Babylon GP at Hand has used rules that allow practices to register out-of-area patients to attract large numbers of predominantly young patients who live across a wide geographical area.
But under NHS England's preferred option for overhauling out-of-area rules, providers could be forced to set up new premises and a local contract once a certain number of patients join from any given CCG.
According to a consultation document published on Thursday, if a provider registers 'between 1,000 and 2,000 patients' on an out-of-area basis from a particular CCG, they could be automatically awarded a local APMS contract and forced to set up physical premises in that area.
The new practice - whose local patient list would be split from the main provider - would then have to join a local primary care network under existing rules set out in the five-year GP contract agreement.
Babylon GP at Hand currently operates five physical sites in London, but has more than 2,000 patients from 10 London CCGs - and could therefore be expected to open a further five premises in London alone.
NHS England says that CCG allocations could also need to be adjusted to help them cope with the financial impact of digital-first providers. The consultation says that the 'conversion of out-of-area registrations back to the "right CCG" through APMS contracts' - as described above - will help ease financial pressure.
But it warns that even with this mechanism, 'significant financial pressures could still arise for CCGs hosting a digital-first provider'. This is because CCGs with large numbers of out-of-area registrations 'become responsible for the healthcare costs of patients registering with a digital provider in their area in advance of the additional population being reflected in their funding allocations'.
This has been the case for Hammersmith and Fulham CCG, the London area that hosts GP at Hand. The CCG has been promised a £21m bailout by NHS England.
Despite concerns that the new patient registration premium - which sees practices paid an additional amount for new patients registered with them during the first year after they sign up - could lead to overpayment for digital first providers, NHS England says it may not change the payment.
However, it is consulting on a rule that would require a patient to remain with the new practice for a minumum period of up to a year for the practice to receive the premium payment. Around one in four patients who have signed up with GP at Hand have subsequently left soon afterwards.
NHS England is also considering whether to restrict the expansion of digital-first providers to areas of high need. The consultation document says that allowing expansion anywhere risks destabilising existing practices and leading to 'an unequal spread of providers with providers more likely to be attracted to specific areas (such as urban areas) and not those in need of capacity'.
It adds: 'We think it could be more beneficial to target any opportunities in areas of identified need, balancing the risks against the opportunity to tackle health inequalities and testing the real-world effects of the new model before further decisions are made.'