.
Although patients can use HSAs to buy $500 Chanel prescription sunglasses and cosmetic surgery, they are not allowed to use it to pay fees for direct primary care.
"DPC is a direct arrangement between doctors and patients, which cuts the red tape out of medical care, and kicks the bureaucrats out of the exam room," writes Dr. Jane Orient, executive director of the Association of American Physicians and Surgeons, in a recent commentary.
Currently, however, patients must pay their monthly DPC membership fees with after-tax dollars.
To change that, Congress was considering HR 365, a bill that would let patients use their HSAs to pay DPC fees. The bill looked promising until special interests got ahold of it. Leaving little time to comment, the bill got to the House Ways and Means Committee, where the bill was "workshopped" and changed to HR 6317.
While the bill was in the committee, AID submitted a letter (see letter below) to try to remedy some of the damaging additions, which made the previously good bill worse than no bill, according to AID members who are DPC doctors familiar with the bill. Lobbyists had modified the bill to make it favorable to big-box retailers, like CVS and Walmart, working to get a bigger share of the primary care market.
Among the damaging changes, Orient summarized, were that the government would micromanage what a DPC could or could not offer, cap the fee that the DPC could charge, and allow only Direct Primary Care, not Direct Patient Care arrangements with specialists. So, a direct care agreement with an endocrinologist to manage diabetes would not qualify.
Unfortunately, the bill passed the Ways and Means Committee, and the U.S. House of Representatives passed it yesterday. The current version, now bundled into HR 6199, is slightly better thanks to the input of AID, AAPS, and vocal physicians and patients. It is now on its way to the Senate.
What groups like AID and AAPS would like to see is the ability for HSA funds to pay for DPC without restriction.
To: Honorable Members of the Ways and Means Committee
From: Marni Jameson Carey, Executive Director, Association of Independent Doctors
Date: July 10, 2018
RE: H.R. 6317, "To amend the Internal Revenue Code of 1986 to provide that direct primary care service arrangements do not disqualify deductible health savings account contributions, and for other purposes."
On behalf of the Association of Independent Doctors, a national nonprofit (501(c)(6)) trade association with more than 1,000 members in 33 states, many of whom are either direct primary care doctors or would like to be, I am writing to voice several concerns regarding the bill formerly known as HR 365, which I understand is undergoing some revision.
On its face, the new bill, which does not yet have a number, would amend the Internal Revenue Code of 1986 so that consumers could use their tax-deductible health savings account contributions to pay for direct primary care service arrangements.
While we at AID heartily support any effort to allow consumers to apply their HSA funds toward the purchase of their health care, at their discretion, including services provided under a DPC agreements, we object to several constraints being imposed on the new iteration of this bill.
The goal of direct primary care is to restore the patient-doctor relationship, and eliminate the intrusion of a third-party payer, whether that payer is the government or private insurance. At the heart of this bill is an effort to allow the free market to dictate cost of care, not a third party. The DPC model has shown repeatedly that it substantially reduces health care costs, saving both consumers and employers, while improving quality and satisfaction.
By allowing patients to pay doctors directly with their own money makes patients better consumers. However, as the bill winds its way through Congress, it has taken on some restrictions that defeat the heart and soul of this bill, which, again, is to let consumers buy, and doctors sell. I list here, on behalf of AID's national membership of independent doctors, and others, the following objections:
- DPC services should not be limited by codes nor by definitions of primary care. This again restricts the consumers right to buy, and the doctors right to sell services outside of government oversight. For doctors to have to make sure they aren't providing services not included in "the code" defeats the purpose.
- The definition of DPC doctor is also too narrow. (See Eligible DPC providers are onlythose defined as such in Sec. 1833(x)(2)(A).) Other specialties beyond those listed could absolutely participate in this care model and should be allowed to. Why can't a woman use her HSA to pay for a one-year contract with an obstetrician when she is having or trying to have a family? What about using an HSA to pay for a pediatrician, or an endocrinologist, who is managing your diabetes? It's the consumer's money, and the doctor's decision what to charge.
- Remove caps on pricing and bundling. (Re: The limitation that states: "With respect to any individual for any month, such term shall not include any arrangement if the aggregate fees for all direct primary care service arrangements (determined without regard to this subclause) with respect to such individual for such month exceed $150." Again, the effort to restore the doctor-patient relationship absent of government dictates means the parties should determine an agreed upon price. Having a government regulate this with a cap of $150 per month defeats the purpose of letting the free market dictate costs. Suggested revisions would also mandate that the capped fee cover all primary care services and provide only limited flexibility to bill for additional services.
If the point of this well-intentioned bill is to deregulate health care in primary care sector to make it more affordable; to allow consumers to use their HSA accounts to purchase the health-care services they desire without caps and encumbrances; to lower costs and increase price transparency, then these restrictions must be eliminated. Thank you for your attention.
Respectfully,
Marni Jameson Carey
Executive Director
Association of Independent Doctors
400 N. New York Ave., #213
Winter Park, Florida 32789
407-571-9316
HR 6317: Special Interest's Bill Perpendicular to the President's Agenda for Health Care Freedom
On July 11, 2018, the House Ways and Means Committee approved HR 6317, "The Primary Care Enhancement Act of 2018," in lieu of a much simpler and better bill, HR 365. Below is a summary of how this flawed legislation unfairly taxes patients of DPC doctors who don't comply with ObamaCare rules and other new regulations. Even when other ObamaCare restrictions are being repealed and the President has demanded cuts in regulation, Congress is unwittingly perpetuating ACA overregulation.
- HR 6317 is tied to ACA rules that define what primary care is.[1] Care not defined by ACA as primary care, could not be included in an HSA-eligible DPC membership. Patients who enter a DPC relationship with a physician offering care outside of the ACA definition of primary care could not use their own HSA dollars to see this doctor and would have to use after-tax dollars-- essentially a penalty or tax.
- HR 6317 inappropriately caps and constrains the power of the free market to encourage innovation and how individuals can spend their own HSA dollars for medical care expenses in a Direct Primary Care setting. HSA dollars are not capped and constrained in any other area of medical care, e.g. fee-for-service primary care, knee replacements, childbirth costs, etc.
- HR 6317 caps what the physician can charge which makes this legislation the first federal attempt at price controls for HSA-eligible medical services in the cash-based, free market setting. Meanwhile, there are no ceilings on HSA-eligible medical charges by insurers or hospitals.
- HR 6317 will further devalue the role of the primary care physician by incorporating 1833(x)(2)(A) of the Social Security Act, also created by the ACA, allowing Nurse Practitioners and Physicians Assistants to operate HSA-eligible DPC practices. This will aggravate increasing scope of practice concerns and drive the improper "industrialization" of DPC facilitated by mergers between insurers, providers, and other middlemen like PBMs.
- HR 6317 increases unnecessary regulations on physician-run small businesses and individual physicians - conflicting with the President's goal of reducing regulation and eliminating unnecessary regulatory costs to promote small business growth.
- HR 6317 improperly defines DPC as a "service arrangement" under Section 223(d) of IRS code, instead of explicitly defining it as medical care under Section 213(d). This flaw could cloud helpful state laws exempting DPC from regulation as insurance and impede additional states from passing similar provisions.
- HR 6317 will adversely affect the flexibility of HSA use in collaboration with Trump Administration reforms to lower patient costs and increase patient options, like Association Health Plans (AHPs) and Short Term Limited Duration Insurance (STLDI). There will be higher costs incurred by employers, employees, and patients, thanks to constraints on allowable medical services.
- New regulations would require billing for all prescription drugs, running counter to the Administration's focus on lowering prescription costs and eliminating middlemen. It forces DPC offices to bill for these drugs often included in the membership fee. It eliminates the ability of medications for routine procedures covered by the monthly DPC fee, like steroids for joint injections, local anesthetics for lesion removal, medication used in nebulizer treatments.
- HR 6317 imposes new regulations on any extra medical services that may be included in the medical service fee. This disallows innovation that increases cost savings and benefits the patient. For example, items like EKGs, spirometry, ear lavage, skin lesion removal, nebulizer treatments, removal foreign bodies are included services. This legislation would not allow any services that fall outside the designated CPT codes without disqualifying a patient from contributing to an HSA. These items would have to be billed through insurance or charged a separate cash fee outside periodic fee. This will benefit insurers but create unnecessary obstacles to the affordable independent DPC model.
- This improper federal regulation will drive new insurer requirements in HSA-eligible high deductible plans like mandatory submission of CPT codes and patient data. This could drive independent DPC practices who choose not to submit out of business.
- HR 365 is a bipartisan bill, has been vetted multiple time and has 35 co-sponsors (https://www.congress.gov/bill/115th-congress/house-bill/365). HR 6317 has not been vetted and was released with less than 48 hours for interpretation and thoughtful response.
Bottom line: This bill is a violation of the rights of patients and physicians and simply bad policy. Instead of HR 6317, Congress should expedite passage of HR 365 or write a new version that includes language permitting any "direct care" agreement to allow specialist direct contracting and truly empower patients to use their own HSA dollars to see the physicians of their choice, not the physicians who comply with counterproductive overregulation. Stop the DPC tax for everyone, not just those who agree to government demands.
[1] Sec. 1833(x)(2)(B) of the Social Security Act created by Sec. 5501 of ACA, http://bit.ly/cptcodesaca