Accounting

Concierge Medicine & Direct Primary Care: Tax & Accounting Structure

Membership-based medical practices have unique accounting and tax considerations. Here's how to set up books, recognize revenue, and structure the entity.

By Aparna Devalla, CPA3 min · 5 slidesUpdated June 15, 2026

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Why Concierge/DPC Is Different

Traditional medical practices: insurance receivables, payer-mix complexity, contractual write-offs.
Concierge/DPC: monthly or annual membership fees, plus per-visit or no-insurance pricing.
Revenue is more predictable but requires accrual accounting and deferred revenue tracking — typical insurance-billing practices won't work.
Entity structure decisions (PC, PLLC, S-corp election) play differently in concierge models.

Revenue Recognition Setup

Annual membership: collect $3,000 in January for 12 months of service. Recognize $250/month as revenue; remaining sits as deferred revenue.
Monthly membership: month-to-month, recognized as collected.
Per-visit charges: recognized when service delivered.
Setup or onboarding fees: typically recognize ratably over expected member life (not at signup).
Refunds and cancellations: estimate refund reserve, reduce revenue at booking, refund deferred revenue at actual cancellation.

Entity Structure

Professional Corporation (PC) or Professional LLC (PLLC) — required in most states for medical practice ownership.
S-corp election: typically reasonable comp + distribution — common in concierge practices with sufficient profit.
Watch reasonable comp: physicians in concierge / DPC are often heavily scrutinized. Document defensibly.
Group practice with multiple physicians: partnership structure with allocation provisions for differential comp.

Tax Planning Specific to Concierge

Section 179 and bonus depreciation on medical equipment, exam room build-out, EHR systems.
Cost segregation on practice real estate if owned — significant year-1 deduction acceleration.
Solo 401(k) + cash balance plan combination for solo concierge physicians earning $400K+.
Multi-state implications: physicians serving members across state lines may face state tax exposure.

Common Issues

Not tracking deferred revenue: management reports become meaningless and any lender / buyer rejects the books.
Mixing concierge / DPC fee revenue with traditional insurance receivables — produces unusable reports.
Inadequate documentation of physician reasonable comp.
Forgetting to plan retirement contributions in profitable years — physicians who don't max out shelter face huge marginal-rate exposure.
Need accounting and tax for a concierge or DPC practice? Rubric Financial supports concierge/DPC practices including deferred revenue setup, entity structure, and high-income tax planning.

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