Buried in the Patient Protection and Affordable Care Act (ACA) is a provision that authorizes an innovative form of health care delivery and insurance: direct primary care, otherwise known as concierge medicine.
One of the ACA’s goals is to make health insurance more affordable by expanding the population of insured individuals. The mechanism to broaden the risk pool is the individual mandate, which requires most Americans to obtain insurance coverage or face penalties. Working in tandem with the individual mandate are market reforms to the health insurance products being offered. Among several market reforms is the fact that health insurers must now offer health insurance plans that provide minimum value. Minimum value is based on actuarial values of covered services, but in general requires coverage beyond just catastrophic care coverage, a popular form of pre-ACA insurance that did not adequately spread risk among the insured population pool.
As an alternative to a traditional insurance policy providing minimum value, however, the ACA permits individuals to obtain catastrophic coverage in conjunction with a direct primary care plan, if permitted under state law. A direct primary care plan is like a gym membership for primary care services. You can call, email or text your doctor at any time or schedule in-office visits, all for a flat monthly fee. The monthly fees for such services tend to run between $10 and $75 per month. Direct primary care is becoming increasingly popular with both physicians and patients in states where it is permitted, as outlined in many recent articles including this piece in Time magazine.
Prior to December 31, 2014, direct primary care was not a viable model of business for primary care doctors in Michigan; as such plans were considered insurance and therefore subject to the complex regulatory scheme of the State’s Insurance Code. With the passage of Senate Bill No. 1033, the door is now open in Michigan to the direct primary care model. Medical retainer agreements, as they are referred to in the bill, are specifically exempted from the Insurance Code. There is a minimum criteria required for an agreement to be considered a medical retainer agreement that include (a) the agreement be in writing, (b) the scope of medical services be clearly delineated and limited to routine health care service, and (c) insurance or third-party payors are not billed for the charges. It should be noted that routine health care service includes prescription drugs dispensed in a health care provider’s office and lab work done at a laboratory associated with the health care provider or under an agreement with the health care provider to perform lab work at no additional cost to the health care provider’s medical retainer patients.
As a new spin on the older model of concierge medicine that was directed mostly at affluent patients, it remains to be seen whether physicians and patients in Michigan will avail themselves of the opportunities available through direct primary care after the passage of Senate Bill No. 1033. If you are a physician or physician’s office interested to learn more about the opportunities provided by medical retainer agreements and direct primary care or need assistance with setting up such a program, please do not hesitate to contact Kate E. Flewelling or any attorney in Smith Haughey Rice & Roegge’s Traverse City office.