Concierge Medicine Poses Problems for State Regulators

One of the main effects of the Affordable Care Act has been that it’s incited substantial changes to the health care system, among them the required inclusion of certain essential benefits, such as maternal care, newborn services and preventative care. In turn, these new mandated benefits have led to a spike in the use of primary care services and providers. According to a report by the United Health Center for Health Reform and Modernization, the ACA has created 25 million more annual primary care visits to already stressed primary care physicians. In response to the rising costs of health care and increased primary care physician workload, an alternative and privatized option for health care has developed over the past 20 years known as concierge medicine.

According to Concierge Medicine Today, an information repository and trade publication for the industry, concierge medicine is a relationship between a patient and a primary care physician in which the patient pays an annual fee or monthly retainer. In return, the patient receives enhanced and specialized care from physicians. Concierge physicians have many fewer patients than traditional practices: typically ranging in the hundreds as opposed to thousands that a physician may otherwise be responsible for. This allows physicians to ensure a deeper level of commitment to their patients in both time and availability. These plans can also boast specialty services such as telephone or email consultations, house calls, 24-hour access, next-day appointments, and more tailored preventative and wellness care for patients.

While there are varying models of concierge medicine services, the increasingly most popular is Direct Primary Care, or DPC, an emerging model that aims to provide a more affordable version of concierge medicine to a wider variety of patients. This model embraces a low, flat rate monthly fee for physician services, with monthly rates ranging between $50 and $100. Other concierge services in contrast range closer to $1,000 to $1,500 a month. In addition, unlike other concierge medicine services, DPC does not accept payment through a typical insurance policy; instead there is an upfront cost for services between patients and physicians without the barriers such as co-pays, deductibles or co-insurance fees.

Currently 42 states have DPC practices, ranging from as many as 10-13 practices in California to 1-3 practices in Maine. These sorts of practices have a growth rate of almost 25 percent a year. As a result of this rapid proliferation, states are having trouble finding an acceptable method of regulation for DPCs, often placing them under existing insurance regulations despite the fact that DPCs have explicit non-insurance policies.

Arizona, Louisiana, Michigan, Mississippi, Oregon, Utah, Washington and West Virginia are the only states thus far to have passed legislation explicitly stating DPC practices are not subject to insurance regulations. There is legislation currently pending in Florida, Idaho, Kansas, Missouri, Oklahoma and Texas to address this important distinction.

The Direct Primary Care Coalition has cited four key issues state legislation should address in attempting to regulate this new model of care: clarifying DPC as a healthcare service outside the scope of state insurance regulations, allowing healthcare consumers to purchase DPC options on health care exchanges, providing tax parity for DPC services and payments, and allowing Medicare and Medicaid beneficiaries to participate in DPC programs.

As states continue to explore options to reduce healthcare costs and expand primary care and employers are looking to comply with the ACA, DPC plans are increasingly becoming a preferred option. With pending legislation in six states and the increasing popularity of concierge medicine services, it is likely that states will continue to look at ways to bring these types of plans into the fold in upcoming legislative sessions.