Primary care is still underpaid and federal policy could make access worse: report

A landmark 2021 analysis called for more, better primary care in U.S. health care, but the nation is not making headway toward that goal, according to the National Academies of Sciences, Engineering and Medicine (NASEM).

What’s more, recent federal policy is likely to push access in the wrong direction, according to “Ensuring Access to High-Quality Primary Care in the United States.” The report is NASEM’s five-year update on progress on the access-related recommendations of the sweeping 2021 report, “Implementing High-Quality Primary Care.”

The NASEM Committee on Ensuring Access to Primary Care in the United States was co-chaired by family physicians Andrea A. Anderson, M.D., M.Ed., and Alex H. Krist, M.D., M.P.H. They pointed to the annual primary care scorecard produced by the Milbank Memorial Fund, the Physicians Foundation and the Robert Graham Center. In 2023, 29.7% of U.S. adults reported having no usual source of care, up from 28.7% in 2021 and 23.6% in 2010. Among children, 13.9% lacked a usual source of care in 2023.

“Thus, nearly 3 in 10 adults and 1 in 7 children continue to lack a usual source of care,” the report said.

Primary care’s share of Medicare pay slipped

For physicians, the report’s payment findings land close to home. Between 2017 and 2023, total annual Medicare Physician Fee Schedule payments to primary care physicians per beneficiary fell from $438 to $420, and payments for primary care office visits dropped from 9.1% to 8.4% of total fee schedule spending, according to a study the committee cited.

Higher evaluation and management values and the G2211 add-on code for longitudinal care “do not appear to have resulted in rebalancing” fee schedule payments toward primary care, in part because specialists account for the plurality of billing for those codes, the report says. The study predates Medicare’s Advanced Primary Care Management (APCM) codes, launched in 2025. The final 2027 Medicare Physician Fee Schedule brings further changes to how that longitudinal care is billed.

The committee estimates high-performing, team-based primary care costs about $75 per member per month (PMPM) for a general population and $111 PMPM for patients with high social needs. Devoting 10% of total U.S. medical spending to primary care would provide roughly $113 PMPM, enough to cover both. That is the basis for the committee’s benchmark of at least 10% of total health care spending for primary care, about twice the share it gets now.

More uninsured patients ahead

The net effect of federal policy since 2021 is “likely to further compromise access to primary care, largely by reducing health insurance coverage,” according to a NASEM news release. Bright spots include APCM, more funding for Teaching Health Centers and Medicare telehealth flexibilities extended through Dec. 31, 2027. But CMS also ended the Primary Care First and Making Care Primary models.

The report cites several Congressional Budget Office (CBO) estimates of coverage losses from H.R. 1, now Public Law 119-21. The figures vary because they rest on different baselines, time frames and combinations of policies:

• 10 million more uninsured people by 2034 from the law, compared with CBO’s preenactment baseline
• 9.1 million people losing insurance by 2034, 7.8 million because of Medicaid changes and 1.3 million because of private insurance changes, in an earlier CBO estimate cited in the report
• An increase in the uninsured from 26.6 million in 2025 to 37.4 million in 2036 when the law is combined with the expiration of enhanced Affordable Care Act premium tax credits

Starting Jan. 1, 2027, 44 states must begin conditioning Medicaid eligibility for expansion adults on work or community engagement requirements, and the report notes added burdens on clinicians to document patient exemptions. A recent survey found 44% of Medicaid members were unprepared for the requirements.

“As more people lose insurance coverage as a result of these policy changes, already underresourced primary care practices cannot reasonably absorb the resulting unmet need and uncompensated care without additional support,” the report says.

The six recommendations

The committee’s six recommendations to policymakers and payers:

• Create a primary care common fund. HHS and Congress should help states establish common funds that provide universal coverage for primary care, pay practices standardized rates that appropriately value primary care and eliminate patient cost sharing. As an alternative, Congress should consider a federal common fund run by CMS.
• Make health systems reinvest. Payers should specify in contracts with health systems that any additional primary care payments be reinvested in primary care practices.
• Double the spending share. State regulators should push primary care to at least 10% of total health care spending, including prescription drugs, and require health plans to report how provider organizations use the added money.
• Tie new residency slots to primary care. Future legislation expanding Medicare-funded graduate medical education (GME) slots should favor institutions with a track record of producing primary care clinicians and require some new slots to go to primary care trainees.
• Double Teaching Health Center residents. Congress should fund at least twice as many residents and make the funding mandatory, with adjustments for new sites and inflation.
• Expand loan relief. Congress should at least double funding for the National Health Service Corps (NHSC) and shorten the time to forgiveness in the Public Service Loan Forgiveness (PSLF) program.

What it could mean for independent practices

Recommendations 2 and 3 are designed to make sure new money actually reaches the practices delivering care. The committee noted that as more primary care physicians become employees of large organizations, enhanced payments flow to those organizations and may not reach primary care, and that growing for-profit ownership risks payments being extracted as investor profit. A Massachusetts proposal would require at least 95% of prospective primary care payments to flow directly to practices.

States are already testing the ideas. Vermont has enacted a primary care common fund law, a Massachusetts bill remains under consideration and Washington’s insurance commissioner plans to propose legislation in 2027. California has set a benchmark of 15% of health plan medical spending for primary care by 2034. Other states have tested spending targets as well.

The committee was skeptical that market responses alone will close the gap. Direct primary care membership grew more than 800% from 2017 to 2025 but still covers less than 1% of the population. A study of artificial intelligence (AI) scribes in primary care found they added about 0.49 visits per week.

“Declaring primary care a common good is not good enough; national policies, investments, and workforce strategies must reflect that commitment,” the report says.