Docs in Congress pitch Medicare overhaul to bolster independent practice, fight health care consolidation

Medicare reimbursement reform, more primary care and less paperwork are among the goals of a new bipartisan bill supported by three physicians in Congress.

The Patients First Act would amend the Medicare Access and CHIP Reauthorization Act, the 2015 law known as MACRA that established the current framework for paying doctors who treat Medicare patients. CHIP is the Children's Health Insurance Program. It was introduced July 15 by Rep. John Joyce, M.D. (R-Pennsylvania), Rep. Greg Murphy, M.D. (R-North Carolina), who co-lead the Republican Doctors Caucus, and Rep. Kim Schrier, M.D. (D-Washington), leader of the Democratic Doctors Caucus.

The sponsors said the bill directly responds to consolidation in health care, in which independent physician practices are increasingly bought out by hospitals or large corporations. Nearly 70% of medical practices nationwide are now owned by hospitals or other corporations, and one in 10 physicians works for UnitedHealth or an affiliated company, according to the lawmakers.

Murphy, a urologist and surgeon, called the current payment system "unsustainable." Schrier, a pediatrician, said the bill was “a commonsense, bipartisan solution” as the country faces a shortage of primary care doctors, who provide preventive care and manage ongoing conditions over long-term relationships with patients.

"The House of Medicine is at a crossroads,” Joyce, a dermatologist, said in a statement. “We can maintain the status quo that rewards more costly, less personalized care, or we can put our heads together to build a modern framework that addresses the challenges that impede physicians’ ability to care for their patients."

Payment updates tied to inflation

Joyce’s office outlined details of the bill in an online fact sheet. The bill's first section would replace the current method for updating Medicare physician payments with one based on the Medicare Economic Index (MEI), the government measure of inflation in the cost of operating a medical practice. Under the bill, annual payment updates would equal the MEI figure minus 1 point, with guardrails ensuring the adjustment never exceeds .75 of the MEI figure or falls below .25 of it in a given year.

Doctors participating in alternative payment models would receive an additional 0.5 percentage point each year, intended to encourage participation in those models. The bill also requires the U.S. Centers for Medicare and Medicaid Services (CMS), to report annually to Congress on whether the new formula is adequate to preserve patient access and independent practice.

New payment model for primary care

The legislation would launch a five-year pilot program blending traditional fee-for-service billing with a monthly per-patient payment for primary care providers, with no cost-sharing for beneficiaries on that monthly portion. The monthly payment would cover care management, behavioral health integration, in-office and telehealth visits, and follow-up communication with patients; providers could still bill separately for services outside that bundle. Only independent practices would be eligible, not those owned by hospitals or other corporations.

A related provision would boost a separate payment adjustment tied to the local cost of doing business, known as the Geographic Practice Cost Index, in years when inflation is running above 2%, with a larger increase for rural areas than elsewhere. Medicare's contractors would be required to publish updated cost data quarterly.

Overhauling quality reporting

Medicare uses the Merit-based Incentive Payment System (MIPS) to adjust payments based on quality metrics. MIPS would undergo a five-year transition to be renamed and restructured as the new Patient Outcome Improvement National Tabulation System (POINTS). The new system would score doctors on quality, resource use and a new "care efficiency" category measuring things like avoidable hospitalizations, unnecessary medications and referrals to lower-cost care settings.

A newly created Quality Care Reform Task Force, composed mostly of practicing clinicians and led by the CMS administrator, would develop and approve the metrics used in the program, with input from medical specialty societies and a fast-track approval path for measures backed by 75% of the task force. New metrics would need to be reportable through electronic health records, billing claims or outside data registries, and account for the circumstances of specialists who don't regularly see patients in person.

The bill would also sharply reduce financial penalties tied to quality scores during the transition, from as much as 9% under current law to 2%, then gradually rise to a 5% maximum over four years. Independent practitioners would be prioritized for bonus payments under the new system, with total bonuses to non-independent providers capped at half of available funds. The legislation additionally creates a formal, renewable approval process allowing outside quality-data organizations called clinician-led or qualified clinical data registries (CLDRs) to help doctors report metrics and to access Medicare claims data for research.

Alternative payment models and other provisions

The bill would freeze, for three years, the participation thresholds physicians must meet to qualify for incentives under alternative payment models, while giving federal regulators flexibility to lower those thresholds further to encourage participation. It would require formal public notice-and-comment periods before Medicare can implement, end early, or substantially change any mandatory payment model tested by the Center for Medicare and Medicaid Innovation. It also directs a report from the Government Accountability Office, the Innovation Center and the Medicare Payment Advisory Commission on barriers that keep medical specialists from participating in these models.

On budget neutrality

Finally, the bill addresses budget neutrality rules, which currently require automatic, offsetting payment cuts elsewhere in the fee schedule whenever changes exceed a set dollar threshold. The current $20 million to a new threshold up to $57.64 million, indexed to the MEI every five years. The bill would also require retroactive corrections when Medicare's utilization estimates prove inaccurate, mandate that practice-cost calculations be updated every five years, and cap year-to-year swings in physician payment rates at 2.5%.