Direct Primary Care Providers Get a Major Policy Win

Clinicians who provide “direct primary care” (DPC) and their patients are gaining a major windfall from the recently passed federal budget reconciliation legislation. Thanks to the “Big Beautiful Budget Bill,” patients will be able to dip into their health savings accounts (HSAs) to pay for DPC services, which are designed to offer relief from assembly-line medicine.

DPC providers are enthusiastic about the change, which will go into effect on January 1. But a critic warns that DPC, which emphasizes smaller patient loads and longer appointments, squeezes other forms of primary care and hurts the poor.

Here’s a closer look at what the new policy means.

What Is DPC?

DPC is a healthcare delivery model that allows physicians to contract directly with patients or employers for a fixed monthly membership fee.

The DPC membership fees typically cover unlimited routine primary care services and lab work plus preventive care, basic procedures, and vaccinations — but not prescription drugs or specialty services. There are no copays.

This is in contrast to traditional employer health plans that involve multiple stakeholders who “take a piece of the pie,” such as third-party administrators, pharmacy benefit managers, and insurance brokers, said healthcare attorney Barbara Zabawa, JD, of Kansas City, Kansas, in an interview.

Why Do People Like It?

DPC providers say the model allows them to escape the bureaucratic constraints of traditional healthcare systems. The providers also tout patient perks such as same- or next-day appointments, shorter wait times, and more personalized care.

“Generally, DPC physicians have a panel of between 600 and 800 patients. In typical FFS [fee for service] settings, the patient panels tend to range from between 2000 and 2500 per family physician,” the American Academy of Family Physicians (AAFP) says.

Critics, however, say DPC hurts primary care access overall.

In a 2018 JAMA commentary, two physicians wrote that “DPC presents physicians with an incentive structure built on accepting healthier patients with limited healthcare needs and a willingness to pay a retainer fee. Practices directly benefit when targeting healthier patients and declining coverage to the ill.”

In addition, they wrote, “DPC practices once held accountable through value-based payment systems have no obligation to report or measure quality metrics.”

Is DPC the Same as Concierge Care?

The terms are often used interchangeably, said healthcare attorney Joanna Eimer of Glenview, Illinois, in an interview although she thinks of them as distinct. DPC is a kind of concierge care, she said, “but there are a lot of concierge services that have grown and become bigger, different kinds of models that include other services as well besides direct primary care.”

There are other differences. “Concierge care” is also often used as shorthand for highly expensive, luxury health services that are marketed to ultra-wealthy people and may cost tens of thousands a year. And as the 2018 JAMA commentary noted, in contrast to concierge care, “the DPC model traditionally does not ‘double dip’ by billing insurers.”

What About Patients on Medicare?

According to AAFP, “primary care practices can continue to see Medicare beneficiaries, as long as the practice’s retainer fee does not cover services already covered under Medicare.”

What Does the New Legislation Do?

It allows people with high-deductible health plans to use HSA funds to pay for qualifying DPC membership fees up to a limit of $150 a month for one person or $300 for a couple or family. The fees will no longer be considered ineligible health insurance payments.

DPC arrangements may not cover prescription drugs (other than vaccinations), laboratory services “not typically administered in an ambulatory primary care setting,” and procedures requiring general anesthesia are excluded. 

According to KFF, the change is expected to cost the federal government about $2.8 billion through 2034.

“This is a big, big win, a big boon for people trying to use their HSAs and be a part of these DDC arrangements who weren’t allowed to take advantage of these savings before,” Eimer said. “It gives them more flexibility.”

How Big Is DPC?

According to the DPC Coalition, more than 2300 DPC practices in 48 states and Washington, DC, serve more than 300,000 patients. The organization says that “as of 2025, 34 states have enacted laws and regulations generally defining DPC as a medical service outside of state insurance regulations as well as offering varying levels of consumer protection.”

Who’s Behind All This?

A bipartisan group of House representatives have pushed for changes in the HSA policy regarding DPC, including physician Kim Schrier, MD (D-WA). AAFP is a prominent supporter of DPC.

Will This Change Encourage More DPC Use?

It’s unclear what the change in policy will mean for DPC, whose growth has skyrocketed in recent years and is expected to continue expanding at a rapid clip. However, plenty of Americans — one estimate puts the number at nearly half of private-sector workers — are enrolled in high-deductible health plans.

For now, at least, the new regulations should reduce confusion among patients and clinicians.

Amy Mechley, MD, a DPC provider in Cincinnati, said the existing law regarding DPC and HSAs could be interpreted in different ways, and she couldn’t give her patients firm guidance about what to do. Some got frustrated.

“This is absolute move in the right direction so that they’re more in charge of how they’re going to finance their healthcare,” she said in an interview.

Are There Direct Care Practices in Specialty Medicine?

Yes. The legislation regarding HSAs doesn’t affect them.

Is Everyone Pleased?

No. Stephanie Woolhandler, MD, MPH, a primary care physician and researcher with Hunter College in New York City, worried about the broader implications for healthcare equity.

On one hand, she said, “it’s pretty easy to understand why patients who have the money would choose to buy their way out of the dysfunctional system. It’s also easy to understand why doctors who are so frustrated with collecting insurance payments would want to walk away.”

However, DPC “actually worsens the situation for patients who don’t have the money to pay extra since it tends to take doctors out of the primary care pool and has them taking care of a smaller number of patients.”

She added that HSAs “don’t work very well for poor people because they often don’t have any money to put in, or their employer doesn’t put much in,” she said. But they’re great for “wealthy people in higher-tax brackets who are in very good health.”

In the big picture, she said, “by abandoning people who can’t pay that extra fee for direct primary care, you’re actually making the whole financing system worse, not better. We need to change the system, but this is going in the wrong direction.”

Randy Dotinga is an independent writer and board member of the Association of Health Care Journalists.