Estimated reading time: 6 minutes
A couple of weeks ago, I published an article about H.R. 1, also known as the One Big Beautiful Bill (OBBB). The article talked about how the OBBB will impact employee benefits. If you haven’t checked it out, I hope you will.
One aspect of employee benefits getting a lot of attention (because of the OBBB) is direct primary care (DPC). I must admit that I don’t know a lot of details about DPC, so I asked our friend Cory Jorbin, Esq., national director of compliance consulting at Hub International, if he would share his knowledge with us. And thankfully, he said yes. In his role, Cory consults with employers of all sizes to design, implement and ensure the compliance of employee benefit plans. He holds a Juris Doctorate from Cleveland State University and is a licensed attorney in the State of Illinois and admitted to practice before the U.S. Tax Court.
A quick reminder that Cory comments shouldn’t be construed as legal advice or as pertaining to any specific factual situations. If you have detailed employee benefit questions, they should be addressed directly with your friendly neighborhood benefits broker or labor and employment attorney.
Cory, thanks for being here. When we spoke last about the OBBB and employee benefits changes, you mentioned direct primary care (DPC). Let’s elaborate on it today. What is direct primary care and how does it work?
[Jorbin] Direct Primary Care (DPC) is a primary care delivery model where a provider or network of providers provide primary care services to members at a fixed periodic fee. The providers do not bill the health plan for office visits. This model is similar to a gym membership, where in exchange for a fixed fee, members can use the gym as much or as little as they need. Regardless of the number of visits, the fee remains the same.
What are the advantages of DPC for employer sponsored benefit plans? Are there any downsides to consider?
[Jorbin] For employer sponsored benefit plans there are several advantages.
- All, or at least some (depending on whether DPC is mandatory or optional) primary care claims become fixed costs rather than variable based on claims.
- DPC may provide a higher level of service than traditional primary care as there is less focus on billing health plans. This could lead to improved health outcomes for plan participants, especially those with chronic conditions requiring frequent primary care visits.
- Removal of cost as a barrier to receiving care. Since the DPC model is based on a fixed fee, plan participants who may otherwise put off receiving primary care due to cost would no longer have this barrier.
Here are potential downsides to consider as well.
- If the employer requires use of the DPC there will be disruption for plan participants who will have to change primary care providers, which they may not like.
- While fixed fees may be preferrable for the employer, they may potentially be greater than the variable fees associated with primary care claims under a traditional model.
- Employer plans may be able to obtain less data from DPC providers than they are from carriers and third-party administrators (TPAs). This will vary by DPC provider and highlights the importance of considering the availability of data by DPC provider.
A healthcare model that’s also getting more attention these days is concierge coverage. Can you explain what concierge coverage is and why it’s different from DPC?
[Jorbin] The main difference between DPC and concierge medicine is that DPC under the One Big Beautiful Bill Act has a statutory definition, while there is no such definition attached to concierge medicine. This means there is no consistency in what constitutes concierge medicine across different types of providers.
Some providers using the concierge label have guaranteed access to same-day appointments, or longer standard appointment times. Some providers offer enhanced access to their teams via apps, text messaging, or telehealth visits. Other providers may even come to the home or office of the member. Notably, unless specifically indicated by the concierge provider, it should be expected that concierge providers will still bill the health plan when they provide medical services.
How can an employer determine if a DPC is a good fit for their organization?
[Jorbin] Employers should start with understanding their populations and the availability of DPC where they have employees. The DPC market is very fragmented as it is still relatively new. This means if an employer has employees in two different states, there may not be a single DPC that has locations in both states. Even within a single state, employees may not have access to a single DPC provider throughout that state. This means the employer must choose between potentially offering different DPC providers based on location or including DPC as part of their plan in one location, but not others.
Next, employers should understand their current primary health claims. Are these significant? Are these growing? Do they have many employees with chronic conditions such as diabetes, or hypertension with frequent primary care visits? Do employees see cost as a barrier to obtaining primary care services? All of these are important questions to ask and may point to implementing DPC.
These considerations will help the employer further evaluate whether DPC is a good fit for their plans.
Last question. Many organizations are entering what I call “open enrollment season”. Is adding a DPC component something that’s relatively easy to do?
[Jorbin] Adding DPC to an employer sponsored plan can be relatively simple. That being said, communication is very important since employees may not be familiar with DPC. This is especially important if the employer is considering a mandatory DPC model. Employees will need to understand what the DPC is, how to access it, and any limitations of the DPC. Ultimately, effective communication can help make the rollout of the DPC successful.
Employers will also need to work with their carriers or TPAs to determine what type of integration or data feeds are needed between the DPC and the carrier/TPA. Since DPCs can vary significantly in their experience of working with employer sponsored plans, carrier and TPAs, this integration needs to be considered as part of the vetting process.
I want to thank Cory for taking the time to share with us a little more about the components of direct primary care. If you want to learn more about the OBBB Act and its impact on employee benefits, check out Hub International’s webinar on the subject.
The good news is that employee benefit options are expanding. That could be great for both organizations and individuals. But employee benefits remain complex. So doing the research to find out the best options for your workforce is still absolutely necessary. Don’t rule out using subject matter experts like benefits brokers and lawyers to get the information you need.
Image captured by Sharlyn Lauby while exploring the streets of Los Angeles, CA
