Proposed Medicare Fee Schedule Brings Important New Tools to Primary Care: Has CMS Nailed It? 

“Chris, if you have a hammer, everything looks like nail.” 

So said the general surgeon in the HMO where I was working 30 years ago, as he explained the tendency of many of his colleagues to perform expensive surgeries on a lot of patients referred to them. 

As it turns out, the general surgeon was an Army General, too — a gruff and intimidating one then serving in the National Guard who took a dim view of his colleagues’ practices. He understood that they were using the tools at their disposal not only for treatment but also for billing in a fee-for-service payment environment. When you get paid by the whack, he was implying, you have an incentive to swing that hammer. The General, by contrast, was on salary and had no compunction about advising some of his patients to watch the condition for a while, or try a therapy, before he started to cut. 

Despite the documented benefits they bring to population health and health equity, primary care clinicians, in contrast, have fewer tools in this fee-for-service environment. They provide neither highly priced interventions nor high-tech diagnostics and can only bill a few meager evaluation and management CPT codes to cover visits. The work of the primary care teams that occurs outside the visit — to coordinate patients’ care and help manage chronic illnesses, for example — has remained under-reimbursed even as demand for it has increased. 

Efforts by Medicare and commercial payers to address the damaging effects of fee-for-service payment methods on both health care costs and the practice of primary care, by increasing the use of value-based payments like capitation and risk-based arrangements, have been slow to take off. (Change it seems is rather hard). So for those concerned with the future of primary care in the United States, the new “Advanced Primary Care Management” (APCM) codes in the proposed 2025 Medicare Fee Schedule rule is, as President Biden said of the Affordable Care Act “a big @#$ deal.” 

This year’s proposed Medicare fee schedule rule weighs at a hefty 2,248 pages, and, as always, contains numbing details. But there are priorities and strategies in each year’s rule. This year one of them clearly is giving relief and support to primary care, consistent with the US Department of Health and Human Services (HHS) initiative to strengthen primary care. 

Addressing the Impacts of Fee-for-Service on Primary Care 

Smaller proportions of new physicians are entering primary care and patient access is worsening. A big reason for this is money. The policy recommendations for strengthening the financing of primary care — crystallized in the 2021 National Academy of Sciences Engineering and Medicine report — have been very clear: pay primary care clinicians differently and pay them more, starting with Medicare. More specifically, the report calls for developing ways to pay physicians per person to encourage team-based care and services outside the office visit and increase the portion of health care dollars devoted to primary care. 

Implementing these recommendations has been challenging, however. Payment policy details are significant and consequential. Moreover, the status quo has its beneficiaries and agreement even on the goals of any policy changes (Strengthen primary care? Save Medicare money? Improve patient experience?) has proven elusive. Evidence for specific impacts of specific policies is scant.  

Defining Advanced Primary Care Management 

The proposed Medicare rule addresses these roadblocks by defining the goal and using, not abandoning, fee-for-service payments. It identifies 13 services – including 24/7 access, comprehensive care management, care transitions coordination and ongoing communication – that together comprise APCM (or more colloquially, good primary care). After a primary care clinician has documented a discussion with a patient about the availability of these services at their practice and the patient’s financial obligation, the clinician can bill one of three codes — depending on the number of chronic conditions the patient has — on a monthly basis and receive from $10 to $110 in reimbursement, on top of reimbursement for any other services provided.  

The rules try to get as close to the hybrid per capita payments recommended by NASEM as possible while maintaining the billing-based accountability and chassis Medicare is built on. At first glance merely adding new codes would seem to perpetuate the fee-for-service principles that have created weaknesses in primary care. The guidance in the rule for the proposed codes shows, however, that the Centers for Medicare and Medicaid Services (CMS) leadership has learned from past practices in Medicare and 12 years of experimentation with primary care payment models in the Center for Medicare and Medicaid Innovation (CMMI). 

The APCM codes bundle services like care management and remote communications that previously had to be billed separately in Medicare. The proposed rule makes it easier to bill routinely and automatically by omitting the customary Medicare references to estimated clinician time and eliminating documentation requirements. The rule allows advanced practitioners like nurse practitioners and physician assistants to bill for services and allows for the possibility that these services could be provided for every Medicare patient in a clinician’s panel, offering opportunities for significantly enhanced revenues.  

Although none of CMMI’s primary care payment models have met Congress’s strict standards for becoming mandatory across all Medicare (either reducing total costs or improving patient care across multiple measures), the proposed APCM services reflect the benefits of this experimentation. First, they suggest that CMS, like NASEM, believes that good primary care for all is a common good. It should be pursued for that reason, not for its ability generate a return on investment. Second, the 13 identified services represent what has been learned about the components of high-quality primary care and the costs of their implementation. Finally, the clinician-patient conversation requirement could prove to be the real game-changer, committing the clinical team to promise to provide advanced primary care and empowering patients to expect it as well as underscoring that good primary care is based on a trusting relationship. 

There remain details to clarify and risks to consider. How will patients (and Medicare supplement insurers) respond to the cost-sharing associated with the APCM codes? What are the conditions for terminating billing? Is provider attestation to the availability of APCM services sufficient to guard against abuse? The proposed rule, however, represents extensive, thoughtful deliberation and collaboration among CMS leadership and staff in both the traditional Medicare program and CMMI to address long-identified problems in the Medicare Fee Schedule. It is a significant milestone that advocates of primary care strengthening would do well to build upon in several ways. 

First, responding to the rule and an accompanying request for information about the future of hybrid payment methodologies by the September 9 deadline is an opportunity to express support for the rule’s intentions and to improve the design of the APCM codes. Second, timely implementation and widespread utilization of the finalized codes will inform further improvements in the efficacy of the fee schedule. Finally, bringing attention to the Medicare rule and its implementation will set the expectation that Medicare Advantage, commercial and Medicaid payers rapidly follow suit. 

The APCM services proposed in this rule offer a new set of tools for primary care clinicians to go with the General’s hammer, and the potential for support to a health services sector that badly needs it. But they also remind us to consider what exactly it is that everybody who participates in Medicare — and in health care delivery and financing — should be building with whatever tools they use: trusting, caring relationships between patients and clinicians, a sustainable health care system, and healthy populations.