The Direct Primary Care Model: Considerations for New York Providers, Patients and Employers

The Direct Primary Care Model: Considerations for New York Providers, Patients and Employers

2.14.2024

By Louis Q. Reynolds

As of July 2023, there were more than 2,100 direct primary care practices operating in the United States, spread out over 48 states.^[i] As the direct primary care concept continues to grow and become an attractive model for patients, physicians and self-funded employers, it will be important to monitor the changing legal and regulatory landscape to see how current federal and state barriers to this model are addressed.

Utilizing components of traditional retainer medicine and capitated payment models, the direct primary care model offers a primary care-based alternative to traditional fee-for-service medicine for private-pay patients. While New York has yet to specifically regulate direct primary care models, more than 30 states have enacted legislation or are in the process of passing legislation that addresses such models.^[ii] This article describes the DPC model and its growth across the United States, the main legal themes applicable to such models and some important considerations for providers and employers who may be exploring such models, especially within New York State.

Background

The direct primary care model is a type of retainer practice arrangement. Retainer practice arrangements generally feature a direct contract between a physician (or physician group) and a patient where the patient pays a periodic fee in exchange for access to a defined range of ongoing primary care services.^[iii] Direct primary care model practices charge this periodic fee, but the following two factors distinguish such arrangements from general retainer practice arrangements:

1. Direct primary care arrangements do not bill any third parties on a fee-for-service basis.
2. Any per-visit charge must be less than the monthly equivalent of the periodic fee.^[iv]

Direct primary care practices typically contract directly with patients or with employers administering a self-funded group health plan.^[v] Monthly membership fees typically range from $65 to $85 for adult patients.^[vi] While the range of services covered under a direct primary care arrangement will vary by arrangement, services typically covered include preventive care, basic illness treatment for both acute and chronic conditions and care coordination.^[vii] Some direct primary care practices may also provide coverage for a defined panel of laboratory tests and imaging services.^[viii]

As alternatives to the traditional fee-for-service payment structure, direct primary care arrangements center on the importance of the relationship between patients and their primary care providers. A primary care provider generally serves as a patient’s on-ramp to the health care system and plays a pivotal role in coordinating a patient’s care at all levels of the health care system.^[ix]

Benefits

Multiple benefits flow from the direct primary care model, for both physicians and patients. For patients, this model promotes better access to a patient’s primary care provider. On average, practice patient panel sizes range from 200 to 600 patients.^[x] The average patient panel size for traditional primary care practices is 2,500 patients.^[xi] The smaller patient panel sizes in direct primary care practices limit delays for patients in scheduling appointments, result in shorter wait times for patients while at the physician’s office and allow for patients to spend more time directly with their physician.^[xii] Overall, a strong foundation of primary care may produce better health outcomes overall, greater equity in health care access and outcomes and lower per capita health costs.^[xiii]

For direct primary care providers, the absence of third-party reimbursement in direct primary care practices has the potential to significantly reduce administrative costs for the direct primary care practice.^[xiv] Similarly, the absence of third-party reimbursement significantly reduces the practice’s time spent on insurance paperwork and quality reporting responsibilities related to government and private payers.^[xv] In turn, this may reduce physician burnout, especially in smaller physician practices.^[xvi]

For employers, because increased access to primary care may contribute to improved health outcomes and thereby reduce health care costs and utilization, employers that administer self-funded health plans may consider implementing a direct primary care option within their health plans to control and reduce costs among their employee populations.

Disadvantages and Policy Concerns

The multifaceted benefits of the direct primary care model are appealing, but there are some disadvantages that may make it a less attractive option for some patients. As noted, it is limited in scope to primary care services. As a result, an individual’s membership usually must be supplemented by insurance coverage that covers specialty and hospital care. The purchase of a direct primary care membership offered through a health insurance exchange would not meet the minimum essential coverage requirements.^[xvii] For individuals who are not covered under an employer’s group health plan and who must obtain individual health coverage, this would be an additional cost and could be cost-prohibitive for patients with lower incomes.

In addition, while the direct primary care model increases patients’ access to primary care providers, patients must be members of a practice within this model in order to take advantage of this increased access. Where access increases for direct primary care members, it may decrease for the non-member population. There are two aspects to this issue.

First, if the direct primary care model grows, there may be fewer primary care physicians available to the overall patient population. Non-members may be forced to join direct primary care practices if there are no other available options in their geographic area.^[xviii]

Second, direct primary care providers typically opt out of Medicare to avoid the regulatory risk of charging a membership fee that covers services already covered by Medicare. When providers participating in Medicare request any other payment for covered services from Medicare patients, they are subject to substantial penalties and exclusion from Medicare and other federal health care programs.^[xix]

Each provider that opts out of Medicare is one less provider available to provide a full scope of primary care services to Medicare patients, who already face challenges in finding primary care providers. Family practitioners accounted for one of the highest percentages of providers who opted out of Medicare in 2023.^[xx]

From the provider perspective, opting out of Medicare reduces the cost of regulatory compliance and the risk of penalties, but may limit providers’ access to treating patients in other health care settings, including hospitals and skilled nursing facilities.[xxi]

As a result, from a financial perspective, providers considering whether to establish practices within this model and opt out of Medicare should be sure that they will serve enough non-Medicare patients to justify opting out of Medicare.^[xxii]

Legal Implications and Regulatory Landscape: State Considerations

A major threshold question in determining the scope of regulation applicable to direct primary care arrangements is not a health care question, but an insurance question. The question asks whether the agreement between a practice following this model and the patient or consumer is a contract for insurance and, overall, whether the practice is engaging in an insurance business. If the practice is engaging in an insurance business, it generally must hold an insurance license and is therefore subject to a multitude of other state insurance laws.^[xxiii]

Direct primary care arrangements do resemble the basic insurance relationship, where an insured pays a set premium to an insurer in exchange for an insurer’s reimbursement for an insurable event. Recognizing this, states that permit direct primary care arrangements typically do so under their insurance, health or professional code using an express carve-out that says such arrangements are not conducting an insurance business.

While statutes addressing direct primary care arrangements vary from state to state, those states that clearly permit direct primary care arrangements take a simple approach. First, the state statutes comprehensively define direct primary care, direct primary care arrangement and direct primary care contract. Next, the statutes create an exemption for these arrangements from state insurance certification and licensure.

Mississippi’s Direct Primary Care Act within Mississippi’s Insurance Code provides for such an exemption from state insurance certification and licensure for direct primary care practices.^[xxiv]

The Mississippi Direct Primary Care Act defines “direct primary care agreement” as “a contract between a primary care provider and an individual patient or his or her legal representative or between a primary care provider and an employer on behalf of its employees in which the primary care provider agrees to provide primary care services to the individual patient for an agreed-upon fee and period of time.”^[xxv]

It defines a “direct primary care service” as “a service that is provided by charging a periodic fee-for-services; not billing any third parties on a fee-for-service basis for the individual covered by the direct primary care agreement; and allowing for a per visit fee to be charged to the patient at the time of service.”^[xxvi]

In addition, to limit the perverse incentive for direct primary care practices to only accept healthier, low-utilization patients for membership (often called “cherry picking”), the Mississippi Direct Primary Care Act prohibits practices from declining to accept new patients or discontinuing care to existing patients solely based on the patient’s health status.^[xxvii]

Tennessee, under its Health Care Empowerment Act, defines a “direct medical care agreement” as a written contractual agreement between a direct medical care provider and an individual patient, or the patient’s legal representative, in which:

• The direct medical care provider agrees to provide medical care services to the individual patient for an agreed fee over an agreed period of time.
• The direct medical care provider will not bill third parties on a fee-for-service basis.
• Any per visit charges under the agreement will be less than the monthly equivalent of the periodic fee.
• The agreement describes the scope of the medical care service that is covered by the periodic fee.
• The agreement contains the disclosures set forth in Tennessee Code Section 63-1-502(1)(E)(i)-(vi).^[xxviii]

As defined under the Health Care Empowerment Act, “‘Direct medical care provider’:

• Means an individual or legal entity that is licensed, registered or otherwise authorized to provide medical care services in [Tennessee] under this title and who chooses to enter into a direct medical care agreement; and
• Includes an individual medical care provider or other legal entity, alone or with other professionals associated with the provider or other legal entity.”^[xxix]

The Health Care Empowerment Act expressly states that “[a] direct medical care agreement is not insurance and is not subject to regulation by the department of commerce and insurance.” It further states that “[e]ntering into a direct medical care agreement is not the business of insurance.”^[xxx]

New York does not specifically regulate direct primary care arrangements at this time, and there are no proposals to do so in the legislative pipeline. New York, however, hinted how it would treat direct primary care arrangements in a 2009 Department of Financial Services advisory opinion.

The opinion assessed whether a New York professional services corporation that, in exchange for a monthly fee of $79 per month, provided “unlimited visits” for “comprehensive medical services” was doing an insurance business in violation of New York Insurance Law Section 1101.^[xxxi]

The practice’s membership agreement provided: “All Members in good standing shall be entitled to regular preventive checkups for adults and/or well-baby checkups (including all vaccinations up to the age of ten except the Gardasil vaccine).”

The agreement provided additional coverage for unlimited sick visits charged at $10 per visit. It excluded coverage for hospital stays, emergency room visits, specialist services, imaging for specialist services and all lab tests not expressly provided for in an appendix to the agreement.

The Department of Financial Services analyzed the practice within the scope of Insurance Law Sections 1101 and 1102. New York Law defines “insurance contract” as “[a]ny agreement or other transaction whereby one party, the ‘insurer,’ is obligated to confer a benefit of pecuniary value upon another party, the ‘insured’ or ‘beneficiary,’ dependent upon the happening of a fortuitous event in which the insured or beneficiary has, or is expected to have at the time of such happening, a material interest which will be adversely affected by the happening of such event.”^[xxxii]

Fortuitous event “means any occurrence or failure to occur which is, or is assumed by the parties to be, to a substantial extent beyond the control of either party.”^[xxxiii]

Making, or proposing to make, as insurer, any insurance contract constitutes “doing an insurance business” in New York State.^[xxxiv] No person, firm, association, corporation or joint-stock company may do an insurance business in New York State unless authorized by a license or exempted from such licensure.^[xxxv]

The Department of Financial Services concluded that a health care provider that offers health care at a discount to patients who pay a membership fee to join the plan constitutes the doing of an insurance business because the benefits that the plan provides are dependent on the happening of a fortuitous event – the need for health care – which is beyond the control of either party.^[xxxvi] As a result, the provider needed an insurance license because the provider bore the risk of incurring a loss if the cost of the services provided exceeded the monthly fees paid by the patient.

The opinion did not categorically prohibit all such membership agreements in the state. It noted one feature of a membership agreement that would not constitute the doing of an insurance business.

“However, a service plan where there is a prepaid membership fee, and certain services occasioned by the happening of a fortuitous event are offered for an additional fee per service which is discounted from the usual fee, does not constitute the doing of an insurance business, and does not require an insurance license by the Department, provided that the fees cover the cost of rendering the service, including reasonable overhead.”^[xxxvii]

Therefore, to avoid the “doing the business of insurance” label, a practice operating in New York must limit the services covered by a patient’s periodic fee to services for non-fortuitous events. A routine annual physical is a non-fortuitous event, for example. The practice may charge an additional fee to provide services for fortuitous events, provided that the fees charged cover the cost of rendering the service, including reasonable overhead.^[xxxviii]

Legal Implications and Regulatory Landscape: Federal Considerations

Federal treatment of direct primary care arrangements, like the states, relates to the impact of these arrangements on individual and group health insurance coverage. Direct primary care arrangements have been directly addressed under the Affordable Care Act and by the Internal Revenue Service in regulatory preambles.

The ACA requires that employers offer minimum essential coverage to at least 95% of their full-time employees (and their dependents).^[xxxix] A key issue, then, is whether an employer can meet this requirement, in part, by offering primary care through a direct primary care arrangement.

The ACA treats these arrangements differently depending on whether the arrangement is offered as part of a qualified health plan or as a standalone arrangement, not paired with a supplementary qualified health plan.

The ACA allows a qualified health plan to provide coverage of certain services through a “direct primary care medical home plan,” provided the qualified health plan meets all requirements that are otherwise applicable and the services covered by the medical home plan are coordinated with the entity offering the qualified health plan.^[xl] The U.S. Department of Health and Human Services considers a “direct primary care medical home plan” to mean “an arrangement where a fee is paid by an individual, or on behalf of an individual, directly to a medical home for primary care services, consistent with the program established in Washington [(state)].”^[xli]

A “patient-centered medical home” is a model of care that includes personal physicians or other primary care providers; whole person orientation; coordinated and integrated care; safe and high-quality care through evidence-informed medicine, appropriate use of health information technology and continuous quality improvements; expanded access to care; and payment that recognizes added value from additional components of patient-centered care.^[xlii]

The Department of Health and Human Services considers “primary care services” to mean “routine health care services, including screening, assessment, diagnosis, and treatment for the purpose of promotion of health, and detection and management of disease or injury.”^[xliii]

On the other hand, a standalone agreement to receive primary care services through a direct primary care arrangement is not subject to the federal consumer protections that otherwise apply to individual health coverage. Enrollment in this type of arrangement does not qualify as “minimum essential coverage” for purposes of the ACA’s individual mandate.^{[xliv], [xlv]}

While the Department of Health and Human Services did consider allowing an individual to purchase a direct primary care medical home and separately acquire wrap-around coverage, it noted that allowing a separate offering would require consumers to make two payments for full medical coverage, “adding complexity to the process of acquiring health insurance, ensuring enrollee[s] have access to the full complement of the essential health benefits to which they are entitled, and complicating the allocation of advance payments of the premium tax credit.”^[xlvi]

The IRS issued a proposed rule in 2020 that, in part, sought to establish a definition for direct primary care arrangements and explain whether these arrangements qualify as “medical care” under Internal Revenue Code Section 213(d)(1)(A) and as “medical insurance” under IRC Section 213(d)(1)(D).^[xlvii] The determination of whether a direct primary care arrangement is medical care or medical insurance has a significant impact on (1) an individual’s ability to have their membership fee reimbursed by their employer-funded health reimbursement arrangement or health savings account; and (2) an individual’s overall eligibility for a health savings account.

First, the IRS permits a deduction for expenses paid during the tax year (if not compensated by insurance or otherwise) for medical care for an individual.^[xlviii]

For deduction purposes, medical care primarily includes amounts paid for the diagnosis, cure, mitigation, treatment or prevention of disease, or to affect any structure or function of the body (“Section 213(d) medical care expenses”).^[xlix]

Health reimbursement arrangements are employer self-insured medical reimbursement plans funded solely by employer contributions, not through salary reductions. These arrangements reimburse some or all of Section 213(d) medical care expenses.

If a direct primary care membership fee is considered a Section 213(d) medical care expense, then an employee’s tax-advantaged health reimbursement arrangement balance can be used to cover the costs of the membership fee.

Health savings accounts are tax-exempt trusts and custodial accounts established by eligible individuals or employees to pay qualified medical expenses in conjunction with a high-deductible health plan.^[l] Both employees and employers may contribute to a health savings account if provided in conjunction with a group health plan. To be eligible, an individual generally (1) must be covered under a high-deductible health plan; and (2) must not be covered under any other health plan that is not a high-deductible health plan that provides coverage for any benefit that is covered under the high-deductible health plan.^[li] In addition, the rules prohibit the purchasing of health insurance with health savings account funds.^[lii]

Therefore, direct primary care arrangements create two limitations with respect to health savings account eligibility and the use of health savings account funds.

First, because direct primary care arrangements provide for a broad range of primary care services, like physical examinations, vaccinations and lab testing, for example, they may be considered “other coverage” that covers the same types of services already covered under a high-deductible plan. As a result, if the arrangement is considered “other coverage,” an individual who participates would be ineligible to contribute to a health savings account under current rules.

Second, if a direct primary care arrangement is considered “medical insurance,” this would prohibit the use of a health savings account balance to pay for direct primary care membership fees.

In its 2020 proposed rule, the IRS noted that an individual participating in a direct primary care arrangement may maintain eligibility for a health savings account in limited circumstances.^[liii] If the individual is covered  in an arrangement that does not provide coverage as part of a health plan or insurance or solely provides coverage for preventive care (solely provides for a routine annual physical examination, for example), the individual is not precluded from contributing to a health savings account.^[liv]

The proposed rule was not finalized, and there is still no definition within the Internal Revenue Code for direct primary care. New legislation addressing the same issue has been introduced, however, under the Primary Care Enhancement Act.^[lv] The Primary Care Enhancement Act amends the Internal Revenue Code to provide, in part, that direct primary care service arrangements are to be treated as medical care under Section 213(d) and that such arrangements do not disqualify deductible health savings contributions. It specifically provides that direct primary care service arrangements:

• “[S]hall not be treated as a health plan” for purposes of the health savings account eligibility rules, meaning that a direct primary care arrangement would not be considered other coverage that would make a participant ineligible to contribute to an HSA account.
• “[S]hall not be treated as insurance” for purposes of rules covering the use of health savings account funds, meaning direct primary care participants with a health savings account may use the balance to pay for their membership fees.^[lvi]

The bill was referred to the U.S. Senate Committee on Finance, and no further action has occurred at this time.^[lvii]

Key Takeaways

New York State Providers

Without any legislation covering direct primary care arrangements, New York has yet to exclude such arrangements from regulation as “doing an insurance business.”

For New York providers, this means that there is no clear protection for direct primary care practices against scrutiny from the New York State Department of Financial Services. Providers considering the model, then, to avoid conducting an unlawful insurance business in New York should adhere to the following concepts established in OGC Op. No. 09-02-02:

• Ensure that the regular, periodic fee to be charged to patients only includes coverage for non-fortuitous events like an annual physical or required vaccines.
• For services that address fortuitous events – sick visits, for example – charge a separate fee and ensure that the fee to be charged exceeds the practice’s cost to render the service, including overhead costs.

Patients

Direct primary care arrangements foster increased access to a patient’s primary care physician. As noted, studies indicate that increased access to a patient’s primary care physician may result in improved health outcomes.

Patients should be aware, however, that this model of care alone, not paired with any other health insurance coverage, generally does not satisfy the ACA’s minimum essential coverage requirement. Therefore, individual patients participating in a standalone arrangement must also enroll in other coverage, necessitating two separate payments for coverage. As a result, standalone arrangements may be cost-restrictive for lower-income patients. In addition, the growth of this model of care could reduce primary care access and limit provider choice for non-direct primary care members, especially for patients with Medicare coverage.

Self-Funded Employers

From the payor side, the direct primary care model may provide an attractive alternative benefit option for self-funded employers looking to reduce overall claim costs and utilization.

Employers exploring partnering with a practice using this model to provide primary care services to their employees must be aware of the impact of such partnership on other benefit offerings within the employer’s health plan. This is especially the case if the employer offers a high-deductible health plan paired with a health savings account.

Louis Q. Reynolds is an attorney at Phillips Lytle’s Buffalo office. He concentrates his practice on health law and represents various clients across the health care industry, including hospital systems, physician practices, and payors on regulatory and transactional matters. He previously worked for a third-party administrator for self-funded group health plans.

This article appears in the Health Law Journal, a publication of NYSBA’s Health Law Section (2024, volume 29, no. 1). Click here for more information about the Health Law Section.

[i] See Philip Eskew, DPC Frontier Mapper, DPC Frontier, https://mapper.dpcfrontier.com/.

[ii] As of 2020, DPC laws had been passed in 32 states. See State DPC Laws, Direct Primary Care Coal., https://www.dpcare.org/state-level-progress-and-issues.

[iii] See Philip Eskew, Direct Primary Care Membership Medicine, 110 W. Va. Med. J. 8 (2014).

[iv] See Philip M. Eskew & Kathleen Klink, Direct Primary Care: Practice Distribution and Cost Across the Nation, 28 J. Am. Bd. Fam. Med. 793 (2015). Direct primary care practices must typically charge per visit fees that are less than the monthly membership fee to avoid scrutiny as an insurance business under state insurance codes (as is the case with New York, as discussed later). Concierge arrangements tend to bill insurers in addition to charging retainer fees and typically cater to wealthier clientele. See Maanasa Kona, Kevin Lucia & Sabrina Corlette, Direct Primary Care Arrangements Raise Questions for State Insurance Regulators, Commonwealth Fund, Oct. 22, 2018, https://www.commonwealthfund.org/blog/2018/direct-primary-care-arrangements-state-insurance.

[v] Fritz Busch, Dustin Grzeskowiak, & Erik Huth, Direct Primary Care: Evaluating a New Model of Delivery and Financing, Society of Actuaries, 5, May 2020, https://www.soa.org/globalassets/assets/files/resources/research-report/2020/direct-primary-care-eval-model.pdf.

[vi] Id. at 12.

[vii] Id. at 13.

[viii] Examples of Laboratory and Radiology Pricing at Direct Primary Care Practices, Startup DPC, Jan. 14, 2021, https://www.startupdpc.com/blog/tag/Laboratory+Services+in+Direct+Primary+Care.

[ix] The direct primary care model emphasizes some of the same care coordination principles as the New York Medicaid health program. See Medicaid Health Homes – Comprehensive Care Management, N.Y. State Dep’t of Health, https://www.health.ny.gov/health_care/medicaid/program/medicaid_health_homes/(revised Feb. 2023).

[x] Busch et al., supra note 5, at 12.

[xi] Caroline Harrington, Considerations for Patient Panel Size, 8 Del. J. Pub. Health 154 (2022).

[xii] For example, the average wait time for patients at direct primary care offices is four minutes. See Busch et al., supra note 5, at 16.

[xiii] Molly FitzGerald, Munira Z. Gunja, & Roosa Tikkanen, Primary Care in High-Income Countries: How the United States Compares, Commonwealth Fund, Mar. 15, 2022, https://www.commonwealthfund.org/publications/issue-briefs/2022/mar/primary-care-high-income-countries-how-united-states-compares.

[xiv] Without third-party reimbursement for direct primary care arrangements, costs related to contracting and submitting claims are reduced. See generally Busch et al., supra note 5, at 12.

[xv] While exemption from quality reporting lessens a burden on providers, it could negatively impact quality overall. At the very least, it will decrease the data available for the quality programs of government and commercial payors.

[xvi] Roxanna Guilford-Blake, The Pros and Cons of Direct Primary Care (DPC), Wolters Kluwer, Apr. 15, 2020, https://www.wolterskluwer.com/en/expert-insights/what-exactly-is-direct-primary-care.

[xvii] What Is Direct Primary Care?, HealthInsurance.org, https://www.healthinsurance.org/glossary/direct-primary-care/.

[xviii] Since membership is not a full solution for health coverage, it requires members to carry some other level of insurance to cover services that the direct primary care practice does not provide. This could be cost-prohibitive for some patients.

[xix] See OIG Alerts Physicians About Added Charges for Covered Services, U.S. Dep’t of Health & Hum. Servs., Mar. 31, 2004, https://oig.hhs.gov/documents/other-guidance/911/FA033104AssignViolationI.pdf.

[xx] Nancy Ochieng & Gabrielle Clerveau, How Many Physicians Have Opted Out of the Medicare Program?, KFF, Sept. 11, 2023, https://www.kff.org/medicare/issue-brief/how-many-physicians-have-opted-out-of-the-medicare-program/.

[xxi] Many hospitals, skilled nursing and other health care facilities require a provider’s participation in federal health care programs for the provider to become part of the facility’s medical staff.

[xxii] See Philip Eskew, Opting Out of Medicare, DPC Frontier, https://www.dpcfrontier.com/opting-out-of-medicare.

[xxiii] See, e.g., N.Y. Ins. Law § 1102.

[xxiv] See Miss. Code. Ann. § 83-81-7.

[xxv] Id. § 83-81-3(b).

[xxvi] Id. § 83-81-3(c).

[xxvii] See id. § 83-81-11.

[xxviii] Tenn. Code Ann. § 63-1-502(1)(A)-(E). These disclosures include statements that the agreement does not constitute health insurance under the laws of the state, that an uninsured patient that enters into a direct medical care agreement may be subject to tax penalties under the ACA, that payments made by a patient for services rendered under a direct medical care agreement may not count towards the patient’s health insurance deductibles and maximum out-of-pocket expenses, that the patient is encouraged to consult with the patient’s health insurance plan before entering into the agreement and receiving care, and that a direct medical care provider who breaches the agreement may be liable for damages and subject to discipline by the appropriate licensing board.

[xxix] Id. § 63-1-502(2)(A)-(B).

[xxx] Id. § 63-1-504(a)-(b).

[xxxi] N.Y. Ins. Law § 1101. See Doing an Insurance Business, OGC Op. No. 09-02-02 (Off. of Gen. Couns., N.Y. State Dep’t of Fin. Servs. 2009).

[xxxii] N.Y. Ins. Law § 1101(a)(1).

[xxxiii] N.Y. Ins. Law § 1101(a)(2).

[xxxiv] N.Y. Ins. Law § 1101(b)(1)-(1)(A).

[xxxv] N.Y. Ins. Law § 1102(a).

[xxxvi] The DFS used the need for a tetanus vaccine after an injury as an example of a fortuitous event that the arrangement at issue would cover.

[xxxvii] See OGC Op. No. 09-02-02.

[xxxviii] Id. Note also that a direct primary care practice does not assume financial responsibility for medical services by other providers, which is a key feature of some capitation arrangements.

[xxxix] See Employer Shared Responsibility Provisions, IRS, https://www.irs.gov/affordable-care-act/employers/employer-shared-responsibility-provisions (last updated Oct. 23, 2023).

[xl] Patient Protection and Affordable Care Act; Establishment of Exchanges and Qualified Health Plans, 76 Fed. Reg. 41866, 41900 (July 15, 2011).

[xli] Id.

[xlii] 42 U.S.C. § 256a-1(c)(2)(A)-(F).

[xliii] 76 Fed. Reg. at 41900.

[xliv] See Kona, et al., supra note 4.

[xlv] Note, however, that as of January 1, 2019, the ACA’s individual mandate penalty is no longer in effect. The current consequences for non-compliance are unclear. Affordable Care Act/Individual Mandate/Financial Assistance, NY State of Health, Nov. 2018, https://info.nystateofhealth.ny.gov/sites/default/files/ACA%20FAQs%20_Nov%202018.pdf.

[xlvi] 76 Fed. Reg. at 41900.

[xlvii] See Certain Medical Care Arrangements, 85 Fed. Reg. 35398 (June 10, 2020).

[xlviii] See I.R.C. § 213(a).

[xlix] Id. § 213(d)(1)(A).

[l] See I.R.C. § 223.

[li] See id. § 223(c)(1)(A).

[lii] Id. § 223(d)(2)(B).

[liii] 85 Fed. Reg. at 35402.

[liv] Id.

[lv] The Primary Care Enhancement Act was introduced in the Senate on March 2, 2023, under S. 628. S. 628, 118th Cong. (2023).

[lvi] Id. § 2.

[lvii] All Actions: S.628-118th Congress (2023-2024), Congress.gov, https://www.congress.gov/bill/118th-congress/senate-bill/628/all-actions?s=1&r=1.