Malcolm Rivera
Direct primary care (DPC) is a healthcare business model in which patients purchase a membership that allows them unlimited access to certain primary care services. The patient pays a monthly fee to the medical office, and can then access care as needed, without paying an additional fee at the time of service. Direct primary care agreements are contracts between a primary care provider and a patient, under which the provider agrees to deliver primary care services in exchange for a monthly fee. This fee covers all or most primary care services, including clinical and laboratory services, consultative services, care coordination, and comprehensive care management. However, DPC is not considered minimum essential coverage under the Affordable Care Act, and patients are advised to have a separate health insurance plan to cover more significant or specialty care. While DPC agreements resemble the basic insurance relationship, they are not considered insurance in many states, and are exempt from state insurance laws and insurance commissioner oversight.
| Characteristics | Values |
|---|---|
| Definition | Direct Primary Care is a healthcare business model in which patients purchase a membership that allows them unlimited access to certain primary care services. |
| Contract | A direct primary care agreement is a contract between a primary care provider and an individual patient or the patient's legal representative. |
| Fee | The patient pays a monthly, quarterly, or annual fee to the medical office. |
| Services | The fee covers all or most primary care services, including clinical and laboratory services, consultative services, care coordination, and comprehensive care management. |
| Third-party billing | Direct primary care practices generally do not bill third-party payers (commercial health insurance, Medicaid, Medicare, etc.). |
| Insurance status | Direct primary care agreements are not considered insurance in many states, including Arizona, Florida, and Mississippi. However, the Department of Financial Services in New York concluded that a health care provider offering health care at a discount to members constitutes an insurance business. |
| Insurance requirements | Direct primary care agreements are often exempt from meeting state insurance standards and requirements, such as those governing benefits, premium rates, licensure, solvency, and oversight. |
| Additional insurance | It is recommended that patients with a direct primary care membership also have a separate health insurance plan to cover medical care beyond basic primary care. |
| Termination | Direct primary care agreements can typically be terminated at any time by either party. |
| Refunds | If the provider ceases to offer primary care services, the agreement must include a provision for refunding any monthly fees paid in advance. |
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What You'll Learn
Direct primary care agreements are not insurance
Direct primary care agreements, or DPCAs, are contracts between a primary care provider and a patient, under which the provider agrees to deliver primary care services in exchange for a monthly fee. This fee typically runs between $50 and $150 and covers most primary care services, including clinical and laboratory services, as well as some additional services like prescription drugs and imaging. However, DPCAs do not include coverage for hospitalization, specialty care services, or other benefits typically provided by a medical insurance policy.
While DPCAs offer patients certainty in healthcare costs, they are not considered minimum essential coverage under the Affordable Care Act. This means that patients still need separate health insurance to cover medical care beyond basic primary care. In fact, DPC practices often recommend that patients acquire a high-deductible wraparound policy to cover emergencies or more specialized care.
Currently, 24 states exempt DPCAs from the regulatory authority of their insurance codes, and some states, like Arizona, have explicitly defined DPCAs as "not insurance" in their legislation. This means that insurance regulators cannot require DPCAs to meet state insurance standards and requirements. However, it is worth noting that some states, like Mississippi, have chosen to exempt DPC practices from state insurance certification and licensure requirements, allowing them to operate under their insurance, health, or professional codes.
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Direct primary care agreements are private contracts
Direct primary care agreements (DPCAs) are private contracts between patients and primary care providers. They are not a form of insurance and are not subject to the regulations that govern insurance products. Instead, they are a type of limited health-insurance-like offering, where the provider agrees to deliver primary care services in exchange for a monthly fee. This fee typically ranges from $50 to $150 and covers most primary care services, including clinical and laboratory services, consultative services, care coordination, and comprehensive care management.
DPCAs differ from traditional insurance in that they do not provide coverage for prescription drugs, specialty care services, hospitalization, or other benefits typically provided by a medical insurance policy. Instead, they focus on providing direct access to primary care services without the need for additional fees at the time of service. This model offers patients certainty in healthcare costs and eliminates the need for providers to deal with insurance companies and billing codes.
While DPCAs are not considered minimum essential coverage under the Affordable Care Act, they can be combined with an ACA-compliant health plan to provide a more comprehensive safety net. This combination can give patients unlimited access to a primary care provider for their basic needs while also having the peace of mind that specialty care is available if needed. However, it is important to note that DPCAs do not indemnify for services provided by a third party, and patients are fully responsible for any additional healthcare expenses incurred outside of the agreement.
The legal status of DPCAs varies across states. While some states, like Florida and Arizona, have explicitly exempted DPCAs from their insurance codes, others are still debating their regulatory scope. For example, the New York State Bar Association has noted that while DPCAs resemble insurance relationships, states that permit them typically do so with an express carve-out stating that they are not conducting an insurance business. This highlights the ongoing discussion surrounding the role and regulation of DPCAs in the healthcare landscape.
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Direct primary care agreements are exempt from insurance regulation
Direct primary care (DPC) is a healthcare business model in which patients purchase a membership that allows them unlimited access to certain primary care services. The patient pays a monthly fee to the medical office, and can then access care as needed, without paying an additional fee at the time of service. Direct primary care practices generally do not bill third-party payers (commercial health insurance, Medicaid, Medicare, etc.), which means that the patient is fully responsible for the cost of any care that isn't included in the membership fee.
DPC is not considered minimum essential coverage under the Affordable Care Act, and more than half of the states have enacted laws that explicitly exempt DPC from state insurance laws and insurance commissioner oversight. For example, the Health Care Empowerment Act expressly states that "a direct medical care agreement is not insurance and is not subject to regulation by the department of commerce and insurance".
As of 2024, there were more than 2,400 direct primary care practices, operating in nearly every state in the US. However, the rising popularity of DPC arrangements, particularly among the uninsured, raises questions about their impact on consumers' out-of-pocket health care costs and the stability of the individual health insurance market.
In terms of specific states, Mississippi's Direct Primary Care Act provides for an exemption from state insurance certification and licensure for direct primary care practices. In 2018, Florida enacted a bill making Direct Primary Care Agreements (DPCAs) exempt from the Florida Insurance Code. Arizona has also passed legislation stating that direct primary care agreements are not insurance and are not subject to insurance regulation.
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Direct primary care agreements offer certainty in healthcare costs
Direct primary care (DPC) is a healthcare business model in which patients purchase a membership that allows them unlimited access to certain primary care services. The patient pays a monthly fee to the medical office, and can then access care as needed, without paying an additional fee at the time of service. DPC practices generally do not bill third-party payers (commercial health insurance, Medicaid, Medicare, etc.), which means that the patient is fully responsible for the cost of any care that isn't included in the membership fee.
DPC agreements are contracts between a primary care provider and a patient, under which the provider agrees to deliver primary care services in exchange for a monthly fee. The fee typically runs between $50 and $150 and covers outpatient, non-specialty services such as preventive services, basic lab services, and chronic disease management. The agreement should set forth the monthly fee for services, the scope of services included in the monthly fee, the duration of the agreement, and whether the agreement will automatically renew.
The DPC model gives family physicians a meaningful alternative to fee-for-service insurance billing. Benefits to patients include substantial savings and greater access to, and time with, physicians. There are no copays or deductibles to figure out, and no pondering whether the service is covered or non-covered by insurance. Benefits to physicians include reduced overhead and the elimination of negative incentives associated with fee-for-service third-party-payer billing.
While DPC agreements are not considered insurance, they do resemble the basic insurance relationship, where an insured pays a set premium to an insurer in exchange for an insurer's reimbursement for an insurable event. Recognizing this, states that permit DPC arrangements typically do so under their insurance, health, or professional codes using an express carve-out that says such arrangements are not conducting an insurance business. As of 2024, 24 states exempt DPCAs from the regulatory authority of their insurance codes by statute, and more than half the states have enacted laws that explicitly exempt DPC from state insurance laws and insurance commissioner oversight. However, it is important to note that relying on a DPC membership by itself is not recommended, as people still need real health insurance in case they end up needing medical care that goes beyond basic primary care.
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Direct primary care agreements are not minimum essential coverage
Direct Primary Care (DPC) is a healthcare business model where patients pay a membership fee for unlimited access to certain primary care services. The monthly fee typically ranges from $50 to $150 and covers most primary care services, including clinical and laboratory services, consultations, care coordination, and comprehensive care management. However, it is important to note that DPC agreements are not considered minimum essential coverage under the Affordable Care Act (ACA).
DPC agreements are not subject to the same regulations as traditional health insurance plans. In most states, DPC providers do not have to meet insurance standards such as guaranteed coverage for pre-existing conditions. Additionally, DPC agreements do not include coverage for prescription drugs, specialty care services, hospitalization, or other benefits typically provided by medical insurance policies. As a result, patients with DPC agreements may still need to purchase separate health insurance to ensure they have comprehensive coverage.
The distinction between DPC agreements and insurance contracts is important from a legal and regulatory perspective. In some states, DPC practices are explicitly exempted from state insurance laws and are not considered to be engaging in the business of insurance. This means that DPC providers are not subject to the same oversight and requirements as traditional insurance companies, such as those governing benefits, premium rates, licensure, and solvency.
While DPC agreements offer benefits such as increased access to primary care providers and reduced costs for basic services, they do not provide the same level of coverage as traditional health insurance. As a result, patients with DPC agreements may still be responsible for significant out-of-pocket expenses for services not covered by their DPC provider. Therefore, it is essential for individuals considering a DPC agreement to carefully review the terms and understand the limitations of their coverage.
In conclusion, while Direct Primary Care agreements provide patients with access to primary care services for a monthly fee, they do not constitute minimum essential coverage. Individuals with DPC agreements may still need to purchase separate health insurance to ensure they are fully covered in the event of unexpected medical needs.
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Frequently asked questions
No, a direct primary care agreement is not considered insurance and is not subject to regulation by the department of commerce and insurance. However, it is a contract between a primary care provider and a patient, under which the provider agrees to deliver primary care services in exchange for a monthly fee.
Direct primary care is a healthcare business model in which patients purchase a membership that allows them unlimited access to certain primary care services. The patient pays a monthly fee to the medical office, and can then access care as needed, without paying an additional fee at the time of service. On the other hand, insurance typically involves paying a set premium to an insurer in exchange for reimbursement for an insurable event.
For patients, the benefits of a direct primary care agreement include certainty in healthcare costs. The patient pays a set fee and in return, is entitled to a menu of services without having to worry about co-pays or deductibles. For providers, the benefit may be a reduction in overhead costs as they no longer need to worry about billing an insurance company, keeping up with billing codes, refiling claims, and fighting claims denials.
The services covered by a direct primary care agreement can vary but may include office visits, home visits, annual physicals, routine lab tests, vaccinations, wound care, treatment of broken bones and fractures, ECGs, colon cancer screening, and other necessary primary care procedures. It might also include patient education and chronic disease management.
Yes, combining a direct primary care plan with a health insurance plan can be beneficial. The direct primary care membership will allow unlimited access to a primary care provider for basic needs, while the health insurance plan can serve as a safety net for more significant or specialty care.
