Primary Care Bonus Payments

Bonus Payment for Primary Care and General Surgery Services

Primary Care Bonus Payments
The proposed rule implements section 5501 of the ACA which provides a 10 percent incentive payment over five years for primary care practitioners for whom primary care services accounted for at least 60 percent of the allowed charges. This provision raises the question of what constitutes “allowed charges.” CMS is interpreting the legislative language to mean allowed charges under Medicare Part B. This would include a number of services that are not paid under the Part B Medicare physician fee schedule, such as clinical diagnostic laboratory services or drugs and vaccines furnished in a physician’s office, which would make it much more difficult for a physician to reach the 60 percent threshold. CMS’ broad interpretation of “allowed charges” would significantly narrow the number of primary care practitioners who would be eligible for the payment incentive.

The AMA urges CMS to narrow its interpretation of “allowed charges” consistent with both the intent and statutory language of this provision. The payment incentive is intended to promote primary care as a physician specialty. According to HHS’ most recent data, there are 6,204 primary care health professional shortage areas with 65 million people living in them. It would take 16,643 practitioners to meet their need for primary care providers (a population to practitioner ratio of 2,000:1).

The primary care incentive is intended to address both the shortage of primary care physicians and to promote preventive care and care coordination as a means to help reduce growth in Medicare services. CMS’ broad interpretation of “allowed charges” undermines the intent of this provision since many physicians would not be eligible for the incentive payment. This would potentially affect both urban and rural physicians, but it would especially hurt patients living in rural communities. For example, a primary care physician practicing in a rural area, with few or no other primary care physicians and no physicians who specialize in services beyond primary care, is likely to furnish many types of services to patients (including clinical laboratory services and drugs and vaccines furnished in the physician’s office) to which the patient may not otherwise have access. CMS proposes to include charges for all of these services in the 60 percent of allowed charges threshold, yet these services are not even paid under the physician fee schedule. The primary care bonus is especially intended to help support these primary care physicians, but under CMS’ narrow interpretation, these physicians will be much less likely to be eligible for the incentive payment unless they discontinue offering certain services that patients may not be able to receive elsewhere. Further, if physicians in these areas are not eligible for the bonus, this will further damage recruitment efforts for these shortage areas.

Finally, we believe the statutory language in section 5501 requires only physician fee schedule services to be counted as “allowed charges.” The language specifically provides that the incentive payment is for certain practitioners “for whom primary care services accounted for at least 60 percent of the allowed charges under this part for such physician or practitioner in a prior period as determined appropriate by the Secretary.” There are several uses of the phrase “under this part” in section 5501, and each time this phrase is used, it is in reference to services that are provided and paid under the Medicare physician fee schedule. For example, section 5501(a) uses the phrase “under this part” as follows:

“In the case of primary care services furnished on or after January 1, 2011, and before January 1, 2016, by a primary care practitioner, in addition to the amount of payment that would otherwise be made for such services under this part, there also shall be paid (on a monthly or quarterly basis) an amount equal to 10 percent of the payment amount for the service under this part.”
Here, “under this part” is referring to primary care services, as defined in section