II 

118TH CONGRESS 

2D SESSION S. 4338 

To provide for the establishment of hybrid primary care payments under 

the Medicare program, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 15, 2024 

Mr. WHITEHOUSE (for himself and Mr. CASSIDY) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To provide for the establishment of hybrid primary care 

payments under the Medicare program, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Pay PCPs Act of 

5 2024’’. 

6 SEC. 2. FINDINGS. 

7 Congress makes the following findings: 

8 (1) Transformation of primary care practices 

9 serves as an essential foundation for improving 

10 health and life outcomes for Medicare beneficiaries, 


ssavage on LAPJG3WLY3PROD with BILLS
2 

•S 4338 IS

1 particularly for those with multiple chronic condi2 tions and complex needs, mental health challenges, 

3 or living in rural and other socioeconomically chal4 lenged communities. 

5 (2) Research has shown that 25 percent or 

6 more of primary care activities are not recognized 

7 for payment under most fee schedules, including the 

8 Medicare physician fee schedule, largely because 

9 these activities reflect a wide range of high fre10 quency, brief activities that cannot efficiently be paid 

11 fee-for-service and because the billing costs for sub12 mitting claims for such services would usually exceed 

13 the value of payment. 

14 (3) Fee-for-service is ill-suited to support many 

15 elements of practice transformation to produce effec16 tive primary care, such as developing and maintain17 ing multi-disciplinary team-based care strategies 

18 that leverage clinicians such as nurse practitioners, 

19 physician assistants, nutritionists, and pharmacists, 

20 and coordinating care with other clinicians and so21 cial service providers. 

22 (4) Research has shown that primary care rep23 resents a much smaller percentage of total health 

24 care spending by payers, regardless of type of insur25 ance coverage, in the United States than in other 


ssavage on LAPJG3WLY3PROD with BILLS
3 

•S 4338 IS

1 wealthy nations, and that higher percentage of total 

2 spending that is devoted to primary care services is 

3 associated with lower overall health care spending, 

4 and in the Medicare Shared Savings Program, with 

5 higher savings performance by accountable care or6 ganizations led by physician groups. 

7 (5) A composite, prospective payment would 

8 provide primary care practices with more predictable 

9 and flexible revenues to support such elements of ef10 fective primary care and help appropriately value 

11 services and activities performed by primary care 

12 providers and critical services not currently paid for. 

13 (6) Payments for some physician services under 

14 the Medicare program, including many that produce 

15 substantial spending under the Medicare program, 

16 have major distortions. 

17 (7) Determination of payments for physician 

18 services under the Medicare program currently be19 gins with subjective survey-based estimates of clini20 cian time and effort per discrete service. This ap21 proach to valuing physician services is inconsistent 

22 with the comprehensive and continuous nature of 

23 primary care. 

24 (8) Studies have found that payment levels in 

25 the Medicare physician fee schedule reflect estimates 


ssavage on LAPJG3WLY3PROD with BILLS
4 

•S 4338 IS

1 of clinician time per service for a variety of services 

2 that are particularly inaccurate. 

3 (9) The extreme complexity of having more 

4 than 8,000 billing codes in the Medicare physician 

5 fee schedule risks inaccuracy in estimations of rel6 ative values for closely related procedures and ob7 scures distortions in pricing that grow over time for 

8 specific services. 

9 SEC. 3. ESTABLISHING HYBRID PRIMARY CARE PAYMENT 

10 IN MEDICARE. 

11 (a) ESTABLISHMENT.—The Secretary of Health and 

12 Human Services (in this section referred to as the ‘‘Sec13 retary’’) may establish within the Medicare physician fee 

14 schedule established under section 1848(b) of the Social 

15 Security Act (42 U.S.C. 1395w–4(b)), hybrid payments 

16 only to be available to primary care providers, as defined 

17 in the shared savings program under section 1899 of such 

18 Act (42 U.S.C. 1395jjj). 

19 (b) HYBRID PAYMENTS.— 

20 (1) IN GENERAL.—Such hybrid payments may 

21 be comprised of the sum of— 

22 (A) prospective, per-member-per-month 

23 payments; and 

24 (B) fee-for-service payments. 


ssavage on LAPJG3WLY3PROD with BILLS
5 

•S 4338 IS

1 (2) DETERMINATION OF AMOUNT OF PROSPEC2 TIVE, PER-MEMBER-PER-MONTH PAYMENT.— 

3 (A) IN GENERAL.—Subject to the pre4 ceding provisions of this subsection, the total 

5 prospective, per-member-per-month payment— 

6 (i) may represent between 40 and 70 

7 percent of expected annual total allowed 

8 charges derived from the Medicare physi9 cian fee schedule for primary care pro10 viders of services and suppliers; 

11 (ii) should be at least actuarially 

12 equivalent to the applicable physician fee 

13 schedule amounts for the services included 

14 within the total prospective, per-member15 per-month payment; and 

16 (iii) should be calculated based on his17 toric Medicare payments for those services 

18 which would be included as part of the pro19 spective, per-member-per-month payment. 

20 (B) APPLICATION OF CERTAIN FACTORS.— 

21 The Secretary may consider applying percent22 ages different from those specified in subpara23 graph (A) for different types of primary care 

24 providers based on factors such as historical 


ssavage on LAPJG3WLY3PROD with BILLS
6 

•S 4338 IS

1 fee-for-service revenue patterns or quality per2 formance of the provider. 

3 (C) RISK ADJUSTMENT.—The Secretary 

4 may assess the need to risk adjust the prospec5 tive, per-member-per-month payment and de6 velop appropriate risk adjustment methodolo7 gies, taking into consideration only those fac8 tors that predict levels of primary care service 

9 utilization. Risk adjustment methodologies may 

10 incorporate clinical diagnoses, demographic fac11 tors, and other relevant information such as so12 cial determinants of health. 

13 (c) CATEGORIZATION OF SERVICES.— 

14 (1) IN GENERAL.—For such hybrid payments, 

15 the Secretary may create categories of different serv16 ices that are wholly reimbursed under the Medicare 

17 physician fee schedule, but may not include services 

18 for which reimbursement occurs partly through 

19 other payment schedules under the Medicare pro20 gram. 

21 (2) SERVICES INCLUDED IN PROSPECTIVE, PER22 MEMBER-PER-MONTH PAYMENT.—The Secretary 

23 may include the following types of services in the 

24 prospective, per-member-per-month payment under 

25 this section: 


ssavage on LAPJG3WLY3PROD with BILLS
7 

•S 4338 IS

1 (A) Care management services. 

2 (B) Communications such as emails, phone 

3 calls, and patient portals with patients and 

4 their caregivers. 

5 (C) Behavioral health integration services. 

6 (D) Office-based evaluation and manage7 ment visits, regardless of modality, for new and 

8 established patients. 

9 (3) CLARIFICATION REGARDING FEE-FOR-SERV10 ICE PAYMENT FOR OTHER SERVICES .—For such hy11 brid payments, the Secretary may continue to pay 

12 through reduced fee-for-service payments for all 

13 other services not specified in paragraph (2) under 

14 the Medicare physician fee schedule, including 

15 screenings, preventive services, annual wellness visits 

16 (as defined in section 1861(hhh) of the Social Secu17 rity Act (42 U.S.C. 1395x(hhh))), vaccinations, and 

18 initial preventive physical examinations (as defined 

19 in section 1861(ww) of such Act (42 U.S.C. 

20 1395x(ww))). 

21 (d) IDENTIFICATION OF QUALITY MEASURES.—The 

22 Secretary may identify quality measures with respect to 

23 primary care providers that receive hybrid payment under 

24 this section to safeguard health outcomes for Medicare 

25 beneficiaries, and reward high quality performance 


ssavage on LAPJG3WLY3PROD with BILLS
8 

•S 4338 IS

1 through mechanisms such as annual bonus payments. 

2 Quality measures may be identified using existing mecha3 nisms such as those approved for use in the Accountable 

4 Care Organization/Patient-Centered Medical Home/Pri5 mary Care Core Set agreed to by members of the Core 

6 Quality Measure Collaborative. Measurement may address 

7 areas such as— 

8 (1) patient experience; 

9 (2) clinical quality measures; 

10 (3) service utilization, including measures of 

11 rates of emergency department visits and hos12 pitalizations; and 

13 (4) efficiency in referrals, which may include 

14 measures of the comprehensiveness of services that 

15 the primary care provider furnishes. 

16 (e) ATTRIBUTION.—The Secretary shall establish 

17 procedures under which a beneficiary is attributed to a 

18 primary care provider using historical claims data and the 

19 beneficiary affirms that the provider is their primary care 

20 provider. 

21 (f) EXCLUSION FROM MIPS.—Section 

22 1848(q)(1)(C)(ii) of the Social Security Act (42 U.S.C. 

23 1395w–4(q)(1)(c)(ii)) is amended— 

24 (1) in subclause (II), by striking ‘‘or’’ at the 

25 end; 


ssavage on LAPJG3WLY3PROD with BILLS
9 

•S 4338 IS

1 (2) in subclause (III), by striking the period at 

2 the end and inserting ‘‘; or’’; and 

3 (3) by adding at the end the following new sub4 clause: 

5 ‘‘(IV) is a primary care provider 

6 that receives hybrid payments pursu7 ant to section 3 of the Pay PCPs Act 

8 of 2024.’’. 

9 SEC. 4. REDUCING BENEFICIARY COST SHARING FOR PRI10 MARY CARE SERVICES. 

11 (a) IN GENERAL.—Notwithstanding any other provi12 sion of law, the Secretary of Health and Human Services 

13 (in this section referred to as the ‘‘Secretary’’) may reduce 

14 by 50 percent any beneficiary cost sharing otherwise appli15 cable under part B of title XVIII of the Social Security 

16 Act (42 U.S.C. 1395j et seq.) for primary care services 

17 that may be reimbursed through the newly established 

18 prospective, per-member-per-month payment established 

19 under section 3, provided that the beneficiary designates 

20 a primary care provider as their usual source of care and 

21 informs the Secretary of who that provider is pursuant 

22 to the procedures established under section 3(e). 

23 (b) REPORT TO CONGRESS.—Not later than 180 days 

24 after the date on which subsection (a) is first imple25 mented, and annually thereafter, the Secretary shall subVerDate Sep 11 2014 18:40 Jun 17, 2024 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4338.IS S4338

ssavage on LAPJG3WLY3PROD with BILLS
10 

•S 4338 IS

1 mit to Congress a report on the implementation of such 

2 subsection, including an analysis of— 

3 (1) whether the reduction of beneficiary cost4 sharing under such subsection has impacted bene5 ficiary utilization of primary care services that may 

6 be reimbursed through the newly established per7 member-per-month payment; and 

8 (2) whether the Secretary has observed any in9 stances of fraud or abuse associated with the reduc10 tion of such cost-sharing, and whether the Secretary 

11 has taken steps to minimize any such fraud or 

12 abuse. 

13 SEC. 5. ESTABLISHING A NEW TECHNICAL ADVISORY COM14 MITTEE ON RELATIVE VALUE UPDATES AND 

15 REVISIONS. 

16 Section 1848(c)(2) of the Social Security Act (42 

17 U.S.C. 1395w–4(c)(2)) is amended by adding at the end 

18 the following new subparagraph: 

19 ‘‘(P) ESTABLISHMENT OF TECHNICAL AD20 VISORY COMMITTEE ON RELATIVE VALUE UP21 DATES AND REVISIONS.— 

22 ‘‘(i) IN GENERAL.—The Secretary 

23 shall establish a technical advisory com24 mittee (in this section referred to as the 

25 ‘committee’) within the Centers for MediVerDate Sep 11 2014 18:40 Jun 17, 2024 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S4338.IS S4338

ssavage on LAPJG3WLY3PROD with BILLS
11 

•S 4338 IS

1 care & Medicaid Services to provide the 

2 Secretary with technical input regarding 

3 the accurate determination of relative value 

4 units under this paragraph. 

5 ‘‘(ii) MEMBERSHIP.— 

6 ‘‘(I) IN GENERAL.—The com7 mittee shall be composed of 13 mem8 bers appointed by the Secretary from 

9 among individuals— 

10 ‘‘(aa) reflecting diverse expe11 riences in provider payment, in12 cluding providers billing the 

13 Medicare program under this 

14 title, providers providing care 

15 under the laws administered by 

16 the Secretary of Veterans Affairs 

17 or the Secretary of Defense, and 

18 providers in primary care or fam19 ily medicine (as defined for pur20 poses of the shared savings pro21 gram under section 1899); and 

22 ‘‘(bb) with technical exper23 tise in Medicare payment policies. 

24 ‘‘(II) CHAIR.—1 of the members 

25 appointed under subclause (I) shall be 


ssavage on LAPJG3WLY3PROD with BILLS
12 

•S 4338 IS

1 a representative of personnel of the 

2 Centers for Medicare & Medicaid 

3 Services, and that member shall serve 

4 as chair of the committee. 

5 ‘‘(iii) STAFF.—The committee shall be 

6 staffed by personnel of the Centers for 

7 Medicare & Medicaid Services. 

8 ‘‘(iv) DUTIES.—The committee shall 

9 advise the Secretary on an ongoing basis 

10 regarding the determination of relative 

11 value units under the physician fee sched12 ule through duties such as the following: 

13 ‘‘(I) Designing new valuation 

14 methodologies the Secretary may use 

15 to determine the time and resource 

16 use by health professionals associated 

17 with furnishing services or other new 

18 approaches to determining relative re19 sources for each HCPCS code. The 

20 committee may prioritize furnished 

21 services that are most common or rep22 resent the services with the highest al23 lowed charges. 

24 ‘‘(II) Advising on research and 

25 development relevant to the deterVerDate Sep 11 2014 18:40 Jun 17, 2024 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S4338.IS S4338

ssavage on LAPJG3WLY3PROD with BILLS
13 

•S 4338 IS

1 mination of relative value units for in2 dividual HCPCS codes. 

3 ‘‘(III) Providing recommenda4 tions with respect to changes in valu5 ations of current HCPCS codes based 

6 upon any newly developed valuation 

7 methodologies. 

8 ‘‘(IV) Evaluating whether exist9 ing HCPCS codes within the same 

10 family of services should be collapsed 

11 to result in fewer payment codes. 

12 ‘‘(V) Identifying opportunities for 

13 bundling or unbundling services for 

14 payment purposes. 

15 ‘‘(VI) Assessing the operational 

16 burden of new approaches on physi17 cians and other suppliers and bene18 ficiaries while also considering the 

19 vulnerabilities of new approaches on 

20 overt fraud and abuse. 

21 ‘‘(VII) Assessing the impacts of 

22 these new approaches and potential 

23 adoption on beneficiary access, finan24 cial liabilities, quality of care, and 

25 health disparities. 


ssavage on LAPJG3WLY3PROD with BILLS
14 

•S 4338 IS

1 ‘‘(v) FUNDING.— 

2 ‘‘(I) IMPLEMENTATION.—The 

3 Secretary may provide for the trans4 fer, from the Federal Supplementary 

5 Medical Insurance Trust Fund under 

6 section 1841, such amounts as are 

7 necessary to carry out this subsection 

8 (other than research and development 

9 under clause (iv)(II)) (not to exceed 

10 $5,000,000) for each of fiscal years 

11 2025 through 2029. Any amounts 

12 transferred under the preceding sen13 tence for a fiscal year shall remain 

14 available until expended. 

15 ‘‘(II) RESEARCH AND DEVELOP16 MENT.—The Secretary may provide 

17 for the transfer, from the Federal 

18 Supplementary Medical Insurance 

19 Trust Fund under section 1841, such 

20 amounts as are necessary to carry out 

21 research and development under 

22 clause (iv)(II) (not to exceed 

23 $10,000,000) for each of fiscal years 

24 2025 through 2029. Any amounts 

25 transferred under the preceding senVerDate Sep 11 2014 05:32 Jun 23, 2024 Jkt 049200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S4338.IS S4338

ssavage on LAPJG3WLY3PROD with BILLS
15 

•S 4338 IS

1 tence for a fiscal year shall remain 

2 available until expended. 

3 ‘‘(vi) DURATION.—The Commission 

4 shall terminate not later than the expira5 tion of the 5-year period beginning on the 

6 date of its establishment.’’. 

Æ 


ssavage on LAPJG3WLY3PROD with BILLS