DPC and Medicaid

Every so often DPC and Medicaid gets brought up. The conversation is predictable and people fall into three camps: “government is evil, stay away,” “we need better access for those who can’t afford membership out of pocket,” and “how exactly would Medicaid and DPC even work together?” That last question matters, because roughly one-in-five Americans relies on Medicaid for coverage.

Medicaid itself is hardly new. Created in 1965 as Title XIX of the Social Security Act, it was designed as a joint federal-state program. Washington sets baseline rules, but each state runs the day-to-day details, from eligibility rules to payment rates and contracts. Over time, most states outsourced that administration to private Managed-Care Organizations (MCOs). As of July 2024, forty-two states (plus D.C.) pay risk-based MCOs a risk-adjusted fixed monthly rate to look after at least some of their Medicaid members. That arrangement keeps state budgets more predictable, but it also means a DPC practice that wants to care for Medicaid patients usually has to go through an MCO gatekeeper. Those MCOs, in turn, only get their full capitation if they hit quality targets, most commonly the NCQA HEDIS bundle or similar metrics that require exhaustive coding and data feeds. The incompatibility is obvious. The simplicity ethos that makes DPC attractive to physicians and patients also makes it hard to slot into a system built on checkbox reporting.

Past experience bears this out. Seattle-based Qliance never contracted directly with the state Medicaid agency; it partnered instead with Centene’s Washington MCO (Coordinated Care). The venture added tens of thousands of subsidized lives in a hurry, but when rates were renegotiated and a financing glitch hit, the company folded in 2017. Qliance remains the cautionary tale everyone cites, even though few people actually know the details or even that the experiment was really an MCO deal, not true Medicaid direct contracting.

New pilots are trying different angles. In Ohio, Dr. Drew Hertz’s Zest Pediatric Network now offers DPC pediatric care to AmeriHealth Caritas Medicaid members, with the plan handling the data and billing overhead. Nationally, venture-backed firms such as Cityblock Health, built around team-based primary, behavioral, and social care, and Waymark, whose machine-learning “Signal” platform predicts avoidable ER visits, earn shared savings by taking the administrative lift off frontline clinics. Either model could potentially let an independent DPC practice plug into Medicaid without drowning in reporting.

Another popular proposal is a state waiver that would give Medicaid enrollees a portable stipend they could spend at the DPC clinic of their choice. While elegant on paper, the idea collides with rate-setting rules (the stipend has to be actuarially “sound”), federal quality-reporting mandates, network-adequacy standards, and the requirement that any waiver be budget-neutral to CMS, no easy feat for an untested payment model. The bipartisan Medicaid Primary Care Improvement Act, introduced by Rep. Dan Crenshaw in early 2025, would explicitly allow states to run DPC pilots. But it leaves every design detail, quality metrics, data exchange, grievance procedures, to the states and their MCOs. In other words, even if the bill passes, the HEDIS problem doesn’t magically disappear.

Most DPC physicians have the heart to serve poorer and sicker patients; the biggest barrier sits in the regulatory plumbing, not in the waiting room. Real progress will come only when more DPC leaders engage Medicaid directors and MCO executives, co-design pilots that satisfy mandatory quality reporting without burying small practices in paperwork, and prove that relationship-based primary care saves money down the line. Until that dialogue deepens, the gulf between Medicaid and DPC will remain wider than either side wants it to be.