Virginia became the 21st state to pass DPC "not insurance" legislation on 04/26/17 when the governor signed SB 800. The House and Senate previously passed helpful DPC legislation in 2016, but it was promptly vetoed by the governor. Fortunately the legislation was offered again in 2017 (HB 1393 and SB 800) and this time it was signed by the governor. Be sure to review the Virginia Insurance Code when planning your DPC practice. The passage of SB 800 will amend the Code of Virginia by adding in Chapter 29 of Title 54.1 an article numbered 10, consisting of sections numbered 54.1-2997 and 54.1-2998, relating to direct primary care agreements. Below are some of the most relevant provisions from the Code of Virginia Title 38.2 Insurance.
"Insurance" means the business of transferring risk by contract wherein a person, for a consideration, undertakes (i) to indemnify another person, (ii) to pay or provide a specified or ascertainable amount of money, or (iii) to provide a benefit or service upon the occurrence of a determinable risk contingency. Without limiting the foregoing, "insurance" shall include (i) each of the classifications of insurance set forth in Article 2 (§ 38.2-101 et seq.) of this chapter and (ii) the issuance of group and individual contracts, certificates, or evidences of coverage by any health services plan as provided for in Chapter 42 (§ 38.2-4200 et seq.) of this title, health maintenance organization as provided for in Chapter 43 (§ 38.2-4300 et seq.) of this title..."
"Nothing contained in this chapter shall prohibit any physician (i) as an individual, (ii) in partnership with other physicians, or (iii) as part of a professional corporation of physicians, from entering into agreements directly with his own patients, or with a parent, guardian, conservator, spouse or other family member acting in a patient's behalf, involving payment for professional services to be rendered or made available in the future."
This sentence is certainly helpful for any “private” physician, and makes Virginia by default a more friendly state than most, but it stops short of providing a black and white definition of direct primary care and the theoretical "business of insurance" risk remains a possibility.
"The Commission shall have no jurisdiction to adjudicate controversies growing out of subscription contracts. A breach of contract shall not be deemed a violation of this chapter."
This sentence is also helpful for DPC practices, but again stops short of being dispositive or eliminating the detailed “risk” analysis that is currently likely to take place on a contract by contract basis. A court may or may not decide to classify each individual DPC agreement as a type of protected “subscription contract.”
We will not list the full language here due to space constraints, but Virginia's HMO provisions appear to be less troublesome than most states. A DPC physician's (likely successful) argument would be that a DPC arrangement amounts to a type of “limited health care services” arrangement that falls outside the scope of HMO regulation.