Why Concierge Medical Practices Need to Consider 831(b) Plans

The Financial Safety Net for Concierge Practices: Understanding 831(b) Plans

As a concierge medical practice owner, staying financially secure in an ever-changing economic landscape is crucial. With the recent changes in Medicare reimbursement rates, many practices are optimistic about increased revenues in 2026. But what happens if unforeseen expenses arise? This is where 831(b) plans come into play, offering a unique approach to risk management that can protect your practice from unexpected, uninsured costs.

What is an 831(b) Plan?

Implemented by Congress in 1986, the 831(b) plan serves as a method for small business owners, including those in the medical field, to create captives that allow for tax-deferred reserves. The essential advantage of these plans is their ability to insure against financial risks that are often excluded from traditional insurance policies. This includes sudden changes in government policy or unexpected operational disruptions — risks all too familiar in the healthcare sector today.

Current Landscape: Medicare Changes and Financial Planning

The passing of the One Big Beautiful Bill Act has brought about a 2.5% increase in Medicare payments for 2026, reversing previous cuts and signaling more stability for physicians. These changes can provide an influx of revenue, but it’s essential to set aside these funds to prepare for potential unexpected costs. By contributing to an 831(b) plan, physicians can build a cushion for their practices, allowing them to weather financial storms without sacrificing patient care.

Why Concierge Practices Should Embrace 831(b) Plans

Concierge practices often face unique challenges due to their business model. With an emphasis on providing personalized, high-quality care, it’s vital to ensure operational resilience as well. Traditional insurers often exclude coverage for certain business-related risks. For example, a sudden change in public policy could jeopardize funding or impact patient volume. An 831(b) plan can cover these gaps by allowing physicians to cater their insurance to the specific needs of their practice.

Real-World Examples of Protection in Action

Consider the case of a national consulting firm that encountered a $2 million loss due to a sudden policy shift. While traditional insurance might have offered limited protection, the firm leveraged its 831(b) plan to file a claim for political risk coverage, securing $600,000 and preserving their financial stability. This narrative not only underscores the practicality of 831(b) plans but also highlights the importance of being proactive in risk management.

The Control Factor: Empowering Practice Owners

One of the significant benefits of 831(b) plans is the control it grants to practice owners. Unlike traditional insurance routes that leave practitioners at the mercy of insurers, these plans empower owners with the flexibility to tailor coverage to their unique operational risks. This shift in control fosters an environment where practice owners can efficiently navigate the complexities of running a medical concierge business without the looming fear of being under or uninsured.

Conclusion: Take Charge of Your Financial Future

As the healthcare landscape continues to evolve, it is essential for concierge medical practices to adopt robust financial strategies. An 831(b) plan is more than a safety net; it is a proactive approach to securing the future of your practice in the face of uncertainty. By working alongside a specialized 831(b) plan administrator, you can build a customized insurance strategy that not only safeguards your operation but also ensures you can continue to provide exceptional care to your patients.

Take the first step toward securing your practice's financial future by connecting with a professional experienced in 831(b) plans today. Your peace of mind—and the stability of your practice—could depend on it.