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How does Direct Primary Care work with High Deductible Health Plans (HDHP) and Health Savings Accounts (HSAs)?

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By Michael Tetreault, Editor, Roy Ramthun, HSA Contributor

JANUARY 6, 2013 – HSAs complement Direct Primary Care (DPC) clinics in a variety of ways.

Sue, who works inside a concierge medicine clinic in Washington State asks, “Many of our patients are asking about HSAs and if they can use those funds to pay for the monthly fee associated with the practice. We charge a monthly fee and do not bill insurance, nor can the patient submit for reimbursement. The fee covers any and all expenses in the office. Can you give me some information or advice to pass on to our patients?”

Roy Ramthun of HSA Consulting Services based in Washington, DC, says “The IRS does not generally consider the monthly payment a ‘qualified medical expense.’ However, we do believe that they will accept reimbursements from an HSA for actual services provided by your practice physicians if you can produce something for the patient that they can use to document the services they received (including any procedure/treatment codes), the date they were provided (and by whom), and the amount you would charge the patient for the services provided.  I know your practice is not set up that way, but the patient needs something that tells them the fair market value of the services they received for tax-free reimbursement from their HSA.”

The high deductible coverage from the HSA provides catastrophic protection against large or unexpected medical bills.  The DPC or concierge medicine relationship with your physician will take care of your routine medical needs and preventive care. The money you save on premiums for your HSA-qualified plan can help you fund your HSA account and/or pay your annual concierge medicine practice fees.

In addition, the HSA account can be used to reimburse yourself part of the cost of your concierge medical services. While you cannot pay your entire annual DPC or concierge medicine practice fee with your HSA funds without penalty, you can use your HSA funds tax-free to pay for individual medical services that you receive from your concierge physician. This requires your physician to generate a “fee-for-service” bill indicating the type of medical care you received (with appropriate codes) and the amount the physician would normally charge for the services you received. This is the amount you can withdraw tax-free from your HSA account.  Over time, these withdrawals can help reimburse the annual cost of your concierge medical services.  Remember, reimbursement is not required if you would prefer to save your money for future needs.

Direct Primary Care can complement High Deductible Health Plans (HDHPs), taking care of the primary care component of health care,” adds Dr. Qamar. “HDHPs, or major medical plans, can take care of catastrophes. This combination can result in significant savings overall. Health Savings Accounts (HSAs), when structured properly with Direct Primary Care plans, can also be used. The key is working with a Direct Primary Care company, like MedLion, that has unquestionable legal and insurance knowledge.”

 

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