Key Takeaways
- A physician can operate a DPC practice without billing health insurance. Instead, patients pay the practice directly for a defined set of primary care services.
- Going direct pay does not eliminate Medicare requirements. Physicians who treat Medicare patients may need to formally opt out and use private contracts.
- A strong membership agreement sets clear expectations for patients. It should spell out the membership fee, included services, exclusions, and other terms of the patient-practice relationship.
What Should Physicians Know Before Starting a DPC Practice?
A physician can generally start a direct primary care (DPC) practice that does not bill commercial health insurance for covered primary care services. Instead, the practice typically charges patients a recurring monthly or annual fee for a defined set of primary care services.
That does not mean a physician can simply stop accepting insurance and operate without considering insurance laws or other healthcare regulations. Medicare, state law, patient agreements, fee structures, and the scope of services offered can all affect how a DPC practice should be structured.
How Does Direct Primary Care Work Without Insurance?
Direct primary care is a payment and practice model in which patients pay the physician or practice directly for a defined set of primary care services. DPC practices commonly charge a recurring monthly or annual fee rather than submitting claims to third-party insurers.
The specific services included in a DPC membership vary by practice. They may include routine office visits, preventive care, chronic disease management, telehealth, secure messaging, care coordination, and other primary care services.
The membership fee generally covers only the services identified in the agreement. Patients may still need health insurance for services outside the DPC practice, such as hospitalization, specialty care, emergency services, or other services the practice does not provide.
DPC is a different way of paying for primary care, not a replacement for comprehensive health insurance.
Can a Physician Stop Taking Commercial Insurance?
In many cases, yes. A physician who wants to transition from a traditional insurance-based practice to DPC can stop participating in commercial insurance networks and establish a direct-pay relationship with patients.
However, the physician needs to address the transition carefully. The practice should determine which services will be provided through the DPC membership and which services, if any, will remain outside the membership. It should also establish clear policies for patients who have insurance but choose to pay the DPC practice directly.
State law matters as well. A growing number of states have enacted laws specifically addressing direct primary care agreements and stating that qualifying agreements are not considered insurance. These laws may establish requirements for the written agreement, fees, termination rights, disclosures, and other terms. Physicians should review the law in the state where the practice operates rather than assuming that every DPC arrangement is treated the same way.
What About Medicare?
Medicare is one of the most important issues for a physician considering a DPC practice. A physician cannot simply treat Medicare patients as private-pay patients without considering Medicare’s rules.
CMS states that physicians and practitioners who see Medicare patients but do not want to enroll in Medicare must generally opt out of Medicare. The opt-out process includes filing an affidavit and entering into a private contract with each Medicare patient.
Those private contracts establish that the patient will pay for the services out of pocket and that neither the physician nor the patient will submit the services to Medicare for payment.
Medicare opt-out status also carries specific timing and renewal requirements. CMS currently states that an opt-out period generally renews every two years unless the physician properly cancels the opt-out.
For this reason, a physician who is already treating Medicare patients should address Medicare status before transitioning to a DPC model. The practice should also distinguish between services included in the DPC membership and services that may implicate Medicare requirements.
What Should a DPC Membership Agreement Include?
A DPC practice should have a written agreement between the practice and each patient or household participating in the membership. The agreement establishes the basic business terms of the relationship: what the patient pays and what the practice provides in return.
At a minimum, the agreement should clearly address:
- The amount and frequency of the membership fee
- The primary care services included in the fee
- Services that are not included
- Any additional fees
- Patient cancellation and termination rights
- Practice termination policies
- How missed payments are handled
- Whether family members can participate under the same arrangement
- The fact that the membership is not comprehensive health insurance
- How the practice handles services outside the membership
State DPC laws may impose additional requirements. For example, some states require a prominent disclosure that the agreement is not health insurance.
Jackson LLP drafts membership and direct-pay agreements that clearly define the services, fees, patient obligations, and other terms of the relationship. Our attorneys can also review your proposed DPC structure for state-specific requirements and potential legal concerns.
What Other Legal Issues Should Physicians Consider?
Moving away from insurance billing does not remove the other legal requirements that apply to a medical practice.
A physician starting a DPC practice should consider the practice’s corporate structure and state corporate practice of medicine requirements, particularly if another company will provide administrative or management services. A management services organization (MSO) arrangement may require careful structuring of management fees, control rights, and the relationship between the medical practice and management company.
The practice should also review its fee structure for potential fee-splitting and Anti-Kickback Statute concerns, particularly when third parties are involved in marketing, patient acquisition, administrative services, or payment arrangements.
Patient communications and marketing deserve attention, too. Claims about unlimited access, guaranteed outcomes, services included in a membership, or savings compared with insurance should accurately reflect what the practice provides.
Finally, physicians should consider what happens when a patient needs care outside the scope of the DPC practice. The practice should have clear policies for referrals, emergencies, after-hours care, and circumstances in which the physician-patient relationship ends.
Can a Physician Convert an Existing Practice to DPC?
Yes, but turning off insurance billing is only one step in transitioning an existing practice.
A physician converting to DPC should review existing payor contracts, patient agreements, employment and contractor arrangements, leases, vendor contracts, and other obligations before changing the practice’s payment model.
The physician should also establish a transition plan for existing patients. Patients need clear information about the new payment structure, what services will be included, whether they can continue using their insurance for other services, and what happens if they do not join the DPC practice.
Medicare patients require particular attention because Medicare opt-out rules and private-contract requirements may apply.
Need Help Starting a Direct Primary Care Practice Without Insurance?
A DPC model can give physicians greater control over how they structure and deliver primary care. But “not taking insurance” does not mean that the practice operates outside the healthcare regulatory system.
Before launching a DPC practice, physicians should address the practice’s legal structure, state DPC and insurance laws, Medicare requirements, membership agreement, fee structure, patient communications, and relationships with any management companies or other third parties.
Our healthcare attorneys can assist with the legal side of launching your DPC practice, including practice structure, membership agreements, Medicare considerations, and other regulatory requirements. Schedule a consultation to discuss your plans with our team.
Free Attorney Consultation
Free Attorney Consultation
Frequently Asked Questions About Direct Primary Care Without Taking Insurance
Can I start a DPC practice without accepting health insurance?
Yes. A DPC practice typically charges patients directly through recurring fees instead of billing commercial health insurance for services covered by the membership. State law may impose specific requirements on the arrangement.
Is a DPC membership the same as health insurance?
No. A DPC membership generally covers a defined set of primary care services and is not comprehensive health insurance. Patients may still need insurance to cover services outside the DPC practice.
Do DPC physicians have to accept Medicare?
No. But physicians who treat Medicare patients and do not want to bill Medicare must follow Medicare’s opt-out rules. This generally includes filing an opt-out affidavit and entering private contracts with Medicare patients.
Does a DPC practice need a patient contract?
Yes. A written membership agreement establishes the financial and service terms of the DPC relationship. State law may also specifically require a written DPC agreement containing certain terms and disclosures.
Can I keep my health insurance while joining a DPC practice?
Yes. A patient can generally maintain health insurance while paying a DPC practice directly for the primary care services included in the membership. The DPC membership does not provide comprehensive coverage for services outside the practice.
Does a DPC practice need to comply with state insurance laws?
Yes. It depends on the state and the structure of the arrangement. Some states expressly provide that qualifying DPC agreements are not insurance, while also imposing specific requirements on those agreements. Physicians should review the law where the practice operates before launching the model.
