How to legally bypass insurance regulation for your dental membership program

Jordon Comstock has been helping dentists nationwide develop in-house membership programs since 2013, and has guided them in the process as their membership base has grown. Are you thinking about starting an in-house membership program? Read Comstock's’s previous articles on DentistryIQ by clicking on his byline.

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Why your dental practice needs to understand DPC law and medical retainer agreements

Your dental practice is continually evolving to meet the needs of not only your patients, but also of the government and its regulations. Many dental practices are turning to in-house membership programs to reduce their dependence on insurance companies, grow their patient base, and boost their income. Here are some critical legal issues that you need to understand.

What is Direct Primary Care (DPC)?

Gaining momentum in several states, DPC is an alternative health-care model that provides access to health care, including dental, by using a flat-rate membership fee structure. Instead of costly third-party billing fees, service payments, and dealing with insurance companies, health-care providers can develop a long-term, trusting relationship with their patients and become their primary care providers. In turn, patients can contract with doctors and clinics for plans that start around $20 to $70 a month. Both sides of the political aisle are embracing this new and innovative structure that’s positive for both health-care providers and their patients.

Here’s an example of DPC plan characteristics:
• Patients are charged a monthly or annual fee for a defined set of health-care services, including dental.
• These plans do not have any third parties or charge fees for any services covered under the membership plan.
• Per-visit charges are less than the periodic membership fee.

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What is a Medical Retainer Agreement?

A Medical Retainer Agreement is different from a Health Discount Program. DPC allows practices to create this type of agreement, which allows them to bypass insurance regulations. This is legal in many states. Some states promote heavy dependency on insurance programs, but with the DPC law, your practice might be able to use a Medical Retainer Agreement to create an in-house membership program and not abide by insurance regulations. To learn more about suggested language and content for a Medical Retainer Agreement, read this article. You can view a sample template here.

Bypassing insurance regulations

Many people ask if DPC is legal and the answer is yes. Because DPC is not a form of insurance, which means there is no risk to transfer, legal DPC contracts are drafted by individual states. State legislation is moving to define DPC, which clearly states it is not a form of insurance. This means that DPC does not fall under authoritative legislation and regulations by state insurance commissioners.

Most legislation seek to define DPC as not a form of insurance. While most people agree that DPC is technically legal without this yellow-tape law, it is helpful to have these types of plans defined as it helps educate the public about the benefits of DPC while also removing any legal gray areas that may hinder further adoption.

Even the Affordable Care Act encourages more health-care providers to adopt DPC plans. Because the DPC model focuses on a mutual selection between the patient and physician, patients can terminate the relationship at any time. This is different than the relationship between the patient and doctor in a traditional HMO and PPO insurance plan.

Reports reveal that while some insurance commissioners are skeptical about allowing DPC plans, they have come to feel more comfortable with the results. For example, the Washington State Insurance Commissioner was skeptical about allowing DPC models in the state in 2007. However, their department’s analysis of these systems in the “Direct Practice Annual Report to the Legislature” found that there were no complaints filed by patients in the 33 practices in the state that served more than 11,500 patients.

Why DPC and in-house membership plans are beneficial

Because DPC practices do not bill insurance or third parties, the practice’s overhead is substantially lower. The plans also allow doctors to spend more time with patients instead of having insurance companies take up their valuable face-to-face patient time.

Here are three more benefits to implementing in-house membership plans:

Better health—Patients who spend more time with their doctors, including dentists, report overall better health. Because DPC plans give patients better access to medical and dental professionals, they receive more comprehensive care.
Lower costs—Patients pay physicians directly, which means there are no added fees for third-party billing, which dramatically inflate medical and dental costs. Additionally, most DPC subscriptions or membership plans cost less than the average cell phone bill.
Enhancing patient experiences—Because patients have unrestricted access to their health-care professionals, there is less wait time, longer in-person appointments, and better relationships between patients and physicians.

Why DPC laws are needed

Currently, 23 states have enacted DPC laws. This number is growing as the DPC model gains momentum throughout the country. With plans that range from $30 to as high as $500 a month, patients can receive care for chronic care management, regular dental services, and much more.

Insurance companies should not regulate the care your patients receive. It’s frustrating for health-care professionals to face bureaucratic red tape that hinders the care their patients need to maintain healthy lives. Instead of battling these obstacles, join the tens of thousands of health-care professionals that are creating in-house membership plans that better serve their patients’ health and long-term needs.

This article is not intended to serve as legal advice. I recommend you speak with your attorney or legal counsel to see how DPC and a Medical Retainer Agreement can benefit your practice.

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Jordon Comstock is the founder of BoomCloud Apps, a software company that allows dental offices to easily create, organize, track, and automate an in-house membership program. You can download a free e-book about membership programs or watch a free demo. Contact him at (801) 753-8586 or [email protected].