DPC: An Alternative to Fee-for-Service

The Direct Primary Care Model

The direct primary care (DPC) model gives family physicians a meaningful alternative to fee-for-service insurance billing, typically by charging patients a monthly, quarterly, or annual fee (i.e., a retainer) that covers all or most primary care services including clinical, laboratory, and consultative services, and care coordination and comprehensive care management. Because some services are not covered by a retainer, DPC practices often suggest that patients acquire a high-deductible wraparound policy to cover emergencies.

Direct primary care benefits patients by providing substantial savings and a greater degree of access to, and time with, physicians.

The Academy’s Position on DPC

The American Academy of Family Physicians supports the physician and patient choice to, respectively, provide and receive health care in any ethical health care delivery system model, including the DPC practice setting.

Typically, these “retainer fees” guarantee patients enhanced services such as 24/7 access to their personal physician, extended visits, electronic communications, in some cases home-based medical visits, and highly personalized, coordinated, and comprehensive care administration. The AAFP supports the physician and patient choice to, respectively, provide and receive healthcare in any ethical healthcare delivery system model, including the DPC practice-setting.

The DPC contract between a patient and his/her physician provides for regular, recurring monthly revenue to practices which typically replaces traditional fee-for-service billing to third party insurance plan providers. For family physicians, this revenue model can stabilize practice finances, allowing the physician and office staff to focus on the needs of the patient and improving their health outcomes rather than coding and billing. Patients, in turn, benefit from having a DPC practice because the contract fee covers the cost of all primary care services furnished in the DPC practice. This effectively removes any additional financial barriers the patient may encounter in accessing routine care primary care, including preventative, wellness, and chronic care services. Most patients, depending on affordability, choose to still carry some form of insurance, such as a high deductible health plan, for coverage of healthcare services that cannot be provided in the primary care practice setting, such as specialty care and hospitalizations.

Ideally, the DPC model is structured to emphasize and prioritize the intrinsic power of the relationship between a patient and his/her family physician to improve health outcomes and lower overall health care costs. The DPC contract fee structure can enable physicians to spend more time with their patients, both in face-to-face visits, and through telephonic or electronic communications mediums should they choose, since they are not bound by insurance reimbursement restrictions. For these reasons, the DPC model is consistent with the AAFP’s advocacy of the PCMH and a blended payment method of paying family medicine practices. (2013 COD)

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