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The Primary Care Enhancement Act (H.R. 365 and S. 1358 ) is a bipartisan bill which expands access to high-functioning primary care services for Americans of all income and age levels. The legislation clarifies to the tax code to remove a major federal regulatory barrier keeping patients, providers and employers who use Health Savings Accounts (HSAs) from using innovative Direct Primary Care (DPC) medical homes to improve health outcomes and reduce costs.

· Today, IRS rules prohibit individuals with HSAs paired with high deductible health plans (HDHPs) from having an agreement with a DPC provider.

· IRS incorrectly interprets DPC arrangements as health plans under Section 223(c) of the Internal Revenue Code; furthermore IRS says the law is unclear whether or not primary care services e are qualified health expenses under Section 213(d) of the code, if services are paid for with a capitated periodic fee rather than fee for service.

· The Primary Care Enhancement Act clarifies the tax code, making it clear that patients with HSAs paired with HDHPs have access to great primary care with a DPC medical home.

· Department of Health and Human Services (HHS) regulations already define DPC medical homes as primary care services – HHS rules note that they are an important delivery reform being defined in state laws.

· Current IRS policy inappropriately interprets DPC arrangements as a form of health plan—despite other interpretations in state and federal law.

· As long as IRS interprets DPC as a health plan, simply having an agreement with a DPC provider bars an individual from funding an HSA.

· IRS rules also need to be clarified to allow fees for periodic fee-based DPC to be paid for using HSA funds.

· IRS regulations are clear: HSAs must be paired with an HDHP, and the HSA holder may not have a second health plan.

· Twenty-three states have passed defining DPC outside of state insurance regulation and many others offer guidance which concurs that DPC Medical Homes are medical services, not health plans.

· DPC is currently offered in exchanges, with self-insured employers, unions, in Medicare Advantage and Medicaid MCOs.

Individuals with HSAs are the only people with health coverage who are barred by federal regulations from having a DPC provider.

· Some in Congress support HSAs but some do not. Regardless of your opinion of HSAs, this change is a matter of fairness to the growing number of patients who already have HSAs, allowing them to access the same high functioning primary care arrangements that those without HSAs may have.

· As of 2015 about 24% of all coverage includes an HSA paired with an HDHP. That number is rapidly growing as premium costs rise for employers and in exchanges. As DPC can remedy some of the concerns with HSAs by forcing behaviors that encourage regular primary care visits, better health outcomes and appropriate spending of HSA funds result.

· If employers who have HSAs in their benefit mix can’t offer DPC to their employees, it will be difficult for practices to grow and offer enhanced primary care access to patients anywhere but in the individual market.

Representatives, please Co-Sponsor, H.R. 365, the Primary Care Enhancement Act introduced by Reps. Erik Paulsen (R-MN) and Earl Blumenauer (D-OR).

Senators, please Co-Sponsor the S. 1358, Primary Care Enhancement Act introduced by Senators Bill Cassidy, MD (R-LA) and Maria Cantwell (D-WA)


The Primary Care Enhancement Act, a bipartisan bill by Rep. Eric Paulsen (R-MN) and Earl Blumenauer (D-OR), passed the House Ways & Means committee by a roll call vote of 26-12 on Wednesday, July 11, 2018. There were also 10 other pieces of tax/health legislation considered. The markup is the first step in passing the Primary Care Enhancement Act and as usual, there have been some compromises to the bill to keep the score down. The language has been reintroduced as H.R. 6317, and contains a $150 per member per month ($300 for family plans) limitation to keep the pre-tax amount down. While not perfect this will allow almost all DPC practices to see patients with HSAs and allow their fees to be paid from the HSA. These changes were added to the bill to bring the revenue score down, and even with them the Joint Committee on Tax has scored the package at a cost of $1.8 billion over ten years. We will continue to work on perfecting the language as the process moves forward but this is a huge first step and we are excited about its momentum!​

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