Summary Points

In July, the Centers for Medicare and Medicaid Services (CMS) made important new proposals to improve how primary care providers are paid to care for Medicare beneficiaries with implications for providers, digital health companies and others. If finalized in the 2025 Physician Fee Schedule Final Rule later this year, these proposals (known as the Advanced Primary Care Management bundle) will add new reimbursement opportunities for the delivery of comprehensive primary care, including care management outside visits. CMS seeks feedback on these proposals, including through a detailed “Advanced Primary Care RFI” for which responses are due September 9.

Below are some key implications of the proposals:

Proposed codes represent shift from ‘time-based’ to ‘capability-based’ coding and billing
Over the past 10 years, providers have invested in infrastructure to bill CMS’s various existing standalone codes—chronic care management (CCM), transitional care management (TCM), principal care management (PCM), eConsult, eVisit and virtual check-in code sets. Importantly, the new proposed codes de-emphasize the need for minute-by-minute activity tracking and re-emphasize need for capability development and practice transformation to deliver advanced primary care. The new codes reflect lessons learned from years of primary care “model tests” from the Center for Medicare and Medicaid Innovation (CMMI).

“Capability based” reimbursement may better support innovation than existing coding
Under these proposals, primary care practices ready to offer all of the advanced primary care functions will be able to receive per member per month payments to support practice-wide advanced primary care infrastructure, which will move usual state payment closer to the previous CMMI model tests. The proposed codes represent the opportunity for continued primary care model innovation, including integration of in-person and virtual clinical care and care management, with simpler billing than under the existing time-based codes.

Implications for provider operations and potential barriers
The new proposals need to be understood in the context that CCM, TCM, PCM and the other preexisting standalone codes are significantly underutilized today. One specific reason for today’s low utilization is that patient copays are generally required by statute in Medicare; more generally, billing the codes correctly takes infrastructure changes at the practice level, with an inevitable layer of administrative burden and associated costs. The new proposals acknowledge these same barriers, particularly for practices using the codes for the first time. However, the new and more flexible reimbursement opportunities presented by the new codes may mean that new providers are interested in using the new codes, even if they have not had experience using the existing codes.

Implications for other payers
Increased Medicare investment in primary care to build advanced primary care capacity indirectly benefits all payers and their patients. Adoption of the new codes by Medicaid and other payers will depend on several factors, including provider interest and take-up, reporting and program integrity considerations, operational lift and care management philosophy, especially the division of responsibility between primary care providers and health plans.

To learn more, including how to submit a response, watch our recent webinar.