February 2021 • DALLAS MEDICAL JOURNAL 27
• Increase patient compliance with preventive
care guidelines (68%).
Provider satisfaction
In general, DPC providers report being
very satisfied with their choice to practice
in the DPC model with the primary
motivators for choosing to operate a DPC
practice being “the ‘potential to provide
better primary care under a DPC model’
(96%), ‘too little time for FFS visits’ (85%),
and ‘too much FFS paperwork to complete’
(78%). Just 10% … indicated that the
‘potential to earn more under DPC’ was a
primary motivator” (Busch et al., 2020, p.
14). Most respondents also “reported that
each of the following has been better or
much better under DPC model of care:
• Overall (personal and professional)
satisfaction (99%).
• Ability to practice medicine (98%).
• Quality of primary care provided (98%).
• Relationships with their primary care
patients (97%).
• The amount of time spent on paperwork
(88%).
• The amount of time spent at the office
(73%).” Thirty-four percent “of respondents
reported having better or much better earnings
as a PCP under a DPC model of care
(Busch et al., 2020).
Workforce
One criticism of DPC from a public
policy viewpoint is that wider adoption of
the model will exacerbate the projected
primary care physician shortage (Weisbart,
2016). Even proponents of DPC admit that
this may be an effect of DPC adoption in
the short term. However, they argue that
with greater access to DPC and with more
effective and efficient delivery and use
of primary care, career satisfaction will
increase, the number of specialty referrals
will fall, and the disparity between primary
care and specialty physician compensation
could eventually shrink, incentivizing physicians
to enter and remain in the primary
care workforce (Eskew, 2016).
Current Policy Efforts
An important barrier to wider adoption
of DPC is the treatment of DPC service
arrangements by the Internal Revenue
Service (IRS) that makes individuals in
these arrangements ineligible to contribute
to a tax-favored Health Savings Account
(HSA). Generally, to qualify for an HSA, an
individual must be covered under a highdeductible
health plan (HDHP) and, with a
few exceptions, have no additional health
coverage. Under current law, the IRS Code
considers an individual in a DPC arrangement
ineligible to contribute to an HSA
and considers DPC subscription fees as
insurance and not as payment for medical
services (IRS, 2019). There are ongoing
efforts to address this issue at the state
and federal levels, as well as to include access
to DPC in public health programs.
State Level
According to the Direct Primary Care
Coalition, as of 2020, Direct Primary Care
laws have been passed in 32 states,
with pending legislation in 12 states.
In general, these laws define DPC as a
medical service outside of state insurance
regulation and offer varying levels of
consumer protection (Direct Primary Care
Coalition, 2020). In 2015, Texas became
the 13th state to enact Direct Primary
Care legislation when the Legislature
passed and the governor signed House
Bill 1945 “An Act Relating to the Provision
of Direct Primary Care.” (HB 1945, 2015).
This legislation specifies that a Direct
Primary Care service agreement is not
health or accident insurance or coverage
and is not subject to regulation by the
Texas Department of Insurance. It provides
additional protections by specifying that
no state agency, health insurer, or health
maintenance organization can prohibit,
interfere with, or initiate a legal proceeding
against a physician solely because the
physician provided DPC, or against a
person solely because the person paid a
fee for DPC. However, as explained below,
further efforts at the federal level are
needed.
Bills have also been introduced in
Indiana, Missouri, Minnesota, Oklahoma,
Colorado, and Iowa that include
provisions to expand DPC to Medicaid
(Eskew, 2020). New Jersey (NJ Treasury,
n.d.) and Nebraska (Nebraska Dept. of
Administrative Services, n.d.) currently
offer DPC as an option in their state
employee plans, and Tennessee introduced
a bill in the General Assembly in 2019
that, if passed, would have required the
Department of Finance and Administration
“to study the feasibility of adding direct
primary care as a covered benefit
under one or more of the basic health
plans approved by the state insurance
committee for eligible state employees”
(HB 0894/SB 0696, 2019).
Federal Level
While language in passed or pending
state legislation, as well as in the Affordable
Care Act,5 expressly states that
DPC is not insurance, the IRS maintains
the viewpoint that a contract with a DPC
practice constitutes a second health plan,
which makes an individual with such an
arrangement ineligible to use or contribute
to a health savings account (HSA). On June
24, 2019, the president issued an “Executive
Order on Improving Price and Quality
Transparency in American Healthcare to
Put Patients First” urging the secretary of
the treasury to propose regulations that
would potentially clarify that DPC expenses
are qualified health expenses under 213(d)
of the Internal Revenue Code (Executive
Order No. 13,877, 2019).
On June 10, 2020, the Treasury Department
and the IRS released proposed
regulations stipulating that because they
typically provide for primary care services
such as physical examinations, vaccinations,
urgent care, and laboratory testing,
DPC arrangements generally count
as health insurance that is not a highdeductible
health plan (HDHP)6 and that
is not disregarded coverage7 or preventive
care. Since the proposed rule failed to
address the key issue of redefining DPC as
a medical service outside of health plan or
insurance regulation, individuals covered
by a DPC arrangement would continue to
be precluded from contributing to an HSA
(Department of Treasury, 2020).
Since at least 2014, a number of stakeholders
have made efforts to provide input
and urge the IRS to change its position on
DPC.8 The IRS has formally responded on
at least two occasions but has given no
indication that its position would change
without legislative action.9
Over the past several years, a number
of bills have been introduced at the
federal level that include provisions that
would allow patients and their employers
to securely use DPC plans through
HSAs by providing clarification that DPC
subscription fees are a qualified medical
expense under 213(d)10 and are not
health plan fees as defined by current
law under 223(c). For example, S. 3112,
the Personalized Care Act of 2019
(Personalized Care Act, 2019), sponsored
by Sen. Ted Cruz and introduced in the
Senate on December 19, 2019, and H.R.
5596, the Personalized Care Act of 2020
(Personalized Care Act, 2020), sponsored
by Rep. Chip Roy (R-TX) and introduced in
the House on January 14, 2020, would
include these provisions for all DPC
arrangements. Another bill introduced
in the House by Rep. Roy, the Veterans
Access to Direct Primary Care Act, would
require “the Department of Veterans
Affairs (VA) to implement a five-year pilot
program to provide eligible veterans with
the option to receive primary care services
from a non-VA healthcare provider under
a direct primary care service arrangement
through the use of a veteran health
savings account” (H.R.6259, 2020;
Veteran Access to Direct Primary Care Act,
2020).