Direct Primary Care is the epitome of value-based medicine. In exchange for a monthly cash payment, patients have 24/7 access to their medical provider and a defined package of medical services.

The John Locke Foundation has released a report on how direct primary care restores the traditional doctor-patient relationship. The DPC movement is certainly small in number, considering that just 2 percent of the 68,000 members of the American Academy of Family Physicians participate in this type of health care delivery.

Yet it’s a growing force that is gaining popularity here in North Carolina partly because these providers don’t have to practice under the thumb of state government, as is the case in other states. No price controls, no defined menu of services, no limit on patient panels. How refreshing.

The map below shows the 20 different DPC practices in 13 locations that span from Asheville to Williamston:

To ensure that the restored physician-patient relationship remains untouched by government red tape, it would be wise for policymakers to pass legislation stating that direct care providers do not act as risk-bearing entities. In other words, patients’ periodic membership fees should not be classified as insurance premiums.

Legislation that clearly defines DPC as not being an insurance product will save this health care delivery method from being subject to regulations under the N.C. Department of Insurance in the future. To date, 13 states have enacted legislation that specifically defines DPC as not acting as insurance. Passing clarifying legislation would likely lead to a stronger DPC presence in North Carolina.

Changes to federal policy will also work in tandem with recommended state action to spur industry growth. While direct care practices do not accept third-party insurance, it is recommended that patients purchase a high-deductible health plan for emergency medical situations beyond primary care (and required under Obamacare’s individual mandate).

As more Americans are purchasing high-deductible health plans, more are also pairing Health Savings Accounts with them. According to America’s Health Insurance Plans, 20 million policyholders now use HSAs. Having an HSA permits you to contribute and withdraw funds on a tax-free basis, so long as the money is used for “qualified medical expenses” as determined by the IRS.

Because monthly payments are not considered to be a qualified health expense under the IRS, HSA holders cannot make monthly DPC payments with HSA funds. To fix this, legislation known as the Primary Care Enhancement Act was introduced in 2015 to amend the tax code such that direct care payments are qualified medical expenses.

Another component of the bill calls for Medicare to pay providers a rate for program beneficiaries seeking DPC. Federal rules in place today are extremely confusing and serve as a hindrance for Medicare patients to access a direct care physician.

Physicians can take Medicare patients but can bill only for services not covered under the government payer — which leaves little room for health care delivery, considering Medicare part B covers most preventative needs.

To steer clear of violating Medicare’s Balanced Billing rule, DPC practices often resort to signing an agreement to opt out of Medicare completely for two years if they see a Medicare-eligible patient willing to pay out of pocket for care and not file any claims to be reimbursed under Medicare.

The Medicare alternative payment model (APM) under the Primary Care Enhancement Act has good intentions of opening up access to DPC for Medicare patients, but such a move could seriously undermine the main appeal of DPC for many doctors and patients — removing government and middleman intervention so providers can actually practice the art of medicine and spend more time with their patients.

If Medicare were to determine a set rate for physicians, it would set a precedent for Medicare to get in the business of dictating the types of services doctors offer their patients to get paid.

A better approach would be to have Medicare distribute vouchers to patients and let them decide where to receive DPC services. There is no one-size-fits-all DPC. It’s best to keep it that way to empower patients with more choices to find a practice most suitable for them.

Katherine Restrepo is health and human services policy analyst for the John Locke Foundation.