Lately, giant health care “disruptors” such as Walmart, CVS, Walgreens, etc. announced plans to close or significantly reduce the number of primary health care clinics. Nearly all seemed to cite the same driving factor for their retreat – inadequate and overly complicated reimbursement making their business plans untenable. Earlier this year, the U.S. Senate’s Budget Committee held a hearing on how primary care improves health care efficiency and what can be done to ensure an adequate supply of primary care providers. Since then, Congress and the Biden Administration have introduced legislation and regulations to reform primary care reimbursement.

Legislative Solutions Proposed

This month, Senators Bill Cassidy, M.D. (R-LA) and Sheldon Whitehouse (D-RI) introduced a bipartisan bill: Pay PCPs Act. The bill encourages the Centers for Medicare and Medicaid Services (CMS) to accelerate its efforts towards value-based care and proposes hybrid payments to reward high-quality primary care providers whose care reduces patients’ emergency visits, hospitalizations, and other significant cost drivers. It also would decrease patients’ cost sharing for certain primary care services and would create a new committee to advise CMS in setting reimbursement rates for primary care providers. The bill was also accompanied by a request for information from the senators which seeks feedback on the activities and services within the Physician Fee Schedule that are currently ill-suited to support primary care.

Regulatory Solutions Proposed

In order to address declining reimbursement in primary care, CMS has instituted a number of programs to boost reimbursement and savings while promoting value-based care, despite lowering overall physician reimbursement by 1.25% in its 2024 Physician Fee Schedule (PFS). In the 2024 PFS, CMS finalised a new add-on payment which would allow physicians to bill at higher rates for complex evaluation and management services. This includes primary care visits that are central to coordinating services for a serious, ongoing health condition. In the PFS, CMS also added new codes physicians can use to bill for time spent coordinating care for patients.