Medicare’s Evolving Approach to Paying for Primary Care

Research Report

Medicare’s Evolving Approach to Paying for Primary Care


Wide differences in incomes for primary care and specialty practitioners contribute to shortages of primary care physicians in many areas of the country. A new analysis, prepared by researchers at the Urban Institute with funding from the Robert Wood Johnson Foundation, explores the two reform methods the Centers for Medicare & Medicaid Services (CMS) is using to address underpayment for primary care in Medicare: new primary care billing codes and demonstrations. New billing codes incentivize specific activities that CMS knows it wants clinicians to engage in, while demonstrations test whether CMS can achieve favorable outcomes by paying for promising new care delivery approaches. The authors analyze CMS’s new primary care billing codes and demonstrations to identify the payment models and care processes being prioritized by the nation’s largest and most influential insurer. The most noticeable trend observed by the authors is a willingness to pay increasingly large amounts for managing the care of patients with chronic conditions – a high-need, high-cost group.
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