Establishing hybrid primary care payment in medicare

(a) Establishment The Secretary of Health and Human Services (in this section referred to as the Secretary) may establish within the Medicare physician fee schedule established under section 1848(b) of the Social Security Act (42 U.S.C. 1395w–4(b)), hybrid payments only to be available to primary care providers (as defined in subsection (g)). (b) Hybrid payments (1) In general Such hybrid payments may be comprised of the sum of— (A) prospective, per-member-per-month payments; and (B) fee-for-service payments. (2) Determination of amount of prospective, per-member-per-month payment (A) In general Subject to the preceding provisions of this subsection, the total prospective, per-member-per-month payment— (i) may represent between 40 and 70 percent of expected annual total allowed charges derived from the Medicare physician fee schedule for primary care providers of services and suppliers; (ii) should exceed the historic actuarially equivalent to the applicable physician fee schedule amounts for the services included within the total prospective, per-member-per-month payment; (iii) should be calculated based on historic Medicare payments for those services which would be included as part of the prospective, per-member-per-month payment; and (iv) should support practice transformation, expanded care coordination capacity, multidisciplinary team-based care, and services and activities not historically recognized for separate payment under the physician fee schedule, such as communications with patients and their caregivers including emails, phone calls, and communications through patient portals. (B) Application of certain factors The Secretary may consider applying percentages different from those specified in subparagraph (A) for different types of primary care providers based on factors such as historical fee-for-service revenue patterns or quality performance of the provider. (C) Risk adjustment The Secretary may assess the need to risk adjust the prospective, per-member-per-month payment and develop appropriate risk adjustment methodologies, taking into consideration factors that predict levels of primary care service utilization. Risk adjustment methodologies may incorporate clinical diagnoses, demographic factors, and other relevant information such as social determinants of health. (c) Categorization of services (1) In general For such hybrid payments, the Secretary may create categories of different services that are wholly reimbursed under the Medicare physician fee schedule, but may not include services for which reimbursement occurs partly through other payment schedules under the Medicare program. (2) Services included in prospective, per-member-per-month payment The Secretary may include the following types of services in the prospective, per-member-per-month payment under this section: (A) Care management services. (B) Communications with patients and their caregivers, such as emails, phone calls, and communications through patient portals. (C) Behavioral health integration services. (D) Office-based evaluation and management visits, regardless of modality, for new and established patients. (3) Clarification regarding fee-for-service payment for other services For such hybrid payments, the Secretary may continue to pay through fee-for-service payments for all other services not specified in paragraph (2) under the Medicare physician fee schedule, including screenings, additional preventive services (as defined in section 1861(ddd)(1)), annual wellness visits (as defined in section 1861(hhh) of the Social Security Act (42 U.S.C. 1395x(hhh))), vaccinations, and initial preventive physical examinations (as defined in section 1861(ww) of such Act (42 U.S.C. 1395x(ww))). The Secretary shall ensure that the services described in the preceding sentence remain separately payable under the Medicare physician fee schedule and the proportion of the payments represented by these services will be not less than the Medicare payments for these services. (d) Identification of quality measures The Secretary may identify quality measures with respect to primary care providers that receive hybrid payment under this section to safeguard health outcomes for Medicare beneficiaries, and reward high quality performance through mechanisms such as annual bonus payments. Quality measures may be identified using existing mechanisms such as those approved for use in the Accountable Care Organization/Patient-Centered Medical Home/Primary Care Core Set agreed to by members of the Core Quality Measure Collaborative. Measurement may address areas such as— (1) patient experience; (2) clinical quality measures; (3) service utilization, including measures of rates of emergency department visits and hospitalizations; and (4) efficiency in referrals, which may include measures of the comprehensiveness of services that the primary care provider furnishes. (e) Attribution The Secretary shall establish procedures under which a beneficiary is attributed to a primary care provider using historical claims data and the beneficiary affirms that the provider is their primary care provider. (f) Exclusion from MIPS Section 1848(q)(1)(C)(ii) of the Social Security Act (42 U.S.C. 1395w–4(q)(1)(C)(ii)) is amended— (1) in subclause (II), by striking or at the end; (2) in subclause (III), by striking the period at the end and inserting; or; and (3) by adding at the end the following new subclause: (IV) is a primary care provider that receives hybrid payments pursuant to section 3 of the Pay PCPs Act of 2026.. (g) Primary care provider defined In this section, the term primary care provider means a practitioner (as defined in section 1842(b)(18)(C)) of such Act (42 U.S.C. 1395u(b)(18)(C)) or a physician (as defined in section 1861(r)) of the Social Security Act (42 U.S.C. 1395x(r)) who furnishes primary care services (as defined in section 1842(i)(4)) of such Act (42 U.S.C. 1395u(i)(4)). (h) Appropriation (1) In general In addition to other amounts made available, for purposes of making hybrid payments under this section, there is appropriated to the Secretary, out of any moneys in the Treasury not otherwise appropriated, $10,000,000,000 for fiscal years 2027 through 2031. (2) Budget neutrality waiver The amounts made available under paragraph (1) shall not be taken into account in applying section 1848(c)(2)(B)(ii)(II) of the Social Security Act (42 U.S.C. 1395w–4(c)(2)(B)(ii)(II)). (i) Rule of construction Nothing in this section shall be construed to require a primary care provider to receive hybrid payments established under this section.