Although retail medical clinics are not a novel idea,
Walmart is taking the concept to a whole new level.
36
The Walmart-ization of Primary Care
By Nichole Geary, J.D.
Retail medical clinics are
not new. By now, everyone
is familiar with CVS’ Minute
Clinic and Walgreen’s Health-
care Clinic. These types of
clinics provide vaccination and
general diseasemonitoring ser-
vices; however, as both compa-
nies have been very careful to
differentiate their clinics from
primary-care providers, the
overall impact on health care
has been small, and for primary care providers, nonexistent.
More recently, the entrance of Walmart has changed the
landscape dramatically.
Walmart has been quietly increasing its retail medicine
footprint, opening primary care clinics in rural health areas
of South Carolina and Texas. These clinics are designed to be
customer-centric, advertising walk-in checkups for $40 and
seven-days-a-week accessibility. Currently, Walmart does
not accept private insurance at its clinic locations; however,
it is enrolling clinics in state Medicaid programs. The retail
giant is working with QuadMed to staff the primary care
clinics with nurse practitioners and anticipates rolling out
three more locations within the next year.
Consumer-directed medicine and chronic-disease man-
agement comprise a large market, representing hundreds
of billions of dollars spent annually, and Walmart has the
marketing reach and store foot traffic to emerge as a strong
player. CombineWalmart’s marketing reach and the influx
of new health care exchange enrollees with high deductible
plans, and these new clinics could potentially change the
way primary care services are provided on a national level.
While Walmart’s ultimate success as a primary care
retailer and the effects of its $40 checkup on the national
cost of health care remain to be seen, companies and in-
Nichole Geary is a health law
attorney in the West Palm Beach
office of Broad and Cassel
.
dividuals looking to follow Walmart’s example should
take note—Walmart’s entry into the medical world raises
several complicated legal hurdles. For example, many
states such as South Carolina and Texas have laws that
ban the corporate practice of medicine. These laws prohibit
non-physician-owned companies such as Walmart from
owning or exerting control over medical facilities or em-
ploying medical professionals. In these states, all medical
facility policies, even those affecting only clinic hours or
payment rates, must be made by a physician.
Moreover, several states have fee-splitting laws that
may limit Walmart’s ability to retain a percentage of clinic
revenue. In addition, many states’ laws prohibit payment
for patient referral and control or limit the marketing of
medical services. In these states, marketing contracts that
are based upon a per-lead fee may be prohibited. Penalties
for violation of these anti-referral laws range from civil fines
to criminal prosecution.
Finally, scope-of-service issues may arise based upon
the provision of primary care by nurse practitioners and
the level of phy-
sician supervi-
sion required
in each state.
Walmart’s abil-
ity to success-
fully navigate
these legal is-
sues will cer-
tainly play a
part in its ul-
timate success
as it attempts
to
rollback
the
prices of pri-
mary care.
COM Outlook . Winter 2015
HEALTH CARE LEGAL EAGLE
