New Practice

Direct primary care (DPC) is a growing practice model, as more physicians are realizing the benefits and more patients are understanding how a DPC can work for their healthcare. There are some challenges for DPC physicians and their patients, however, many of which are the subject of federal and state legislation efforts in 2020. Other areas for DPC physicians to watch in 2020 include a more intense focus on prescription and healthcare costs.

Growth of DPC practices

The DPC concept first launched around the turn of the 21st century. Data regarding the number of practices and patients dates back to 2014, when 125 practices and 5,988 patients were recorded. In the past five years, the number has climbed to over 1,000 practices in 49 states caring for approximately 500,000 patients and will undoubtedly continue to increase in 2020.

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HSA legislation

DPC patients currently are not able to use their Health Savings Accounts (HSAs) to pay their DPC membership fees, as the Internal Revenue Service (IRS) considers the DPC model of care to be a type of health insurance. The Primary Care Enhancement Act of 2019 is designed to change that. Also known as HR 3708, the act’s intent is to “amend the Internal Revenue Code of 1986 to allow individuals with direct primary care service arrangements to remain eligible individuals for purposes of health savings accounts, and for other purposes.”

State legislation

Many states are introducing their own legislation to have DPC recognized as “not insurance,” including Maryland, South Carolina, and Minnesota. While Colorado has already passed such a law, the state’s Medicaid patients are still prohibited from privately contracting for any “covered services.” CO HB1140, introduced in January with a hearing expected in February 2020, “prohibits the department of health care policy and financing (department) from denying a Medicaid recipient the right to purchase direct primary care services or enter into a direct primary care agreement.”

Tennessee’s TN HB 894/SB 696 requires the state’s Finance and Administration Department to “study the feasibility of adding direct primary care as a covered benefit under one or more of the basic health plans approved by the state insurance committee for eligible state employees.” The legislation was introduced in 2019 and is expected to be carried over to 2020.

Employer healthcare costs

Healthcare costs continue to rise for employers who provide coverage to their employees as a benefit. A survey conducted by the nonprofit National Business Group on Health (NBGH) found that larger companies estimate that their health care costs will increase a median of 6 percent in 2020. Premiums and out-of-pockets costs will increase from $14,642 to $15,375 per employee in 2020.

DPCs have the opportunity in 2020 to promote their healthcare services as a less expensive and more effective benefit to these employers, particularly as approximately 41 percent of those surveyed said they would be using cost-management tactics to reduce their projected health plan cost increases.