DIRECT CARECASH ONLY DIRECT PRIMARY CARE Direct Primary

DIRECT CARE/CASH ONLY DIRECT PRIMARY CARE Direct Primary Care September 22, 2016

Today Introduction Discussion: What is direct primary care Background Growth How they function Visits Services/Procedures Pricing Examples Issues/Final Points

Introduction Stephen Peters, MA, Private Practice Associates Group Purchasing Management Service (support of independent physicians Payor Contracting Direct Primary Care Led a discussion group at Creighton on cash only models Attended several conferences Researched for an independent physician considering Relocated two physicians into a concierge model Currently consulting on three clinics looking to add DPC Attended Direct Primary Care conference, Lincoln NE, State Senator: Merv Riepe Disclaimer: Although I have spent a great deal of time in this space, I do not have a bias toward one way or another. Market forces, patient demographics and provider efforts ALL play a role in the Direct Pay model.

What is Direct Primary Care Traditional Fee for Service: Insurance or some third party payor reimburses physician for care and procedures. Negotiated rate. --Reimbursement --Co-pay ( or it could be waived at time of service) Two Types: Concierge and Direct Pay Concierge Physician charges a Yearly Fee (aver: $1500) per patient and provides 24/7 care • • • Anytime visit (within scope) Direct patient contact, typically no mid-level. Regular appointments. Special appointments Chronic condition management. PCMH (maybe) (Potential Hospital visits) Fee for service model (so you still have insurance, the yearly fee allows for extra care services. Potential co-pay. • Directs contact with specialists • Very small patient panel

What is Direct Primary Care Physician charges a monthly fee $45 to $95 per patient • • • • Anytime visit (within scope) larger patient panel Direct patient contact, typically no mid-level. Regular appointments and unplanned Chronic condition management. PCMH (maybe) (Potential Hospital visits within scope) No insurance reimbursement, no third party payment No co-pay. One source of revenue: direct pay Reduced overhead with limited billing/insurance issues Office visits covered Procedures, services, lab: direct pay at time of visit. Procedures and service reduced rate Specialists: Negotiate reduced rates for DPC patients Reporting to payors removed.

Hypotheticals A complete and thorough proforma must be completed. NOTE: Visits only. No procedures/ancillary added Fee For Service: Patient Panel: 2100 patients @ $145. 00 each x 2 visits= $725, 000 Concierge: Patient Panel: 800 patients @ 1500. 00 yr X 2 visits @ 145. 00= $1, 432, 000 Direct Primary Care: Patient Panel 2100 patients @ $55. 00 per month ($660 yr) @$ 75. 00 per month ($900 yr) $660 x 2100= $1, 386, 000 $900 x 2100= $1, 890, 000

AAFP Statement on Direct Pay: “The American Academy of Family Physicians supports the physicians and patient choice to, respectively, provide and receive health care in any ethical health care delivery system model, including DPC practice setting”. Accountable Care Act: Provision made that allows DPC> Go TO: http: //www. jabfm. org/content/28/6/793. full

How direct pay works: Direct Primary Care How they function: Visits: Any other clinic, scheduled and non-scheduled Hospital: Physician decides Labs and Test: Any POC labs can be administered Services/Procedures: Procedures that can be performed there. Payment at time of service or a plan Pricing: GO TO WEBSITE: http: //www. ascentdpc. com/pricing/ NEGOTIATION WITH SPECIALTY: Per specialist Provider works to establish and agreement that allows for a price reduction Catastrophic Insurance is recommended.

How direct pay works: GUIDING PRINCIPLES FOR OPERATING A CASH-BASED PRACTICE 1. Prior to transitioning to or opening a cash-based practice, physicians should develop a business plan that includes the following: (a) An analysis of the target patient mix, and, if transitioning from a traditional practice, an analysis of how the target compares to the current patient population with respect to demographics such as age, income and health status. (b) A description of the type(s) of care that will be offered by the practice. (c) An evaluation of practice expenses to determine revenue requirements. (d) A description of how the marketing, billing and collection needs of the practice will be met. (e) Consideration of the legal, regulatory and contractual implications of opening or transitioning to a cash-based practice. 2. Cash-based practices should develop and maintain an appropriate and transparent fee schedule that is understandable and easily accessible to patients. 3. Cash-based practices should have clearly defined payment policies that help patients understand their payment responsibilities. These policies should include guidance about how patients can coordinate health insurance benefits with cash-based physician services. 4. Cash-based practices should encourage patients to maintain health insurance coverage for more complex or catastrophic health care events. (CMS Rep. 3, A-08)

Issues: 1. Must pay out of pocket for all services and procedures including lab. Clinic greatly reduces cost on these, but must be diligent in tracking and not wasting or making mistakes. Especially POC tests. 2. Prescriptions: Clinic must enter into a program of dispensing prescriptions Prescription plans with pharmacies and other sources. Costly to patient. 3. Specialist: Direct costs to patient. The physician in most cases have actually negotiated with specialists to reduce costs to DPC. However, availability, Stark, and other issues arise. This is a difficult spot. 4. Patient encouraged to get catastrophic insurance that can be costly. 5. Medicare/Medicaid and HSA-moderate usage allowed. Still unclear. 6. Overhead and cost containment: Is critical. 7. State Regulations: Some states have determined that DPC is a form of insurance, other states have rules it is not. Nebraska has legislation approved. Still some hurdles. 8. Care coordination not reimbursed or limited

Issues: From: Self-Pay Patient Gold Direct Care http: //www. golddirectcare. com/ As do most DPC’s, Dr. Gold offers free visits, same- or next-day appointments, and unlimited communications (phone, video, e-mail, etc. ) for a monthly fee. The fees are adjusted for age, starting at $30 a month for those 21 and under, $50 for those 22 -30, $75 for the 31 – 44 age group, and $90 for those between 45 and 65. He also offers membership to those age 65 and older, charging $125 a month. He also has posted on his site the discounted lab prices he can offer patients, such as an electrolyte panel for $5 that Healthcare Bluebook says has a “fair” price of $18 (meaning that’s what insurers typically pay) and a Vitamin B-12 test for $45 ($39 according to Healthcare Bluebook, so a little higher but not much). Access Family http: //accessfamilymedicine. com/fees/ Harkin Health ( United Health-Initiative) https: //www. harkenhealth. com/insurance http: //khn. org/news/unitedhealth-tries-boutique-style-health-plan/

Final Points: Larger Groups are looking at a form of DPC CHI United Health (Harkin Health) Most of the data about DPC is coming from the physicians in the program, a couple of associations. So there is not a strong sense of actual success from patients Most physicians have a Hybrid Clinic and then transition. Fee for service Direct pay Concierge Dr. Clint Flannigan– Colorado www. nexthealthcare. com Risk and Action: Physicians in this model have to keep a clear path to sustaining patients in the direct fee. If there is a disruption, it the provider cannot act, expenses do not stop. In Fee for Service, you typically have a two month lag and a A/R to continue some cash flow. Specialty issue: Cost to patient