This year, the House passed the Medicaid Primary Care Improvement Act (H.3836) sponsored by Rep. Dan Crenshaw (R-TX) and Rep. Kim Schrier (D-WA). The legislation ensures that state Medicaid programs can contract with direct primary care (DPC) providers, a membership-based primary care model that gives patients virtually unlimited access to a doctor for an affordable monthly fee.
The primary care shortage necessitates innovation in care models and state financing to ensure access to primary care physicians. The passage of H.3836 would facilitate easier access for Medicaid patients to receive consistent and reliable preventive care, thereby optimizing the safety net that Medicaid provides to low-income Americans and enhancing the healthcare options available to patients.
Patients need more primary care options
The foundation of any effective health care system is the availability and use of primary care services. Routine primary care is essential for preventing and managing chronic and life-threatening diseases. However, in the U.S. preventive care is on the decline. From 2021 and 2022, primary care visits fell by 6 percent, continuing a downward trend since 2008, where some survey results show per person drops as high as 25 percent.
While the causes of declining primary care utilization is driven by multiple factors, most notable is the widening gap between demand and supply for primary care services. The Health Resources and Services Administration (HRSA) expects a 9 percent gap between needed and available general internal physicians and a 7 percent gap for family doctors in 2030. Overall, the Association of American Medical Colleges (AAMC) estimates that the U.S. will be short 20,000 to 40,000 primary care doctors by 2036.
The decline in primary care visits is paralleled by an increase in visits to emergency rooms, specialists, and urgent care centers. Urgent care centers, in particular, have seen significant growth and are meeting the demand for regular and reliable care. From 2019 and 2023, urgent care utilization rose nearly 20 percent while urgent care centers increased by over 25 percent. While it is crucial for patients to have access to options like urgent care centers, those facilities are not designed to provide reliable preventive care. Effective preventive care is best delivered through a sustained relationship with a primary care provider.
What is Direct Primary Care?
Direct primary care (DPC) is a membership-based primary care model and does not accept insurance as payment. DPC providers offer access to a primary care doctor in exchange for a flat fee usually between $40 and $85 a month which covers all basic primary care, including urgent care and walk-in appointments.
Because DPC doctors do not have the administrative burden that comes with interactions with commercial insurance companies, they can employ fewer staff and spend more of their time on direct patient engagement. Ninety-eight percent of DPC clinics offer same-day appointments to members. In contrast, the average wait time for an appointment with a primary care provider is currently around 20 days. Not only do DPC member patients have easier access to their primary care provider they also spend more than double the amount of time with their doctor. While the average primary care appointment lasts between 13-16 minutes, DPC doctors spend 40 minutes on average with their patients.
The DPC model is growing rapidly as more patients seek out simple and affordable primary care. Between 2017 and 2021, DPC clinicians increased by 159 percent and memberships increased by 241 percent. There are now over 2,000 DPC clinics across the country and more than one in each state.
H.3836 will optimize Medicaid and provide better access for patients
Research indicates that Medicaid patients encounter more obstacles in accessing primary care compared to those with private insurance. Additionally, Medicaid enrollees use emergency medicine more than other groups with or without health insurance, often waiting until their medical need becomes urgent before seeking care. This pattern highlights the need for improving access to regular primary care to prevent emergencies and improve overall health outcomes for this vulnerable population.
H.3836 would establish in statute that states have permission to engage in arrangements with DPC clinics. Under current law, states have to go through the Medicaid waiver process to contract with DPC clinics. Michigan is the only state to have arranged agreements with DPC clinics using a Medicaid waiver, running a 1-year pilot in 2018. The bill would allow states to forego the Medicaid waiver application process, easing their path toward a DPC arrangement. Under H.3836, state Medicaid programs could contract with DPC clinics to cover the monthly fee for beneficiaries. Medicaid would then pay a fixed amount regardless of how much care patients receive at the clinic. This will open up access to Medicaid patients who can then receive virtually unlimited access to a primary care provider at a DPC clinic for an affordable monthly rate of $45-$85. Each participating state Medicaid program will work directly with the clinics to determine reimbursement.
Patients living near a Medicaid-contracted Direct Primary Care (DPC) clinic will not only gain reliable access to preventive primary care, but the bill could also reduce Medicaid expenditures over time. Policy experts from the Hoover Institution estimate that the bill could lower costs by reducing consumption on expensive hospital stays and outpatient procedures. Recent research also shows that DPC patients saw reduction in overall claim costs and emergency department usage compared to patients in a traditional model. The bill aligns incentives across payer and provider to support primary care and the clinician-patient relationship. State Medicaid agencies would then have the opportunity to create a replicable case study in increasing access to Medicaid beneficiaries without inflating overall health costs.
What’s next
Since the legislation was approved by the House in March, it now awaits consideration in the Senate. If passed and signed, individual states would then need to design their own programs and engage directly with DPC clinics to begin the process. Each state would determine how it would work based on the availability of providers. Some state officials have already indicated interest in contracting with DPC doctors due to the potential long-term savings.
The bill requires that Medicaid seeks input from all stakeholders within a year and provides a follow-up analysis after two years to determine its impact on cost and quality. Although the impact on Medicaid costs are uncertain, H.3836 would optimize Medicaid funding by using it for lower-cost, high-quality relationship-based preventive care. While patients struggle to access reliable primary care and costs for Medicaid continue to rise above inflation, the Medicaid Primary Care Improvement Act will address both – increasing access to primary care while incentivizing affordable and efficient care models.