Share

Archives: KHI News Service

On January 1, 2017, the KHI News Service became part of KCUR public radio’s new initiative, the Kansas News Service. The Kansas News Service will continue to cover health policy news and broaden its scope to include education and politics. All stories produced by the former KHI News Service are archived here. Stories and photos may be republished at no cost with proper attribution and a link back to KHI.org.

Direct primary care not subject to state insurance regulation under new law

Governor signs bill specifying that month-to-month payment agreements aren’t insurance

By Andy Marso | May 14, 2015

Direct primary care not subject to state insurance regulation under new law
Photo by Kevin Brown/Special to KHI News Service Josh Umbehr operates a direct primary care practice in Wichita where he sees patients who pay him a flat monthly fee.

Starting July 1, primary care physicians in Kansas may see patients who pay them a flat monthly fee without fearing that such agreements are subject to state insurance laws.

Josh Umbehr, a doctor who runs a Wichita practice that has gained notoriety for practicing under the no-insurance “direct primary care” model, pushed the Legislature to pass a bill that specifies such plans are not health insurance.

Gov. Sam Brownback announced last week he had signed the bill.

Umbehr said via email that his practice, AtlasMD, and the few other direct primary care practices in the state had not faced insurance regulation in the past. But a West Virginia doctor operating under a similar model faced investigation by his state’s insurance department 10 years ago to determine whether he was selling insurance without a license.

Since then, Umbehr said, some doctors have been nervous about trying direct primary care. So he and other advocates of the model are pushing for state laws to ensure they’re free of insurance regulation.

“Now Idaho has (also) signed similar legislation to add another nail in the coffin of this false concern,” said Umbehr, who unsuccessfully ran for lieutenant governor on the Libertarian Party ticket last year. “So it really helps the movement.”

The Kansas bill also defines what qualifies as a “medical retainer agreement” exempt from insurance law and what services those primary care agreements can contain: routine screenings, lab work, medical supplies and prescriptions.

It also requires physicians who operate under such agreements to inform patients in writing that the agreements are not insurance, do not satisfy the insurance requirements of the federal Affordable Care Act and do not cover the costs of any treatment not outlined in the monthly agreements.

The Kansas Insurance Department did not take a position on the bill. Bob Hanson, a spokesman for the department, said via email that the department compiled a fiscal note for the bill “which says that the medical retainer agreements for routine health care services, supplies, and drugs are outside the jurisdiction of the Commissioner of Insurance.”

Consumers who are unsatisfied with their direct primary care agreements have no recourse with the insurance department, but Umbehr said they can opt out of his monthly contracts at any time with 30 days notice.

Patients also can take complaints about physician professionalism to the Kansas Board of Healing Arts or, under the Consumer Protection Act, to the Attorney General’s Office. Disputes about the monthly agreements also can be settled in the court system.

The Senate passed the direct primary care bill unanimously.

On the House side, three members voted “no,” including Rep. John Edmonds, a Republican from Great Bend.

Edmonds said he did not believe the House had fully vetted some miscellaneous measures attached to the direct primary care bill. But he said even if those had not been attached, he likely would been a “no” vote, although he could see why doctors like Umbehr do not want their practices regulated like insurance.

“They’re really not an insurance agreement, so that’s why,” he said. “I think it’s probably there to make sure the insurance commissioner doesn’t get overly ambitious.”

Edmonds said he’s “dubious” about direct primary care plans in general, referring to them as “concierge medicine” and saying they have an “elitist” feel to them because not everyone can afford them.

Edmonds said his wife runs a pediatric clinic where she sees all comers, regardless of their finances.

“About 40 percent of those are Medicaid patients,” Edmonds said. “We don’t do wallet biopsies before they come in. We treat everybody.”

Umbehr has said he and other newcomers to the direct primary care field have worked hard to shed the “concierge medicine” label, developing business models with monthly fees affordable to the average American.

A direct primary care plan, coupled with a high-deductible catastrophic care insurance plan for unplanned hospitalizations, can be a less expensive option for some than paying monthly premiums for comprehensive insurance plans, he said.

Edmonds said he remains unenthused about primary care by monthly subscription.

“It may be the coming thing; I’m just not very comfortable with it,” Edmonds said. “I’m not what you would call avant-garde.”