Zocdoc to begin charging N.Y. doctors per booking

Zocdoc said Tuesday it will begin charging doctors throughout New York state for each new patient who books an appointment using its service instead of a monthly fee, effective April 1.

The company said the move was needed to make the service more attractive to doctors with fewer patients, who were dissuaded from signing up by the $300 per month, or $3,000 a year, fee per physician. Existing patient bookings won't trigger a charge.

"The flat fee has limited our ability to sign up providers in rural and suburban markets," said Oliver Kharraz, Zocdoc's CEO. "That's what we're seeking to change"

Zocdoc has become an increasing presence in providers' practices. The company says that 1 in 5 new patient–doctor relationships in New York is formed through Zocdoc.

The new per-booking charge will vary by specialty, from $35 to $110, with primary-care doctors on the low end of the spectrum, and dentists at the highest tier, Kharraz said. That pricing reflects a third-party evaluation of the fair-market value of Zocdoc's services. The fee will remain the same regardless of whether a patient attends the appointment or what services are provided during the visit. Providers also must pay an annual licensing fee, which will be lower than the current rate.

Zocdoc expects the change to affect practices differently, with about half paying the same or less to use the service and half paying more.

"I don't want to gloss over the fact that the price will go up for some providers. These doctors had a phenomenal deal," Kharraz said. "We want a model that fairly represents the number of bookings each doctor is getting."

Physicians can cap their spending and set a limit on how many bookings they receive through the site, at which point new patients won't be able to find them through search or schedule appointments. Existing patients could still find them and book on Zocdoc.

Doctors will be able to retain the existing pricing model until their current contract expires.

The company previously rolled out the change in Connecticut, Colorado, Georgia, Pennsylvania and Washington. It said that participation in Georgia has increased more than 80% since it started charging per booking there in April.

Zocdoc had planned to implement the change in New York in October but tabled it to solicit feedback from physicians after the Medical Society of the State of New York said some of its members were concerned.

The company said it worked with the state Department of Health and Office of Professional Misconduct to ensure the change does not violate state rules that prohibit doctors from paying for referrals or splitting fees among providers.

But federal regulations present a greater challenge. The company said there is a "lack of clarity" around the federal anti-kickback law whether the new pricing model would be permitted. To avoid running afoul of the law, the company has disabled its search and appointment-booking tool for patients who identify as Medicare or Medicaid beneficiaries while it awaits guidance from the federal government.

That move seems counter to the company's goal of increasing access to health care. It reduces the usefulness of Zocdoc for the 38% of New Yorkers who rely on those government programs for insurance.

"It's certainly not a long-term solution," Kharraz said of disabling features for Medicare and Medicaid patients. "We will continue to be an advocate for change here."

"Zocdoc to begin charging NY doctors per booking" was originally published in Crain's New York.