The Presidential Executive Order on Price and Quality Transparency:
What does it mean for DPC?
On Monday June 24th, the President signed a new Executive Order on Improving Price and Quality Transparency which urges the Secretary of the Treasury to act within the extent of the law possible to propose regulations that would potentially clarify that DPC expenses are qualified health expenses under 213(d) of the Internal Revenue Code (IRC).
The Direct Primary Care Coalition is very pleased that the Administration has formally urged Treasury to consider proposing regulation to clarify direct primary care arrangements under IRC section 213(d).
This is an important development signaling the Administration’s ongoing support for DPC. It’s important to note, however, that the Executive Order alone, without further action by the Treasury or Congress does not change any current IRS policy or guidance regarding DPC.
The rule provides the agency with direction and authority from the President to begin a regulatory process which may, at its conclusion, result in some favorable policy change. We will continue to work closely with the Administration and the Treasury Department as potential rules are developed.
The scope of these potential regulations does not appear to address the issue under 223 (c) of the IRC that currently prohibits individuals with health savings accounts (HSA) from funding their HSA when they have a DPC arrangement. Treasury has insisted in the past that Congress also needs to act to make changes to IRC Section 223 (c) to clarify this prohibition to make DPC fully compatible with HSAs.
The Executive Order shows that there is bipartisan support both in Congress and at the White House to ultimately make the changes needed to the tax code to clarify that DPC agreements can be used with HSAs without making the HSA holder ineligible.
What does the Executive Order Actually Say?
The language states that: “Within 180 days... the Secretary of the Treasury, to the extent consistent with law, shall propose regulations to treat expenses related to certain types of arrangements, potentially including direct primary care arrangements and healthcare sharing ministries, as eligible medical expenses under section 213(d) of title 26, United States Code.”
The DPC Coalition will be working closely with the Administration and Congress as the proposal moves forward. It’s important to make sure that these new developments don’t impede our efforts to work in a bipartisan effort to pass legislation to make these changes to the tax code a permanent part of the law.
What is Direct Primary Care?
Direct Primary Care (DPC) is an innovative alternative payment model improving access to high functioning healthcare with a simple, flat, affordable membership fee. No fee-for-service payments. No third party billing. The defining element of DPC is an enduring and trusting relationship between a patient and his or her primary care provider. Patients have extraordinary access to a physician of their choice, often for as little as $70 per month, and physicians are accountable first and foremost their patients. DPC is embraced by health policymakers on the left and right and creates happy patients and happy doctors all over the country!
DPC Frontier Mapper
Green = Pure
Yellow = Unknown
Red = Hybrid
Bipartisan legislation that will definitively make DPC arrangements compatible with HSA has been reintroduced in the House of Representatives. Representative Earl Blumenauer (D-OR) has been joined by Devin Nunes, (R-CA), ranking member of the Ways and Means Health Subcommittee, Reps. Brad Schneider (D-IL) and. Jason Smith (R-MO) as original co-sponsors of the Primary Care Enhancement Act of 2019. This bill passed the House of Representatives one year ago with strong bipartisan support. We urge the Ways and Means Committee to mark up the legislation and move the bill to the House floor for passage.
Momentum is building in support of DPC. The bill comes on the heels of a Presidential Executive order urging the Treasury Department to consider guidance or rulemaking that might address one of the two issues that need to be clarified in the Tax Code by potentially defining DPC Arrangements as qualified health expenses under Sec. 213 (d) of the Internal Revenue Code. This bipartisan bill will finish the job by clarifying in statute that DPC arrangements are excepted from definitions under Sec. 223 (c) as insurance or “other coverage” that disqualifies an individual from funding an HSA. A bipartisan Senate companion will be introduced next week.
Act Now! Be a part of the solution: Please contact your Representatives today and ask them to co-sponsor the Primary Care Enhancement Act (H.R. 3708). Representatives need to hear from their constituents about the importance of bringing high-quality affordable primary care to more Americans with DPC. The Primary Care Enhancement Act will ensure that millions of Americans with HSAs are allowed access to the best primary care available with the DPC doc of their choice. Instructions, talking points and staff contact information can be found onour Call to Action page here.
Please visit with your Members of Congress during the upcoming Recess, and share your personal story about how bringing better care at lower costs can help improve care for Americans of all ages and incomes.
Action Alert: Support H.R. 3708
The Primary Care Enhancement Act Today!