Texas

Texas became the 13th state to enact Direct Primary Care legislation on May 28, 2015 when House Bill 1945 "An Act Relating to the Provision of Direct Primary Care" was signed by the governor.  The law, now reflected in the Texas Occupations Code Chapter 162 Subchapter F, is generally well written and is helpful for DPC physicians.  It protects physicians from many scenarios beyond the most concerning and obvious potential opponent (the state insurance commissioner). The Texas defining DPC language varies some from other states by requiring DPC practices to be of broader scope. Note the “And” rather than the “Or” in most sections below:

“Primary medical care service" means a routine or general health care service of the type provided at the time a patient seeks preventive care or first seeks health care services for a specific health concern, is a patient's main source for regular health care services, and includes:
(A) promoting and maintaining mental and physical health and wellness;
(B) preventing disease;
(C) screening, diagnosing, and treating acute or chronic conditions caused by disease, injury, or illness;
(D) providing patient counseling and education; and
(E) providing a broad spectrum of preventive and curative health care over a period of time.

In other words, for a practice to labeled DPC it must be 1) capable of handling an undifferentiated complaint (either acutely or chronically - not necessarily both), 2) capable of offering preventive care, and 3) offering continuity of care over time.

Workers Compensation is specifically excluded from inclusion in any DPC agreements in Texas.

DPC patients and physicians are protected from discrimination from third party payors, facilities, etc. solely due to their DPC status.

It is also worth noting that a proposed constitutional amendment favoring "Direct Care," but not specifically mentioning DPC or providing any business of insurance protections, was previously authored in 2013 but died in committee in April of that same year. Be sure to review the Texas Insurance Code when planning your DPC practice, and note that Texas is one of the harshest states when it comes to the prohibition of in-office dispensing of medications (you are essentially limited to a three day supply).  Fortunately the Texas Academy of Family Physicians is supportive of the DPC model.  When starting your DPC practice and deciding on the type of entity you plan to form look to this informational page from the Texas Secretary of State.  

DISPENSING

For those seeking additional information about in office dispensing hurdles, please review the text of the Texas Occupations Code, Title 3 Health Professions, Subtitle B Physicians, Chapter 158 Authority of Physician to Provide Certain Drugs and Supplies.  The problem is also discussed on pages 6 & 7 of this review manuscript on dispensing.  Attempts have been made to correct this law, but the pharmacy lobby has repeatedly protected this bad legislation by peddling alleged safety concerns to naïve state policy makers.  Physicians are well versed in drug interactions, especially for the small amount (likely 20-40) of medications they would be dispensing regularly.  

Fortunately Michael Garrett, MD (a DPC Physician) and Kris Held, MD (an ophthalmologist) have joined up with the Institute for Justice to make an effective state constitutional law argument against the state boards of both medicine and pharmacy. Here is a copy of the complaint that was filed in June 2019. They argued that the law violated Article I, Section 19 of the Texas Constitution, which protects the right to pursue a chosen business free from unreasonable governmental interference. They also argued that the law violated Article I, Section 3 of the Texas Constitution, which forbids the state from drawing unreasonable and protectionist distinctions between similar groups. Unfortunately the case was lost at the district court level on 12/24/20 and has been appealed.

TX Sec. 158.003. DISPENSING OF DANGEROUS DRUGS IN CERTAIN RURAL AREAS.

(a) In this section, "reimbursement for cost" means an additional charge, separate from that imposed for the physician's professional services, that includes the cost of the drug product and all other actual costs to the physician incidental to providing the dispensing service. The term does not include a separate fee imposed for the act of dispensing the drug itself.

(b) This section applies to an area located in a county with a population of 5,000 or less, or in a municipality or an unincorporated town with a population of less than 2,500, that is within a 15-mile radius of the physician's office and in which a pharmacy is not located. This section does not apply to a municipality or an unincorporated town that is adjacent to a municipality with a population of 2,500 or more.

(c) A physician who practices medicine in an area described by Subsection (b) may:
(1) maintain a supply of dangerous drugs in the physician's office to be dispensed in the course of treating the physician's patients; and
(2) be reimbursed for the cost of supplying those drugs without obtaining a license under Chapter 558.

(d) A physician who dispenses dangerous drugs under Subsection (c) shall:
(1) comply with each labeling provision under Subtitle J applicable to that class of drugs; and
(2) oversee compliance with packaging and recordkeeping provisions applicable to that class of drugs.

(e) A physician who desires to dispense dangerous drugs under this section shall notify both the Texas State Board of Pharmacy and the [Texas Medical] board that the physician practices in an area described by Subsection (b). The physician may continue to dispense dangerous drugs in the area until the Texas State Board of Pharmacy determines, after notice and hearing, that the physician no longer practices in an area described by Subsection (b).

If starting a new practice, physicians might consider locating it in one of the following counties (each with no pharmacy and fewer then 5,000 residents in my searches): Hudspeth, Culberson, Roberts, Oldham, Motley, Cottle, Cochran, Kent, King, Throckmorton, Borden, Sterling, Glasscock, Loving, Irion, Menard, Edwards, Real, Terrell, or Kenedy. Here is a link to an ABC story that includes an interactive map showing the locations of each pharmacy across not just Texas but the entire US. It may be useful as you contemplate the location of your practice in Texas. Notably Dallam, Delta, and Duval counties also lack a pharmacy, but their populations are greater than 5,000 people and they would need to meet the rule based on the town population without running afoul of the “adjacent to” language. Of course physicians could also start a practice just across the border in NM, OK, AR, or LA.

MEDICAID

Please review the language of the Texas Medicaid Provider Procedures Manual. The language quoted below can be confusing. It states that on a case by case basis Texas physicians may sign “Private Pay Agreements” with patients permitting the physician and patient to contract with the mutual understanding that Medicaid will not be billed. The language is unclear, but likely only applies to noncovered services rather than covered services. Also note that if you wanted to opt out of Medicare and still see patients in the traditional Medicaid program this (admittedly uncommon) approach is not permitted in Texas. If you are a Texas Medicaid participating provider it looks like privately contracting for covered services is prohibited. I am not a Texas attorney and I am not aware of any groups that have attempted to investigate this with any detail.

1.1.10.15 Medicare Participation

“Under federal law, Medicaid is the payor of last resort, so Medicare-covered services must first be billed to and paid by Medicare. Therefore, in order to be eligible to enroll in Texas Medicaid, a provider must be a Medicare participating provider. Certain types of providers, however, are not required to meet the Medicare participation requirement, including: Pediatrics, OB/GYN, and other providers “if they do not serve Medicare-eligible individuals.”

1.7.11 Billing Clients

“Providers must certify that they will accept the reimbursement paid by Texas Medicaid for covered services and will not bill an eligible client for covered services.”

1.7.11.1 Client Acknowledgment Statement

“A provider is allowed to bill the following to a client without obtaining a signed Client Acknowledgment Statement:

All services provided as a private pay patient. If the provider accepts the client as a private pay patient, the provider must advise clients that they are accepted as private pay patients at the time the service is provided and responsible for paying for all services received. In this situation, HHSC strongly encourages the provider to ensure that the client signs written notification so there is no question how the client was accepted. Without written, signed documentation that the Texas Medicaid client has been properly notified of the private pay status, the provider cannot seek payment from an eligible Texas Medicaid client.”

The suggested Texas Medicaid Private Pay Agreement language is very brief:

“I understand that _________________________________ is accepting me as a private pay patient for the period of _____________________, and I will be responsible for paying for any services that I receive. The provider will not file a claim to Medicaid for the services that are provided to me.”
Signature _____________ Date ______________