What are the consequences of rejecting insurance payment?

Direct care practices operate just as their name implies – they provide care directly to their patients, eliminating the insurance middleman. Direct care physicians focus on preventative care, with a goal of maintaining their patients’ health and well being to help prevent major illnesses and injuries. By reducing the need to secure prior approval and then insurance reimbursement, direct care physicians are better able to focus on the needs of their patients without the administrative overhead.

Rob Lamberts, MD, a board-certified internist and pediatrician with a direct primary care practice in Augusta, Georgia, writes in Medical Economics that one result of the direct care practice eliminating the insurance payments is an increased focus on reducing the cost of care. With healthcare costs rising, that can be a significant factor for independent physicians as well as for their patients.

Dr. Lamberts, who takes advantage of the benefits of Elation Health’s electronic health record (EHR) solution, notes that there are three key benefits to rejecting insurance payments:

There is an increased focus on customer service. Direct care patients enjoy more time with the physician during each visit. The wait to see the physician is often reduced significantly as well. When the direct care physician is more focused on patient care and less on insurance paperwork, the physician also becomes more accessible before and after the visit. Dr. Lamberts notes that some patient care can actually be “done via text message or phone, reducing the need for coming to the office at all.”

Patient records are freed from the coding nightmare. As Dr. Lamberts states, “Most health records hide important clinical information in an avalanche of insurance documentation compliance.” The direct care physician is able to “document for care” without the need to apply codes and secure insurance approval.

Patients trust their doctor more. Direct care physicians who reject insurance payments are winning back the confidence of their patients who “are increasingly suspicious of the motivations of their physicians, wondering if the care they get is focused on them or if it is done for increasing revenue or following insurance company rules.”

Krystle Thornton
October 3, 2018


On Base Percentage = All Cause Mortality

This week, Dr. Phillip Eskew, DO, JD, MBA shared a guest blog post for Elation Health’s direct care blog

Dr. Eskew founded DPC Frontier in Feb 2015. He is a direct primary care family physician and attorney. He joined ProactiveMD in Feb 2016 and is the company’s VP of Clinical Development and General Counsel.   Dr. Eskew has advised state and federal legislators about DPC legislation, and volunteers his time as the general counsel of the Direct Primary Care Coalition where he also serves as a member of the steering committee. He intends to use his diverse training to not only grow Proactive MD, but to support other DPC practices in the medical, legal, and policy arenas.

Baseball fans have always been obsessed with statistics.  For those that have not watched the film “Moneyball” the story focuses on how baseball analysts added up hits, runs, and RBIs for decades while ignoring (not even tracking) a more valuable statistic – on base percentage.  Deep down, health insurance companies already know that their current coding system is a garbage in, garbage out process. If you want proof, look no further than life insurance companies.  Life insurance applications commonly ask a variety of medical questions, but these are generally objective laboratory findings. These are not CPT code driven. They are simple, objective measurements related to lifestyle behaviors and chronic conditions that are easily trended over time.

As DPC physicians we can happily abandon 90% of the “data” tracked by the traditional system.  This data is not clinically useful. It doesn’t predict all cause mortality. Usage of this “fluff” data makes it easier for interlopers to argue their wasteful services are necessary.  We should track clinical information that is useful to us and our patients. Laboratory studies and vital signs related to chronic conditions are an obvious place to start. This kind of data is clinically actionable, allows for outlier identification, and can be presented in a trended view to motivate patients.

Whether they want to admit or not, life insurance companies are focused on one thing – when will someone die – or in medical speak does a number or lifestyle choice predict “all cause mortality.”  We will know that DPC has “made it” not when it is embraced by health insurance companies, but by when life insurance companies ask “are you a member of a DPC practice?” right after the question “are you a tobacco user?”

Dr. Phillip Eskew, DO, JD, MBA
October 1, 2018


What is direct care?

As the name suggests, direct care describes a relationship between a healthcare provider and a patient that does not involve intermediaries such as insurance companies. The direct care practice operates on patient membership fees and does not rely on insurance reimbursements. The independent physician in a direct care practice also does not have to wait for insurance review and approval prior to caring for the patient.

Direct care essentially harkens back to the days of the family doctor who engaged with the patient, taking phone calls and even making house calls as needed. The provider contracts directly with the patient for basic healthcare services, much as it was in the days before health insurance outpaced out-of-pocket pay as the primary revenue source for medical practices. The trend is now turning back to direct care as a preferred model of care delivery.

The number of direct care practices is growing significantly as patients learn more about the structure of the practice. Many patients do not understand or do not believe the simplicity of the model, as they are used to having to work with insurance companies for their healthcare services. Direct care providers find that they need to educate potential patients as to the direct care model and possibly even convince them that is legitimate.

Direct care practices charge a flat monthly membership fee, typically between $50 and $100 per month. Some practices have tiers of membership levels, based on age primarily. The monthly fee covers basic services such as immunizations, checkups, and visits for illness or injury. Outside services such as lab tests or hospitalizations are generally not covered. For those, direct care patients may carry high deductible, catastrophic insurance.

The direct care model of healthcare delivery benefits patients and independent physicians. For physicians, adopting a direct care model can improve work-life balance, reduce practice overhead, bring higher per patient revenues, and maintain physician autonomy. For patients, direct care can mean a greater degree of access to, and time with, physicians. Improved communication and more regular, engaged care lead to fewer unnecessary tests, less frequent hospital visits, and lower total cost of care.

Gabby Marquez
September 25, 2018


How does Medicaid apply to direct care physicians?

One way that direct primary care (DPC) physicians are able to maintain low overhead costs and to survive solely on patient membership fees is to not be burdened with administrative tasks such as filing for insurance reimbursement. While Medicaid is considered a type of insurance, the rules and regulations around how it applies to DPC physicians are complicated.

The Centers for Medicare & Medicaid Services (CMS) recently issued a request for information (RFI) through its Innovation Center. The RFI was designed to seek input on “experiences with, and perspectives on, DPC and how CMS can use DPC models to reduce expenditures and preserve or enhance the quality of care for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) beneficiaries.”

CMS received approximately 1000 responses to their RFI, from physicians as well as patients, healthcare systems, health plans, and other organizations. The responses focused on areas such as “increased physician accountability for patient outcomes, improved patient choice and transparency, realigned incentives for the benefit of the patient, and a focus on chronically ill patients.”  Additionally, the comments “reflected broad support for reducing burdensome requirements and unnecessary regulations.”

Currently, for DPC physicians who have not formally “signed up” as a Medicaid provider, “the assumption is that you are not enrolled in the program and thus you are free to privately contract with Medicaid patients for covered services.” According to DPC Frontier, depending on the state in which the DPC operates, contracting with a patient may or may not be possible. Most likely, though, orders for tests, medication, and referral will not be honored by Medicaid. “If you are not enrolled in Medicaid then the state will pretend that you do not exist … and the state will require that these orders be placed by a Medicaid enrolled physician.”

Medicaid regulations differ by state. Many states allow DPC physicians to have an “”Ordering and Referring Only” provider status; however, it is best to check with the state Medicaid office to determine how Medicaid applies to the DPC physician’s ability to contract with and receive payment from Medicaid patients.

Gabby Marquez
September 24, 2018


Considerations for opting out of Medicare as a direct care physician

The structure of a direct primary care (DPC) practice relies on patient membership fees rather than insurance reimbursement. Many DPC physicians set up categories of fees that are based on the patient’s age, including those patients over age 65. Some DPC physicians may opt to accept Medicare reimbursement for those patients, but some choose to opt out. There are a number of considerations to think about when deciding whether to opt out of Medicare as a DPC physician.

The first consideration is that the Medicare opt-out is for a two-year period. After the two years, the DPC physician has the option to opt back in. This means that once the DPC physician opts out of Medicare, “they cannot submit claims to Medicare for any of their patients for a two-year period.”

Additionally, for the patients’ consideration, any outside services referred to by the DPC physician would still be covered by Medicare for those patients who are eligible for that coverage. For example, if a patient needs laboratory services that are not part of the DPC membership fee, Medicare would cover those costs, “provided the physician is not paid, directly or indirectly, for such services (except for emergency and urgent care services).”

DPC physicians who opt out of Medicare should ensure their patients are aware of their status. There may be complications for patients who have also secured a Medicare Advantage plan, which are “generally written to cover things that Medicare does not cover.” Physicians and patients must sign an agreement stating that, given the physician’s opt out status, none of the DPC services can be submitted to Medicare.

A DPC physician who decides to opt out of Medicare, “must file an affidavit that meets the necessary criteria and is received by the MAC (Medicare administrative contractors) at least 30 days before the first day of the next calendar quarter. There is a 90-day period after the effective date of the first opt-out affidavit during which physicians may revoke the opt-out and return to Medicare as if they had never opted out.”

Krystle Thornton
September 21, 2018


Does HIPAA apply to direct care practices?

The Health Insurance Portability and Accountability Act (HIPAA), enacted in 1996, is a complex law that most patients assume applies to all of their private information in a healthcare setting. There are different aspects of HIPAA that apply to the sharing of private data with other medical providers and to the transmission of patient data electronically. The basis of HIPAA is protected health information (PHI) which has its own specific definition and requirements.

The HIPAA Privacy Rule defines protected health information (PHI) as individually identifiable health information, including demographic information, information about the patient’s physical or mental condition, genetic information, and information about the patient’s healthcare plan or payment system. The Health Information Technology for Economic and Clinical Health (HITECH) Act, enacted as part of the American Recovery and Reinvestment Act (ARRA) of 2009, was signed into law on February 17, 2009, to promote the adoption and meaningful use of health information technology.

Direct primary care (DPC) practices may or may not be subject to HIPAA regulations, depending on how they operate. In fact, according to the American Academy of Family Physicians (AAFP), “pure DPCs operating completely outside of the insurance industry are not as constrained by parts of HIPAA, the Health Information Technology for Economic and Clinical Health (HITECH) act, and the Affordable Care Act that protect patients’ confidential medical information.”

DPC practices that do not transmit patient data to insurance companies are not bound by the rules of HIPAA, protecting that data. So, if a DPC physician maintains paper files and never communicates with anyone else regarding the patient, HIPAA would not apply to that practice. However, most DPC physicians maintain electronic health records (EHRs) and do communicate with other healthcare providers in the interest of providing quality care for their patients. In these cases, they are subject to the HIPAA regulations regarding PHI and ePHI.

Krystle Thornton
September 18, 2018


Check out Elation’s Direct Care Interview series

As many direct care physicians know, there is never a bad time to learn more about and improve the way patients receive care. That’s why we strive to constantly give physicians resources, tips, and advice for how to provide innovative care.

At the same time, it’s important to spend time understanding how direct care physicians can grow their businesses – whether you are new to direct care or looking to scale your practice.

Recently, we started doing an interview series with some of the most successful direct care physicians that use Elation as their EHR. These physicians include Dr. Garrison Bliss (Bliss MD), Dr. Vivek Sinha (Belleview Medical Partners), and Dr. Jeremy Smith (MyMD Select).

By listening to these interviews, you can hear more about these physicians’ direct care journey, insights for other direct care practices, and how choosing an EHR system developed with the physician in mind has benefitted them.

In case you missed it, we also recently launched Elation for Direct Care, a new version of Elation that is focused on direct care physicians and their practices.

We’re committed to helping the direct care movement succeed and deliver on its promise to provide high-quality, personal care. With these resources and an EHR platform that allows physicians to focus on their patients, direct care practices can do what they do best – delight patients.

You can check out the videos here and learn more about Elation for Direct Care.

Krystle Thornton
September 10, 2018


Most popular direct care marketing strategies

Independent physicians who launch or transition to direct primary care (DPC) practices may bring existing patients with them but may also need to market their practices to potential new patients so they can grow their businesses. With DPC, the physician needs to promote the practice and will probably also need to provide a little education and reassurance as to the DPC model itself in order to attract new patients.

The first step in marketing a DPC practice is to build a compelling and informative website. The website provides the online presence that can help the DPC practice build credibility and provide information in an accessible format. In particular, a well-designed and responsive website will help the practice stand out from the crowd.

In addition, there are a number of other marketing strategies that can benefit the DPC practice:

  • Patient referrals. Happy patients are the best marketing tool for a DPC. Word-of-mouth referrals made by current patients emphasize their satisfaction not only with the DPC model but with the specific DPC practice.
  • Blogging. Educational blogs posted on the practice website can provide information and answer questions potential patients may have about the way the DPC practice operates. Blogs may also cover, at a high level, health issues that may be of particular concern in the practice’s geographic area or for a particular demographic. For example, a blog post could discuss the general symptoms of Lyme disease if the practice is located in an area known for ticks.
  • Social media posts. Posting timely, relevant content is one way to bring exposure to the DPC practice. When initiating any sort of online communication where patient information may be at risk, physicians should, of course, carefully avoid any HIPAA violations.
  • Community involvement. The practice may sponsor a community event or a local youth sports team or volunteer for a non-profit organization, to gain exposure and to give back to the community. The key to this strategy is to be sincere about a desire to give, rather than overt about using it as a marketing strategy.
  • Reviews. Encourage satisfied patients to post reviews on sites that potential patients may visit for information about the practice and its “ratings.”

Gabby Marquez
August 29, 2018


Revisiting the tax treatment of direct care

The discussion around taxes and direct primary care (DPC) practices primarily focuses on the Health Savings Account (HSA) and the Affordable Care Act (ACA). Given the structure of the DPC, it is not considered insurance, even though it does qualify for meeting the ACA individual mandate. Many DPC patients also opt to carry high-deductible insurance for catastrophic and major medical events not covered by their DPC membership fee.

To date, patients cannot use HSA funds to pay their DPC membership fees and, in fact, cannot join a DPC if they have an HSA. A bill that has passed in the House and is pending in the Senate may change the tax implications for a DPC. HR 6199, the Restoring Access to Medication and Modernizing Health Savings Accounts Act of 2018, would enable “millions of Americans with HSAs to have great access to affordable primary care from a DPC doctor of their choice. While not perfect this will allow almost all DPC practices to see patients with HSAs and allow their fees to be paid from the HSA.”

As to the use of Flexible Spending Accounts (FSA), given certain conditions patients may be able to use those funds with a DPC membership. The DPC must be “structured properly” to qualify. As Dr. Phil Eskew, licensed physician and attorney, states, “the practice would want to bill in arrears, focus on preventive nature, consider itemized statement of preventive services, etc.”

DPCs are eligible as employer plans, that is, the healthcare coverage provided for employees by a business. Even though the Internal Revenue Service (IRS) once determined that DPCs do not qualify to “satisfy market reforms,” and employers of a certain size would be subject to fines, with the passage of “H.R. 34: 21st Century Cures Act the potential for a $100 per day fine for the less than fifty employers desiring to pay for DPC services with pretax dollars has largely been eliminated.”

Gabby Marquez
August 24, 2018


10 differences between DPC and concierge care

Healthcare delivery evolves with technology, demand, reimbursement plan structures, and many other factors. However, sometimes independent physicians have a desire to return to the days of a simple delivery structure with no insurance involved and with more time to spend with fewer patients. Those physicians often start or convert existing practices into either a direct primary care (DPC) or concierge care practice.

The premise of both models is essentially the same, that is a return to the days of the family physician who has time to spend with each patient in the office and before and after visits. Each model offers the independent physician the opportunity to focus on the patient’s specific healthcare needs, without worrying about insurance reimbursement or meeting tight daily appointment schedules. The DPC and concierge care models both run on patient membership fees that cover a range of basic services.

What are the differences between a DPC and a concierge care practice?

  1. Monthly fees are typically less for a DPC. Patients pay between $50 and $100 a month, depending on the DPC practice’s membership fee scale. Many practices offer special rates for children or seniors. Concierge care patients typically pay between $100 and $200 month for their membership fees.
  2. DPCs offer basic primary care services, although membership fees may also cover x-rays or labs. Concierge care encompasses a much broader range of services.
  3. All of a DPC’s services are covered by the patient membership fees. Independent physicians in DPC practices may encourage patients to carry catastrophic insurance but do not accept insurance payments for their basic services. Concierge care physicians will generally accept insurance or Medicare.
  4. Patient panel sizes differ somewhat. In a recent survey of 5,000 physicians in DPC and concierge practices, 69% of the DPC physicians indicated their patient panel was between 50 and 550. In that same survey, 76% of the concierge care physicians stated that their patient panel was between 250 and 550.
  5. Although DPC physicians make themselves available for communication with patients before and after the visit, concierge care physicians are typically available to treat patients before and after office hours.
  6. Since DPCs do not accept Medicare or any other type of insurance, they are not subject to the Medicare regulations to which concierge care practices must adhere.
  7. DPC is indicated in the Affordable Care Act (ACA) as an acceptable form of healthcare coverage, while concierge care is not.
  8. DPC practices are more attractive to younger patients while the majority of the concierge patients are over the age of 50.
  9. Concierge care may be more attractive for patients with chronic or complex conditions, as they receive personalized attention, to the point of their primary care physician accompanying them to specialty provider visits or attending to them while they are traveling or on vacation.
  10. DPCs have less overhead, as they operate solely on patient membership fees and have the administrative burden of billing insurance companies for reimbursement.

Gabby Marquez
August 14, 2018