Kentucky enacted excellent DPC legislation (SB 79 on 03/17/17) to define DPC as outside of insurance!  It became effective on 06/29/2017. This made Kentucky the 18th state with DPC legislation on the books!  There are multiple DPC practice in Kentucky.  Be sure to review the Kentucky Insurance Code when designing your DPC patient agreements.

Kentucky’s DPC Law:

KRS 304.1-120 Application of code to particular types of organizations.
No provision of this code shall apply to:
(9) A direct primary care agreement established under KRS 311.6201, 311.6202, 314.198, and 314.199.

Note that 314.198 and 314.199 are restatements of the language in 311.6201 and 311.6202 included in their entirety below). I have used bold language in the most important sections for reader emphasis purposes.

KRS 311.6201 Definitions for KRS 311.6201 and 311.6202.
As used in this section and KRS 311.6202:
(1) "Direct primary care membership agreement" means a written contractual agreement between a primary care provider and an individual patient or his or her legal guardian that:
(a) Is for an agreed-upon fee over an agreed-upon period of time;
(b) Describes the primary care services to be provided in exchange for the agreed-upon fee;
(c) States that the primary care provider shall not bill a health benefit plan or the Medicaid program on a fee-for-service basis for the primary care services provided under the agreement;
(d) Specifies automatic agreement renewal periods;
(e) Specifies any additional fees that may be charged for primary care services that are not included in the agreement;
(f) States that the patient is not required to pay more than twelve (12) months of the agreed-upon fee in advance;
(g) States that the agreed-upon fee and any additional fees may be paid by a third party;
(h) Allows either party to terminate the agreement in writing, without penalty or payment of a termination fee, after notice;
(i) Provides that, upon termination of the agreement by the patient or his or her legal guardian, all unearned fees are to be returned to the patient, his or her legal guardian, or any third-party payor; and
(j) Contains a conspicuous and prominent statement that the agreement does not constitute a health benefit plan and does not meet any individual health benefit plan mandate that may be required by federal law;

(2) "Health benefit plan" has the same meaning as in KRS 304.17A-005;

(3) "Primary care provider" means a physician as defined by KRS 311.550 or a physician's medical practice that enters into a direct primary care membership agreement;

(4) "Primary care service" means the screening, assessment, diagnosis, and treatment for the purpose of promotion of health or the detection and management of disease or injury within the competency and training of the primary care provider; and

(5) "Third party" means a legal guardian, the individual patient's employer, a spouse's employer, a family member of the patient, or a state-sponsored direct primary care payment program. "Third party" does not include a network designed to merely accept payment from a patient and then direct the patient to one (1) of several independently owned clinics for the delivery of care.

KRS 311.6202 Receipt of primary care services under direct primary care membership agreement.

(1) Receiving primary care services under a direct primary care membership agreement shall not require a patient or his or her legal guardian to forfeit coverage under a health benefit plan.

(2) The offer or provision of primary care services under a direct primary care membership agreement shall not be deemed an offer or provision of coverage under a health benefit plan and shall not be regulated under KRS Chapter 304.

(3) A primary care provider shall not be required to obtain a license to market, sell, or offer to sell a direct primary care membership agreement.

(4) All services provided pursuant to this section shall be consistent with this chapter for physicians.

Dispensing: Fortunately Kentucky does not have any prohibition of in-office dispensing. According to KRS 217.182 Sale, distribution, administration, prescription, or possession of legend drugs: “A duly licensed manufacturer, distributor, or wholesaler may sell or distribute a legend drug to… a practitioner” and “[a] practitioner may: (a) Administer, dispense, or prescribe a legend drug for a legitimate medical purpose and in the course of professional practice; or (b) Distribute a legend drug to a person licensed to administer, dispense, distribute, or possess a legend drug. Please see pages 75 and 76 of this detailed KMA Legal Handbook. If a scheduled medication is dispensed this must be reported to KASPER and separate regulations apply (also summarized by the KMA here).

Medicaid Private Contracting Prohibition: Medicaid changes required through the ACA are creating hurdles ordering tests, medications, and labs in many states by physicians that are not "participating" in Medicaid.  In Kentucky this fight has been exacerbated by an executive order from the (former) governor.

Consider the following language from 907 KAR 3:005. Coverage of physicians' services:  The language around the phrase "Non-Medicaid basis" has grown problematic.  

"Non-Medicaid basis" means a scenario in which:
      (a) A provider provides a service to a recipient;
      (b) The Medicaid Program is not the payer for the service; and
      (c) The recipient is liable for payment to the provider for the service."

"Notify the recipient referenced in paragraph (b) of this subsection of the provider’s decision to accept or not accept the recipient on a Medicaid basis prior to providing any service to the recipient.
      (b) A provider may provide a service to a recipient on a non-Medicaid basis:
      1. If the recipient agrees to receive the service on a non-Medicaid basis before the service begins; and
      2. The service is not a Medicaid-covered service.
      (c)1. If a provider renders a Medicaid-covered service to a recipient, regardless of if the service is billed through the provider’s Medicaid provider number or any other entity including a non-Medicaid provider, the recipient shall not be billed for the service."

As written, the effect of the governor's executive order is to prohibit Medicaid patients from signing up for DPC memberships regardless of the provider's status.  This must be corrected!

Insurance Related Definitions from the Kentucky Revised Statutes:

304.1-030 "Insurance" defined.  "Insurance" is a contract whereby one undertakes to pay or indemnify another as to loss from certain specified contingencies or perils called "risks," or to pay or grant a specified amount or determinable benefit or annuity in connection with ascertainable risk contingencies, or to act as surety.

304.1-040 "Insurer" defined.  "Insurer" includes every person engaged as principal and as indemnitor, surety, or
contractor in the business of entering into contracts of insurance. 

304.5-040 "Health insurance" defined.  "Health insurance" is insurance of human beings against bodily injury, disablement, or
death by accident or accidental means, or the expense thereof, or against disablement or
expense resulting from sickness, and every insurance appertaining thereto.

304.38-030 Definitions for subtitle (regarding Health Maintenance Organizations).
"Health care services" means any services included in the furnishing to any individual of medical, optometric, or dental care, or hospitalization or incident to the furnishing of such care or hospitalization, as well as the furnishing to any person of any and all other services and goods for the purpose of preventing, alleviating, curing, or healing human illness, physical disability, or injury;
"Health maintenance organization" means any person who undertakes to provide, directly or through arrangements with others, health care services to individuals enrolled with such an organization on a per capita or a predetermined, fixed prepayment basis. A health maintenance organization is authorized to provide all health care services.