Can I Treat Medicare Patients in a Direct Primary Care (DPC) Model?
- Nisha Mehta, MD
- Sep 23
- 6 min read
Direct Primary Care (DPC) is an innovative healthcare model that emphasizes a direct financial relationship between patients and physicians, bypassing traditional insurance billing. This model offers numerous benefits, including enhanced patient access to care, improved physician-patient relationships, and reduced administrative burdens. By charging a flat monthly fee, DPC practices can focus on providing comprehensive and personalized care without the constraints of insurance reimbursement schedules. Medicare’s traditional fee-for-service model, however, conflicts with the DPC’s subscription-based approach. Direct Primary Care practices considering treating Medicare patients must navigate significant compliance challenges with Medicare’s enrollment and billing requirements to ensure compliance, including understanding the implications of Medicare’s billing requirements and the potential need to enroll as a Medicare provider. We walk you through commonly asked questions and key considerations below.
The information for this article has been derived from material originally contributed by Trevor Anderson, a healthcare attorney who specializes in assisting physicians navigate the business of healthcare while complying with the uniquely fraught regulatory framework in which it exists. Trevor is a paid advertiser on our attorney database for physicians and offers PSG members a special perk.
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As a Direct Primary Care Physician, Can I Opt Out and Still Treat Medicare Patients?
Yes, in fact you must.
Physicians who wish to treat Medicare patients under a Direct Primary Care model must opt out of Medicare.
Opting out allows physicians to enter into private contracts with Medicare beneficiaries, but it requires a formal process and adherence to specific guidelines. Physicians must submit an affidavit to their Medicare Administrative Contractor and renew their opt-out status every two years to maintain compliance. It is critical to understand that unless you opt out, you are presumed to comply with the Medicare billing requirements – i.e., submit claims directly to Medicare for reimbursement and agree to the Medicare rates.
Learn more about how to opt out of Medicare as a physician.
If I Have Opted Out, Can I Charge Medicare Patients My Membership Fee?
One of the primary compliance challenges for Direct Primary Care practices is the restriction on private contracting with Medicare beneficiaries. To avoid this compliance issue, DPC physicians opt-out of contracting with Medicare so that they can enter into private payment contracts with each patient they treat.
This process allows the DPC doctor to collect payment directly from the patient, rather than bill Medicare, but there are significant limitations, and having a private contract with a patient does not allow you to charge the Medicare patient whatever fee (monthly or otherwise) that you want.
“Perhaps the most complicated challenge in treating Medicare patients under the DPC model is Medicare’s limiting charge requirements and prohibition on balance billing,” states Trevor Anderson, founder of the healthcare focused law firm, The Anderson Firm, P.C. and a paid advertiser on our attorney database for physicians.
Balance billing occurs when a physician bills a patient for the difference between their charge and the amount covered by Medicare. Direct Primary Care practices must ensure that their billing practices do not violate this prohibition, which may require careful structuring of patient agreements and fee schedules to avoid inadvertent non-compliance. This restriction prohibits non-participating physicians from charging more than 115% of the Medicare-approved amount for unassigned claims (claims that are submitted by a doctor who does not accept the Medicare-approved charge as full payment for services, meaning the payment is sent directly to the patient, not the doctor).
In other words, even if you have opted out of Medicare and entered into a private contract with the patient, you are still limited to billing and collecting fees that equal the sum of limiting charges (115% of Medicare rates) for the services rendered.
As you can see, the DPC model creates a complex accounting and tracking process whereby physicians must ensure that the subscription fee does not exceed the chargeable limits of the services rendered to a Medicare patient.
Can DPC Physicians Participate in Medicare Incentive Programs?
Direct Primary Care practices may be eligible for certain incentive payments, such as those offered under the Medicare Access and CHIP Reauthorization Act (MACRA), but only if they participate with Medicare. To qualify, practices must meet specific criteria related to quality reporting and performance metrics.
DPC practices should explore opportunities to participate in incentive programs by aligning their care delivery models with Medicare’s quality initiatives. This may involve investing in health information technology and participating in value-based care programs.
What If a DPC Physician Accidentally Violates Medicare Billing Requirements?
Physicians violating Medicare requirements in Direct Primary Care practices may face significant penalties, including civil fines, repayment obligations, and disciplinary actions. Civil penalties can include fines up to $1,000 for repeated offenses, along with repayment of excess charges with interest.
Federal law prohibits balance billing, requiring physicians to accept Medicare payments as full compensation, with violations leading to penalties. Fraudulent billing practices can result in severe consequences, including fines and separate penalties for each violation.
Additionally, physicians may face license revocation for improper billing practices, emphasizing the importance of compliance to avoid financial liabilities and professional disciplinary actions.
How Can I Protect Myself from Medicare Violations?
For DPC practices contemplating the treatment of Medicare patients, several best practices can help navigate compliance challenges:
Strategic Decision-Making: Evaluate the benefits and drawbacks of opting out of Medicare. Consider the impact on patient access, practice revenue, and administrative requirements.
Comprehensive Compliance Plan: Develop a robust compliance plan that addresses Medicare’s enrollment, billing, and contracting requirements. Regularly review and update the plan to reflect changes in regulations.
Patient Education: Educate Medicare patients about the DPC model, including the implications of opting out and the limitations on Medicare coverage. Provide clear and transparent communication about fees and services.
Legal and Financial Consultation: Seek legal and financial advice to ensure compliance with Medicare regulations and to optimize practice operations. This may include consulting with healthcare attorneys and accountants familiar with Direct Primary Care models. Explore our attorney database for physicians to find a healthcare attorney.
Quality Reporting and Incentive Participation: Explore opportunities to participate in Medicare’s quality reporting and incentive programs. Align practice operations with value-based care initiatives to enhance eligibility for incentive payments.
Conclusion
While treating Medicare patients presents unique compliance challenges for Direct Primary Care practices, these challenges can be effectively managed through strategic planning and adherence to best practices. By opting out of Medicare, developing comprehensive compliance plans, and educating patients, DPC practices can successfully integrate Medicare patients into their care models. Additionally, by participating in quality reporting and incentive programs, DPC practices can enhance their financial sustainability while continuing to provide high-quality, patient-centered care.
As the healthcare landscape evolves, Direct Primary Care practices must remain vigilant in navigating regulatory requirements to ensure compliance and optimize patient outcomes.
Related DPC & Private Practice Resources for Physicians
Explore related PSG resources:
If you need help navigating the complexities of treating Medicare patients through your Direct Primary Care (DPC) practice, we have a database of healthcare attorneys who can help you navigate the process.
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