Changing Acupuncture Practice Models and Compliance Requirements

As the healthcare industry rapidly evolves, a growing number of acupuncturists who traditionally have used a fee-for-service payment model are investigating novel practice structures, such as concierge and direct-pay care models. These approaches have become increasingly popular due to their potential to reduce the administrative workload associated with practice management and provide stable revenue streams. This enables acupuncturists to offer more individualized and accessible care to patients, who benefit from improved access to their provider and fewer obstacles related to insurance.

Comparing Practice Models

Although all of these models can work well, there are notable distinctions between them.

In a fee-for-service practice, patients pay a fee for all care provided at the time of service. In the direct pay model, providers charge patients directly, often through a monthly, quarterly or annual membership fee that covers all services offered by the practice, allowing acupuncturists to minimize overhead costs and ensure a predictable range of services.

Concierge practices also implement a membership fee but often continue to bill insurance providers. These providers must navigate the complexity of state and federal laws that govern adopting a mixed payment model that allows for both private pay and insured reimbursing for services. Additionally, some payor contracts may restrict the services practitioners can offer the insurer’s members outside of those services covered by the agreement.

Despite these complexities, concierge practices tend to provide a wider array of services compared to direct-pay practices, which can facilitate treatment for patients who might need to seek care elsewhere.

While fee-for-service, direct-pay and concierge care can be appealing, acupuncturists need to consider the relevant legal regulations to ensure compliance before transitioning to any of these models. Seek advice from a licensed healthcare attorney in your state to review a patient care agreement before you onboard any patients under a direct-care or concierge service arrangement.

Does HIPAA Apply to These Models?

There's a widespread belief that all healthcare providers are bound by HIPAA regulations. However, HIPAA rules apply only to "covered entities," which are those providers that transmit health information electronically as part of what the Department of Health and Human Services terms standard transactions. These transactions often involve sharing healthcare data with insurers, including transactions related to payment, claims status, plan enrollment and disenrollment, benefit coordination, eligibility determination for health plans, and referral or authorization requests.

Acupuncturists who do not electronically communicate health information to a third-party payor in connection with standard transactions typically do not qualify as covered entities and are thus not subject to HIPAA regulations. However, this exemption does not extend to providers who collect, store, or use patients’ names, addresses, email addresses, phone numbers, or other protected health information; nor are providers exempt from HIPAA if they charge a membership fee for services outside insurance coverage while simultaneously billing insurance, which may include both concierge and direct pay practitioners whose patient base is mixed between direct pay and third-party payers.

Given the high volume of data exchanges between healthcare providers and patients, and the associated security risks, even providers who do not submit insurance claims should generally comply with HIPAA regulations to safeguard patient data privacy and security, and to meet the requirements under state privacy and data security laws. State consumer and data privacy legislation generally applies to all healthcare providers, underscoring the necessity for acupuncturists to better understand the relevant state privacy and health data security laws that pertain to their specific practice type and location.

When contemplating which patient care model is right for you and your patients, it is crucial for acupuncturists to review state and federal compliance requirements, consult an attorney, and have a HIPAA/IT compliance consultant assess your needs and provide the most accurate and reliable advice.