Little Health Law Blog
Our healthcare law firm works with many providers to help set up medical practices, including direct primary care practices. We have previously written about direct primary care practices in 2022 and 2023 but are writing an updated post because our clients have had renewed interest in starting direct primary care practices. Direct primary care practices provide an alternative method to the traditional insurance model to provide more targeted, individualized care for patients, but direct primary care also carries legal and compliance risks. This blog covers two considerations that providers should consider before starting a direct primary care practice. If you need assistance setting up a direct primary care practice or would like to discuss this blog post, you may contact our healthcare law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@littlehealthlaw.com. You may also learn more about our law firm by visiting www.littlehealthlaw.com.
First Consideration: Direct Primary Care Is Not Insurance, and Direct Primary Care Agreements Need to State Clearly That These Agreements Are Not Health Insurance
Under Georgia’s Direct Primary Care Act, direct primary care is not considered insurance, meaning direct primary care practices cannot bill their claims to insurance. Because direct primary care practices cannot bill their claims to insurance, issues arise when direct primary care physicians provide medical services covered under Medicare to patients on Medicare, but the providers have not opted out of Medicare. Therefore, if direct primary care practices providing “covered services” wish to accept patients who are on Medicare, providers will need to opt out of Medicare before accepting Medicare patients and sign a Medicare Private Opt-Out Agreement with Medicare patients, acknowledging that patients will need to pay for direct primary care services out of pocket. Our firm has previously written about the interplay between direct primary care practices and Medicare, which can be found here.
State laws also list specific requirements for direct primary care agreements. In Georgia, for example, the Direct Primary Care Act gives several requirements for direct primary care agreements to be valid, including, that the agreement describes the scope of health care services covered by a “periodic fee,” which is usually known as a membership fee, that the agreement “prominently” says in writing that the agreement is not health insurance, and that the agreement allows the patient and practice to terminate the agreement with 30 days’ written notice.
Second Consideration: Direct Primary Care Practices Need to Consider State Fraud and Abuse Laws When Referring Patients for Diagnostic Services or Other Specialists
Direct primary care practices typically refer patients to vendors and specialists for labs, imaging, or specialized care. Although federal fraud and abuse laws may not apply to direct primary care practices if the practices have opted out of Medicare and are not billing claims to Medicare, state fraud and abuse laws, particularly fee-splitting laws, still apply to direct primary care practices. Georgia, for example, prohibits healthcare providers from referring patients to an entity who provide services like physical therapy, imaging, labs, surgical services, etc. where the referring provider has an investment interest in that entity, and it prohibits healthcare providers from splitting fees with other healthcare providers for referring patients. Violating fee-splitting laws can lead to severe penalties, including penalties of up to $50,000 and disciplinary actions from the Medical Board.
If you need assistance setting up a direct primary care practice or would like to discuss this blog post, you may contact our healthcare law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@littlehealthlaw.com. You may also learn more about our law firm by visiting www.littlehealthlaw.com.