Top Medicare Officials Outline Vision for Rewarding Upstream Health Investment, Modernizing Payment Accuracy, and Expanding Telehealth Access
The architects of Medicare’s 2026 physician payment framework are sending an unmistakable message: primary care and disease prevention are no longer peripheral policy considerations — they are becoming the central organizing principles around which the nation’s largest health insurance program intends to restructure its financial incentives.
In a candid and wide-ranging discussion hosted by Primary Care for America — an advocacy coalition dedicated to advancing comprehensive, continuous, and coordinated primary care — three senior CMS officials laid out their vision for how the Medicare Physician Fee Schedule (MPFS) and related payment policies will evolve under the current administration. Their remarks went well beyond routine regulatory announcements, touching on chronic disease reversal, the health consequences of social isolation, the role of faith communities in healthcare, outdated government computing systems, and a philosophical commitment to keeping bureaucratic interference out of clinical decision-making.
The officials — Medicare Director and CMS Deputy Administrator Chris Klomp, Medicare Principal Deputy Director Alec Aramanda, and Policy Director Joe Albanese — were joined in conversation by R. Shawn Martin, chief executive of the American Academy of Family Physicians (AAFP), who represented the perspective of frontline primary care clinicians.
Primary Care as the Foundation of “Make America Healthy Again”
Chronic Disease as the Central Challenge
Klomp framed primary care’s elevated priority within the broader policy agenda of Health and Human Services Secretary Robert F. Kennedy Jr., whose “Make America Healthy Again” (MAHA) initiative seeks to redirect federal health resources toward addressing the root causes of illness rather than merely managing its downstream consequences.
“As a nation, we’ve constructed an environment where being unhealthy is the path of least resistance and making healthy choices requires enormous effort,” Klomp observed. “That reality manifests most visibly in our chronic disease burden. More than 60 percent of Americans live with at least one chronic condition. Forty percent are managing multiple simultaneous chronic diseases. Thirty percent are either diabetic or on the verge of developing diabetes. We take this challenge seriously, and as the country’s largest healthcare payer, we possess a substantial pool of resources that we can strategically deploy to drive meaningful change.”
This framing represents a notable philosophical departure from Medicare’s traditional orientation. Historically, the program has functioned primarily as a financing mechanism for treating established illness among Americans aged 65 and older. The MAHA-aligned vision articulated by Klomp repositions Medicare as an active participant in health improvement — not merely a bill-payer for sickness management.
Moving Beyond Early Detection
Klomp drew a pointed distinction between genuine prevention and what currently passes for preventive care within Medicare’s quality measurement infrastructure.
The program currently directs tens of billions of dollars annually toward quality measurement programs, many of which evaluate process compliance rather than actual health outcomes. Even measures commonly categorized as “preventive” — such as mammography screening rates or colonoscopy completion — are more accurately described as early detection rather than true upstream prevention.
“Screening for breast cancer and colorectal cancer is genuinely important — I’m not dismissing that work,” Klomp clarified. “But those measures capture whether we’re identifying disease that has already developed. They don’t address whether we’re preventing that disease from occurring in the first place. True prevention means moving much further upstream.”
This distinction carries provocative implications for how Medicare might redirect its quality measurement investments. If the program were to shift even a fraction of its quality spending from process measures toward genuine preventive health outcomes, the ripple effects across clinical practice, medical education, and healthcare delivery could be substantial.
A 25-Year Investment Horizon
Perhaps the most striking element of Klomp’s remarks was his suggestion that Medicare should consider investing in beneficiaries’ health decades before they become eligible for the program.
“We’re beginning to ask a fundamentally different question: should Medicare be making strategic investments 25 years before someone enters our program at age 65?” he said. “Once someone enrolls, we cover them for an average of 17.8 years. That’s a substantial period during which we can make genuine differences in people’s lives — including through the reversal of chronic conditions that many people have been told are permanent.”
The notion of Medicare investing in pre-enrollee health represents a conceptual boundary expansion that would require significant legislative and regulatory innovation. Current Medicare statute generally limits program spending to services for enrolled beneficiaries. However, Klomp’s framing suggests the administration may be exploring creative interpretations of existing authority — or preparing the groundwork for future legislative proposals — that would allow the program to fund upstream health interventions with longer time horizons.
The reference to chronic disease “reversal” rather than merely “management” also signals alignment with a growing body of clinical evidence suggesting that conditions like type 2 diabetes, metabolic syndrome, and certain cardiovascular risk factors can be substantially improved or even resolved through intensive lifestyle interventions — nutritional changes, physical activity programs, stress reduction, and sleep optimization — rather than relying exclusively on pharmaceutical management.
The Loneliness Epidemic: An Unexpected Medicare Priority
Quantifying the Health Impact
In one of the discussion’s most noteworthy segments, Klomp highlighted social isolation and loneliness as a major — and largely unaddressed — driver of healthcare costs and mortality among Medicare’s elderly population.
“The data on the health consequences of social disconnection among older adults has become increasingly clear and increasingly alarming,” he said. “For Americans aged 65 and older, chronic loneliness and social isolation correspond to a 30 percent increase in mortality risk. To put that in perspective, the mortality impact is equivalent to smoking 15 cigarettes daily or carrying a body mass index of 30 or above.”
Beyond the human toll, Klomp cited estimates suggesting that Medicare may be spending approximately $8 billion annually in direct medical costs attributable to social isolation — costs that manifest through higher rates of depression, cognitive decline, cardiovascular disease, weakened immune function, and increased hospitalization.
“This isn’t a minor quality-of-life concern — it’s an epidemic with quantifiable health and financial consequences,” Klomp said. “And it’s something we can actually address if we’re willing to think creatively about what constitutes healthcare.”
Faith, Family, and Community as Health Infrastructure
The CMS leadership’s proposed response to the loneliness crisis extends well beyond traditional medical interventions. Both Klomp and Aramanda emphasized that religious congregations, family networks, and community organizations are often better positioned than clinical providers to combat social isolation — and that Medicare’s payment and quality frameworks should acknowledge and potentially support these broader connections.
“Churches and families are frequently the most effective institutions for addressing the kind of deep social disconnection that drives health deterioration in older adults,” Klomp observed. “But physicians and other healthcare providers also have a role to play, particularly if we broaden our understanding of what primary care encompasses.”
He proposed an expanded definition of the “principal provider” relationship that would encompass whatever healthcare professional a beneficiary interacts with most regularly — not necessarily a physician, but potentially a nurse practitioner, physician assistant, behavioral health specialist, or community health worker. Under this framework, Medicare could use quality metrics and financial incentives to encourage these providers to dedicate time and resources to addressing social isolation as a root cause that cascades into multiple chronic conditions.
Aramanda reinforced this vision by invoking the principle of subsidiarity — the idea that decisions should be made at the most local level capable of addressing them effectively.
“We believe strongly that primary care works best when it integrates with the family structures, community organizations, and faith institutions that are already part of patients’ lives,” Aramanda said. “Treating physical health in isolation from mental, emotional, and spiritual wellbeing produces incomplete outcomes. The most effective primary care recognizes and connects with the full context of a patient’s life.”
This language — referencing spiritual health alongside physical and mental health in an official Medicare policy discussion — represents an unusual and deliberate framing that reflects the MAHA movement’s broader philosophical approach to health and wellness.
Restructuring Financial Incentives: The 2026 Fee Schedule
The MACRA Split Conversion Factor
Moving to the technical mechanics of the 2026 MPFS, Policy Director Albanese outlined one of the rule’s most structurally significant provisions: implementation of the split conversion factor authorized under the Medicare Access and CHIP Reauthorization Act (MACRA).
Under this framework, the single conversion factor that has historically translated relative value units (RVUs) into dollar payments for all Medicare physician services will be divided into separate conversion factors — creating different payment trajectories depending on whether clinicians participate in Advanced Alternative Payment Models (APMs) or remain in the Merit-based Incentive Payment System (MIPS).
“The split conversion factor is designed to create a compounding financial incentive over time,” Albanese explained. “In any single year, the difference between the APM and MIPS tracks may seem modest. But as the differential compounds annually, clinicians will increasingly find that participating in advanced payment models delivers meaningfully better financial returns than remaining in fee-for-service arrangements.”
This mechanism represents the latest — and potentially most consequential — federal effort to accelerate the healthcare system’s transition from volume-based to value-based reimbursement. By making the financial case for APM participation progressively more compelling with each passing year, CMS aims to reach a tipping point where the majority of Medicare clinicians voluntarily migrate toward payment models that reward outcomes rather than service volume.
For primary care physicians in particular, APM participation can offer several advantages:
- Predictable revenue streams through capitated or prospective payments rather than visit-dependent billing
- Flexibility to provide non-visit-based services such as care coordination, chronic disease management, and population health activities
- Quality bonuses tied to health outcomes rather than process compliance
- Reduced administrative burden in some models compared to the documentation-intensive MIPS reporting requirements
Principles Before Rules
Klomp articulated a governing philosophy that he said distinguishes the current administration’s approach to payment policy: establishing clear principles first and allowing specific regulations to flow from those principles, rather than crafting rules in isolation and attempting to retrofit a principled justification afterward.
“You’ll notice a recurring pattern in our approach, not only in this fee schedule but in everything we do going forward,” he said. “We begin by asking: what are our core principles? We believe primary care deserves stronger financial support. We want to accelerate clinician participation in alternative payment models. We want to incentivize genuine preventive care. Those principles guide our rulemaking — not the other way around.”
This emphasis on principled governance, while partly rhetorical, serves a practical signaling function for stakeholders trying to anticipate future regulatory direction. If CMS consistently prioritizes primary care investment, APM migration, and prevention across multiple rulemaking cycles, the cumulative policy trajectory becomes more predictable — enabling physicians, health systems, and insurers to make longer-term strategic decisions with greater confidence.
Site-Neutral Payment and Fair Competition
Leveling the Playing Field
Aramanda connected the 2026 MPFS to the broader CMS effort to establish site-neutral payment policies — eliminating the reimbursement differentials that currently pay hospitals significantly more than independent practices for identical services.
“Across the physician fee schedule, the outpatient prospective payment system, and other CMS payment initiatives, our leadership wants to create conditions where physicians and other clinicians compete based on the value they deliver to patients,” Aramanda said. “We want to be as agnostic as possible about where a service is rendered. The goal is to recognize that medical practice has been fundamentally transformed over recent decades and to build payment structures that protect and support physicians practicing in their communities — whether they operate independently or within institutional settings.”
Klomp was careful to frame the site-neutral agenda in inclusive rather than adversarial terms.
“Let me be explicit: this is not a critique of health systems or physicians who practice as employees of larger organizations,” he said. “What we don’t want is for Medicare’s payment structure to place its thumb on the scale in a way that systematically disadvantages community-based practices. The financial incentives embedded in our reimbursement framework should not be the deciding factor that pushes physicians toward employment or away from independent practice. That decision should be driven by clinical preferences, patient needs, and practice philosophy — not billing arbitrage.”
Modernizing Payment Accuracy
The Problem with Survey-Based Data
Klomp raised pointed concerns about the data foundations underlying current Medicare reimbursement rates, arguing that the traditional methodology — which relies heavily on physician time-and-cost surveys — produces unreliable results that distort payment across specialties.
“Historically, the fee schedule’s relative value assignments have been determined largely through survey instruments sent to practicing physicians,” he explained. “But physicians are extraordinarily busy people — they’re running practices, seeing patients, managing staff, dealing with administrative requirements. Response rates to these surveys can be quite low in certain specialties, potentially yielding sample sizes that lack statistical significance. Yet those limited responses may determine reimbursement levels for an entire discipline.”
The implication is that specialties with more organized, better-resourced professional societies — which can mobilize their members to complete surveys and participate in the RUC (Relative Value Update Committee) process — may receive more favorable valuations than specialties where physicians are too stretched to engage with the survey process. Primary care, where physicians tend to carry heavy patient panels and limited administrative support, may be particularly disadvantaged by this dynamic.
Incorporating Real-World Evidence
Klomp pointed to emerging data sources that could supplement or eventually replace survey-based methodologies:
- In-market time studies: Direct observational measurement of how long specific services actually take to deliver across different practice settings
- Cost analyses: Granular examination of the actual resources consumed in providing various services, rather than relying on self-reported estimates
- Administrative claims data: Mining Medicare’s own vast claims database for utilization patterns, practice costs, and resource consumption metrics
“There is no defensible reason, given the data resources available today, for us to continue relying exclusively on survey instruments with potentially inadequate response rates,” Klomp said. “The objective is accuracy — grounding our payment decisions in real-world evidence rather than imperfect self-reporting. It’s a budget-neutral fee schedule, so every dollar that flows to one service or specialty is a dollar that doesn’t flow to another. Getting the underlying cost and time data right is therefore essential to ensuring fair allocation.”
He characterized this methodological modernization as an initial step with broader implications.
“Once we’ve established an accurate empirical foundation for understanding true service costs and time requirements, we can then layer policy priorities on top — directing additional emphasis toward primary care, preventive services, or other areas we’ve identified as strategically important. But the policy overlay should rest on a foundation of analytical truth, not approximation.”
Technology Infrastructure: A $1.5 Billion Daily Operation Running on 1970s Code
The COBOL Problem
In one of the discussion’s most eye-opening revelations, Klomp disclosed the extraordinary technological constraints under which CMS currently operates.
“Medicare processes approximately $1.5 billion in claims every single day for traditional Medicare alone,” he said. “That processing runs on computer systems programmed in COBOL — a programming language developed in the 1950s and implemented in CMS systems during the 1970s. These legacy systems make it extraordinarily difficult to analyze true costs, understand utilization patterns across geographic regions and specialties, or generate the kind of real-time insights that a program of this magnitude demands.”
COBOL (Common Business-Oriented Language) remains operational in numerous government and financial sector legacy systems worldwide, but its continued use as the backbone of a $1.7 trillion healthcare program has drawn increasing criticism from technology experts and government efficiency advocates.
The practical consequences of this technological obsolescence extend beyond mere inconvenience:
- Limited analytical capability: Aging systems constrain CMS’s ability to perform sophisticated data analysis on the enormous volume of claims information flowing through the program daily
- Inflexible payment structures: Implementing nuanced payment reforms — such as site-neutral adjustments or value-based payment modifications — is technically more difficult when the underlying claims processing infrastructure cannot easily accommodate new logic
- Vulnerability to errors and fraud: Older systems may lack the pattern-recognition and anomaly-detection capabilities that modern computing platforms offer, potentially allowing improper payments and fraudulent claims to escape detection
- Workforce challenges: The pool of programmers proficient in COBOL is shrinking as the language’s practitioners age into retirement, creating knowledge concentration risks
The Staffing Revelation
Compounding the technology challenge, Klomp referenced CMS Administrator Dr. Mehmet Oz’s public disclosure that when the current administration took office in January 2025, the entire CMS enterprise — responsible for administering a $1.7 trillion portfolio of programs including Medicare, Medicaid, CHIP, and the ACA marketplace — employed just nine technical engineers.
“That staffing level is obviously inadequate for an operation of this scale and complexity,” Klomp acknowledged. “The administrator has committed to building out the technical workforce necessary to modernize our systems and improve our operational management capabilities.”
While specific hiring targets and technology modernization timelines were not disclosed during the discussion, Klomp’s remarks suggest that infrastructure investment — both human and technological — will be a sustained priority for CMS leadership alongside the more visible policy reforms.
Telehealth: Meeting Beneficiaries Where They Are
The Abuse That Didn’t Happen
The rapid expansion of Medicare telehealth coverage during the COVID-19 pandemic was accompanied by widespread anxiety — among regulators, legislators, and fiscal watchdogs — that remote care delivery would invite rampant overutilization and abuse. Physicians would bill for brief, superficial virtual encounters that added little clinical value. Patients would demand unnecessary appointments simply because the convenience barrier had been removed. Telehealth would become a vehicle for fraud.
Those fears, Klomp said, have proven largely unfounded.
“When we granted expanded telehealth flexibilities during the public health emergency, the prevailing concern was that the privilege would be exploited — that we’d see massive inappropriate utilization,” he recalled. “That has not materialized. The evidence does not support the narrative of widespread telehealth abuse.”
The data broadly corroborates this assessment. While telehealth utilization surged dramatically during the pandemic’s peak and has settled at levels far above pre-2020 baselines, studies have generally found that the increase reflects genuine care delivery — chronic disease management visits, mental health consultations, medication management check-ins, and post-acute follow-ups — rather than fraudulent or clinically unnecessary services.
A Principled Approach to Virtual Care
Klomp articulated a governing philosophy for Medicare’s telehealth policy that emphasizes beneficiary access and clinical autonomy over bureaucratic control.
“Our guiding principle is straightforward: we want to reach our beneficiaries wherever they are, serve them in whatever modality best meets their needs, and make it as seamless as possible for providers to sustain their patient relationships through whatever care delivery channel is most clinically appropriate,” he said. “We do not believe the federal government should be dictating to physicians how to practice medicine or what clinical decisions to make for their patients. That is simply not our role.”
This framing positions telehealth not as a temporary pandemic accommodation but as a permanent feature of the Medicare care delivery landscape — one that reflects the reality of how both patients and providers have come to expect healthcare to function.
Albanese noted that some dimensions of Medicare’s telehealth policy are subject to congressional authority rather than purely administrative discretion. Certain pandemic-era flexibilities were enacted through legislation with specific expiration dates, requiring congressional action for renewal or permanent extension.
“Where we have administrative latitude, we intend to use it to facilitate new telehealth services and maximize available flexibilities,” Albanese said. “Where congressional action is required, we’ll work to provide legislators with the evidence and analysis they need to make informed decisions about permanent telehealth policy.”
Implications for Primary Care
Telehealth’s continued availability carries particular significance for primary care practices. Remote care delivery can:
- Reduce no-show rates by eliminating transportation barriers for elderly patients with mobility limitations
- Enable more frequent touchpoints for chronic disease management without requiring in-person visits for every interaction
- Expand geographic reach for practices in areas with limited specialist availability, allowing primary care physicians to coordinate virtual specialist consultations
- Support care continuity when patients travel, relocate seasonally, or experience temporary health limitations that make office visits impractical
For independent primary care practices in particular, telehealth can serve as a competitive differentiator — offering the kind of flexible, patient-centered access that larger institutional systems may be slower to implement effectively.
The Primary Care Community Responds
Cautious Optimism from the Front Lines
AAFP CEO R. Shawn Martin expressed appreciation for the administration’s stated priorities, while implicitly signaling the primary care community’s expectation that rhetoric must translate into sustained action.
“I’m confident I speak for the entire primary care community — physicians, nurse practitioners, physician assistants, and all clinicians delivering frontline care across the country — when I say we’re genuinely grateful for the signals this administration has embedded in the 2026 fee schedule to strengthen primary care’s financial foundation,” Martin said.
“We look forward to building on these initial steps and collaborating with CMS leadership to establish a reliable, ongoing primary care relationship — what we call a usual source of care — for every American. That’s the vision we’re working toward, and we see real alignment between that goal and the direction this administration is charting.”
Martin’s measured language — praising “signals” rather than accomplished reforms, and referencing “building on initial steps” rather than celebrating completed work — reflects the primary care community’s hard-earned caution. Decades of rhetorical support for primary care from successive administrations have frequently failed to translate into proportionate financial investment, leaving family physicians, internists, and pediatricians chronically underpaid relative to procedure-oriented specialties.
The test of this administration’s commitment will come not in a single fee schedule but in whether the principles articulated by Klomp, Aramanda, and Albanese — prioritizing primary care, rewarding prevention, ensuring payment accuracy, and maintaining site-neutral competition — are sustained and strengthened across multiple policy cycles.
What to Watch Going Forward
For primary care physicians, healthcare organizations, and Medicare beneficiaries tracking these developments, several key questions will shape whether the 2026 MPFS represents the beginning of a genuine transformation or another cycle of promising rhetoric followed by incremental disappointment:
1. Will the split conversion factor create meaningful APM migration? The compounding differential between APM and MIPS payment tracks should theoretically accelerate the transition toward value-based care. Whether the practical magnitude of the difference is sufficient to overcome the inertia, risk aversion, and administrative burden that have slowed APM adoption to date remains to be demonstrated.
2. Can payment accuracy reforms survive political pressure? Shifting away from survey-based RVU determination toward evidence-based cost and time measurement will inevitably create winners and losers among medical specialties. Specialties that have been advantaged by the current methodology can be expected to resist changes vigorously through their professional societies and congressional allies.
3. Will technology modernization actually happen? Replacing decades-old COBOL-based claims processing infrastructure is a massive undertaking requiring sustained budgetary commitment, technical talent acquisition, and organizational change management. Government IT modernization projects have a troubled history of delays, cost overruns, and incomplete implementation.
4. How will upstream prevention investments be structured? The concept of Medicare investing in beneficiary health years before program eligibility raises novel legal, actuarial, and practical questions. Translating this vision into operational programs will require creative policy design and potentially new legislative authority.
5. Will site-neutral payment expand beyond initial categories? The 2026 OPPS rule’s application of site-neutral pricing to drug administration services is a starting point. Whether CMS extends the principle to imaging, laboratory, evaluation and management, and surgical services in subsequent years will determine whether site neutrality becomes a transformative policy or remains a limited experiment.
6. Can telehealth flexibilities become permanent? Congressional action will ultimately determine whether Medicare’s expanded telehealth coverage survives beyond its current temporary authorizations. The evidence base supporting telehealth’s value continues to grow, but legislative dynamics are unpredictable.
