Pricing the tiers: age bands, household rates, and the one variable you may not use

What may a membership fee vary by?

By almost anything a state's own chapter has not addressed. Washington draws the one line found in the statutes read for this page: a direct practice may not let its fees for comparable services vary from patient to patient based on health status or sex 1Ref 1Washington State Legislature (2007).RCW 48.150.030 — Direct fee—Monthly basis—Designated contact person.Washington's bar on direct fees for comparable services varying from patient to patient by health status or sex, the monthly billing basis, and the 60-day advance notice of a fee change with no more than one increase a year.. Age and household size appear nowhere in that sentence, which leaves them permitted by silence rather than by any express grant, and silence is state by state.

Texas shows what these chapters do govern. Its definition of a direct fee lists the shapes the fee may take, a monthly retainer, a membership fee, a subscription fee, a fee under a medical service agreement, or a fee charged per service, visit or episode, and requires none of them 2Ref 2Texas Legislature (2015).Texas Occupations Code § 162.251 — Definitions (Direct Primary Care).The pricing forms Texas recognizes for a direct fee (monthly retainer, membership fee, subscription fee, a fee under a medical service agreement, or a per-service, visit or episode fee), used to show that these chapters govern the fee's form and not its amount.. The statute names the container and leaves the number alone.

No source in this set surveys which states restrict fee variation and by which categories, so treat Washington's bar as Washington's. Read your own chapter on direct agreements before the schedule goes out, and read it for what it prohibits.

Washington's text, laid against the variables a tier schedule uses:

Drawing the age bands, and where the top one breaks

Draw them around cost of service, and keep the top band away from Medicare. A child rate under the adult rate, an adult rate, and a rate for older patients is a common shape, and nothing in the statutes read here forbids it. The break is federal. A physician who privately contracts with a Medicare beneficiary for an otherwise covered service opts out of Medicare entirely for the full two-year period 4Ref 4Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (2024).Code of Federal Regulations, Title 42, Chapter IV, Subchapter B, Part 405, Subpart D — Private Contracts (§405.400 Definitions, §405.405 General rules, §405.410 Conditions for properly opting-out, §405.415 Requirements of the private contract).The private-contracting mechanic behind a senior tier: a physician who privately contracts with a Medicare beneficiary for an otherwise covered service opts out of Medicare for the whole two-year period, and no Medicare payment is made for services furnished under such a contract, direct or indirect..

Entering even one such contract triggers that opt-out, and no Medicare payment is made for services furnished under it, direct or indirect 4Ref 4Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (2024).Code of Federal Regulations, Title 42, Chapter IV, Subchapter B, Part 405, Subpart D — Private Contracts (§405.400 Definitions, §405.405 General rules, §405.410 Conditions for properly opting-out, §405.415 Requirements of the private contract).The private-contracting mechanic behind a senior tier: a physician who privately contracts with a Medicare beneficiary for an otherwise covered service opts out of Medicare for the whole two-year period, and no Medicare payment is made for services furnished under such a contract, direct or indirect.. A membership covering services Medicare would otherwise cover, sold to a beneficiary, is the arrangement that regulation describes, and whether a particular agreement is one is a question for health counsel.

A hybrid that keeps billing on one side and a retainer on the other is the two tiers, one calendar problem, and it turns on this same regulation.

Below Medicare age, the bands are a cost question. Each cutoff should correspond to something real in the practice, the visit frequency it implies or the services included, because Washington's bar means an age band may not do the work of a health-status band 1Ref 1Washington State Legislature (2007).RCW 48.150.030 — Direct fee—Monthly basis—Designated contact person.Washington's bar on direct fees for comparable services varying from patient to patient by health status or sex, the monthly billing basis, and the 60-day advance notice of a fee change with no more than one increase a year.. Pricing a 62-year-old above a 32-year-old is age rating. Pricing one of them above the other because of what is in his chart is the thing the statute names.

The household rate, and what counts as a family

Whatever the agreement defines it to be, in a state whose statute recognizes a family agreement at all. Washington's definitions section contemplates a direct agreement with an individual patient, with the parent or legal guardian of a patient, or with a family of direct patients 3Ref 3Washington State Legislature (2013).RCW 48.150.010 — Definitions (Chapter 48.150 RCW: Direct Patient-Provider Primary Health Care).Washington's recognition that a direct agreement may be made with an individual direct patient, with a parent or legal guardian, or with a family of direct patients, which is the statutory hook a household tier rests on.. It stops there. The statute neither defines the family nor tells you how to structure the rate, which makes the household definition a drafting decision that belongs in the agreement.

Two shapes recur in the agreements themselves. One prices every member and applies a discount from the second or third member onward. The other sets a flat household price with a stated cap on covered members and a defined age at which a child ages out. Both are conventions rather than requirements, and the cap and the age-out are what decide the tier's cost three years in.

But the definition also decides who can join later. A household tier written around people at one address behaves differently from one written around a subscriber and dependents, once a member's adult child moves out or a parent moves in.

The two federal numbers that cap both tiers

$150 and $300 a month, and they bind only where a member is pairing the membership with a health savings account. For months beginning after December 31, 2025, a direct primary care service arrangement keeps its member's HSA eligibility only while the aggregate monthly fee stays at or under $150 for one individual, or twice that amount for an arrangement covering more than one person 5Ref 5Office of the Law Revision Counsel, U.S. House of Representatives (2025).26 U.S.C. § 223 — Health savings accounts (subsection (c)(1)(E), Treatment of direct primary care service arrangements).The federal HSA-compatibility ceiling on a direct primary care service arrangement, $150 in aggregate monthly fees per individual and twice that amount for an arrangement covering more than one person, effective for months beginning after December 31, 2025..

Two adult memberships at the individual ceiling already sit at the household ceiling.

So a family tier that stacks children on top of two full adult rates is above the line, and a practice that wants the whole schedule to stay HSA compatible is designing the household rate to $300 in aggregate whatever the member count. The constraint comes out of the tax code.

But the ceiling is a tax-eligibility threshold and not a price control. A practice may charge above it; what changes is that the arrangement loses the exclusion keeping it from being treated as a disqualifying health plan for that member. The cap reaches no month before January 2026, and says nothing about a member who holds no HSA 5Ref 5Office of the Law Revision Counsel, U.S. House of Representatives (2025).26 U.S.C. § 223 — Health savings accounts (subsection (c)(1)(E), Treatment of direct primary care service arrangements).The federal HSA-compatibility ceiling on a direct primary care service arrangement, $150 in aggregate monthly fees per individual and twice that amount for an arrangement covering more than one person, effective for months beginning after December 31, 2025..

Indexing a sliding scale to a number you did not invent

Use the federal poverty guidelines, which are published every year by household size and updated without you. The 2026 guidelines for the 48 contiguous states and the District of Columbia put the one-person figure at $15,960 and the four-person figure at $33,000 6Ref 6U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (ASPE) (2026).2026 Poverty Guidelines for the 48 Contiguous States and the District of Columbia.The 2026 dollar cutoffs by household size for the 48 contiguous states and the District of Columbia, $15,960 for one person and $33,000 for four, used as the published index a sliding-scale bracket is built on.. A discount bracket written as a percentage of that figure reprices itself each time the guideline is updated, and it can be shown to any member who asks how the number was reached.

The guidelines are the index and nothing more. They set no discount percentage, no bracket width and no documentation standard, so those are the practice's to write and apply consistently. Pegging a reduced rate to a percentage of the guideline is a common convention among practices that offer one, and its advantage is that the bracket moves when the guideline does.

The same rating question turns up in pricing cash-based physical therapy, where the unit is a visit and the sliding scale attaches to the visit.

What other practices charge, and the one place it gets collected

One state's regulator publishes it, and no source in this set carries a national figure. Washington's Office of the Insurance Commissioner reports monthly direct-fee data for the state's 99 registered direct practices in its 2025 annual report to the legislature: the average fee, the change from the prior year, the full range, the distribution across fee bands, and averages by county 7Ref 7Washington State Office of the Insurance Commissioner (2025).Direct practices in Washington state: Annual report to the Legislature.The existence and contents of Washington's regulator-collected 2025 monthly direct-fee data for its 99 registered direct practices, including the average fee, the year-over-year change, the range, the distribution across fee bands and county averages, scoped to that one state.. Read the distribution before the average.

A county average is the closest thing in that document to a local comparison, and the band distribution shows a spread the average hides. What it cannot tell a practice in another state is what that market pays, because it counts practices registered under one state's chapter.

Ask of every other fee number in circulation which document it came from, who collected it, and in what year.

Before the schedule goes out

Washington requires the direct fee to be charged on a monthly basis, and requires at least 60 days' advance notice to an existing patient before any change to that fee takes effect 1Ref 1Washington State Legislature (2007).RCW 48.150.030 — Direct fee—Monthly basis—Designated contact person.Washington's bar on direct fees for comparable services varying from patient to patient by health status or sex, the monthly billing basis, and the 60-day advance notice of a fee change with no more than one increase a year.. A price increase is therefore a calendar exercise that starts two months before the new rate, and a tier restructure that moves an existing member is a fee change for that member. Write the tier definitions into the agreement itself.

Where those definitions live matters as much as the prices beside them. The household cap, the age at which a child ages out, and the cutoffs between bands decide what happens when a family's composition changes.

Run each band through the DPC equation before publishing it: the panel the practice can hold at that price, times the fee, against what a year of running the practice costs. A band that prices well and cannot be staffed is a schedule you will rewrite inside twelve months, and Washington's chapter allows one increase a year to do it with 1Ref 1Washington State Legislature (2007).RCW 48.150.030 — Direct fee—Monthly basis—Designated contact person.Washington's bar on direct fees for comparable services varying from patient to patient by health status or sex, the monthly billing basis, and the 60-day advance notice of a fee change with no more than one increase a year..

Two documents settle most of this before any number is chosen: your state's chapter on direct agreements, and the most recent report your insurance regulator has published about the practices operating under it, if it publishes one.