Direct Primary Care Practice

Direct primary care (DPC) is changing how many physicians, nurse practitioners, and other primary care clinicians practice medicine. Instead of billing insurance for each visit, a DPC practice charges patients a fixed periodic fee, usually monthly, for a defined set of primary care services. Patients get easier access and longer visits. Practitioners get freedom from claims administration and more time with patients.

Removing insurance billing, however, does not remove regulation. A DPC practice can implicate state insurance law, Medicare enrollment and opt-out rules, federal tax law, pharmacy and dispensing laws, scope-of-practice and supervision requirements, and federal and state fraud and abuse laws. A membership program that is not properly structured may be treated as unlicensed insurance, may violate Medicare billing rules, or may leave the practice with unenforceable patient agreements.

G2Z Law Group assists physicians, nurse practitioners, medical practices, and health care entrepreneurs with launching, converting to, and operating direct primary care practices.

What Is a Direct Primary Care Practice?

A direct primary care practice contracts directly with patients, or with employers on behalf of their employees, to provide ongoing primary care services in exchange for a periodic fee. Services commonly include office visits, care coordination, telehealth and messaging access, and certain in-office procedures and tests.

DPC is different from “concierge medicine.” Concierge practices typically charge a membership fee and continue billing insurance for covered services. Pure DPC practices generally do not bill insurance for the services included in the membership. The distinction matters because each model raises different legal issues.

Is a Direct Primary Care Agreement Considered Insurance?

Not necessarily, but it depends on the state and on how the agreement is structured.

A practice that accepts a fixed fee in exchange for promising future care is taking on a form of risk, which is why insurance regulators have historically scrutinized prepaid health arrangements. Many states have responded by enacting statutes confirming that a qualifying DPC agreement is not insurance.

Virginia’s DPC law, for example, provides that a direct primary care agreement is not health insurance or a health maintenance organization, provided that the provider does not require patients to pay monthly periodic fees before the coverage period begins. Practices that collect large prepayments or annual fees up front should evaluate whether they still qualify for that protection.

In jurisdictions without a DPC statute, the analysis depends on the general insurance code and the regulator’s view, and the agreement’s terms deserve even closer review.

What Must a Virginia Direct Primary Care Agreement Include?

Virginia imposes specific agreement, disclosure, and disclaimer requirements. Among other things:

• the agreement must contain a statutory disclaimer stating that it does not provide comprehensive health insurance coverage;

• marketing materials and agreements must prominently disclose that the agreement is not insurance;

• the practice must clearly list the services included in the membership;

• patients must be told they are responsible for paying for services not covered by the agreement;

• the agreement must be signed by the individual patient; and

• patients must receive a disclosure statement describing their financial rights and responsibilities, encouraging them to maintain insurance for services the practice does not provide, and confirming that the practice will not bill a health carrier for services covered by the agreement.

Employers that offer DPC agreements to their employees are subject to disclosure obligations as well.

Can a Direct Primary Care Practice See Medicare Patients?

Yes, but Medicare patients require careful planning.

A practitioner who is enrolled in Medicare generally cannot charge a Medicare beneficiary a membership fee for services that Medicare covers. Practices that want to serve Medicare patients through a DPC membership typically choose between two paths:

• Remain enrolled in Medicare and limit the membership fee to services and amenities that Medicare does not cover, which requires careful drafting and is the area where most enforcement risk arises; or

• Opt out of Medicare under the private contracting rules, which allows the practitioner to treat Medicare beneficiaries under private contracts.

What Does Opting Out of Medicare Involve?

Opting out is a formal process with lasting consequences. The practitioner must:

• file an opt-out affidavit with each Medicare Administrative Contractor that has jurisdiction over the practitioner’s claims;

• enter into a written private contract meeting federal requirements with every Medicare beneficiary the practitioner treats; and

• refrain from receiving any direct or indirect Medicare payment for services provided to those beneficiaries.

Opt-out periods run for two years and renew automatically unless properly terminated. Special rules apply to emergency and urgent care, ordering and referring, and Medicare Advantage. Because opt-out affects every Medicare patient the practitioner sees, the decision should be made before the practice begins enrolling Medicare members.

Can Patients Use Their Health Savings Accounts to Pay DPC Fees?

As of 2026, often yes.

Historically, enrolling in a DPC arrangement could disqualify a patient from contributing to a health savings account (HSA). The One Big Beautiful Bill Act changed that rule. As explained in IRS Notice 2026-5, individuals with high-deductible health plans may now participate in a qualifying “direct primary care service arrangement” without losing HSA eligibility and may pay the periodic fees with HSA funds.

To qualify, the arrangement must meet several conditions, including:

a fixed periodic fee as the sole compensation for the included primary care services;

aggregate fees of no more than $150 per month for one individual or $300 per month for arrangements covering more than one individual (2026 amounts, indexed for inflation); and

exclusion of certain services, such as procedures requiring general anesthesia, most prescription drugs, and laboratory services not typically provided in an ambulatory primary care setting.

Practices that want to market to HSA holders should design their pricing and service packages with these limits in mind. Further IRS guidance is expected.

Can a Direct Primary Care Practice Also Accept Insurance?

In some circumstances.

Virginia law, for example, permits a provider who participates in a DPC practice to also participate in a health insurance carrier’s network, as long as the provider meets the carrier’s network terms. However, the practice may not bill a health carrier for services already covered by the DPC agreement. Hybrid models therefore require careful coordination between patient agreements, payer contracts, and billing practices.

Can a Direct Primary Care Practice Dispense Medications?

Possibly, depending on state law and the type of practitioner.

Low-cost, in-office medication dispensing is a common feature of DPC practices, but it is regulated by state pharmacy law. In Virginia, a physician who sells medications to patients must hold a license from the Board of Pharmacy and comply with its storage, labeling, and recordkeeping requirements. Rules for nurse practitioners and physician assistants differ, and controlled substances raise additional federal and state requirements.

Can a Nurse Practitioner Own or Operate a DPC Practice?

It depends on the state.

A nurse practitioner’s ability to operate a DPC practice depends on the state’s scope-of-practice rules, any physician collaboration or supervision requirements, and any restrictions on ownership of medical practices. Physician assistants are generally subject to supervision or collaboration requirements. These issues should be resolved before the practice is formed, because they affect the entity structure, staffing, and the services the practice can offer.

What Other Laws Should a DPC Practice Consider?

A DPC practice should also evaluate:

• corporate practice of medicine restrictions on ownership and control;

• federal and state anti-kickback and self-referral laws when working with laboratories, imaging centers, pharmacies, or employers;

• HIPAA and state privacy laws, including for telehealth and messaging platforms;

• consumer protection rules governing advertising, renewals, cancellations, and refunds;

• licensure requirements for treating patients located in other states; and

• rules for ending a patient relationship without abandoning the patient.

What Can G2Z Law Group Do for My Direct Primary Care Practice?

G2Z Law Group assists physicians, nurse practitioners, medical practices, and health care entrepreneurs with every stage of building a direct primary care practice.

Our attorneys can help select the appropriate entity and ownership structure, draft patient membership agreements and required disclosures, advise on Medicare opt-out and private contracting, structure HSA-compatible fee arrangements, prepare employer DPC agreements, evaluate dispensing and scope-of-practice requirements, and review vendor, laboratory, and referral relationships for fraud and abuse risk.

Whether you are opening a new practice or converting an existing insurance-based practice, a sound legal foundation can protect both your patients and your practice from unnecessary regulatory and legal exposure.