Direct Primary Care (“DPC”) is increasing in popularity in the United States as an alternative payment model for primary care medical services. Instead of fee-for-service insurance billing, typically a DPC medical provider enters into an agreement with its patients and charges its patients a monthly, quarterly, or annual fee that covers all or most primary care services. Given the fact that a DPC medical provider takes on a certain amount of risk in agreeing to provide primary care services to patients for a fixed amount (regardless of how often a patient is seen by the provider), there were concerns that such an arrangement could be interpreted under Idaho law as the provision of insurance. With the passage of the Idaho Direct Medical Care Act1 (the “Act”), and subsequent signing by Governor Butch Otter, Idaho is now the ninth state in the country to pass legislation to ensure that DPC medical providers are not treated as insurance products by state regulators.
Physicians providing DPC services to patients must comply with the following requirements under the Act:
- Direct Care Agreements. Under the Act, patients and physicians must enter into “Direct Care Agreements.”2 Direct Care Agreements must be in writing and identify the following information:
- The medical provider and the patient;
- The general scope of services as well as the specific services to be provided by the medical provider;
- The location or locations where services are to be provided and whether out-of-office services are included;
- The amount of the direct fee and the time interval at which it is to be paid; and
- The term of the Direct Care Agreement and the conditions upon which it may be terminated by the medical provider. The Direct Care Agreement must be terminable at will by written notice from the patient to the medical provider.
- Refund Upon Termination. If either party provides notice of termination of the Direct Care Agreement, the medical provider must refund to the patient all unearned direct fees within thirty (30) days following the notice of termination. “Unearned” is not defined by the statute, so it would be advisable to include language in the Direct Care Agreement addressing this issue.
- Required Disclaimer. The Direct Care Agreement must include the following disclaimer: “This agreement does not provide comprehensive health insurance coverage. It provides only the services described herein. It is recommended that insurance be obtained to cover medical services not provided for under this direct care agreement.”3
- Sale or Transfer of Direct Care Agreements. The statute also provides that Direct Care Agreements may not be sold or transferred without the written consent of the other party. Because Direct Care Agreements are individual agreements between a medical provider and a patient, the agreements cannot be sold to a group, employer, or group of subscribers. The statute is clear, however, that it does not prohibit the presentation of marketing materials to groups of potential patients or their representatives.4
- Insurance Billing. A DPC medical provider is prohibited from billing an insurer for the services provided under a Direct Care Agreement. A patientmay submit a request for reimbursement to an insurer if permitted under the patient’s insurance policy. DPC medical providers are not prohibited from submitting claims to insurance for services notprovided under a Direct Care Agreement.5 The language of the Direct Care Agreements outlining the scope of services provided is incredibly important for this reason.
By removing a potential barrier to starting a DPC practice, the legislature affirmed its support for personal responsibility and “cost-effective delivery of medical services by encouraging innovative use of direct patient-provider practices for primary and specialty medical care.”6