[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 5269 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
2d Session
S. 5269
To provide for the establishment of hybrid primary care payments under
the Medicare program, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 5, 2026
Mr. Whitehouse (for himself and Mr. Cassidy) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To provide for the establishment of hybrid primary care payments under
the Medicare program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Pay PCPs Act of 2026''.
SEC. 2. 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.
SEC. 3. 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.
SEC. 4. REDUCING BENEFICIARY COST SHARING FOR PRIMARY CARE SERVICES.
(a) In General.--Notwithstanding any other provision of law, the
Secretary of Health and Human Services (in this section referred to as
the ``Secretary'') may reduce by 50 percent any beneficiary cost
sharing otherwise applicable under part B of title XVIII of the Social
Security Act (42 U.S.C. 1395j et seq.) for primary care services that
are reimbursed through the hybrid payments established under section 3,
provided that the beneficiary designates a primary care provider as
their usual source of care and informs the Secretary of who that
provider is pursuant to the procedures established under section 3(e).
(b) Report to Congress.--Not later than 180 days after the date on
which subsection (a) is first implemented, and annually thereafter, the
Secretary shall submit to Congress a report on the implementation of
such subsection, including an analysis of--
(1) whether the reduction of beneficiary cost-sharing under
such subsection has impacted beneficiary utilization of primary
care services that may be reimbursed through the newly
established per-member-per-month payment; and
(2) whether the Secretary has observed any instances of
fraud or abuse associated with the reduction of such cost-
sharing, and whether the Secretary has taken steps to minimize
any such fraud or abuse.
SEC. 5. ESTABLISHING A NEW TECHNICAL ADVISORY COMMITTEE ON RELATIVE
VALUE UPDATES AND REVISIONS.
Section 1848(c)(2) of the Social Security Act (42 U.S.C. 1395w-
4(c)(2)) is amended by adding at the end the following new
subparagraph:
``(P) Establishment of technical advisory committee
on relative value updates and revisions.--
``(i) In general.--The Secretary shall
establish a technical advisory committee (in
this section referred to as the `committee')
within the Centers for Medicare & Medicaid
Services to provide the Secretary with
technical input regarding the accurate
determination of relative value units under
this paragraph.
``(ii) Membership.--
``(I) In general.--The committee
shall be composed of 13 members
appointed by the Secretary from among
individuals--
``(aa) reflecting diverse
experiences in provider
payment, including providers
billing the Medicare program
under this title, providers
providing care under the laws
administered by the Secretary
of Veterans Affairs or the
Secretary of Defense, and
primary care providers (as
defined in subclause (III));
and
``(bb) with technical
expertise in Medicare payment
policies.
``(II) Chair.--1 of the members
appointed under subclause (I) shall be
a representative of personnel of the
Centers for Medicare & Medicaid
Services, and that member shall serve
as chair of the committee.
``(III) Primary care provider.--For
purposes of this clause, the term
`primary care provider' means a
practitioner (as defined in section
1842(b)(18)(C)) or a physician (as
defined in section 1861(r)) who
furnishes primary care services (as
defined in section 1842(i)(4)).
``(iii) Staff.--The committee shall be
staffed by personnel of the Centers for
Medicare & Medicaid Services.
``(iv) Duties.--The committee shall advise
the Secretary on an ongoing basis regarding the
determination of relative value units under the
physician fee schedule through duties such as
the following:
``(I) Designing new valuation
methodologies the Secretary may use to
determine the time and resources use by
health professionals associated with
furnishing services or other new
approaches to determining relative
resources for each HCPCS code. The
committee may prioritize furnished
services that are most common or
represent the services with the highest
allowed charges.
``(II) Advising on research and
development relevant to the
determination of relative value units
for individual HCPCS codes.
``(III) Providing recommendations
with respect to changes in valuations
of current HCPCS codes based upon any
newly developed valuation
methodologies.
``(IV) Evaluating whether existing
HCPCS codes within the same family of
services should be collapsed to result
in fewer payment codes.
``(V) Identifying opportunities for
bundling or unbundling services for
payment purposes.
``(VI) Assessing the operational
burden of new approaches on physicians
and other suppliers and beneficiaries
while also considering the
vulnerabilities of new approaches on
overt fraud and abuse.
``(VII) Assessing the impacts of
these new approaches and potential
adoption on beneficiary access,
financial liabilities, quality of care,
and health disparities.
``(v) Funding.--
``(I) Implementation.--The
Secretary may provide for the transfer,
from the Federal Supplementary Medical
Insurance Trust Fund under section
1841, such amounts as are necessary to
carry out this subsection (other than
research and development under clause
(iv)(II)) (not to exceed $5,000,000)
for each of fiscal years 2027 through
2031. Any amounts transferred under the
preceding sentence for a fiscal year
shall remain available until expended.
``(II) Research and development.--
The Secretary may provide for the
transfer, from the Federal
Supplementary Medical Insurance Trust
Fund under section 1841, such amounts
as are necessary to carry out research
and development under clause (iv)(II)
(not to exceed $10,000,000) for each of
fiscal years 2027 through 2031. Any
amounts transferred under the preceding
sentence for a fiscal year shall remain
available until expended.
``(vi) Duration.--The committee shall
terminate not later than the expiration of the
5-year period beginning on the date of its
establishment.''.
<all>