HF1157

Purpose

• Establishes a new framework for direct primary care service agreements. It clarifies that these agreements are not insurance and are not subject to Minnesota’s health-insurance laws or to certain insurance chapters. The goal is to allow direct primary care practices to offer a separate, fee-for-service arrangement outside traditional health plans.

Key terms and definitions used

• Direct primary care service agreement: a written contract between a direct primary care practice and a direct patient (or their legal representative) in which the practice provides primary care services for a direct fee.
• Direct fee: the total amount charged for all primary care services under the agreement, paid monthly or upfront for up to 12 months.
• Direct patient: the person who signs the agreement and is entitled to receive services.
• Direct primary care practice (direct practice): the primary care provider or group that offers services under the agreement.
• Primary care provider: a licensed physician or a licensed advanced practice registered nurse qualified to provide primary care.
• Health plan: defined broadly to include many forms of health insurance and coverage, but certain limited or supplemental coverages are excluded.
• Health plan not included: the bill lists specific exclusions to what counts as a health plan (e.g., some fixed-indemnity, credit, or supplement policies).

What the bill does (main provisions)

• Non-insurance status: A direct primary care service agreement is not health insurance, not a health plan, and not subject to Minnesota’s insurance laws or the business of insurance.
• Eligibility to offer: A health care provider or their agent does not need a certificate of authority or license under certain chapters to market or offer a direct primary care service agreement that meets the defined requirements.
• Definitions of health plan: The term health plan covers many forms of health coverage, but excludes several limited benefit coverages (e.g., certain fixed indemnity, hearing/dental/vision-only, long-term care, Medicare supplements, workers’ compensation, etc.).
• Direct primary care service agreement requirements:
  • In writing, signed by both sides, and can be terminated with written notice by either party.
  • Must describe the scope of covered primary care services, the monthly (or other) fee, the duration, and that there is no automatic renewal.
  • Must state that it is not health insurance and that fees aren’t reimbursable toward a health plan deductible.
• Acceptance and discontinuance of patients:
  • Direct practices may not decline new patients or discontinue care based solely on health status, except for capacity limits, inability to provide appropriate services, or if the patient previously terminated a direct agreement within the past year.
  • Either party can terminate the agreement for specified reasons (e.g., nonpayment, fraud, abusive behavior). The termination takes effect the first day of the month after notice.
  • If the practice stops operating as a direct primary care provider, it must give sufficient notice to allow the patient to obtain care elsewhere.
• Direct fees and payment terms:
  • The direct fee covers all listed primary care services and must not vary by patient health status or sex.
  • Fees may be paid by the patient, the patient’s legal representative, or a third party; can be charged monthly or prepaid for up to 12 months.
  • Prepaid fees must be held in a trust account and earned monthly; unearned amounts must be refunded if the agreement ends or if the practice ceases operations, with prorated refunds for the current month.
  • Fees cannot be increased more than once per year; at least 60 days’ advance notice is required for any fee change.
• Conduct of business:
  • Practices must keep proper accounting of payments and services and provide records on request.
  • Direct services under a direct agreement cannot be billed to a health plan.
  • Prohibits false or misleading advertising or misrepresentations about the agreement or its benefits.
• Other care and relationships:
  • A direct primary care practice may still provide services to other patients under separate contracts with health plans.
• Enforcement:
  • Violations are treated as unprofessional conduct and can be subject to disciplinary actions under the relevant professional licensing chapters.

Significant changes to existing law

• Adds a new subdivision to Minnesota Statutes (section 62A.01) establishing that direct primary care service agreements are not insurance and not subject to certain insurance chapters.
• Amends the health-plan definition (section 62A.011, subdivision 3) to clarify what counts as a health plan and what is excluded.
• Creates a new chapter for direct primary care service agreements (section 62Q.20) to define terms, requirements, and enforcement related to direct primary care.

Enforcement and compliance

• Violations can trigger disciplinary action for unprofessional conduct under the relevant licensing statutes.
• The framework emphasizes transparency, fair pricing, and patient rights in agreements separate from traditional health insurance.

Relevant terms - direct primary care service agreement - direct primary care (direct practice) - direct fee - direct patient - primary care provider - health plan (definition and exclusions) - not health insurance - 62Q.20 (section creating the direct primary care agreement) - 62A.01 (amended subdivisions for non-insurance status) - 62A.011 (health plan definition and exclusions) - trust account (for prepaid direct fees) - termination and notice periods - misrepresentation and advertising rules - unprofessional conduct and disciplinary actions