DPCA Articles

The most common way for a DPC practice to arrange lab services is via a client billing (this phrase is key!) arrangement if it’s allowed in your state. Effectively, this is a “pass-through” arrangement where the lab company bills the practice (the “client”), rather than the individual patient. While not truly direct-pay or self-pay, it’s what most lab companies are comfortable doing to offer better pricing. The process for setting up a client bill is fairly straightforward but does require a few steps:

In some areas, the most time-efficient way to establish client billing with a lab may be through a GPO/GPP. There are many GPOs/GPPs that offer this service. The advantage is that it requires very little work on the part of the physician, but the trade-off is that you may not get the absolute best pricing available. One such example is the DPCA GPP program.

Finding a lab company willing to offer a client-bill arrangement

These options will be very dependent on your location but both small locally-owned lab companies and large national lab companies have worked with DPC practices around the country. The easiest option to get started here is to speak with a DPC doctor in your area to see which lab companies have been most friendly and affordable.

The nationwide lab companies with the largest menu of testing are Quest and LabCorp. These companies have local/regional representatives that you will work with. You can typically identify a representative through their websites or by speaking with a local DPC doctor. The regional variability (service & pricing) is significant so, once again, speak with a local DPC doctor.

Obtaining a contract for your desired labs and prices:

If you are starting from scratch (no existing DPC or standard client-bill pricing) with a lab company, you may need to start with a smaller list of labs. Even though you may need 100+ lab tests eventually, having fair pricing on your 10-20 most common labs is something to build on; you can add more later. Be aware though, if you select something with “reflex” and the additional labs are not on your list you will get a LARGE bill for the reflexed labs.
Once services and pricing are agreed to, the lab company typically arranges a monthly bill with your business.

Phlebotomy options

Decide if you are going to offer onsite phlebotomy. Many lab companies will provide some basic supplies (needles, tubes, etc.) and equipment (centrifuge, label printer, etc.) at no cost to you. If you do onsite phlebotomy, your options will be to arrange to pick-up from the lab courier or to mail the sample depending on the lab you are working with.

Most lab companies will have a “service center” that can do phlebotomy but may come with an additional “draw fee” that should be included in your client bill contract.

When your practice reaches the point that you need to start hiring, you want to make sure you fully understand the differences between 1099 independent contractors and W-2 employees. If you are hiring people to work for you full-time, then you will likely have to make them an employee. Also, if you control how many hours they work, give them benefits, and pay them a salary, that also makes them an employee. I encourage my practitioners to be independent contractors as that puts them in control of their income and taxes. As an employee, they cannot write off any expenses, but as a 1099 they can take advantage of deductions and reduce their taxable income. Doctors get killed in the high tax bracket as a W-2. That does make some people nervous though, so I do offer the option to be a W-2 but their pay will be a little less as I have to cover payroll taxes on top of their salary. I pay 60% of membership revenue for my independent contractors and 50% for employees.

Know that you can get in trouble with the IRS if they decide that your independent contractor is actually an employee. Say they work for you for 5 years, then the IRS makes that determination, you will have to go back and pay 5 years' worth of payroll taxes! In order to avoid that, you want to minimize any benefits you give them and not control the hours they work, but just that they are fulfilling their duties. I do not require my PA who is an independent contractor to be at the office for a certain amount of hours as long as patients are able to get in to see him quickly. Also, I encourage him to have side gigs as that helps solidify his 1099 status in the IRS’s eyes. Finally, it is key for them to set up their own LLC that you pay instead of them personally. It is definitely a risk to hire practitioners as independent contractors but I think it benefits the practitioner and employer much more than a W-2 employee.

You also need to get a W-9 filled out on anyone that you have paid $600 or more for a service. This could include cleaning companies, lawyers, pest control, painters, plumbers, etc. You can put them in your payroll software like Gusto to then give them their tax documents in January of the next year or your CPA can help process it for you.

Integral to any relationship is good communication; your relationship with your patients is no different. Before picking your software and platform for communication first decide your priorities for communicating with patients:

• Will you allow texting with patients? If so, during what hours? And for what concerns?
• Will you allow direct emailing with patients? If so, for what concerns?
• Will you utilize a patient portal for messaging with patients?

Additionally, there is one big law that governs communications with patients: The Health Insurance Portability and Accountability Act (or: HIPAA).

• The Department of Health and Human Services has information about patients exercising individual choice regarding communication linked here.
• DPC Frontier discusses the nuance of HIPAA in the context of running your DPC practice.

Understandably, HIPAA is a complex subject that likely warrants consultation with your attorney.

Once you get past the legal hurdles and decide your communication preferences, there are many software vendors that help you communicate with patients.

• Spruce
• AtlasMD
• Google Suite (email, forms)
• + various other secure messaging apps -- just do an online search to see what’s out there!

Once you decide how you are going to communicate, you need to educate your patients.

One of the biggest benefits of direct primary care is the fact that it removes episodic, transactional billing and provides a more fluid, easy-to-administer monthly fee.

Several vendors can assist in the monthly billing process. The ones that can cater to the DPC marketplace are:

• AtlasMD (EHR)
• Hint Health
• Twin Oaks
• Cerbo (previously MD-HQ) (EHR)
• Square
• And many more…

Beyond the monthly billing, other items require billing your patient. A far-from-comprehensive list may include:

• Labs*
• Imaging*
• Medications (see DPC Frontier for state-by-state regulations)
• Pathology* (see DPC Frontier for state-by-state regulations)
• Durable medical equipment
• Medical supplies (i.e. stitches, casting, etc.)
• Enrollment fees, after-hours visit charges, etc.

*There is a concept, called “client billing” where a vendor bills you, the practice, and you pass the charge on to the patient. Many vendors use this setup to offer your practice -- and subsequently, your patients -- below-list-price prices. Other vendors offer direct, patient billing. There are pluses and minuses to each setup.

With any of these options, consider the time requirements, scheduling conflicts with DPC clinic time, pay, your existing skillset, malpractice coverage, and whether it requires Medicare participation. Malpractice coverage is required for every clinical position. Make sure you are covered both in your DPC and your moonlighting position and get separate coverage if needed. Regarding time commitments, DPC patients expect good service and part of that is doctor availability. Plan to meet or exceed those expectations, and remember your long-term plan when choosing a side gig. Any option that provides adequate income and fits your skills, interests, and schedule increases your chances of DPC success.

When a patient needs to get lab work outside the scope of your practice’s in-house capabilities, there are several options to consider:

• CLIENT-BILLING: This is what most DPC practices have in place with a lab company to ensure transparent rates and avoidance of insurance hassles. This is effectively a “passthrough” where the lab company bills the practice rather than the individual patient. Client billing is allowed in most states, but a few have restrictions. Setting up this option for your patients, insured or not, is typically the most affordable option for your patients. (See article Arranging Client Bill Labs for more information).
• LOCAL LAB WITH INSURANCE: If a patient has an insurance plan, you can give them an order and visit a local lab that will bill their insurance as usual. This process can, of course, be filled with many pitfalls and caveats for the patient and doctor. For example, the patient and physician may not know which labs are in-network or out-of-network. Some insurances may have limitations on which labs can be drawn or how often. And there may be unexpected costs associated with this option. Additionally, the physician will be required to supply diagnostic information not required for the other options (ICD 10 codes). If a patient chooses this option, the best advice is to urge caution and keep expectations low.
• LOCAL LAB WITHOUT INSURANCE: Sending a patient to a lab without insurance is likely to stick them with a bill with “chargemaster” (3-10x insurance) rates. This is not advisable unless the lab company has a transparent, “self-pay” option in place (fairly rare).
• ONLINE LAB SERVICE: Many online companies will sell labs, often without a physician’s order, directly to patients (for example Ulta Labs). Many of these companies are basically resellers who use a lab company (e.g. Quest or LabCorp) to perform the actual lab and deliver results to the patient. On average these will be more expensive than client-bill rates, but less than chargemaster rates for uninsured patients.

A question asked frequently within the DPC community is whether or not you can successfully open a direct primary care practice in your own home.  It is a natural question to ask since, in many ways, the DPC model is ‘going back to the future.’  We are trying to recapture the spirit of the old-time family doctors who cared for many of us and our families in generations past.  Many of these physicians had offices attached to their homes and were very successful.  The question is whether or not that can be done today.

There are a small handful of DPC physicians who are practicing in a home office and are very happy doing so.  There are several pros and cons, and many factors to consider before going down this road.  We do our best to outline them here.

Without a doubt, the first thing to examine is how would having a practice within your own house affect your family?  If you have a spouse/significant other, are they on board with this concept?  Will working out of your home improve your relationship because you may be home more because you have no commute?  Will it hurt it because you have a hard time walking away from work and respecting home/work boundaries?  Is your spouse/partner going to work in the practice with you?  Some love the idea of just going down the hall to go to work and being able to have lunch in their own kitchen or a nap in their own bed.  On the other hand, some prefer clear delineation between home life and work-life to promote balance.

If you have children, how will this affect them?  There is a definite advantage to working out of your home if you have young children, especially if both parents work in the practice.  It would allow you to check in on the children throughout the day.  If a child is home from school sick, it is easy to keep an eye on them without having to take a day off.  Older patients often love to see the doctor’s children coming in and out of the office.  It promotes a sense of family in your primary care practice.  On the flip side, some physicians prefer not to have their children underfoot, and to maintain boundaries between patients and their private lives.  If the children tend to be noisy, that can irritate you and the patients. There are also considerations in terms of whether or not you want to have your children potentially interacting with strangers in your front yard.  It is also important to have you think about keeping your front yard free of loose toys, bicycles, etc.  It detracts from a professional appearance and can create tripping hazards.  Also, your pediatric patients might help themselves to play with your children’s toys, which may not be ideal.

The second issue to research is whether or not local town ordinances will permit you to run a medical office out of your home.  In our experience, the codes often vary widely from one town to another.  In many cases, home offices are allowed by the municipality if they do not take up more than a certain percentage of the house’s square footage (i.e. 20-25%).  Some towns might restrict the absolute amount of square footage that is used for the office space.  It is not uncommon in cities and suburbs to require that the business have a certain amount of off-street parking, which is usually based on the square footage of the business.  There may also be constraints on signage in order to maintain the residential feel of the neighborhood.  Some towns also have a cap on how many employees can work in your office who do not reside in the home.

If after doing this research, you find that you would not meet your town’s criteria for being considered a home office within a residential area, you might have to investigate what it would entail to have your property rezoned.  Some localities recognize a residential/professional designation, which is ideal for what you would need.  It means that a home can be used for either purpose at any time.  If your town does not have this option, you might have to look into petitioning to have your property rezoned for business purposes.  Depending on whether or not your town hall is business-friendly or not will determine how difficult this process might be.  In order to test the water, you might want to speak to your local code enforcement or planning department to see what they require.  Some towns will allow a single parcel to be rezoned to accommodate a business, but some would require that a whole group of them convert.  The process would require a formal application, meetings with the planning committee and town council, as well as soliciting input from your neighbors regarding their concerns about the proposed zone change.  It is sometimes beneficial to discuss the process with an attorney with experience in this area.  If you need to go through this process, it can take several weeks or months, so please factor that into your plans.

It is important to check with your homeowner’s insurance company to see if you will need to add a rider to your current policy to allow for a home business.  There is a chance that they cannot cover you at all, at which point you would need to talk with a broker about a new policy.  This may be an inconvenience, but not the end of the world.

The optimal arrangement for a home office is to have a space that is completely distinct from your living area, with a separate entrance, which is clearly marked so that patients do not go to the wrong door.  As a home office, there is a good chance that you will not need to be ADA compliant, but it is still a good idea, if possible, to be as handicapped accessible as possible.  You might want to consider a ramp if the door is not at ground level.   If your office space needs structural renovations, you may need a permit and certificate of occupancy from your town.  You can expect a visit from your local fire department to be sure that you have fire extinguishers, emergency lights, and fire alarms in the areas open to the public.  We will not discuss office design or space requirements here because every practice and physician is unique.  

The financial advantages to a home office are many.  You should talk with your accountant for formal advice because there are many different approaches and each may have its own advantages.  Some examples given by one physician who practices out of his home are: it is legitimate for you as a homeowner to charge the practice rent.  This will allow you to defray a portion, if not all, of the cost of your mortgage as a business expense.  In order to do this, you should have a formal lease.  You may be able to pay some of your utility bills as a business expense.  You may also be able to declare a portion of your home improvements, landscaping, and other expenses and supplies necessary to maintain a professional appearance to your building.  (Please consult your accountant for formal guidance.)

Frequently, the question is asked about practicing medicine out of your home is about patient boundaries.  This generally is not as big an issue as one might suspect.  The key to success is to clearly establish boundaries early on.  If the office entrance is clearly marked, it is not likely that patients will be knocking on your front door.  Patients tend to be extremely respectful of your private time.  Occasionally, patients may broach the subject about dropping by to see you after hours but frame it as a joke to feel you out.  It may just be a joke, but it is usually best to make it clear, in a friendly way, what your boundaries and expectations of privacy are.  It may sometimes be a challenge to enjoy a day off during the week and be in your front yard and have a patient stop by unexpectedly to ask a question, pick up a refill, etc.  In most cases, simply letting a patient know that you are enjoying private time and that it would be better if they call before coming over is perfectly fine.  The same applies to pharmaceutical representatives.  Realistically, the best way to avoid interactions such as this is to not be visible during personal time taken off during your usual business hours.  Stay in the back yard, in the house, or away from home.

In summary, there are many things to consider and research before opening your medical practice in a home office.  It is a unique situation with many advantages and a few caveats.  It may not be a good fit for everyone, but for the right physician and their family, it can be a fantastic arrangement.

Before employees chose your DPC clinic they will have to go through an “open enrollment” process. This process occurs yearly and allows time for benefits advisors and employers to explain all the employee benefits. These are usually long, boring meetings but do offer critical time for employees to ask questions and understand their health plans. Getting involved in this open enrollment process is a must for DPC docs as it is crucial for starting a relationship with employees (and employers -- they will be patients too).

You should ask the employer and the benefits advisor to keep you involved and plan for time off to attend those meetings. Ideally, they will allow you time to speak at open enrollment to share your DPC passion with employees. Plan to be available to answer employee questions at the end of this meeting.

(This will likely blow employers’ and employees’ minds, as they have never had a physician actually come speak to them about anything -- let alone about increasing access to care and lowering costs!)

Open enrollment meetings are a great time to “meet and greet” some potential new patients!

You landed a new employer which potentially could add dozens or hundreds (!) of new patients in a few months, now what? How do you get all those people into your EHR system and into your office for initial visits? Here are some tips:

• Plan ahead for busy schedules (leave open schedules, limit time off)
• Prepare the staff for new patients (add new staff? adjust work hours?)
• Get patients registered In your EHR ASAP (educate employee and employer here)
• Try designing cards to be given to employees with simple directions on how to sign up on the DPC EHR
• Build basic “skeleton” charts for all the patients that did not sign up online
• Schedule initial visits for all employees, as soon as possible -- think about sending reminders via text and/or email to encourage people to come in.
• See sick visits and refills as needed even if initial visits not done
• If possible, don’t onboard in the middle of cold and flu season

Adding lots of new employer patients will be time-consuming but proper planning can be done in a few months. Be sure to let the employer know about your onboarding plans and get involved in the open enrollment sessions to provide clear communication with your future patients is the key.

The diagnosis and treatment of Obstructive Sleep Apnea can be achieved at a more affordable rate through cash pricing.

TESTING:

Home Sleep Apnea Testing (HSAT) services will mail the HSAT equipment to your patient’s home, where the patients hook it up, sleep, and mail it back. Reports are mailed/faxed to your office. Prices are currently as low as $125. Several companies offer this service, and the DPCA has partnerships with two of them, Somno and OwnSleepMed.

TREATMENT:

Auto-CPAP equipment with additional supplies (mask, filters, tubes, etc.) is available for around $600. Also, look for used equipment on sites like eBay.

Note: Patients of DPC Alliance members can get a discount on OSA-related equipment via our Vendor Partnership with TerraCore DPC. This negotiated discount is a member benefit. The DPC Alliance receives no direct financial benefit from any of our vendor partnerships. Learn more about our vendor partnerships here.

During your transition to your DPC, you will want to notify your existing patients about the change. If you have a non-solicitation clause in your agreement, you have to be careful how you do this. Before announcing your departure, there are some ways to circumnavigate this and maintain contact with patients without breaking your non-compete clause. Check your contract - does your non-compete clause include email addresses and social media connections?

CONNECT WITH YOUR PATIENTS ONLINE BEFORE YOUR ANNOUNCEMENT:

• Open social media pages on all platforms and “friend” your patients from those (check your contract, some employers have shut down social media networking with patients)
• Start your website as a physician (not the name of your new DPC….yet)
• Consider posting some blog posts about health topics on your website/blog
• Ask friends to share your posts so that patients can see them too
• Join all the local community groups on social media with your full name and participate in some discussions. Patients will start to take notice that you are there.

EMPLOYED PHYSICIANS - TRY TO NEGOTIATE NON-SOLICITATION CLAUSE:

Most employers may restrict your ability to notify patients about a new (competing) practice. However, that is not universally true. It’s best to have a conversation with your employer to get the best terms possible.

Consider using the discussion point that your DPC practice will be totally different from your current FFS practice. You can argue that because the new practice will be so different you won’t be competing against each other. Each situation will have different results depending on the hospital and administrators. The best-case scenario is to obtain the contact information (mailing address and emails) of all of your patients. You may want to prepare for a negative outcome, that they say no to patient solicitation. Before you announce your departure, there are some ways to circumnavigate this and maintain contact with patients without breaking your non-compete clause. Check your contract - does your non-compete clause include email addresses and social media connections?

IF SOLICITATION IS PERMITTED - ANNOUNCEMENT(S)

• HOW MANY? Send at least 2 notifications (letters, emails, or other) to create some anticipation and build-up to opening your DPC practice. This can be a great marketing strategy and ease potential shock patients.
• CONTENT: Your announcement should include, and likely start, with your “why.” Let patients know the reasons why you have decided to switch to DPC, namely, to provide better care to them! This will help incite an emotional and human response from patients. At the end of this letter, create some anticipation, with a teaser and sign-off with “stay tuned” or “more information coming soon.”
• FOLLOW UP: Your subsequent announcements should give more detailed information on your DPC practice, including timeline, website, how to sign up, and contact information. You can also use this letter to invite each of them to an informational meeting or town hall to help answer their questions about DPC.

MAILING LETTER(S)? It can be expensive to send letters to each patient or family when you have thousands of patients, so most physicians elect to only send one letter. You can use a local mailing service or you can recruit family, kids, or friends to help you stuff envelopes. This can be very time-consuming but can save you money on start-up costs if you have the time. Conversely, if you have enough money to use a service, this can save you significant frustration and time. Remember email is much more affordable, but at least one mailing would be appropriate. To invite patients to events you could consider postcard type mailing which is much more affordable.

SPREADING THE WORD IF YOUR NO SOLICITATION IS IRONCLAD

• Continue to post health blog posts and share them on all your social media
• Monitor your community social media groups and if patients post asking about where you went, recruit a good friend to answer the post with your details
• Get involved. Offer to give a talk at your local business association/community center/church on medical topics. Give your new cards out and ask your community to spread the word.
• Solicit newspaper or television media to write an article or do a TV news piece on your practice. Share it on your social media and ask friends and family to do the same.
• The power of social media reaches far beyond the non-compete. As long as the patient finds you, and not the other way around, your non-compete patient solicitation clause has not been violated.

NON-COMPETE RADIUS:

• Patients will travel for medical care from their physician that they trust, especially when DPC allows care to be done easily through telemedicine.
• Find the location that suits you best. Take a 2-year sublet or lease. Once your non-compete is up, you can decide to move your DPC location closer to your original patient panel. Who knows, maybe your new location will suit you better.

SAMPLE NOTIFICATION AND TRANSITION LETTERS (DPCA members only)

1. Transitioning to DPC from Private Practice Letter - Written by Debbie Sutcliffe, MD (members only)
2. Transitioning to DPC from Employed Practice Letter - Written by Kissi Blackwell, MD (members only)

As of 2020, roughly 400 physicians commit suicide annually. More than 40% of primary care physicians’ time, by some estimates, is taken up with non-clinical activities. Burnout and moral injury are oft-discussed phenomena regarding the physical and emotional toll practicing medicine has taken on physicians. Put simply: current healthcare constructs fail to provide a therapeutic environment for the patient and physician and, most importantly, for the physician-patient relationship. Direct Primary Care (DPC) is one practice model that focuses on the physician-patient relationship where the incentives of both parties are aligned. The chasm between being an employed physician in a traditional health care setting and going out on your own to open your own small medical practice can seem exceptionally vast. However, many physicians are returning to solo or small group independent practice and are sharing their experiences on how to do so successfully. DPC restores physician autonomy, affords the same and next-day access, and is empowering primary care physicians to remain inspired and empowered.

Why Dispense?

One of the best ways to bring value to your DPC membership is to dispense prescription medications out of your office. It saves patients time, energy, and (most of the time) money to get their prescriptions from your office. 

Physicians can currently dispense prescriptions out of their offices in 45 states. The rules and regulations for dispensing varies drastically by state. DPC Frontier which is managed by Phil Eskew DO, JD, MBA has an extensive listing of each and every state that he keeps track of.  (https://www.dpcfrontier.com/dispensing-medications). The five states that currently dont allow physician dispensing are NH, MA, NJ, TX, NY (even in these states there are some “emergency” situations where short term prescriptions can be dispensed. 

For the rest of the states, after you have complied with your state regulations, you should strongly consider providing this service. It is extremely valuable for a sick/acute patient to be able to get what they need at the visit rather than going to the pharmacy to wait for an hour or more while in pain or ill. 

Similarly, dispensing chronic medications is valuable for patients. Many DPC offices will buy drugs in bulk just like a pharmacy and sell them at very little or no profit. Patients will often save enough money on several prescriptions to pay for most or all of the DPC membership fee. (example: lisinopril is currently 5 cents/pill. 100 of them would only be $5). This provides VALUE to your membership. Many of your patients would rather spend their money with YOU to support your small business and you. Dispensing medications allows you to keep better track of compliance as well. 

Also if you get your system streamlined, you provide ease of ordering and picking up medications. Patients will communicate by text, call, email or any of the above to request refills. Most offices will fill non urgent meds within 1-2 days. Usually their software or EMR tracks the meds and billing allowing patients to just put the meds on their account. This makes it easy to just come in and pick them up without long lines and wait times at a pharmacy. Some offices will buy or add some sort of “lockbox” on the outside of their building for after-hours pickup when necessary. 

How to Dispense

There are multiple online distributors that will sell meds (and bottles) in bulk and deliver them to your office. Andameds, Bonita, Henry Schein to name a few. With most of these suppliers, you can create an account and pay weekly or monthly for the supplies you buy. 

Something to consider is what pill counts to order. If you buy in bottles of 1000s then you or your staff must plan a way to count out the right amount of pills. You may need to buy a pill counter (https://rxcount.com/rx-4/. They run about $2500). Another option is to buy in 90 or 100 count bottles. Then you dont have to count. You do need to be aware of your state law on the type of container needed to dispense. Most have to be child proof.

Prescriptions also need to be labeled. You’ll need a label printer. (Dymo and Brother are a couple of the label printer companies to consider). Connecting the printers to your computers requires a little bit of tech know-how. Most of the inventory tracking and managing will populate the labels with the information. The majority of EMRs that are used in the DPC community do the inventory and billing directly, but there are other software programs that cover this as well if needed. 

A few docs also team up or hire a local pharmacy or pharmacist to manage the dispensing. The main concern about this is making sure that they provide good value to the patients. Otherwise it would be the same as any other pharmacy they already have access to.

A new DPC practice does not typically provide the same income as a traditional practice. When starting a DPC practice--whether out of residency or leaving a traditional or employed practice--a strategy for additional income sources is essential. Having adequate income outside the DPC practice can be the difference between success and failure. Don’t put your ultimate freedom in jeopardy by not having a viable plan. Even if you plan to use loans or savings to subsidize your income, having other possible revenue sources can help if growth is slower or costs are higher than expected.

Do what you know: If you’re already moonlighting in an ER or urgent care--or have before--that’s a natural place to start. If not, there are plenty of options for a primary doctor willing to hustle.

Most DPC doctors are opted out of Medicare. Learn more about opting out of Medicare. Many DPC docs who are doing moonlighting/side hustles will wait until their DPC is more established to opt-out because opted-out moonlighting is more challenging and bamboozles administrators who’ve never had to figure out how to make it work. For those who have opted out of Medicare, DPC Frontier also has a great resource on Opted-out moonlighting, here.

Deciding how you wish to handle Medicare is a huge step for those entering DPC. There are several excellent resources on how to opt out of Medicare and the consequences of doing so.

• Dr. Phil Eskew’s DPC Frontier has the go-to resource for legal issues on this matter.
• To learn how to opt out of Medicare, watch this video.

The more important discussion here is why and when to opt out of Medicare. In order to offer full-scope DPC for all patients, you must eventually opt out of Medicare. Until you opt out you either cannot see Medicare patients, or you must bill Medicare for your services. Some small loopholes allow for billing Medicare patients for non-covered medical services, which is a tactic utilized by many concierge practices, but if you wish to consider this you must speak with an attorney to ensure you are set up correctly.

Many physicians starting out worry that they will struggle to enroll Medicare patients into their DPC, so they choose to remain opted-in during start-up. However, if your end goal is to be full-DPC, it may not be a great plan long term to do this as you will eventually have to make the transition, and it may be harder to explain the change to established patients than it would have been to enroll Medicare patients directly into DPC from the beginning.

When deciding the right time for you to opt out, one of the major decisions is whether you anticipate moonlighting. Most moonlighting opportunities require you to be opted-in. Medicare does not allow you to opt-in at one location but opt out at another. Thus if moonlighting will be important for you financially, you may choose to delay opting out. (See this Member Only article Moonlighting and Side Hustles for more information)

You should also realize that your opt-out is effective for 2 years and will automatically renew every 2 years unless you apply to be reinstated. Effectively, once you decide to opt-out you should assume you are opted-out for 2 years because opting back in within the 2 years is extremely difficult and rarely successful.

Finally, if you have been credentialed with Medicare as a private entity, you will likely only be able to opt-out once per quarter (Jan 1, April 1, July 1, and Oct 1) so you must plan accordingly. If you miss the deadline, you are stuck until the next quarter and you cannot accept payment from Medicare patients. In some areas, if you have only been credentialed as part of a larger organization, this limitation does not apply to you. And the opt-out process does have some regional variation, so speak with an attorney or DPC mentor near you to help you determine whether these deadlines are likely to apply to you, and how to opt-out in your region.

There are many different ways to advertise, and what works for one office may not work for another. When developing your marketing plan, the first step is determining who your target audience is. Without defining a target audience, you cannot expect your marketing to have peak success.

The biggest mistake you can make is thinking “my target audience is everyone” because if it is everyone, no one is listening. So, while you may want a variety of patients and want “everyone” as patients, you should not try marketing to “everyone”.

Part of defining the target audience is evaluating what your ideal patient looks like. Is your ideal patient a young married couple with 2-3 kids? Or maybe your ideal patient is a truck driver who is rarely home and likely to utilize remote medicine more heavily than in-office appointments. Or perhaps your ideal patient is the diabetic hypertensive patient who really wants to improve their lifestyle but struggles to keep to a plan.

Although this is not an exhaustive list, some things to consider when determining your target audience include:

1. What kind of medical care do I enjoy the most? Do I really enjoy lifestyle medicine? Do I enjoy making personal connections and being that connection for people whose family has all moved away? Do I enjoy pediatric care and watching my patients grow into adulthood? Identifying what you enjoy will help ensure you will find joy and fulfillment in your practice.
2. Who is around me? If you want to grow a pediatric practice, but are looking to establish near a retirement community, you might want to look elsewhere or change your target audience. If you are unfamiliar with an area, you can usually obtain general demographic information such as age distribution, gender distribution, average income level, average education level, etc from the local Town or City Hall
3. Look at the current customer base. Where are your current, potential patients receiving their care? Look for common characteristics and identify ways you can stand out among the crowd. If you are establishing in an area where there are very few primary care offices, your advertising will be very different than if you are establishing in an area dominated by multiple large well-known medical corporations.
4. Are there any medical services you wish to offer that currently are not offered locally? For instance, if you enjoy cosmetics and there are no obvious cosmetic medical practices, that would be a great asset to really set you apart.
5. What are the personal characteristics of your target audience? Are they stay-at-home parents? Are they avid outdoors people? Your marketing will be very different if you are trying to reach stay-at-home parents than if you wish to reach avid mountain bikers.
6. Where does your local community congregate? Do they all go to churches? Do they congregate on select Facebook Communities? Do they utilize Nextdoor heavily? Is there a local paper that everyone in the neighborhood reads? This information is key to helping you determine where to reach your target audience. For instance, if they are all on Facebook and you are advertising on Nextdoor you will be wasting your time and money.
7. Evaluate your decisions. You’ve made it this far into identifying a target audience, but is that target audience large enough to warrant spending money to advertise to? Or are you likely only going to get a couple of patients over several years out of that audience?

With all that, remember that you can have multiple target audiences for different marketing plans/goals - but each marketing plan should be directed at one target audience for the best effect.

For more information, consider checking out this link, How To Create A Great Elevator Pitch

Sometimes the best or most affordable option is for a patient to travel to receive specialty care, especially for surgery and other procedures. This is commonly referred to as “medical tourism.” In the past, this has implied leaving the US; however, there are several US surgery centers catering to direct-pay patients.

It is valuable but not always necessary to help your patient navigate this process. Your knowledge of medical tourism options can be very reassuring for patients when this feels very different and may be hard for them to consider the idea. Familiarize yourself with large direct pay centers in the US.

A few of these options for patients to consider:

DOMESTIC DIRECT-PAY SURGERY CENTERS

https://www.surgerycenterok.com/ (Oklahoma City, OK)

https://www.affordableherniasurgery.com/ (Rockville, MD)

https://www.oceansurgerycenter.com/specialties-pricing-torrance/ (Torrance, CA)

https://hpbsurgery.net/Pages/pricing/low-cost-surgery-pricing.html (Winston-Salem, NC)

https://texasfreemarketsurgery.com/ (Austin, TX)

https://www.pacificsurgicalwa.com/pricing/ (Longview, WA)

https://lonestarsurgeryctr.com/pricing/ (Houston, TX)

https://omahasurgicalcenter.net/billing-insurance/ (Omaha, NE)

https://www.nttcsurgerycenter.com/ (Mesquite, TX)

https://www.stgeorgesurgical.com/ (St. George, UT)

INTERNATIONAL DIRECT-PAY SURGERY CENTERS

Traveling to another country for surgery or medical care is a more complex matter with a few special considerations. The CDC has some guidance on this topic.

Here is a map

Non-solicitation clauses in employed practice can be difficult to navigate when you are trying to transition into DPC. Try to find out exactly what the clause states and how restrictive it is. If you are able to let the patient know you are leaving, but not where you are going, you may be able to simply hand them your new DPC business card and direct them to your website for enrollment. In these cases, it is especially important that you have your cards, flyers, and website already created, so it is very simple for patients to find you on their own.

Some clauses are very restrictive and will not allow you to let patients know that you are leaving. In this case, there are opportunities to create a personal brand via social media, podcasting, or blogging. While planning and preparing for your transition to DPC, you can share these channels and content with your patient so they can start following you on your journey. This way, you can eventually let them all know where you will be in a more passive form.

Know the laws and the board regulations in your state. In Texas, for example, you are required to send a letter to all patients you have seen within the last 2 years and notify them of your departure. You can allow the employer to do this for you but since the physician is ultimately responsible, you can elect to do this yourself instead. For physicians in Texas, this is a prime opportunity to alert patients of their new location and practice model. They may even want to invite patients to a town hall type meeting explaining the workings of the new practice inside the text of the letter.

Whether you are employed or self-employed, there are lots of ways you can market to your existing patients while you are transitioning to DPC.

If you are employed, check your employment contract for clauses that may hinder or prohibit the solicitation of existing patients. Read Leaving an Employer for more information.

First and foremost, BE READY!

• Before you start talking about your new practice have a few things in place, including contact information, website, and some practice (business) basics. Read this article to learn more about Branding and Marketing[UPDATE LINK].
• Create and share some print marketing: business cards, flyers, brochures, etc.
• Consider possibly waiving enrollment fees or for patients that sign up prior to your opening date.
• Create a letter for patients to give notice of your transition. Consider adding an event invitation to the letter, such as a town hall event.

Pre-enrollment

• Embed a link to your enrollment/EMR inside your website to pre-enroll patients prior to your opening date.

Once you have everything ready

• Use the time between announcing your transition and your opening date to market to EVERY SINGLE patient. Use each patient visit as a marketing opportunity and practice your 1-minute elevator speech.
• Hand out flyers and business cards during patient visits and direct each patient to your website for immediate enrollment. You might consider letting them know that enrollment will be limited.
• Consider holding one or more events where you explain your practice, answer questions, and enroll patients
• Find networking events, such as health fairs or other community events. You might also consider small business networking, such as BNI, Rotary Club, Lion’s Club, and Chamber of Commerce.

Called “dunning,” many businesses find themselves chasing after unpaid bills. Even in direct primary care, with the streamlined monthly billing, you will find that a certain percentage of charges simply won’t go through automatically for a variety of reasons (think: stolen cards, lost cards, expired cars, insufficient funds in a pre-paid or HSA card, etc.).

For those whose payments don’t go through automatically, a systematic process will both create clarity for your staff and patients and will also allow you to operate in a business-like fashion without letting your big, DPC heart get in the way.

Here is a sample process:

From Allison Edwards, MD | Kansas City Direct Primary Care

Clinic-Triggered Cancellation for Nonpayment (using AtlasMD)

All monthly membership payments to the clinic must be paid via automatic payment (it’s in the contract). If a patient’s auto-pay on the 1st or 5th (we only allow the 1st or 5th) fails, the following ensues:

Notification (numbers indicate days from failed payment -- though we usually start this process on the 5th of the month):

• 0: Each failed payment triggers an automatic email from AtlasMD.
• 5: Names are added to the “Failed Payments” list (a living GDoc) on the 5th (or next business day) of the failed payments; each of these members is called or texted by the front staff. Results of the communication are noted on the list.
• 15: Any balances that remain unpaid after the 15th receive a standard letter via US mail and an identical email noting their failed payment and impending 30-day termination.
• 30 or 31: the auto-payment system tries to charge the patient again at the start of the new month (for last month’s balance + current month’s fee). As detailed above, on the 5th the list is updated with new failed payments, and a note is made of the payments that have failed 2 months in a row. Just as before, an automatic email is triggered by AtlasMD notifying the patient of this (second) failed charge.
• 45: A final letter of termination due to nonpayment is created. The letter is then sent to their primary mailing address & also sent as an attachment to their email address.

Determining the remaining balance & ending the membership:

• Remaining balance = the previous month’s fee + prorated half of the current month’s fee (total = 45 days’ worth of membership following their first failed payment). Proration = $(12*(monthly membership fee)/365)*(15).
• End the subscription charge in their chart & delete the current month’s full charge.
• Add prorated fee, as above, as a miscellaneous charge and label it “Medical Services - (month)” then select “Apply charge to the current invoice?” and “Add payment for this charge?” to (try to) run the card for the remaining balance.

Assigning all files & messages:

• In the files inbox in AtlasMD, make sure that all files & messages relevant to this patient are assigned to them (including the letter just created).

Archiving the patient:

• From the billing section of the patient’s chart, the option to “Add to collections” is selected from the cogwheel. Note: we do not actually send the patient to collections, this is just a designation to separate out those who have a remaining balance with us at the end of their membership.

Adding to the Master Status Report

• We track -- as best we can -- the reasons why people leave the practice. The person archiving every patient will add the patient’s name, enrollment details, etc. to the most current Master Status Report.

When starting your own business/practice one of the more exciting aspects of business ownership is taking advantage of the many tax write-offs available to you. It can be easy to get carried away and get yourself in trouble (audited). Knowing what you can and what you should write-off are keys to avoiding a visit from the IRS. As my accountant told me early on in my practice “pigs get fat, but hogs get slaughtered.” Just like eating cupcakes, moderation is key. In recent years, tax laws are changing constantly and are not permanent. Some of the options listed here are set to expire in 2025. Having a good CPA you meet with regularly is necessary to stay on top of everything. Another thing to remember is that you do not need to feel guilty for avoiding paying taxes. The tax incentives and write-offs the government creates exist to help incentivize business creation and growth, in turn, improving the economy. 

Self-employment tax

• You may be asking, “wait a minute, I thought this was an article on write-offs?? A tax as a tax write-off?” Well, this one is ​​a little confusing to me as well, but as a business owner, you have to pay an additional 15.3% tax on the salary you pay yourself, on top of your normal tax bracket. If you were an employee, you would pay half and your employer would pay half. The good news is that you can deduct half of the self-employment tax from your net income when you calculate your income tax bracket. As a business owner, you can help minimize this tax though by paying yourself the lowest salary you can while taking the remainder of your pay through owner draws (if you are filed as an S-corp). The catch is that you have to pay yourself what you would pay someone else to do your current job duties. The IRS may let you get away with not paying yourself a salary for several years, but it will raise red flags if you pay yourself via owner draws for too long. A CPA can help guide you when you need to start taking a salary. 

Home office

• In my opinion, this one can be tricky and maybe more trouble than it’s worth. There is the standard and the simplified method. Your home office space has to only be used for your business. It has to be used “exclusively and on a regular basis, as your principal place of business.” It cannot be larger than 300 square feet. With the standard method, you can deduct the percentage of your expenses for the house. Including utilities, home depreciation, etc. The simplified version allows you to deduct $5/sq ft or up to $1500. If you do decide to set up a home office you can also reimburse yourself for mileage driven from your home office to your main office, and this is not countable as taxable income. I would run this by your CPA first as the “principal place of business” line would likely make it hard for most people to qualify. 

Clothing

• I got into trouble with my CPA on this one when I first started. I was attempting to write off any clothes I bought that I MIGHT wear to the office. My CPA pointed out that I could only deduct clothes that I would ONLY wear to the office like scrubs. So, go ahead and buy those new Apple Bottom jeans but don’t try and write them off. 

Meals

• For now, until the end of 2022 you can deduct 100% of a meal as a business expense. You have to be traveling for business, at a conference or entertaining a client. Traditionally you could only deduct 50% of the cost of the meal. When I first started my practice I tried to write off every meal I ate while at work, even if I was by myself, unfortunately that is not a deductible meal. 

Health insurance

• If your spouse is employed and you do not qualify for their plan, you can deduct all health/dental insurance premiums. If you pay for your spouse’s and kids’ plans as well, you can also deduct their premiums. 

Cars

• This is one I tried early on in my practice and found it too involved to be worth it at the time. You have to keep track of mileage and purpose for each trip. I even used an app called MileIQ that automatically tracked each trip. The app made it much easier, but even with it, I had a hard time keeping up. If you are good with tracking/categorizing every time you drive, it can be a significant deduction. You can basically deduct the percentage of the time the car was driven for business-related purposes throughout the year. If you do not qualify for a home office, then the only times you drive from your home to a coffee/lunch meeting, business trip, etc would count. There are some pretty risky ways to be able to write off the entire cost of the vehicle, but as my CPA told me, you’d have around a 100% chance of getting audited. If you’re curious about how this would work, you would buy the vehicle in December to make it easier to ONLY use it for business-related expenses (i.e. leave it parked at the clinic). Then, when you are filing your taxes for that year, you can take the depreciation deduction all within that year and deduct 100% of the cost of the vehicle. If it’s looking like you may owe a lot of taxes in a given year, this may not be a bad strategy, but have all of your i’s dotted and t’s crossed for that audit that is coming. 

Travel

• The main things you can deduct while traveling for business is transportation to, from and at your destination, lodging and meals. Transportation and lodging can be deducted 100% but meals are 50%. The trip must last longer than an ordinary workday and outside the city where your business is located. Make sure you have the business purpose of your trip planned ahead of time. If you are combining a business trip with a vacation make sure you deduct the percentage of the trip that was dedicated to business. 

Event/party at your house

• If you want to host a Christmas party or another company get-together at your house, you can actually pay yourself similar to what you would have to pay to rent out another facility. This is a double-whammy in that you get paid and can write off that expense under the business.

Interest

• This may not be a deduction you want if you can avoid it, but if you have any bank loans, lines of credit, credit card interest you can deduct the interest paid on it. You cannot deduct the full loan payment. However, if it is a loan for equipment or a vehicle, then the combo of interest paid and depreciation typically is similar to the total loan payment each year.

Transfer of, normally, personal expenses to the business

• This is not a write-off per se but it can help decrease your taxable income. Here is a list of several examples:
  • Charging your electric vehicle at your office which allows to pay for your “fuel” through your electric bill at the office. 
  • Hiring your kids to do jobs they are capable of doing like cleaning, then they can contribute that to their college funds. You can also use your kids as models and use their pictures on your website or social media. You can pay each kid up to $6000/year without having to pay income tax. 
  • Contribution to a retirement plan. You need to be saving for retirement anyways!