Hope for Direct Primary Care (DPC) Access for Medicaid Enrollees
The Medicaid Primary Care Improvement Act (H.R. 3836) passed the House on a voice vote
Earlier this month, the Medicaid Primary Care Improvement Act (H.R. 3836) passed the House on a voice vote under suspension of the rules (meaning it was non-controversial and cost almost nothing). With any luck, it’ll push through the Senate as well and Medicaid patients will have much more access to primary care.
The bill was introduced by Rep. Crenshaw (R-TX) and cosponsored by Representatives Smucker (R-PA), Schrier (D-WA), Blumenauer (D-OR), and Pettersen (D-CO). It’s great to see bipartisan agreement on DPC and Medicaid.
What is Direct Primary Care?
Backing up: If you haven’t heard of DPC, it’s a growing way to receive primary care outside of the normal system. I explain it as a Netflix-like model of primary care, where patients pay around $60-$80 a month to have one-on-one access to a primary care physician. It’s all outside of the insurance system though, so customers pay cash separate from any other coverage.
Physicians like it because instead of having 3,000-5,000 patients on a panel at the hospital and spending most of their time coding their procedures to bill insurance, they build a membership of ~300-600 patients and only see a handful a day. As one DPC doctor told me, “I get to be a doctor again.”
Patients like it because they actually have a doctor again on their side, who will spend an hour with them, check up on them, and point them to lower priced care. The striking thing about DPC is how accessible the primary care physician is once you’re signed up. I’ve interviewed a number of DPC doctors and they all stress that they give their patients their email and their cell phone number.
DPC Frontier’s Mapper has every DPC doctor in the country. And Maryal Concepcion’s excellent “My DPC Story” has over a hundred interviews with actual DPC doctors. Go give any random episode a listen.
What Does the Bill Do?
The text of the bill is quite short. As I read the bill, it:
Allows states to contract with DPC physicians as part of their Medicaid coverage.
Requires HHS to seek input within a year from stakeholders, including DPC doctors, state Medicaid agencies, and Medicaid Managed Care Organizations (MCOs)
A follow up analysis within two years of state Medicaid program efforts including estimates of quality and cost of care offered through MCOs.
In short: I believe it would allow state governments to bypass Section 1115 Medicaid demonstration waiver requirements by simply passing legislation that directs funding and Medicaid recipients to DPC coverage. States could still go out and request a waiver, but that wouldn’t be the only method.
That’s good because waivers can be quite the hurdle for states, especially when the HHS Secretary was appointed by a different political party than the one that governs in that state.
How Could It Help Medicaid Enrollees?
Think of it like this: Currently under Medicaid arrangements, state governments either handle Medicaid coverage directly or pay MCOs (insurance companies) a capitated payment per enrollee per month.
Medicaid patients have longer wait times than commercial payments (when there isn’t enough money, we ration using time). They also have a harder time finding new physicians. In short: Access is lacking for Medicaid patients.
But what if states could alter their Medicaid coverage by telling Medicaid enrollees that they could go find a DPC doctor they like and use them for their primary care needs? And if they needed hospital or outpatient care outside of primary care needs, they could use Medicaid just like normal.
Behind the scenes, if the Medicaid patient has their needs handled by the DPC doctor, there would be no need to worry about billing or charging Medicaid more. The state or MCO would pay the DPC doctor their fee per person, and the DPC doctor would provide that care.
The goal would be to test to see if the cost of covering each Medicaid patient went down while quality and access either stayed the same or went up.
As a thought experiment, here’s how that math could end up positive for states:
Let’s say a typical Medicaid capitated payment is around $6,000 per year (or $500 per month per enrollee). That number isn’t picked out of thin air. It’s what the insurance company agrees to receive because it believes it can provide the required amount of care for all enrollees for that average price.
So, the math could work out to save money if, for example:
The typical Medicaid MCO capitated payments are around $6,000 a year.
A state or MCO pays a DPC doctor $80 a month (round that to ~$1,000 a year) to cover a Medicaid patient.
That Medicaid patient consumes, on average, less than $5,000 a year in Medicaid-covered services (like hospital stays and outpatient procedures).
Goes through the DPC doctor for everything else.
The next year, required capitated payments would fall if the cost of covering Medicaid patients for non-primary care coverage falls.
Could it work? I don’t know, but I’d like to find out. The Medicaid waiver requirement is so difficult right now that states haven’t tried it at scale. H.R. 3836 would allow that experiment to go forward. Why not give it a shot? If it doesn’t save states (and by extension, the federal government) money, then they’ll stop the program.
What I Like About H.R. 3836
First, in conversations with staffers and other think tank people, one of the sticking points has been how to define a DPC arrangement. Just within 100 miles of me, there are DPC doctors that specialize in cardiovascular patients, newborns, and the typical primary care coverage.
This bill specifically defines it as a primary care physician providing medical assistance solely of primary care services where the sole compensation is a fixed period fee.
Second, a good government program is one that successfully gets people off the program. There are over 60 million people on Medicaid right now. Wouldn’t it be better if millions of them earned enough money to work their way off needing coverage? The way state Medicaid experiments could work, a Medicaid patient could form a relationship with a DPC doctor and then transition to paying for it themselves if their circumstances improved enough to stop qualifying for Medicaid. It doesn’t have to trap them in Medicaid coverage.
(Notably, the next extension would be to allow ACA subsidies to cover DPC arrangements too.)
And third, it embraces our federalist system and gives states much more flexibility to experiment with providing health coverage. Having the federal government be the source of innovation rarely goes well.
What Happens Next?
Well, it needs to be taken up in the Senate. After that, enterprising states need to design programs or run small-scale experiments to estimate its efficacy.
In a private conversation, one state official has already indicated interest in the idea, considering it could save the state money while increasing access for Medicaid patients.
And even if it doesn’t, many states might want to expand the program simply to give Medicaid patients more access to necessary care.