Direct Primary Care: An Alternative to Traditional Insurance - Jay Keese
1. What Is Direct Primary Care?
• High-functioning primary care and prevention services
• Direct agreement between doctor and patient
• Monthly retainer or periodic fee paid by individual, employer,
health plan, or other payer
• No third party, fee for service billing
• Significantly reduced administrative costs
• Improved health outcomes
• Medical services: Not insurance or health plan
• Defined in ACA - §1301 (A) (3) and...
• 23 State Laws (e.g. WA 48.150 RCW)
• Medicare/Medicaid Pilot Outlined in HHS Budget
2. Direct Primary
Care in 2017
• 700 DPC Practices in 48 States + DC
• Median fee about $70 per month *
• Better outcomes, patient
satisfaction
• Savings of up to 20% *
• Offered through employers,
Medicare Advantage, Medicaid
MCOs, State Employees Plans
* Journal American Board of Family Medicine , Nov. 2015
3. Inpatient Admits PTMPY
51
163
49
250
183 187
Control Group (246) Study Group (264)
Pre-Period Post-Period Pre-Period Post-Period Pre-Period Post-Period
Las Vegas Population
3
35%
6%
2%
DPC Creates Economic Value
Inpatient hospital admissions -37% * - Overall reductions in cost of care of up 20% **
25.4 % reduction in claims costs + reduction in risk scores reported by employers***
Data Sources:
* Iora Claims Database
** Journal American Board of Family Medicine , Nov. 2015
*** Nextera/Digital Globe Case Study June 1 – Dec. 31, 2015
Why?
• Significantly Reduced Administrative
expenses – No claims
• Reduced overall health costs through better
primary care utilization
• Predictable fixed costs for employers/payers
4. Policy Issues:
State Insurance
Laws
• Laws define DPC outside insurance regulation in 23 states.
• Legislation may be needed to bring DPC to Medicaid – 1332
Waivers
• States weigh in with Congress on waivers/other issues
• State employees plans use of DPC
Tax Code - HSAs
• DPC not a qualified medical expense {IRC 213 (d)}
• IRS considers DPC a “health plan” {IRC 223 (c)}: DPC
disqualifies HSAs
• Primary Care Enhancement Act S. 1358; H.R. 365 clarifies tax
code for both issues
Medicare
Medicaid/VA
• CMS Pilot Outlined in Trump Budget for FY 2018
• CMS RFI for CMMI New Direction
• Medicare “opt out Issues”
• DPC now offered with Medicare Advantage... Medicaid
MCOs
• MACRA payment reforms lead to path as APM?
• VA Choice Program?
5. 1. Washington – 48-150 RCW
2. Utah – UT 31A-4-106.5
3. Oregon – ORS 735.500
4. West Virginia – WV-16-2J-1
5. Arizona – AZ 20-123
6. Louisiana – LA Act 867
7. Michigan – PA-0522-14
8. Mississippi – SB 2687
9. Idaho – SB 1062
10. Oklahoma – SB 560
11. Missouri – HB 769
12. Kansas – HB 2225
13. Texas – HB 1945
14. Nebraska – Legislative Bill 817
15. Tennessee – SB 2443
16. Wyoming – SF0049
17. Arkansas – HB 1161
18. Kentucky – SB 79
19. Colorado – HB 17-1115
20. Indiana – SB 303
21. Virginia - HB 2053
22. Alabama - SB 94
23. Maine - S.P. 472
• Laws generally define DPC as a medical service outside
of state insurance regulation, offer varying levels of
consumer protection
• Restrictive WV and AR laws modified in 2017
• MT Bill vetoed by governor.
• OR and AZ laws need updates
• FL, and GA bills introduced but have not passed
• PA legislation just introduced.
DPC Laws Passed in 23 States – 8 New Laws in 2017
6. NJ State Employees Unions
• Direct Primary Care Medical Home
Pilot Program Stared in 2017
• R-Health DPC in Burlington, Camden,
and Mercer counties, Trenton Area
• by Sen. Majority Leader Stephen
Sweeney (D-NJ); Supported by Gov.
Chris Christie (R-NJ)
• Backed by 9 public employee unions
• Voluntary program
• Up to 800,000 police officers,
firefighters, and state, county and
municipal employees and family
members
• Aetna, Horizon Blue Cross TPAs
7. The Primary Care
Enhancement Act
• Bipartisan Bill – H.R. 365 Reps Erik Paulsen
(R-MN) and Earl Blumenauer (D-OR) S. 1358
Sens. Bill Cassidy, MD (R-LA) and Maria
Cantwell (D-WA)
• Clarifies HSA Provisions regarding DPC
in the Tax Code
• DPC is not a health plan under IRC
§223 (c)
• DPC is a qualified health expense
under the IRC §213 (d)
• Allows individuals with HSAs to pay
for DPC services with HSAs.
• Provisions also found in Health Savings
Act S. 403/H.R. 1175
8. CMS Direct Primary Care Initiative
– Engaged with CMS on rollout
2018 HHS Budget in Brief Page 62
• DPCC Working with CMS Innovation Center on Design
• Likely to Start in Medicare, but move to Medicaid
• Three or more DPC models could be tested
• Small Practice – Flat Fee
• Small –Midsize Practice, Flat Fee Shared Savings
• Larger Team Based Practice
– Flat Fee with Upside and Downside Risk
• States may have option to allow beneficiary to make
direct payment using voucher or HSA-like account
• Policy Issues to be addressed:
• Medicare Opt Out
• IRS HSA changes needed to ensure balanced
multi-payer mix including employers
----- Meeting Notes (9/24/15 13:55) -----
America's Agenda: Core members International unions. 20 million lives in taft hatley 15 million in self funded plans with union participants. 1/3 Mark Kapsa - Chief Economist.
New Jersey
PCMH: FFS and not scalable. Not accountable.
Manage referrals -
Horizon BCBS/Aetna
Polling data
Public Sector Unions - 800,000 lives in NJ.
----- Meeting Notes (9/24/15 15:33) -----
State Health Benefits Program DPCMH Pilot
Jim Barr
Julie: Mentorship program.
Transformed.
PMPM:
Timetable for DPC by March.
Three year evaluation Quality Patitent Satisfaction and Cost.
2017 Contract will require DPC practices in the network.
Learning collaboratives - AAFP? Unions. Steward based mobilzation program.
Practices that will be willing to bear risk will be referred. Lower up front fee. Global Capitated fee.
Chapter 11 Plan design.
No garunteed. Camden Union Bergen. 160,000 lives.
Credentialed as in-network providers.
14 providers identified by Horizon.
3 new medical schools.
Downstream providers -
Data Availability
Subcommittee of uinios reps/state legislture.
Cooper Camden. NO.
Share the reg. Partner on development of the doc specs. Share data.