Federal Legislative Efforts as of 09/14/2024
The Direct Primary Care Coalition met Sept 10 and 11, 2024 in Washington DC. We were there to remind senate and house members how section 223(c) of the Internal Revenue Code is being interpreted by the treasury (explained in detail here) in a manner that discriminates against patients with Health Savings Accounts by prohibiting these patients from maintaining an HSA and joining a DPC practice. We sought support for both the Primary Care Enhancement Act (S 628) and the Medicaid Primary Care Improvement Act (expecting a Senate version of HR 3836 that unanimously passed the house soon). There are many possibilities for passage of one or both bills later in 2024 during the lame duck session.
Other federal efforts underway include:
Passing language that prohibits insurance companies from discriminating against their patients that seek care from out of network physicians (often DPC physicians) by automatically declining to follow any orders from out of network physicians without applying the same utilization management process.
Reducing the Medicare Opt-Out burdens by either expanding the “Advanced Beneficiary Notice” language so that private contracting decisions can be made case by case or by allowing physicians to participate in Medicare or Opt Out of Medicare on a monthly basis rather than a two year rolling cycle.
Alaska’s “Direct Health Care Agreements” (Not Insurance) Law
Here is a link to the language from Alaska HCS CSSB 45(L&C) was signed into law in Sept 2024. Unfortunately this is a misguided piece of legislation. Those that drafted and passed the legislation demonstrate a clear misunderstanding of direct primary care both in terms of the much better legislation that has already been passed in 30+ states and federal law regarding Medicare and the ability to privately contract for covered services after opting out. Since the Alaska page of the bill displays in a way that is tougher to read I took the language and turned it into a PDF and highlighted the problematic sections.
In Alaska DPC physicians are required to either accept Medicare patients into their DPC practice or if their practice is closed to Medicare patients then the DPC practice must be able to prove that 20% or more of the patients in the practice either have Medicare or have no health insurance at all. Medicare does not pay for DPC services. This means that DPC physicians either have to 1) see Medicare patients for free, 2) opt out so that they can private contract with Medicare patients and then continue to let them join the practice even if they are full if they don’t hit the 20% uninsured/Medicare target, or 3) run a hybrid practice where DPC patients get great care and Medicare patients are forced in to a sad, inefficient fee for service traditional model that may well bankrupt the practice. This requirement is foolish. It does not consider federal law. It has NOTHING to do with clarifying what activities do or do not bear risk - which is the ENTIRE POINT of defining DPC as outside of insurance.
If I lived in Alaska and wanted to be a DPC physician I would likely move elsewhere. For those that choose to stay and want to practice in a DPC practice, you should try to find a location with a high number of uninsured patients to meet this 20% target. Meeting that target with Medicare patients could be challenging as Medicare patients are often less price sensitive than others with high deductible plans. I would hope that this law would not survive a constitutionality argument, but you never know what a court might decide.
Other thoughts: Section (l) is in clear conflict with section (g). You are limited to one membership price change every year and there must be at least 45 days’ notice. All monthly fees must be charged at the end of the month of service. The insurance commissioner still has broad power to “adopt regulations regulating direct health care agreements that are consistent with this section.” This is a poorly drafted bill. It reflects confusion about the DPC model on the part of those that passed it. I fear it also reflects the lobbying efforts of the Washington state insurance commissioner’s office which presented testimony to Alaska in prior sessions.
Prior State Policy Considerations - If you want to start (or restart) a conversation in your state, maybe consider picking up where things left off.
Minnesota - Efforts were made again in the 2023-2024 legislative session with HF 3648 with a the language here.
Wisconsin - Also made legislative efforts in the 2023-2024 with Senate Bill 905. Here is the proposed language.
South Carolina - Considered H 4157 in the 2023-2024 General Assembly but it did not make it out of the Labor, Commerce and Industry committee. For many years BCBS has lobbied heavily against any DPC defining efforts. We do not have official insurance commissioner guidance but a letter sent to one SC practice (discussed on the South Carolina page of DPC Frontier) does help clarify a few questions.
Pennsylvania - Considered HB 886 in the 2023-2024 Regular Session. Historically the insurance commissioner’s office in Pennsylvania has taken a more adversarial approach towards the DPC model. They have written a seven page letter to this effect on 12/12/2017 when lobbying against SB 926. This office along with the Washington state insurance commissioner’s office have lobbied heavily against efforts by the legislature to pass clarifying DPC language. Most insurance commissioners do not oppose DPC defining legislation. DPC laws are drafted to guide practices about how to appropriately communicate the model to patients, which avoids confusion and decreases audit burdens in an insurance commissioner’s office and places oversight back where it belongs (with the board of medicine).
Massachusetts - Prior legislative efforts were made with Bill H.1212 (2021-2022) and Bill H.1160 (2023-2024). Fortunately helpful insurance commissioner guidance is on the books.
Maryland - Last attempted to pass DPC defining legislation with SB 0685 in 2021.
Hawaii - Attempted to pass DPC defining legislation with SB 232 in 2019 and House Concurrent Resolution 157 in 2016.
Nevada - Last attempted to pass DPC defining legislation with SB 208 in 2017.
California - Unbeknownst to most people the state did attempt to pass direct primary care defining “not insurance” legislation in 2012 with Senate Bill 1320. The language in this effort is dated and debated the term “retainer” rather than DPC (DPC was not a common term at the time). It also referenced that clarifications were helpful not only for state definitions of insurance but also regarding the Knox-Keene Health Care Service Plan Act of 1975.
Remember that Knox-Keene requires health care providers to obtain a license or exemption from the California Department of Managed Health Care (DMHC) if they engage in global risk arrangements such as accepting a prepaid or periodic charge from enrollees. See the California page for more details.
In each of the states below I am not aware of any prior DPC “outside of insurance” defining bills.
Connecticut - No prior legislative efforts.
Delaware - No prior legislative efforts.
Illinois - No prior legislative efforts.
Rhode Island - No prior legislative efforts.
New Jersey - No prior legislative efforts.
New Mexico - No prior legislative efforts.
New York - No prior legislative efforts.
Vermont - No prior legislative efforts.
