New legislation introduced in the House by leaders of both parties’ doctors caucuses takes a crack at providers’ long-requested overhaul of annual physician payment adjustments.
The Patients First Act (PDF of bill text) would eschew the year-to-year reimbursement formula established under 2015’s Medicare Access and CHIP Reauthorization Act (MACRA) to instead tie physician reimbursement to an inflationary measure. The formula would take the Medicare Economic Index and subtract one percentage point. The approach answers years of alarm from physicians and medical groups that the costs of running a practice have grown far faster than reimbursement.
"We often talk about expanding access to high-quality care, but without meaningful Medicare reimbursement reform, that mission becomes nearly impossible to achieve,” Rep. John Joyce, M.D., R-Pennsylvania, one of the bill’s cosponsors, said in a statement. “Putting patients ahead of politics, we worked together to develop this comprehensive legislation to address a system that has for far too long undermined patient access to affordable, physician-driven care within their communities.”
To further incentivize value-based care, participants in an alternative payment model (APM) would still see a slightly higher conversion factor, but with an additional half of a percentage point above what’s laid out in MACRA, according to a section-by-section primer released by the bill’s sponsors.
Mirroring a bill brought earlier this year by another cosponsor, Rep Greg Murphy, M.D., R-N.C., year-to-year changes in the conversion factor would be limited to 2.5% to avoid any substantial swings in reimbursement for physicians. The Centers for Medicare and Medicaid Services (CMS) would also get more flexibility to make adjustments in its rulemaking thanks to a larger budget-neutrality threshold—$57.6 million, plus inflation adjustments every five years, as opposed to the current $20 million.
Additionally, the legislation would establish a primary care hybrid payment pilot program, in which independent physicians would receive per-member-per-month capitated payment alongside some of their traditional fee-for-service reimbursement.
The bill also outlines a successor to the Merit-based Incentive Payment System (MIPS) dubbed the Patient Outcome Improvement National Tabulation System (POINTS), which legislators said would be more flexible and create a care efficiency category alongside MIPS’ quality and resource use categories. All quality metrics in POINTS would require a recommendation from a clinician-led task force to ensure a limited administrative burden, they added. A five-year transition period from MIPS to POINTS would bring a greatly reduced financial penalty or bonus from providers scores from 9% to 2%, before settling at a “far less rigid and onerous” 5%.
The Patients First Act would further put a three-year freeze on current participation thresholds for APMs, introduce more flexibility for adjusting those thresholds and create a statutory requirement for a full notice and comment period when a mandatory model is being introduced, ended early or otherwise materially changed.
Together, these updates would give physician practices, and particularly primary care providers, the financial support they need to remain independent, lawmakers said.
"Our nation is in a primary care crisis, and if we don’t act swiftly to reform the system, patients will lose access to care, costs will rise, and physician practices will continue to close,” Rep. Kim Schrier, M.D., D-Washington, said in a statement. “Consolidation in our healthcare system is forcing small, independent physicians to sell their practices to corporate entities, decreasing choice and competition, and increasing costs for patients without delivering better quality. This bill gives stability to independent practices, reduces red tape and burdensome paperwork, and invests in primary care.
Unanimous approval from providers staring down another pay cut
Of note, the legislation was unveiled less than 24 hours after CMS released its calendar year 2027 Physician Fee Schedule draft rule. That proposal, in line with current statute, floated conversion factors reflecting a projected conversion factor decrease of 1.19% for qualifying APM participants and a 1.68% decrease for non-qualifying participants—which alongside the expiration of a one-time 2.5% legislative increase from the One Big Beautiful Bill Act prompted calls on Congress for reprieve from various physician groups and associations.
The response to Wednesday’s bill was a stark contrast to the prior day’s condemnations, with the industry and professional organizations praising The Patients First Act nearly from head to toe.
“With a 33% inflation-adjusted cut to Medicare physician payment since 2001, too many physician practices are struggling to keep their doors open and care for Medicare patients,” Willie Underwood III, M.D., president of the American Medical Association, said in a statement. “The AMA commends the bipartisan leadership of the GOP and Democratic Doctors Caucuses for proposing solutions to stabilize physician payment and protect access to care.”
Jerry Penso, M.D., president and CEO of The American Medical Group Association (AMGA), said the trade group was particularly encouraged by the inflation-tied pay updates and formal rulemaking requirement for mandatory models.
“We appreciate this physician-led policymaking process, as these members of Congress know firsthand how federal policies impact medical practices,” Penso said.
Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, said the bill is “a critical first step” and lays “a solid foundation for addressing the underlying issues that result in financial and administrative burdens,” while calling for prompt action to avert the reimbursement cuts proposed by CMS for 2027.
The Primary Care Collaborative President and CEO Ann Greiner said that hybrid payments for independent PCPs will bolster care delivery, while “eliminating cost-sharing for primary care, team-based care and integrated behavioral health visits covered by the hybrid program will make it easier for beneficiaries across the country to get the care they need and deserve.” And the American Academy of Family Physicians called the bill “a concrete step toward modernizing a payment system that has historically undervalued primary care.”