AHA criticizes payment structure in Pay PCPs Act

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The Pay PCPs Act, an attempt to improve pay and support for primary care providers, has drawn criticism from the American Hospital Association, which penned a letter to Senators Sheldon Whitehouse and Bill Cassidy this week saying the bill could lead to payment cuts.

"Current reimbursement for physicians is woefully inadequate and fails to account for inflation, which continues to outpace updates to reimbursement for services covered under the physician fee schedule," the AHA wrote.

It cited the latest Medicare Trustees' Report, which indicated physician reimbursement has dropped over 20% over the last 20 years when accounting for inflation. The AHA added there's a widening gap between physician payment and increases in the Medicare Economic Index, a proxy measure for physician cost inflation.

These reimbursement shortfalls to Medicare physician payment have come at a time of other headwinds, the AHA said, including a national staffing emergency (The Association of Medical Colleges projects a physician shortage of over 86,000 by 2036.), increased administrative burden and an aging beneficiary population.

WHAT'S THE IMPACT?

The Pay PCPs Act, introduced this spring by U.S. Senators Sheldon Whitehouse (D-R.I.) and Dr. Bill Cassidy (R-La.), aims to head off a primary care shortage, while also improving Medicare beneficiaries' health outcomes and helping primary care providers lower health costs, the senators said.

If signed into law, the bill would task the Centers for Medicare and Medicaid Services with establishing hybrid payments to reward primary care providers who provide the best care to their patients – care that reduces patients' emergency visits, hospitalizations, excess specialist services and other big cost drivers – and reward patients with better health outcomes.

The bill would also provide Medicare beneficiaries with reduced cost-sharing for certain primary care activities and services, and would also create a new technical advisory committee to help CMS more accurately determine fee schedule rates.

One of the aspects of the bill that caught the AHA's attention is that it would establish a hybrid per-member-per-month (PMPM) and fee-for-service payment structure. While the AHA said this type of structure can support migration to value-based models, the organization is concerned this still may result in payment decreases for certain providers – decreases that, in the AHA's view, cannot be absorbed.

The group is also concerned that there's too much latitude for the PMPM to not be risk-adjusted, and fears restrictions on what could be included in the risk adjustment. 

"Limiting the risk adjustment only to those factors that predict primary care utilization does not necessarily account for clinical complexity or social risk factors that may impact care management and the intensity of services required," the AHA wrote.

The AHA is likewise concerned that the bill includes a provision that "the Secretary may continue to pay through reduced fee-for-service payments for all other services not specified in paragraph (2)." In the organization's view, this means providers may receive decreased amounts for services like screenings, preventive services, annual wellness visits, vaccinations and preventive physical exams, thereby potentially decreasing access to these services.

The AHA called for a number of changes to the bill, including adequate risk adjustment, voluntary participation and flexible design, a balance between risk and reward, transparency and resources to support the initial investment.

THE LARGER TREND

The primary care workforce is struggling to meet the population's demands, and doesn't receive enough investment, despite diminishing supply and growing demand, a March report found.

Despite a rapidly aging population with higher levels of chronic disease, the number of primary care physicians per person has decreased, the report found. The share of all clinicians practicing primary care – including nurse practitioners and physician assistants – stagnated at around 28% between 2016 and 2021, and PCPs declined from 68.4 to 67.2 per 100,000 people between 2012 and 2021.

According to the report, demand for PCPs will only increase with time. The National Institute of Health estimates that the number of people 50 or older with at least one chronic disease will increase by 99.5%, from 72 million in 2020 to 143 million by 2050.
 

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.