Direct Primary Care Payment Model Has Distinct Advantages



Direct Primary Care Payment Model Has Distinct Advantages

Administrative demands coupled with growing physician dissatisfaction about poor work-life balance are causing some doctors to consider moving to a “direct” primary care payment practice. Hiring extra staffers may not be the right prescription to reduce the paperwork and compliance burden for every practice, but the direct payment model may just be the medicine needed.

A direct payment model allows healthcare providers to deal with patients directly for payment, cutting out the insurance payors along with the red tape. This model, an alternative to fee-for-service insurance billing, typically charges patients a monthly, quarterly, or annual fee that covers all or most primary care services including clinical, laboratory, consultative services, along with care coordination and comprehensive care management. Patients worried about major health issues, or services that are not covered by direct payment, could acquire a high-deductible wraparound policy to cover emergencies.

Advantages to physicians are the ability to care for the whole patient, providing more personalized care. It reduces documentation requirements, prior authorization, and electronic health record and burdensome desk duties known to contribute to doctor burnout. Advantages to patients include substantial savings, and a greater degree of access to and time with their physicians.

Don’t be fooled - direct primary care and concierge care are not synonymous. In practices offering concierge care, the patient typically pays a high retainer fee in addition to insurance premiums and copays, and the practice continues to bill the patient’s insurance carrier. Direct primary care physicians often offer house calls or email access, adding to the confusion. However, the distinction is important because direct primary care is explicitly mentioned in the Affordable Care Act, while concierge medicine is not. Several state laws have also recognized direct primary care as medical practice models, and non-insurance entities, exempting direct-payment arrangements from any regulations under the state insurance code.

The American Academy of Family Physicians supports the direct-payment concept, citing the following advantages:
  • Decreased practice overhead
  • Fewer medical errors
  • Improved practice collections rates
  • More time with patients
  • Zero insurance filing
Medicare is the platform through which almost 80 Million Baby Boomers will receive medical attention. It may be a life-saving solution to patients, but unfortunately is a headache for providers. How can physicians, doctors, PAs and office staff suffocating under the paperwork and billing nightmares that plague practices both small and large?

In May of 2018, America's Physician Groups, an association of medical groups, submitted a proposal to the Centers Medicare & Medicaid Services whereby a provider network could receive Medicare funds up front to manage patient care. CMS announced recently it would develop a potential direct payment model enabling providers to contract directly with CMS and share accountability for costs and quality of care, eliminating administrative burden for clinicians and providing increased flexibility to provide the high-quality care while reducing expenditures.

It remains to be seen how CMS would set capitation rates. Would they use methods and benchmarks similar to those used to establish rates for Medicare Advantage plans? Payments must be risk adjusted and updated annually. The CMS would pre-pay this amount to provider networks each month for enrolled beneficiaries, and encourage Medicare beneficiaries to participate through differential co-payments and co-insurance.

In conclusion, if you are considering transitioning from a fee-for-service to value-based care, please keep in mind that implementing a direct-payment model will take time, and it is not without risk. Consider:
  1. A business plan and implementation timeline must be put in place;
  2. Create an appropriate fee structure for you and your patients;
  3. Address the financial aspects and impact on cash flow;
  4. Develop a marketing plan to attract patients;
  5. Consider regulations and legal implications that apply;
  6. Research technology or service providers to help with the conversion.
Contact Us: Want to learn more about alternative reimbursement structures? Contact your Fuoco Group healthcare consultant for insight into industry changes and how those trends may impact the finances of your practice. Dial toll free to reach our Florida or New York CPAs at: 855-534-2727.
 


 
 

In The News

Fuoco Group would like to share the exciting news that we have just opened a satellite office in the Fort Lauderdale area to better serve our Broward County clients and expand our footprint in the Fort Lauderdale/Miami area.
Read more...

Press and Events

2019 Best of Palm Beach County Award! We are proud to announce that Lou Fuoco, CPA, CEPA, of The Fuoco Group, has been chosen one of the Top 3 Finalists for The Palm Beach Post’s “Best of Palm Beach County” in the Finance category under Accountant! Thank you to all who voted for Lou – we will keep you posted as to the final results!
Read more...
 
August 3, 2018 — Fuoco Group, is proud to announce that Russell Seyffarth, accountant in our Hauppauge office, has been selected as an Honoree in the Long Island Business News 30 Under 30 Class of 2018.

Read more...