State Legislative Conference

1. What Is Direct Primary Care?
• High-functioning primary care and prevention services
• Direct agreement between doctor and patient
• Monthly retainer or periodic fee paid by individual, employer,
health plan, or other payer
• No third party, fee for service billing
• Significantly reduced administrative costs
• Improved health outcomes
• Medical services: Not insurance or health plan
• Defined in ACA - §1301 (A) (3) and...
• 23 State Laws (e.g. WA 48.150 RCW)
• Medicare/Medicaid Pilot Outlined in HHS Budget

2. Direct Primary
Care in 2017
• 700 DPC Practices in 48 States + DC
• Median fee about $70 per month *
• Better outcomes, patient
satisfaction
• Savings of up to 20% *
• Offered through employers,
Medicare Advantage, Medicaid
MCOs, State Employees Plans
* Journal American Board of Family Medicine , Nov. 2015

3. Inpatient Admits PTMPY
51
163
49
250
183 187
Control Group (246) Study Group (264)
Pre-Period Post-Period Pre-Period Post-Period Pre-Period Post-Period
Las Vegas Population
3
35%
6%
2%
DPC Creates Economic Value
Inpatient hospital admissions -37% * - Overall reductions in cost of care of up 20% **
25.4 % reduction in claims costs + reduction in risk scores reported by employers***
Data Sources:
* Iora Claims Database
** Journal American Board of Family Medicine , Nov. 2015
*** Nextera/Digital Globe Case Study June 1 – Dec. 31, 2015
Why?
• Significantly Reduced Administrative
expenses – No claims
• Reduced overall health costs through better
primary care utilization
• Predictable fixed costs for employers/payers

4. Policy Issues:
State Insurance
Laws
• Laws define DPC outside insurance regulation in 23 states.
• Legislation may be needed to bring DPC to Medicaid – 1332
Waivers
• States weigh in with Congress on waivers/other issues
• State employees plans use of DPC
Tax Code - HSAs
• DPC not a qualified medical expense {IRC 213 (d)}
• IRS considers DPC a “health plan” {IRC 223 (c)}: DPC
disqualifies HSAs
• Primary Care Enhancement Act S. 1358; H.R. 365 clarifies tax
code for both issues
Medicare
Medicaid/VA
• CMS Pilot Outlined in Trump Budget for FY 2018
• CMS RFI for CMMI New Direction
• Medicare “opt out Issues”
• DPC now offered with Medicare Advantage... Medicaid
MCOs
• MACRA payment reforms lead to path as APM?
• VA Choice Program?

5. 1. Washington – 48-150 RCW
2. Utah – UT 31A-4-106.5
3. Oregon – ORS 735.500
4. West Virginia – WV-16-2J-1
5. Arizona – AZ 20-123
6. Louisiana – LA Act 867
7. Michigan – PA-0522-14
8. Mississippi – SB 2687
9. Idaho – SB 1062
10. Oklahoma – SB 560
11. Missouri – HB 769
12. Kansas – HB 2225
13. Texas – HB 1945
14. Nebraska – Legislative Bill 817
15. Tennessee – SB 2443
16. Wyoming – SF0049
17. Arkansas – HB 1161
18. Kentucky – SB 79
19. Colorado – HB 17-1115
20. Indiana – SB 303
21. Virginia - HB 2053
22. Alabama - SB 94
23. Maine - S.P. 472
• Laws generally define DPC as a medical service outside
of state insurance regulation, offer varying levels of
consumer protection
• Restrictive WV and AR laws modified in 2017
• MT Bill vetoed by governor.
• OR and AZ laws need updates
• FL, and GA bills introduced but have not passed
• PA legislation just introduced.
DPC Laws Passed in 23 States – 8 New Laws in 2017

6. NJ State Employees Unions
• Direct Primary Care Medical Home
Pilot Program Stared in 2017
• R-Health DPC in Burlington, Camden,
and Mercer counties, Trenton Area
• by Sen. Majority Leader Stephen
Sweeney (D-NJ); Supported by Gov.
Chris Christie (R-NJ)
• Backed by 9 public employee unions
• Voluntary program
• Up to 800,000 police officers,
firefighters, and state, county and
municipal employees and family
members
• Aetna, Horizon Blue Cross TPAs

7. The Primary Care
Enhancement Act
• Bipartisan Bill – H.R. 365 Reps Erik Paulsen
(R-MN) and Earl Blumenauer (D-OR) S. 1358
Sens. Bill Cassidy, MD (R-LA) and Maria
Cantwell (D-WA)
• Clarifies HSA Provisions regarding DPC
in the Tax Code
• DPC is not a health plan under IRC
§223 (c)
• DPC is a qualified health expense
under the IRC §213 (d)
• Allows individuals with HSAs to pay
for DPC services with HSAs.
• Provisions also found in Health Savings
Act S. 403/H.R. 1175

8. CMS Direct Primary Care Initiative
– Engaged with CMS on rollout
2018 HHS Budget in Brief Page 62
• DPCC Working with CMS Innovation Center on Design
• Likely to Start in Medicare, but move to Medicaid
• Three or more DPC models could be tested
• Small Practice – Flat Fee
• Small –Midsize Practice, Flat Fee Shared Savings
• Larger Team Based Practice
– Flat Fee with Upside and Downside Risk
• States may have option to allow beneficiary to make
direct payment using voucher or HSA-like account
• Policy Issues to be addressed:
• Medicare Opt Out
• IRS HSA changes needed to ensure balanced
multi-payer mix including employers

9. www.dpcare.org
For further information contact:
Jay Keese
Executive Director,
(202) 624-1450
jpkeese@cagdc.com