Time to Do the Right Thing: End Fee-for-Service for Primary Care

Current fee-for-service (FFS) payment rates for physician visits trace to the origins of Blue Cross Blue Shield insurance in the 1930s. At that time, rates were set that paid generously for hospitalizations and for procedures, such as surgery.  Payments for so-called “cognitive services” were lower per minute of physician time. This disparity has been perpetuated since the 1980s in the calculation of rates set by the Centers for Medicare & Medicaid Services (CMS), based on “Relative Value Units,” for payment of the Evaluation and Management codes most often billed by primary care physicians. Despite recognition by the Medicare Payment Advisory Commission (MedPAC)  and others  of the adverse effects of inadequate payment for primary care, only limited progress has been made toward correction of the disparity. This may be due, at least in part, to treatment of total payment for physicians as a zero-sum game in which decision making is dominated by non–primary care physicians through mechanisms such as the Relative Value Scale Update Committee (RUC).