Physician's Concierge services

[Possi]

I had a call from a client this morning asking about the flat fee he is paying his physician for services. He pays a flat fee every year, and gets to be seen a premier times, longer visits, phone consults, whatever he needs. I have heard of this.
This client is self employed.
He was asking how those payments to the doctor are treated regarding taxes.
I would logically believe that these payments are treated the same as out-of-pocket medical expenses, and that they would not be considered medical insurance.

Any thoughts?

[taxmandan]

Physicians services

I agree, he is buying access but not coverage of medical conditions as in insurance coverage.

[Lion]

What if the concierge service charges for an annual executive physical and gives the other perks free?

[New York Enrolled Agent]

What if the concierge service charges for an annual executive physical and gives the other perks free?

This is an IRS document INFO 2011-0027. I'm sure it fully answers the original post.


The Honorable Mark R. Warner
United States Senator
180 West Main Street
Abingdon, VA 24210

Attention: * * *

Dear Senator Warner:
I am responding to your letter of February 9, 2011, on behalf of your constituent * * *. * * * wrote about whether reimbursements from her medical reimbursement account (MRA) were allowable for a "medical concierge" fee she paid to her doctor.

* * * paid an annual fee to her medical practice for the following benefits: heightened access to physicians, a comprehensive annual physical, minimum half hour doctor visits, and access to dietitians and exercise therapists. The administrator of her MRA decided that this annual fee was not a reimbursable expense.

In general, expenses that are reimbursable from an MRA must be both expenses paid during the taxable year for medical care and expenses that the MRA decides to reimburse. The Internal Revenue Code defines medical care as amounts paid for the diagnosis, cure, mitigation, treatment or prevention of disease, or for the purpose of affecting any structure or function of the body. An MRA can limit payment or reimbursement to only certain expenses. Each plan can have its own rules as to what it chooses to reimburse and can disallow an expense even if it otherwise fits the definition of a medical care expense.

I hope this information is helpful. If you have further questions, please contact me or * * * at * * *.

Sincerely,

Christopher F. Kane
Chief, Branch 3
Associate Chief Counsel
(Income Tax & Accounting)

[taxea]

Sounds to me like this is a perk and has nothing to do with treating a medical condition...not deductible in my point of view.

[Possi]

agree!

It is a perk. I agree completely that it is not a legitimate medical expense. I think that is very clear. It is a shame that we can't take it as a medical expense, but that's the way it is.

Great discussion, and thanks for your input!

[Gene V]

"Each plan can have its own rules as to what it chooses to reimburse and can disallow an expense even if it otherwise fits the definition of a medical care expense"

I suppose it could be deducted if the MRA plan allowed it.

[Roberts]

IMO it depends on what is included with the Physician's concierge service fee.
Some of the expense may be deductible. For example if the fee includes a yearly physical and some lab tests to work up your blood test, that portion may be deductible. If you are only paying for access, it isn't deductible.

The few clients I have who use that service - the doctor's office provides a percentage they deem deductible if you should care to ask for it. It's usually a really small percentage of the overall fee.