Medicare, Direct Primary Care, and the Rules No One Explains Clearly

Erik Petersen

7d • Common DPC Mistakes

One of the most misunderstood topics in Direct Primary Care is how DPC physicians interact with Medicare.

Not because it’s shady.

Not because it’s forbidden.

But because the rules were written for a healthcare system that no longer exists.

So let’s talk about it clearly.

First: The Big Picture

Medicare was designed around insurance billing.

Direct Primary Care is designed around direct relationships.

Those two models don’t naturally fit together—which is why Medicare has specific rules about how physicians can participate, opt out, or limit what they provide.

Understanding those rules is critical—for doctors and patients.

The Core Medicare Rule That Matters

A physician who is enrolled in Medicare cannot charge Medicare beneficiaries cash for services that are otherwise covered by Medicare.

That’s the foundation of the entire framework.

From that single rule, everything else flows.

The Two Legitimate Paths for a DPC Physician

Opt Out of Medicare

A physician formally opts out and enters into private contracts with Medicare beneficiaries.

The physician does not bill Medicare
The patient agrees not to seek Medicare reimbursement
The relationship is entirely private
The opt-out lasts 2 years at a time

This path is legal, structured, and commonly misunderstood.

2. Remain Enrolled, But Limit Scope

A physician stays enrolled in Medicare but does not charge Medicare patients for covered services.

Medicare-covered services must be billed to Medicare
Non-covered services may be offered privately
Membership fees must be carefully structured
Boundaries must be extremely clear

This path requires discipline and precise compliance.

Why the Rules Feel So Rigid

Medicare is designed to:

Prevent double billing
Protect beneficiaries from coercion
Maintain standardized coverage

What it is not designed to do is accommodate innovative care models.

So the rules aren’t malicious—they’re just outdated.

Common Scenario Questions (And How DPC Doctors Stay Compliant)

Below is a real-world scenario list most people never see laid out clearly.

Scenario 1:

“Can a Medicare patient join a DPC membership?”

👉 It depends on the physician’s Medicare status.

If the physician has opted out → Yes, with a private contract
If the physician is enrolled → Only if the membership does NOT include Medicare-covered services

Scenario 2:

“Can a DPC doctor charge a Medicare patient a monthly fee?”

👉 Only if:

The physician has opted out OR
The fee covers non-covered services only (care coordination, extended access, wellness planning)

This is why many practices choose one model clearly.

Scenario 3:

“Can a Medicare patient pay cash for a regular office visit?”

👉 No, if the physician is enrolled in Medicare.

Covered services must go through Medicare.

Cash pay for covered services is prohibited.

Scenario 4:

“What about phone calls, texts, emails?”

👉 Many of these services are not reimbursed by Medicare, which creates flexibility.

However, bundling them improperly into a membership can still create compliance risk.

Scenario 5:

“Can a DPC doctor treat a Medicare patient at all?”

👉 Absolutely.

Medicare patients can still:

Be seen
Be treated
Have labs and imaging ordered
Be referred appropriately

The question is how the billing and contracts are structured.

Scenario 6:

“What if the patient wants DPC but also wants Medicare?”

👉 This is one of the most common frustrations.

Patients want:

Relationship-based care and
Medicare protection

The system forces a choice—not because it’s best for patients, but because of how rules are written.

Scenario 7:

“Is DPC trying to avoid Medicare?”

👉 No.

DPC isn’t avoiding Medicare.

It’s choosing not to be governed by a billing framework that undermines primary care.

There’s a difference.

Scenario 8:

“Can Medicare patients still have catastrophic coverage?”

👉 Yes.

Medicare still covers:

Hospitalizations
Procedures
Specialty care
Imaging and diagnostics

DPC doesn’t replace Medicare—it replaces the broken primary care layer.

Scenario 9:

“Is this legal?”

👉 Yes—when done correctly.

DPC has been explicitly recognized in:

Federal law
State statutes
IRS guidance (for non-insurance classification)

The key is structure and transparency.

Scenario 10:

“Why don’t more doctors do this?”

Because:

It requires smaller panels
It reduces volume-based income
It demands accountability
It requires saying no to bad incentives

This is not the easy path.

Why We’re Open About This

At FirstCall DPC, we believe:

Patients deserve clarity
Doctors must respect the rules
Trust is built through transparency—not shortcuts

Medicare rules are complex because the system is complex.

Our responsibility is to navigate that complexity ethically and clearly, not ignore it.

The Takeaway

Direct Primary Care doesn’t exist to fight Medicare.

It exists to fix primary care.

Until the rules evolve, responsible DPC practices will:

Choose a compliant structure
Explain it clearly
Stay within the framework
Advocate for better policy over time

That’s how trust is built—and kept. .

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