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Wyoming Exempts Direct Primary Care from Insurance Regulations

April 14, 2016
By Marcus Rech

Wyoming Gov. Matt Mead (R) has signed into law Senate File 49, which will exempt direct primary care practices from state insurance code regulations.

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Wyoming Gov. Matt Mead (R) has signed into law Senate File 49, which will exempt direct primary care practices from state insurance code regulations.

Direct primary care (DPC) is a payment model in which patients pay doctors a monthly fee in exchange for a suite of services. Bypassing insurance companies reduces physicians’ administrative costs and time spent processing claims, allowing doctors to spend more time with patients and charge lower prices for health care.

The average monthly membership fee for a direct primary care practice is $93, and some practices charge as little as $26 per month, states a 2015 Journal of the American Board of Medicine survey of direct primary care practices.

Mead signed SF 49 into law February 29. By clarifying that direct primary care is not a form of insurance, the law will make it easier for physicians to enter private agreements with patients who prefer to pay doctors directly rather than through third-party health insurers.

An Answer to Cost Crisis

Charles Katebi, a policy analyst at the Wyoming Liberty Group, says exempting direct primary care providers from cumbersome insurance regulations will help keep providers’ doors open.

“All legal entities regulated as insurers must hold reserves in excess of $5 million as a safeguard against insolvency,” Katebi said. “That rule would shut down all of the direct primary care practices currently in operation in Wyoming and prevent all but the largest primary care groups from operating.”

Katebi says the direct primary care model creates market incentives for doctors to offer higher quality care at prices patients can afford.

“Deregulating direct primary care will go a long way toward addressing many problems that plague Wyoming’s health care system,” Katebi said. “Employer-sponsored plans that include direct primary care have substantially lowered health care costs by incentivizing doctors to provide better care rather than more care.”

DPC vs. the System

Dr. Hal Scherz, founder of Docs4PatientCare, says Wyoming’s protection of direct primary care providers will help bring relief to a health care system that has grown unreasonably expensive for patients and physicians.

“We’ve got a huge problem here that’s brewing in our health care system, and what direct primary care does is a win-win for all—patients, doctors, the system itself,” said Scherz.

Scherz says direct primary care allows doctors to establish a “reasonable income stream” without the overhead required to process insurance claims. Some direct primary care providers are making more money by serving direct-pay patients on monthly plans than when billing through insurance, and Scherz says they are using their profits to hire additional nurses and wellness experts to reduce their patient load.

“Direct primary care lets doctors limit their number of patients,” Scherz said. “That means they can give patients more time, have a predictable income stream, have direct relationships with patients, give better care, and focus on keeping patients well.”

By freeing up doctors to focus on providing better care rather than on insurance codes, direct primary care “restores the joy of medicine,” Scherz said. “Doctors have told me, ‘This is why I went into medicine to begin with.’”

Marcus Rech (mr308512@ohio.eduwrites from Centerville, Ohio.

Internet Info:

Charlie Katebi, “Direct Primary Care: Lower Costs and Better Health,” Wyoming Liberty Group, February 19, 2016: https://www.heartland.org/policy-documents/direct-primary-care-lower-costs-and-better-health

Image via Thinkstock

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