Concierge Tax Services (Cover charge)

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#1
Wiles  
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I have a doctor client - a solo general practitioner - that has built up a fairly good reputation in his community that he practices in. A few years ago he was getting burned out seeing too many patients per day in order to earn a good income. He also felt he was not giving his patients the best service by focusing on high turnover of patient visits per day - which has become the model for the family practitioner. He hooked up with a network that was marketing concierge physician services to doctors. He sent a letter to all of his patients stating that he was limiting his practice to X number of patients and each patient could reserve their spot by paying an annual fee of $1,500 (I think). This is basically a cover charge. The patient is required to visit twice a year, there is no charge for this other than what insurance will pay. All other services are billed as normal - insurance pays what they pay and the patient pays the remainder of what the insurance allows.

I talked to him recently and he said that this was the best move he ever made. He said that he currently has a waiting list for new patients. He said he spends less time practicing, provides a much better service, and is making more money than before.

This has got me thinking... Do you think this model would work for the Tax Professional / Accounting industry?

The 'cover charge' would allow me to limit my client list and spend more time without necessarily worrying about whether or not I can bill it out. I often feel like I would like to do more for my clients, but I am not sure they necessarily want to get a bill for it. So, instead, I don't do it and move on to a job that I know I can bill.

Has anybody out there considered this? implemented this?
 

#2
zl28  
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There are accounting firms that do it. In my opinion, it all comes down to the demand for those services.

If you are in NYC or CA, it's probably easier to get clients like that.

If you are in a more modest income area, could be harder.

Business is a balancing act.
 

#3
Frankly  
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Seems the good doctor, or accountant could achieve the same thing by raising the price of an office visit (or tax engagement). Some clients will not want to pay the price and will drop, allowing more time for the rest.

No way would I ever pay an annual "cover charge" or retainer for the privilege of being allowed to stay on the practitioner's client list.
 

#4
Wiles  
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Frankly wrote:Seems the good doctor, or accountant could achieve the same thing by raising the price of an office visit (or tax engagement).

This is a good point and identifies a major difference between the 2 industries. The doctor can only charge what the insurance company says he can for the office visit. The annual fee is not dictated to him by the insurance company. Fortunately, we tax pros do not have third party payers dictating our fees.

I guess one approach I can take is to just continue to raise fees for core services and, internally, know that I have a pool of extra funds available for additional work that I do not necessarily want to bill the client.
 

#5
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My doctor does this, and it's the best service I've ever had. I can email him or text him, and he is always responsive. I can tell him I need to see him and usually I can see him the same day or no later than the next.

At the same time, from his point of view, I probably only see him twice a year, along with two or three other communications.

He charges $80 per month and I find it of great value.

The problem with the accounting industry, is that most individuals don't communicate with us outside of tax season.

Maybe 10% of my 1040 clients reach out for tax planning, notices, etc.

Many of my business clients are monthly clients and you could argue are very much like this concierge service. I rarely find I charge them for anything extra other tag the tax return.

Maybe it's an idea for business clients that reach out occasionally and don't want monthly services. But then what am I charging for if they are wanting to "work with me" 2 or 3 times outside of tax season.
 

#6
Frankly  
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Wiles wrote: The doctor can only charge what the insurance company says he can for the office visit. The annual fee is not dictated to him by the insurance company.

Doctors set their own prices. They submit their bill, insurance pays whatever they decide to pay, then the doctor sends a statement to the patient for the balance. It's been like that forever.

Another alternative is to collect a bigger co-payment from the patient at the time of service.
 

#7
Wiles  
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Frankly wrote:Doctors set their own prices. They submit their bill, insurance pays whatever they decide to pay, then the doctor sends a statement to the patient for the balance...

... after adjusting the charges down to the contracted rate.
 

#8
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So ive read a bunch of the responses and what I might add is this..

Raise your minimum fee to a point where it is like a concierge fee. We charge a $600 minimum. That keeps away most price shoppers etc. Average return (1040) probably about $750 to $800. Inside that fee is a 20 minute buffer for calls etc throughout the year.

If a practice has a client base that might leave due to a $50 increase, then increase them $50.

We also screen clients to make sure they are a good fit. We just turned away a good prospect transferred here from Europe. Why? I cant be efficient filing all the foreign account forms etc.

So, id say, get narrow in our focus and charge a premium for your work. That combination works in my view.
 

#9
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I'm in agreement with a lot of the posters here, but I'd argue that a lot of us already operate on a model approaching a concierge model.

If you've adopted a type of value billing for tax returns, and you have a premium "built in" for calls and questions during the year, you're already well on your way to a concierge model, even if it's not a separate fee. And if you have a monthly/quarterly accounting fee instead of an hourly fee for such work, then I'd agree with RazorbackCPA in saying that you already have implemented the concierge model. The only difference might be what your minimum fee might be.
 

#10
Wiles  
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We are finding that we will need to lighten our tax season load and are considering disengaging a number of clients.

There was a good recent discussion here viewtopic.php?f=10&t=22351 regarding inclusive / value billing. This got me thinking about this topic here, an annual "VIP" fee, that I posted a number of years ago.

As discussed in that other discussion, it seems it would be hard to set an annual fee that included the tax prep. Every tax return is different and the same client doesn't have the same tax return from one year to the next.

It would be easier, instead, to still charge for the tax return prep, but, in addition to that, charge, say, an extra $300/yr to reserve a seat. We would throw in a few services, such as responding to notices, limited correspondence, etc.

The general consensus, above, was to just increase fees gradually so that you have the equivalent of this concierge fee.

Knowing that we need to reduce client load before next tax season begins, the gradual increase is not the optimal solution. We are thinking of doing this $300 "VIP fee" due in November. Or sending a letter telling all clients their tax prep fee is going up $300 next tax season. However, we will need to know who is on board before tax season begins.

It's going to be hard to disengage some of my long term clients. We just don't have the staffing that we used to have - and that includes me not wanting to work like I'm 30 years old anymore.
 

#11
ATSMAN  
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VIP fee" due in November. Or sending a letter telling all clients their tax prep fee is going up $300 next tax season. However, we will need to know who is on board before tax season Knowing that we need to reduce client load before next tax season begins, the gradual increase is not the optimal solution. We are thinking of doing this $300 "begins.


I think that is a new trend developing in my area. Right after tax season I got 2 referrals to potential clients who had received such a letter and now they are looking to hire a new tax preparer for next tax season.
 

#12
JAD  
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Your OP - that is MDVIP, right? My husband's doc was part of that until I suppose he realized he was giving too much of his revenue to the organization. Now the doc charges $2200 on his own.

My doc on the other hand simply doesn't take insurance. My last appointment with her was $650. Outrageous? We were together for over 1 1/2 hours. It is quite a different experience from an 8 minute appt.

The reason for the VIP charge, as you know, is because the docs can't make enough to provide good care/make a living in high cost areas on the amount that they receive from insurance. Post above saying that doc charges what he wants, receives payment from insurance, and gets the rest from patients is simply untrue. Insurance contract forces doc to take a huge write-off.

That is in contrast with us, thank goodness. Just raise your rates. I think it would be hard for a client to swallow a three-digit billing rate that increases each year, plus a VIP charge. No need to complicate things.
 

#13
novacpa  
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Physicians who are Internists (Internal Medicine) have been hit hard by Medicare & Medicaid fee decreases (reimbursement rates). As a result, many have either stopped accepting Medicare Patients or limited the number in their Practices.
Medicare patients are a "protected class" in that Physicians fees are regulated (DRGs) by the Federal Govt HHS.
I don't think the Feds know or care that they are putting many very expert and much needed Physicians out of business, and leaving millions without Medical Care. For example, I got a colposcopy where the Gastroenterologist charges $3,200
for the procedure, Medicare allowed only $162 (Medicare rate control). A ridiculously low pay rate.
The result is that if you want to see the Physician you now must pay the annual fee to be a member of the Practice,
or go without. Medicare/Medicaid/ACA reimbursement rates are so ridiculously low the Physician can not survive.
Luckily our fees are not regulated, we can charge what we want to whom we want.
 

#14
JAD  
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Exactly. And as a patient, do we really want someone doing a colonoscopy on us who is only receiving $162 for the procedure? How hard would you or I work on a tax return if our fee was cut down by that %? And their work is more important. I have friend who works as a PT at the hospital. She said the reimbursement rates don't even cover her salary.

Anyway, Wiles, you have posted at least a few times over the years on this theme. Just raise your rates. Substantially, if necessary. Send out the letter that the cost of compliance is much higher than it used to be (new law every year, retroactive law, more reporting requirements each year, etc etc) and you have kept rates artificially low and can no longer sustain that business model. Some will stay, some will go, and you will be fine.
 

#15
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Wiles wrote:
However, we will need to know who is on board before tax season begins.


The first thing that comes to my mind would be to raise your fee by 20% for each client and home you lose 1 in 5.

It's not likely that you will lose more than this, and this way you end up with:

Same money, less clients.

Or

Same clients, more money.

If you are that fed up with working so hard, go right to 25% or 30%.

Overshooting is unlikely, but if you do, you could always drop your fees as needed and get new clients again.
 


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