Findings

Congress makes the following findings: (1) Transformation of primary care practices serves as an essential foundation for improving health and life outcomes for Medicare beneficiaries, particularly for those with multiple chronic conditions and complex needs, mental health challenges, or living in rural and other socioeconomically challenged communities. (2) Research has shown that 25 percent or more of primary care activities are not recognized for payment under most fee schedules, including the Medicare physician fee schedule, largely because these activities reflect a wide range of high frequency, brief activities that cannot efficiently be paid fee-for-service and because the billing costs for submitting claims for such services would usually exceed the value of payment. (3) Fee-for-service is ill-suited to support many elements of practice transformation to produce effective primary care, such as developing and maintaining multi-disciplinary team-based care strategies that leverage clinicians such as nurse practitioners, physician assistants, nutritionists, and pharmacists, and coordinating care with other clinicians and social service providers. (4) Research has shown that primary care represents a much smaller percentage of total health care spending by payers, regardless of type of insurance coverage, in the United States than in other wealthy nations, and that higher percentage of total spending that is devoted to primary care services is associated with lower overall health care spending, and in the Medicare Shared Savings Program, with higher savings performance by accountable care organizations led by physician groups. (5) A composite, prospective payment would provide primary care practices with more predictable and flexible revenues to support such elements of effective primary care and help appropriately value services and activities performed by primary care providers and critical services not currently paid for. (6) Payments for some physician services under the Medicare program, including many that produce substantial spending under the Medicare program, have major distortions. (7) Determination of payments for physician services under the Medicare program currently begins with subjective survey-based estimates of clinician time and effort per discrete service. This approach to valuing physician services is inconsistent with the comprehensive and continuous nature of primary care. (8) Studies have found that payment levels in the Medicare physician fee schedule reflect estimates of clinician time per service for a variety of services that are particularly inaccurate. (9) The extreme complexity of having more than 8,000 billing codes in the Medicare physician fee schedule risks inaccuracy in estimations of relative values for closely related procedures and obscures distortions in pricing that grow over time for specific services.