How does Medicaid apply to direct care physicians?

One way that direct primary care (DPC) physicians are able to maintain low overhead costs and to survive solely on patient membership fees is to not be burdened with administrative tasks such as filing for insurance reimbursement. While Medicaid is considered a type of insurance, the rules and regulations around how it applies to DPC physicians are complicated.

The Centers for Medicare & Medicaid Services (CMS) recently issued a request for information (RFI) through its Innovation Center. The RFI was designed to seek input on “experiences with, and perspectives on, DPC and how CMS can use DPC models to reduce expenditures and preserve or enhance the quality of care for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) beneficiaries.”

CMS received approximately 1000 responses to their RFI, from physicians as well as patients, healthcare systems, health plans, and other organizations. The responses focused on areas such as “increased physician accountability for patient outcomes, improved patient choice and transparency, realigned incentives for the benefit of the patient, and a focus on chronically ill patients.”  Additionally, the comments “reflected broad support for reducing burdensome requirements and unnecessary regulations.”

Currently, for DPC physicians who have not formally “signed up” as a Medicaid provider, “the assumption is that you are not enrolled in the program and thus you are free to privately contract with Medicaid patients for covered services.” According to DPC Frontier, depending on the state in which the DPC operates, contracting with a patient may or may not be possible. Most likely, though, orders for tests, medication, and referral will not be honored by Medicaid. “If you are not enrolled in Medicaid then the state will pretend that you do not exist … and the state will require that these orders be placed by a Medicaid enrolled physician.”

Medicaid regulations differ by state. Many states allow DPC physicians to have an “”Ordering and Referring Only” provider status; however, it is best to check with the state Medicaid office to determine how Medicaid applies to the DPC physician’s ability to contract with and receive payment from Medicaid patients.