandages used to cover torn skin" implies that the skin is currently torn as opposed to "might or will" be torn at some time in the future.

As for Dr. Bob you certainly are free to accept the tax issue recommendation that he gives, but I certainly would not be taking such advice from him.

Why would you think that a medical doctor who is trying to sell you something that he will make money on, is a good source for tax advice or employee benefits advice ?

IMHO, the fee is not for "medical care" so it is not reimburseable. Further if it is an "insurance premium" I doubt that even the new Proposed Treas Regs allow such reimbursement through an FSA. It might be deductable on a 1040 but not reimbursed through an FSA or HSA.

[Guest Quicksilver]

Come on we all know that loading up on OTC eligible expenses was one of the ways to drain your FSA account at year end. Have you ever denied a claim because of a lack of blood?

I did not say he was a good source. You can see Dr. Bob is working with an insurance service, we have to know what our competitors’ are doing.

While I agree the FSA issue is fairly closed as a no. The premium issue still is very open?

[GBurns]

How can the premium issue be open if the FSA issue is No ?

I expect that many of our TPA and FSA experienced readers will not agree with you on stocking up, but let's see.

Knowing what comptitors are doing is good, but that does not mean that copying what they do makes sense.

[Guest Quicksilver]

Below is the Relius instructions for a prem conversion plan

The proposed regulations prohibit a Health Flexible Spending Account

from reimbursing a participant for insurance coverage

(Prop. Reg. 1-125-2, Q&A 7). The IRS has indicated informally

that certain individual health policies could be reimbursed,

provided such reimbursement is provided as a benefit separate

from the Health FSA. This is consistent with Revenue

Ruling 61-146 which provides that an employee does not have

an inclusion in gross income when an Employer either reimburses

the employee for individual coverage or pays the premiums for

individual coverage directly to the insurance carrier. However, in no

case may a spouse's coverage from another Employer be paid

through a cafeteria plan.

So is this a plan that shifts enough risk to qualify as insurance?

I am not trying to copy, but gain knowledge

[GBurns]

Quicksilver

It would be good if you read your own posts. Your last post clearly states " provided such reimbursement is provided as a benefit separate from the Health FSA". It cannot be done through an FSA and your cite in your own post says so.

Since you apparently are hell bent on getting someone to say that the fee is insurance, I suggest that you do a Google search using terms like "doctor's contingent fees IRS" (without the "") and see the many discussions of the reasons why it is not insurance etc and the IRS position.

I see no transfer of risk nor any difference from most health club dues.

[J Simmons]

Treas Reg sec 1.105-11(b)(1)(i) provides that a

plan or arrangement is self-insured unless reimbursement is provided under an individual or group policy of accident or health insurance issued by a licensed insurance company or under an arrangement in the nature of a prepaid health care plan that is regulated under federal or state law in a manner similar to the regulation of insurance companies.

Dr Bob's fee doesn't smell like a premium to me--unless his fee is regulated by the feds or a state like an insurance company is.

I agree with George.

[masteff]

First - I agree completely w/ GBurns' and J Simmons' preceding posts. As noted, insurance is a regulated industry... so that should be your litmus test for if it's insurance or not.

Second -

I have not been able to find any IRS discussion of the issue, on the FSA side band aids and other OTC items are allowed, you do not wait to buy them only when medically necessary, but have them on hand for use when needed, exactly the same for this doctor.

Stepping back one moment to non-prescription items like bandaids and OTC products.... those are explicitly allowed as result of Revenue Rulings 2003-58 and 2003-102. It's not an analysis of how or when used... it's by definition, not by situation. And the definition can't be extended to doctors' retainer fees.

http://www.irs.gov/pub/irs-drop/rr-03-58.pdf

http://www.irs.gov/pub/irs-drop/rr-03-102.pdf

[Guest Quicksilver]

Since the time of my first post we received another request for reimbursement for “access fees” from a different group, but both from the same provider MDVIP (website mdvip.com)

According to MDVIP no one is billed until after the MDVIP yearly physical which is very comprehensive and the keystone of their services (and not billed to their primary insurance carrier). The patient is supposed to be provided with a statement of services rendered only after this physical is completed. The patient may chose to pay this cost annually or monthly. Below is the list of other services provided:

The MDVIP Physical yearly

Personalized Wellness Plan

Medical Record Mini CD

Entry to the Medical Centers of Excellence program

Same or next day appointments that start on time and last as long as needed

Physician availability 24/7

Travel Advantages program

myMDVIP personal website

Assistance with any insurance questions or prescription needs you may have

Have they done enough to move the description of the their fees from “access fees” to medical fees?

[LRDG]

If they invoiced the The MDVIP Physical yearly, removed reference to 'access fees' from the description of services and charges, and provide the remaining services at no charge. it's possible it might meet eligibelity for FSA required reimbursement.

If any portion of the total cost were invoiced for medical services for The MDVIP Physical yearly, the respective amount would possibly meet eligibelity for FSA reimbursement.

[GBurns]

Much of what is offered seems to be concierge care and therefore not reimbuseable. If they were to breakout screenings etc there would be some reimburseable items.

My information sources (a participating Dr and a patient) tell me that the annual fee is paid upon joining (up front) so you might want to re-check.

From my information and from what I gleaned fron their website, it is just a souped up concierge service which serves to generate leads for the MCEs.

I suggest that you do a Google search on "FSA eligible expenses". You should see that in the opinion of most, especially the larger TPAs and The Federal programs, that this would not be reimburseable. It is not an expense for medical care. It is not for the diagnosis, treatment, care etc of a medical condition.

Bear in mind that they are "dressing up" their offering with the intention of making a sale. This tends to lead to a bias.

[LRDG]

Fees and services consisting of both eligible and ineligible expenses, 'bundled' as an access fee with those charges that would otherwise be eligibe for reimbursement are not eligible unless and untill the claim is perfected, ie 'unbundled', and presented for reimbursement with itimized cost and dates of service of respective eligible services.

The appeal of marketing as 'boutique' medical care may be lost or wartered down, but there is nothing inappropriate with itimizing the cost if some of the fees and services are otherwise eligible services for reimbursement.

[Guest Quicksilver]

This should get interesting P&G just purchased MDVIP, I will be interested to see how they market this.

[Guest jackmo]

In addition, it would seem that if those fees are billed monthly before services are rendered, they would be ineligible for reimbursement anyway.