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Direct patient provider primary care practices (PDF, 273KB) – Legislative report – December 2016 — “The average monthly fee increased from $134 in fiscal year 2015 to $154.65 in fiscal year 2016. There were 11,504 enrollees in fiscal year 2015 and 11,272 enrollees in fiscal year 2016. As a result, the overall direct practice patient participation decreased in 2016 by 232 enrollees, or 2 percent.”

By/Source: Mike Kreidler, Insurance Commissioner | http://www.insurance.wa.gov | Direct practices in Washington state Annual report to the Legislature

The Legislature did not give the OIC rulemaking authority over direct practices. However, the OIC does have the authority to tell direct practice clinics how to submit the statements, what format to follow in submitting statements, and what data to include … Although direct primary care practices have not gained significant market share, they have expanded into 10 counties in the state. The OIC does not have any recommendation for the Legislature to consider other than continuing to monitor direct practices using annual statements and consumer complaints.~Direct practices in Washington state Annual report to the Legislature, December 2016

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Executive summary

December 1, 2016 –  In 2007, the Washington State Legislature enacted Engrossed Second Substitute Senate Bill 5958, which is codified as RCW 48.150.

This bill created an innovative primary health care delivery option called “direct practices.” The bill requires the Office of the Insurance Commissioner (OIC) to report annually to the Legislature on direct health care practices. Under RCW 48.150.100(3), this includes but is not limited to “participation trends, complaints received, voluntary data reported by the direct practices and any necessary modifications to this chapter.”

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Total number of patients in all (WASH.) Direct practices falls from 11,504 (2015) to 11,272 (2016). Two new direct practices opened. Five clinics reported they no longer provide direct practice services. Direct practices operate in the 10 Washington counties. Although enrollment decreased at 13 direct practice clinics, 12 clinics increased enrollment. ~Direct practices in Washington state Annual report to the Legislature, December 2016

In a direct health care practice, a health care provider charges a patient a set monthly fee for all primary care services provided in the office, regardless of the number of visits. No insurance plan is involved, although patients may have separate insurance coverage for more costly medical services. Direct practices are sometimes called “retainer” or “concierge” practices.

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The 2016 annual report on direct patient-provider primary care practices analyzes two fiscal years of annual statements:

  • Fiscal year 2015: July 1, 2014 through June 30, 2015.
  • Fiscal year 2016: July 1, 2015 through June 30, 2016.

The average monthly fee increased from $134 in fiscal year 2015 to $154.65 in fiscal year 2016. A key assumption underlying the legislation was that direct practices could provide affordable access to primary services. In theory, this would reduce pressure on the health care safety net or relieve problems caused by a shortage of primary care physicians, and possibly reduce emergency room use. ~Page 15; ~Direct practices in Washington state Annual report to the Legislature, December 2016

Participation trends in fiscal year 2016

  • There were approximately 11,272 direct practice patients out of 6.7 million Washington state residents1, .16% of the population.
    Overall patient participation decreased by 232 patients, or 3 percent, from 11,504 participants in fiscal year 2015 to 11,272 participants in fiscal year 2016.
  • The number of practices decreased from 33 to 30. Two new direct practices opened in: Camas; Edmonds
  • Fees changed in the following ways:
    o Fourteen direct practices did not change their fees.
    o Five direct practices decreased fees.
    o Nine direct practices increased fees.
  • Only one direct practice, Qliance, reported that it participates as a network provider with a health insurance issuer inside the Washington Health Benefit Exchange (Exchange).
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Complaints received: The Insurance Commissioner’s consumer advocacy group did not receive any formal or informal complaints regarding direct patient practices.

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Voluntary data reported by direct practices: While all of the registered practices responded to the mandatory questions, not all of the direct practices chose to report voluntary information. Some said they do not collect this information, and others simply did not respond to the supplementary questions.

Necessary modification to Chapter: The OIC does not recommend modifications to chapter RCW 48.150 at this time.

ADDITIONAL INFORMATION

  • Thirteen clinics reported a total decrease of 926 direct practice patients.
  • Twelve clinics reported a total of 807 new patients, gaining as few as three patients (Hirsch Center for Integrative Medicine) to as many as 366 patients (Seattle Medical Associates).
  • Fourteen of the direct practices participate as in-network providers in a health carrier’s
    network in 2016. This is a significant change since 2007, when all direct practices reported that they performed direct-patient provider primary care practices exclusively.
  • Twenty-three of these practices reported the percentage of their business that is direct practice.
    o Nine practices reported that the percentage of their business that is direct practice is less than 10 percent. Of these, six reported that the percentage of their business that is direct practice is less than 2 percent.

The Exchange bill

In 2012, the Washington Legislature passed E2SHB 2319, “An act relating to furthering state implementation of the health benefit exchange and related provisions of the affordable care act.” This is called “The Exchange bill.”

  • Section 8(3) of the bill, now codified as RCW 43.71.065(3), allows the Exchange Board to permit direct primary care medical home plans, consistent with section 1301 of the ACA, to be offered in the Exchange beginning on January 1, 2014.
  • Section 1301(a)(3) TREATMENT OF QUALIFIED DIRECT PRIMARY CARE MEDICAL HOME PLANS.

The Secretary of Health and Human Services shall permit a qualified health plan to provide coverage through a qualified direct primary care medical home plan that meets criteria established by the Secretary, so long as the qualified health plan meets all requirements that are otherwise applicable and the services covered by the medical home plan are coordinated with the entity offering the qualified health plan.

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If the Trump administration alters the ACA, how may that affect direct practices?

The answer to this question will depend on if and how the Trump administration alters the ACA. Because Senate Democrats have enough votes for a filibuster, it appears unlikely that congressional Republicans will be able to repeal the law. It’s possible that Congress could use a budget procedure to enact funding changes, and that the Trump administration could enact other changes through regulatory processes. Such changes, though, would take months. The OIC prepared most of this report the week of November 7, 2016. At that point, it was too soon to know what ACA changes may arise under the Trump administration.

The Trump administration could eliminate the tax penalty that applies to people who don’t purchase health insurance coverage (the “individual mandate”). Direct practices don’t qualify as health insurance for the purpose of the individual mandate, which may be one of the reasons why direct practice enrollment has decreased in the years since this requirement went into effect. If the Trump administration eliminates the individual mandate, it’s possible that more people may start participating in direct practice agreements.

In addition, the Trump administration might start giving Medicaid block grants to states, which would decrease the amount of money that’s available for the Washington state expanded Medicaid program. If the state Legislature is not able to identify an alternative funding source, the state may limit or eliminate the expanded Medicaid program. This, too, could result in an increase in the number of Washington residents who participate in direct practices.

There are many additional potential actions that the Trump administration could take that may result in an increase in direct practice enrollment. Overall, though, it’s simply too soon to know what will happen.

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SOURCE: https://www.insurance.wa.gov/about-oic/reports/commissioner-reports/; https://www.insurance.wa.gov/about-oic/reports/commissioner-reports/documents/2016-direct-practice-report.pdf

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