RALEIGH — A growing health care alternative in North Carolina that shuns insurance for services provided by physicians at a set price could be incorporated into the state’s insurance program for government employees, along with Medicaid — the federal/state health insurance plan for the poor, aged, and disabled.
Dr. Brian Forrest, who in 2002 made his Apex medical practice a pioneer for direct primary care in the United States, said state legislation is needed before direct primary care could be expanded to include state employees or Medicaid patients. He warned that laws would have to be drafted carefully to prevent unintended consequences that could be devastating to this emerging alternative to insurance-led systems.
“We are starting to get some folks interested in doing this in partnership with things like the State Health Plan, and Medicaid,” Forrest said. Direct primary care physicians operate in 46 states, and provide a defined set of high-level primary care and prevention services; the median fee per patient is $70 monthly.
If government insurance plans were interested in adding direct primary care as an option for members or patients, Forrest said, the General Assembly probably would have to pass legislation requesting a waiver from federal authorities, Forrest said.
He said legislation could be necessary “in the next year or so. We’ll be all over it, making sure we get the best bill we can.”
Until then, “It’s perfectly legal to practice the way that 15 of 16 practices are operating now” in North Carolina, Forrest said. “We’ve enjoyed 14 years regulation-free, and it’s gone really great.”
In some states, insurance department officials have classified direct primary care as insurance rather than a medical practice.
They say direct primary care’s concept of offering services at set prices (in some cases, with no limit on the number of office visits) requires physicians to assume risk, making it insurance; at that point, the states regulate the practice under their insurance codes.
Jay Keese, executive director of the national Direct Primary Care Coalition, said 13 states have avoided those regulations by passing bills stating explicitly that direct primary care is not insurance. He recommends other states follow suit, even if their current insurance commissioners are sympathetic to the model.
“We don’t think the take-it-to-the-bank approach is very good,” Keese said, because a subsequent commissioner may interpret the situation differently.
“I have not heard any discussions about this in the General Assembly,” said state Rep. Donny Lambeth, R-Forsyth. He is chairman of both the House Health Committee and the Joint Legislative Oversight Committee on Medicaid and NC Health Choice.
“We’re not aware of any legislative attempts along these lines,” said Kerry Hall, spokeswoman at the state Department of Insurance.
Hall said Commissioner Wayne Goodwin “is always receptive to exploring any possible ideas that would benefit North Carolinians. The department would be glad to be at the table for discussions involving all the appropriate stakeholders.”
Lambeth expects direct primary care “certainly [to] play a role in the future of the health care delivery system,” but would not dominate the industry.
“This is an easier and more efficient model that reduces cost,” allowing the primary care doctor to pass savings to patients while avoiding insurance paperwork and delays in payments, Lambeth said. He explored it as an option while he was chief operating officer of Wake Forest Baptist Medical Center.
Forrest said there are “lots of variations” in direct primary care, but offering unlimited services usually get the attention of insurance companies and regulators.
“You are basically assuming risk because you’re saying that for a set fee every month you’re seeing people as much as they need to be seen, do as many things as you need to do, in an unlimited fashion,” he said.
In North Carolina, 15 of 16 direct primary care practices charge a small office visit or other fees in addition to the monthly retainer, avoiding the unlimited service trigger. The Attorney General’s Office reviewed and approved that model as differing from insurance, Forrest said.
He and Keese “have worked on a lot of this legislation in other states,” Forrest said.
He agrees that a law declaring direct primary care a medical service potentially could allow the concept to expand in North Carolina. But poorly enacted legislation could damage the industry.
“The down side is that there have been states where the legislation has actually been bad,” Forrest said. “The wrong people got involved, you had too many special interests that tried to tag on, and next thing you know it actually made it harder.”
He said direct primary care in West Virginia is now under the control of the insurance department instead of the state medical board because legislation went awry.
Direct primary care practices are “not allowed to advertise or anything else. So you’ve kind of got more government regulation and intrusion in states where it was done poorly,” Forrest said.
In North Carolina, Forrest said, direct primary care physicians are not required to provide extensive details of their practices’ activities to state regulators. “In some of the states that have passed legislation, you have to submit an annual report either to the department of insurance or the department of commerce.”
While some insurers initially felt threatened, and opposed direct primary care in North Carolina, they have backed off, Forrest said, because “it actually saves them money.”
For example, he said, his Apex office has about 2,000 state employees as patients.
“Of those 2,000 state employees who have Blue Cross and Blue Shield insurance, Blue Cross and Blue Shield hasn’t gotten a bill in 12 years. They’re saving 100 percent,” adding that data shows direct primary care patients stay healthier and are more likely to avoid emergency room visits and hospital stays, Forrest said.
Some of “the more forward-thinking” insurance companies are starting to explore plans to include direct primary care, and pay their patients’ monthly fees, Forrest said. One will launch this month.
Though Forrest said it was premature for him to discuss this specific plan in detail, he said the fixed-premium plan would allow participants to avoid Obamacare’s penalty for not purchasing insurance.
Dan Way (@danway_carolina) is an associate editor of Carolina Journal.