October 19, 2020

Recently, the IRS held hearings on its proposed regulations for direct primary care (DPC) arrangements—generally, provider practices that accept a per attributed member per month fee to manage the health of their total population rather than fee-for-service payments.

These hearings and regulations addressed, among other things:

• The definition of “direct primary care”;
• The ability to use health reimbursement arrangement (HRA) funds to reimburse DPC expenses; and
• The interaction between health savings account (HSA) rules and the ability to pay for DPC expenses pre-deductible.

Business Group on Health joined other employer and industry groups to support:

• A flexible definition of “direct primary care” that would include the services of nurse practitioners, physician assistants, and other non-physician providers; and
• Interpretation of the HSA rules such that DPC expenses would be considered expenses for “preventive” services and therefore reimbursable before participants meet required deductibles.

The Business Group also emphasized the role of HSAs and DPC arrangements in encouraging higher quality health care and lowering the overall cost of health coverage. Although legislation ultimately may be required to make DPC arrangements reimbursable on a pre-deductible basis, we will continue to monitor the rules for HSAs and DPC arrangements and update members of any developments.

Resources

• Webinar: Compliance Update
• The Business Community Perspective: Principles for an Optimal Primary Care Experience

If you have questions, comments, or concerns about these or other regulatory and compliance issues, please contact us.

We provide this material for informational purposes only; it is not a substitute for legal advice.

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