The Maine Legislature could vote in 2017 on whether to exempt direct primary care (DPC) practices from health insurance regulations.
DPC arrangements are private agreements in which patients pay physicians a monthly membership fee, usually $50 to $125, in exchange for a predefined array of preventive care services, tests, office visits, and minor procedures. DPC physicians do not bill insurance companies or government payers, and they typically negotiate discounts for non-primary care services not covered under their agreements.
As of December 2016, 13 states had passed laws specifying DPC agreements do not constitute health insurance and should not be regulated as though they are insurance, according to DPCFrontier.com. Maine has not passed DPC legislation, the website states.
Maine state Rep. Eric Brakey (R-Androscoggin), chairman of the legislature’s joint committee on Health and Human Services, told Health Care News, “I am familiar with direct primary care and have spoken with the Maine Heritage Policy Center about potentially serving as the sponsor for such legislation.”
Liam Sigaud, an analyst at the Maine Heritage Policy Center, says DPC is significantly different from insurance.
“Direct primary care is essentially prepaid routine medical care,” Sigaud said. “It doesn’t cover the catastrophic injuries traditionally protected against by insurance.”
Stymying the growth of DPC in Maine is the Bureau of Insurance’s potential to restrict the practices, which could qualify as health insurers under state law, Sigaud says.
“These regulations include the need to submit detailed annual financial reports to state regulators, undergo a comprehensive audit every five years, and maintain a minimum of $1 million of capital reserves,” Sigaud said. “Though the insurance bureau has not yet enforced these regulations with respect to direct primary care practices, this uncertainty is deterring several physicians in the state from transitioning to direct primary care.”
Clearing Federal Hurdles
Brakey says the Affordable Care Act (ACA) tax penalty on people without health insurance deters some from enrolling in a DPC practice.
“My understanding is that there are two main difficulties around laws relating to direct primary care,” Brakey said. “One is at the federal level, and that includes some people having to simultaneously pay for an insurance plan and a direct primary care plan.”
Legally distinguishing Maine’s DPC practices from insurers would exempt those practices from ACA requirements for insurers, Brakey says.
“The second [difficulty] is at the state level,” Brakey said. “If direct primary care is considered insurance, then it’s required to follow all insurance regulations, including with respect to things like Obamacare. In Maine, if we clarify that it’s not insurance, then we can be exempt from some of those restrictions.”
Patients as Customers
Brakey says freeing physicians to try new business models allows them to increase quality and efficiency for patients.
“The great thing about the free market is that people come up with great ideas about how to innovate goods and services,” Brakey said. “In the health care marketplace, we have gradually moved away from the situation where the patient is the customer. When the patient is the customer, the provider of goods and services caters to that customer. Over time, prices go down and quality goes up.”
Federal and state regulations, and the industry’s emphasis on third-party payers, have turned patients into products sold to insurers and doctors, Brakey says.
“Today, insurance companies and government are the customers, and the patient is almost just the product,” Brakey says. “We aren’t being catered to anymore. One great thing about direct primary care is that it restores that relationship. The patient is the customer again, and you cut out a third party. I think that is one of the simplest ways to empower patients again.”
Protection from Overregulation
Sigaud says lawmakers can catalyze the growth of DPC practices in the 2017 legislative session by protecting them from overregulation.
“There is only one key reform at the state level that we are advocating: exempting direct primary care practices from onerous insurance regulations,” Sigaud said. “By reforming these regulations, lawmakers will encourage physicians to open direct primary care practices in Maine, allowing the industry to flourish.”
Jordan Finney ([email protected]) writes from Boise, Idaho.
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This article has been updated.