Pay PCPs Act of 2026
- Sponsor
- Sen. Whitehouse, Sheldon [D-RI]
- Committees
- Finance Committee (primary)
- Last action
- Aug 5, 2026
Bottom line
The Pay PCPs Act of 2026 aims to fundamentally reform how Medicare pays for primary care, investing significant federal funds to support comprehensive, team-based care and reduce beneficiary out-of-pocket costs.
What it actually does
This bill authorizes the Secretary of Health and Human Services to establish a hybrid payment model for primary care providers under Medicare, combining prospective per-member-per-month payments with traditional fee-for-service payments. It appropriates $10 billion over five years to support these payments, explicitly waiving budget neutrality requirements. The bill also allows for a 50% reduction in beneficiary cost-sharing for primary care services and establishes a new technical advisory committee to reform the valuation of services under the Medicare physician fee schedule.
Proponents argue
Supporters argue that the current fee-for-service model inadequately compensates primary care providers for essential activities like care coordination and patient communication, leading to poorer health outcomes and higher overall healthcare costs. This bill, they contend, provides predictable revenue, encourages practice transformation, and ensures primary care is appropriately valued, ultimately improving care for Medicare beneficiaries, especially those with complex needs.
Opponents contend
Critics might raise concerns about the significant federal expenditure, particularly the unquantified costs of reduced beneficiary cost-sharing, and the waiver of budget neutrality. They may also highlight the administrative complexity of implementing a new hybrid payment model and the potential for unintended consequences, such as fraud or shifts in payment equity across different medical specialties.
The bill is relatively short and clearly structured, making it accessible for an informed reader to evaluate its core provisions within a reasonable timeframe.
Section 3
Establishment of Hybrid Primary Care Payments
This section authorizes the Secretary of Health and Human Services to create a hybrid payment system for primary care providers under Medicare. This system would combine prospective, per-member-per-month (PMPM) payments, representing 40-70% of expected annual charges, with traditional fee-for-service payments for other services. The PMPM component is intended to cover care management, patient communications, behavioral health integration, and office-based evaluation and management visits, supporting practice transformation and team-based care.
Supporters argue
Supporters argue this provision is crucial for modernizing Medicare payments to better reflect the comprehensive, continuous nature of primary care. It addresses the historical underpayment for non-visit activities, incentivizes team-based care, and provides financial stability for practices, ultimately improving patient care and potentially reducing overall healthcare costs.
Critics contend
Critics might express concerns about the administrative complexity of integrating PMPM with FFS, the potential for 'panel stuffing' or reduced access if PMPM rates are set too low, and the challenges of accurately risk-adjusting payments for diverse patient populations.
Tradeoffs
The provision balances the desire to provide predictable revenue and incentivize comprehensive care for PCPs against the need to maintain accountability for services and avoid unintended consequences of a new payment model.
Section 3(h)
Appropriation for Hybrid Payments
This section appropriates $10 billion from the Treasury for fiscal years 2027 through 2031 to the Secretary of Health and Human Services. These funds are specifically designated for making the new hybrid primary care payments under the Medicare program. Crucially, the bill specifies that these amounts shall not be considered in applying the budget neutrality requirements of the Medicare physician fee schedule.
Section 4
Reduced Beneficiary Cost Sharing for Primary Care Services
This section authorizes the Secretary to reduce by 50% any beneficiary cost-sharing (e.g., co-pays, deductibles) under Medicare Part B for primary care services reimbursed through the new hybrid payment model. This reduction is contingent on the beneficiary designating a primary care provider as their usual source of care. The Secretary is also required to report annually to Congress on the impact of this reduction on utilization and any instances of fraud or abuse.
Section 5
Establishment of Technical Advisory Committee on Relative Value Units
This section mandates the establishment of a 13-member technical advisory committee within the Centers for Medicare & Medicaid Services (CMS). The committee's role is to provide expert input on the accurate determination of relative value units (RVUs) under the Medicare physician fee schedule. Its duties include designing new valuation methodologies, advising on research and development, recommending changes to existing RVUs, evaluating code collapsing or bundling, and assessing the operational burden and impact of new approaches. The bill appropriates $5 million annually for committee implementation and $10 million annually for R&D for fiscal years 2027-2031.
This provision amends Section 1848(q)(1)(C)(ii) of the Social Security Act to explicitly exclude primary care providers who receive hybrid payments under this Act from participating in the Merit-based Incentive Payment System (MIPS).
Section 3(f)
Why it matters:This is standard legislative practice for making technical amendments to existing law, rather than an attempt to obscure the provision.
Case for: Supporters argue that MIPS, being largely designed for fee-for-service models, is not appropriate for evaluating primary care practices operating under a hybrid payment system. This exclusion reduces administrative burden for participating PCPs and allows for the development of quality measures better aligned with the goals of the new payment model.
Case against: Critics might argue that exempting these providers from MIPS could reduce accountability or create an uneven playing field for providers who remain under MIPS, potentially leading to less rigorous quality reporting for a subset of primary care.
Estimated impact: Reduces administrative burden for participating primary care providers and aligns quality reporting with the new hybrid payment model.
This sub-clause specifies that the $10 billion appropriated for hybrid primary care payments shall not be taken into account when applying the budget neutrality requirements of the Medicare physician fee schedule (Section 1848(c)(2)(B)(ii)(II) of the Social Security Act).
Section 3(h)(2)
Why it matters:This is technical legislative language necessary to define the fiscal impact of the appropriation, rather than an attempt to hide it.
Case for: Proponents argue this waiver is critical to ensure the $10 billion represents a true, additive investment in primary care, rather than requiring offsetting cuts to other services within the existing budget-neutral physician fee schedule. This prevents the new program from inadvertently disadvantaging other specialties.
Case against: Opponents might argue that waiving budget neutrality for such a significant appropriation sets a precedent for increased federal spending within Medicare Part B, potentially leading to less fiscal discipline and uncontrolled growth in healthcare expenditures.
Estimated impact: Ensures that the $10 billion appropriated for hybrid payments is additive funding for primary care and does not necessitate cuts to other services reimbursed under the Medicare physician fee schedule.