centered image

centered image

Direct Primary Care Is An Answer To Volume-Based Insurance Reimbursement Models

Discussion in 'Hospital' started by The Good Doctor, Nov 11, 2021.

  1. The Good Doctor

    The Good Doctor Golden Member

    Aug 12, 2020
    Likes Received:
    Trophy Points:

    An excerpt from Medical Answers Now!: How Direct Primary Care Guarantees Fast Access to Your Doctor.

    Health care costs are out of control and volume-based insurance reimbursement models are felt to be contributing to the problem. Medicare and most major private medical insurance carriers have begun testing and transitioning to reimbursement models that pay for health care services based on the quality of care instead of the quantity of services provided. These quality-based or value-based reimbursement models reward health care providers for providing the best care possible as efficiently as possible. They also have the effect of shifting some amount of financial risk from the insurance carrier to the health care provider.

    Physicians, hospitals, and other providers must assume the risk that they will be able to improve the level of care and health outcomes while simultaneously cutting the costs to deliver care. With the aforementioned pressures on primary care practices, assuming risk of reimbursement for services performed is not an easy sell for smaller physician-owned practices but is being adopted by larger primary care practices and many that are owned by hospitals.


    Since Medicare is by far the largest health insurance payer in the U.S. and is therefore a very influential buyer of health care services, it has led the way in developing programs that encourage health care providers to coordinate care and assume risk of outcomes in these value-based reimbursement models. The Affordable Care Act and the Centers for Medicare & Medicaid Services (CMS) encouraged the formation of Accountable Care Organizations (ACOs) consisting of various health care providers that join together to coordinate care and enter into contracts with Medicare and commercial insurance companies.

    Many ACOs are organized by large hospital systems that enter into these alternate payment arrangements with public and private payers. As of January 2021, providers had formed 477 ACOs across the country that serve more than 10.7 million Medicare beneficiaries and several hundred additional ACOs contracting with Medicaid and private insurance companies. CMS has also recently launched Primary Care First, a new program that will provide primary care services to Medicare and Medicaid recipients under a value-based reimbursement model with physician practices.

    In another approach to value-based care, some private insurance carriers and captive health plans are offering access to primary care clinics with little or no fee-for-service costs to the participants. Insurance carriers have employed primary care physicians and mid-level providers at dedicated insurance-owned clinics that provide a full range of primary care services to members of the insurance plan. Private payers are hopeful that expanded access to primary care services, sometimes during extended office hours, with no office visit or lab charges to the patient will encourage the use of these clinics and consequently limit care provided through other medical providers, thus shrinking insurance claims, minimizing downstream specialty care, and lowering cost.

    While these approaches seem to mitigate some of the limitations of traditional volume-based primary care, many of the disadvantages of our existing primary care delivery approach that were enumerated previously still remain. Members of these plans are only able to access care when these clinics are open. They may see a different provider each time they require care, and, in the event that their employer no longer offers a plan with access to these primary care clinics, they are forced to start over with a new primary care physician.

    Maybe the greatest limitation to these value-based care models is the fact that the reimbursement and therefore the care are still being driven by the insurance carrier, rather than by the patient and their personal physician.

    Direct primary care

    The value-based care delivery model that is growing rapidly and organically among practicing primary care physicians across America is known as direct primary care (DPC). Direct primary care is a membership-based primary care payment model in which patients (or their employers or health plans) pay a flat monthly/periodic fee directly to the DPC physician practice in exchange for unrestricted access to their personal physician.

    This periodic fee is typically under $100/month and entitles the member to high-level access to all or most acute care, disease management, and preventive services available at the primary care practice. These fees are not filed to health insurance plans and are typically not reimbursed by them. The three characteristics that generally define DPC practices are that DPC practices:
    • Charge a periodic fee,
    • Do not bill any third parties (insurance) on a fee-for-service basis, and
    • Per-visit charges (if any) must be less than the monthly membership fee.
    A provision in the Affordable Care Act, championed by the DPC Coalition defines DPC as an innovative care delivery model “Allowing consumers gain access to an affordable and reliable source of primary services.” Over 30 states have subsequently passed laws or regulations establishing DPC as a medical service regulated by state boards of medicine outside of third-party insurance reimbursement. These key policy changes allow employers to offer DPC a valuable health benefit which is not considered a health plan under state insurance regulations.

    DPC is not concierge medicine. The characteristics of DPC practices are in contrast with concierge practices, which generally are much more expensive than $100 per month and also bill insurance for each service rendered, in addition to charging members a retainer or access fee.


    Add Reply

Share This Page