2019 DPC Legislative Activity

Though we are early in the 2019 Legislative cycle there are whispers of legislative activity in several states. I hope to add to this post throughout the legislative season. Updated post on 05/30/19.

Here is what we know so far:

Texas has HB 1622 designed to permit physicians to dispense medications again. This bill is worth supporting. The bill allows physicians to dispense non-controlled substances directly to their patients. Physicians can delegate some of these tasks to office employees (not permitted in many states currently). Notifying the patient that they could obtain these medications at a pharmacy is an easy criteria to meet and an understandable request. It remains unclear which board (Medical or Pharmacy) has more authority (bottom of page 2 - section f) in the event of a disagreement. While a form will need to be filled out, hopefully the medical board will keep it simple. No fee was contemplated in this legislation.

Here are the NOT INSURANCE efforts:

Arizona has modified its existing (previously irrelevant) DPC law by passing companion bills in the House (HB 2113) and Senate (SB 1105). The legislation was signed by the governor on 04/17/19.

Georgia has passed SB 18 the “Direct Primary Care Act” which is a well written bill to define DPC as “not subject to state insurance laws.” It passed the senate and the house and was signed by the governor on April 25, 2019 making it the 26th state to have DPC “not insurance” defining language.

Hawaii introduced a well written SB 232 “not insurance” bill “Relating to Direct Primary Care Agreements” on 01/18/19. It has been read once in the Senate and was then assigned to a committee where it has not received much attention.

Maryland has sponsored HB 0315 and SB 0315 entitled “Insurance Law - Application to Direct Primary Care Agreements” to define DPC as outside of insurance. Neither bill has made it past a first reading in early February. The legislation received an unfavorable report by the Health and Government Operations committee and was subsequently withdrawn on 03/25/19.

Minnesotas SF 277 “Direct primary care service agreements establishment” was introduced on 01/17/18 and immediately referred to the commerce and consumer protection finance and policy committee. It passed the House without a single nay vote (67-0) on 04/04/19 and is now scheduled to be heard in the Senate. This well written legislation specifies that DPC agreements are not insurance and are not health plans. The language of the original draft bill is available here.

New Hampshire will consider HB 508 “Relative to Direct Primary Care” to defined DPC as outside of insurance. It was signed by the Governor in Aug 2019 making NH the 27th state to clearly define DPC as outside of insurance.

Pennsylvania will be making a renewed effort as discussed in this press release from Sen Pat Browne’s office at DPC Defining “not insurance” legislation.

South Carolina has proposed SB 0445 and it has been referred to the Committee on Banking and Insurance.

Wisconsin has made a renewed “not insurance” effort with Assembly Bill 26 and Senate Bill 28. The Assembly bill has been referred to the Committee on Small Business Development and the Senate bill has been referred to the Committee on Health and Human Services.

Here are the PILOT PROGRAM efforts (Medicaid and state employees):

Indiana has proposed SB 470 directing the state to attempt to obtain a federal Medicaid waiver to operate a DPC pilot program. The bill was assigned to the Committee on Health and Provider Services and has not received much attention. As readers will note from the quoted language below, there are some strings attached, and it appears that the payment comes from the state in a capitated manner to the practice rather than a voucher or reimbursement from the state to the patient. It will be important to avoid the old arranged marriage problem of prior capitated systems if this pilot moves forward. The state will also need to determine whether they will permit hybrid DPC practices to form and serve patients exclusively as part of this pilot if they were not otherwise already operating a DPC practice. I’ve use bold format to highlight much of the problematic language below. I expect that DPC physicians would not be quick to participate in this pilot due to its proposed terms. It looks more like a re-branded HMO than DPC.

“The pilot program must be limited to not more than four hundred (400) recipients from any of the following eligibility categories:
(1) Childless adults.
(2) Children.
(3) Parents of children.
(4) Individuals at least sixty-five (65) years of age.
(5) Individuals with a disability.

“In order to participate in the pilot program under this chapter as an eligible direct primary care services provider, an individual shall meet the following:
(1) Be licensed as a physician under IC 25-22.5 and practice primary care.
(2) Charge an average monthly fee to a participant of not more than seventy dollars ($70) across all eligibility categories described in section 3(a) of this chapter, weighted by the population makeup of the pilot program.
(3) Contract with the office and not accept any other third party payments for providing health care services to a pilot program participant.
(4) Provide only primary care services, including access to telemedicine and same day or next business day appointments.”

“A direct primary care services provider must do the following:

(1) Refer pilot program participants needing nonprimary care services only to nonprimary care services providers within the network of the respective office or managed care organization.
(2) For any pharmacy service not covered under the direct primary care services agreement between the direct primary care services provider and the participant, authorize the use of a drug covered only under the formulary of the respective office or managed care organization.
(3) Comply with any prior authorization requirement set by the respective office or managed care organization.
(4) Allow the office to have access to the participant's medical records for the sole purpose of aggregate data collection.”

Missouri is attempting a Medicaid pilot with HB 233 scheduled to start in January 2020 and conclude in December 2025. Similar to Indiana, this bill appears to be stuck at the committee level with no hearing scheduled at this time. It will be offered in counties of three different population sizes. (260,000 - 300,000 and 65,000 to 85,000 and 17,000 to 19,000). The pilot program shall include enrollees from each of the following MO HealthNet eligibility categories:
(1) Childless adults;
(2) Children under seven years of age;
(3) Children seven years of age and older and under nineteen years of age;
(4) Parents;
(5) Elderly individuals; and
(6) Disabled individuals.

“The monthly direct primary care enrollment fee shall not exceed a weighted average of seventy dollars per month across all eligibility categories. The average shall be weighted by the population makeup of the pilot program.”

Minnesota is also proposing something like a DPC Medicaid pilot with HF 718, though they are calling it a primary care case management program instead. This bill has been referred to the Health and Human Services Policy committee and does not seem to be getting much attention. It is missing lots of important details and contains an obligation to provide emergency care that is rather confusing.

“Under the program, patients may choose a primary care provider to act as the enrollee's case manager. Primary care physicians, nurses, and other qualified medical professionals may provide primary care case management. Specialists who routinely provide care for patients with specific or complex medical conditions may also be primary care providers for purposes of case management. Primary care providers who offer PCCM services shall also receive a flat per-member, per-month fee for performing care coordination services. The commissioner shall set case management fees to reflect the variation in time and services required for a primary care provider to coordinate care based on the complexity of a patient's health needs and socioeconomic factors that lead to health disparities. The primary care provider shall provide overall oversight of the enrollee's health and coordinate with any other case manager of the enrollee as well as ensure 24-hour access to health care, emergency treatment, and referrals.”

Oklahoma will be made an effort with SB 386 to launch a DPC Medicaid pilot program, but SB 386 did not receive a hearing in Committee. It will be automatically filed for the 2020 legislative session. Their effort is elegant in its simplicity. This is the entire text of the law (below) and this well written effort is something that other states will want to emulate:

“1. The Oklahoma Health Care Authority, upon verification of a SoonerCare member's execution of a direct primary care membership agreement as provided for in Section 4605 of Title 36 of the Oklahoma Statutes, shall reimburse the member the expense of the monthly direct primary care membership fee not to exceed Twenty-five Dollars ($25.00) per month for minors or Fifty Dollars ($50.00) per month for adults.

2. A SoonerCare member receiving reimbursement pursuant to this subsection shall immediately notify the Authority upon termination of a direct primary care membership agreement. The Authority shall verify each SoonerCare member's direct primary care membership on a quarterly basis. Such verification may include, but not be limited to, review of the member's direct primary care membership invoice.

3. The Authority shall apply for any necessary waivers with the Centers for Medicare and Medicaid Services (CMS) and promulgate such rules as are necessary to implement the provision of this subsection.”

Tennessee has proposed HB 0894 and SB 0696 which state that the “department of finance and administration shall study the feasibility of adding direct primary care as a covered benefit under one (1) or more of the basic health plans approved by the state insurance committee for eligible state employees pursuant to…” “The study must be actuarially based and include an examination of any legal barriers, estimated cost savings, and benefits to patients/physicians/insurers.”

Virginia has drafted HB 2456 to direct the “Department of Medical Assistance Services (the Department) shall prepare and submit to the Centers for Medicaid and Medicare Services an application for a waiver, pursuant to § 1115 of the Social Security Act, 42 U.S.C. § 1315, to allow the Commonwealth to implement a pilot project… provided that such regular monthly fees shall in no case exceed $100 per month for each eligible recipient and $125 per month per dual eligible recipient.” “The Director of the Department of Medical Assistance Services shall report to the Governor and the General Assembly on the status of the waiver application and implementation of the direct primary care pilot program by December 1, 2019.” The bill went to the Appropriations Committee in early February and has not been receiving attention.

Here are the FEDERAL TAX CORRECTION efforts:

At the federal level efforts to make an HSA tax correction continue. These efforts have been underway for several years, as evidenced by around 30 pieces of federal legislation revealed in a “direct primary care” search. Hopefully we will cross the finish line with one of the few bipartisan ideas in healthcare this year. The first piece of official legislation in the 116th Congress (2019-2020 session) to mention direct primary care is Senate Bill 12 - The Health Savings Act of 2019. This legislation offers a 223(c) correction but does not address the 213(d) (medical expense) problem. In section 205 of the bill it states that DPC service arrangements “shall not be treated as a health plan… and shall not be treated as insurance.”

HR 603 attempts to solve the medical expense 213(d) problem by referencing section 223(d)(2) and then omits the 223(c) issue.

HR 457 the “Health Savings Account Act” contains clean 213(d) and 223(c) corrections. This language was pulled from the original Primary Care Enhancement Act that has been offered in prior years. See below:

(a) In General.—Section 223(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(6) TREATMENT OF DIRECT PRIMARY CARE SERVICE ARRANGEMENTS.—An arrangement under which an individual is provided coverage restricted to primary care services in exchange for a fixed periodic fee or payment for such services—

“(A) shall not be treated as a health plan described in subclause (I) or (II) of paragraph (1)(A)(ii) for purposes of such paragraph, and

“(B) shall not be treated as insurance for purposes of subsection (d)(2)(B).”.

(b) Certain Provider Fees To Be Treated As Medical Care.—Section 213(d) of such Code is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph:

“(4) PERIODIC PROVIDER FEES.—The term ‘medical care’ shall include—

“(A) periodic fees paid to a primary care physician for a defined set of medical services or the right to receive medical services on an as-needed basis, and

“(B) pre-paid primary care services designed to screen for, diagnose, cure, mitigate, treat, or prevent disease and promote wellness.”

Are you aware of additional legislative activity? Please comment below!