What is the PCORI fee?


Two significant drivers in healthcare cost escalation have always been the lack of consumer knowledge about medical procedure cost and the lack of patient engagement in healthcare decisions. Thanks to healthcare consumerism, this is starting to change. Healthcare consumerism is a movement to improve the quality of healthcare services while making delivery more efficient and cost-effective. It aims to accomplish this goal by putting purchasing power and decision-making in the hands of consumers. Agencies providing resources to help patients get more involved in their healthcare decisions support the movement. The Patient-Centered Outcomes Research Institute (PCORI) is one of those organizations.

What Is PCORI?

PCORI is a nonprofit research group that funds studies to help healthcare consumers make better-informed healthcare choices. Its primary goal is to ensure that healthcare consumers have the information they need to make the decisions that reflect their desired health outcomes. PCORI works to achieve this goal by:

  • Funding research guided by patients, caregivers, and the broader healthcare community
  • Producing and promoting evidence-based information based on the research PCORI supports
  • Working to improve healthcare delivery and outcomes
  • Helping people make informed healthcare decisions

PCORI believes engaged patients, caregivers, clinicians, and other healthcare stakeholders are vital for producing the most valuable research results. They also consider the researchers they fund, patients, and other healthcare stakeholders as equitable partners rather than research subjects.

Priorities and Programs

PCORI’s research priorities, outlined in the organization’s National Priorities for Research, focus on five key areas:

  • Assessment of prevention, diagnosis, and treatment options
  • Improving healthcare systems
  • Communicating and disseminating research results
  • Addressing disparities in prevention, diagnosis, and treatment effectiveness
  • Accelerating methodological research in patient-centered outcomes

The organization’s programs to address these priorities include:

  • Clinical Effectiveness and Decision Science (CEDS)

CEDS aims to fill gaps in clinical knowledge by producing valid evidence to compare the effectiveness of different treatment options.

  • Healthcare Delivery and Disparities Research (HDDR)

HDDR addresses two of PCORI’s five national research priorities for improving healthcare systems and addressing disparities. The program compares patient-centered approaches to improve healthcare effectiveness and efficiency in providing equal access to care.

  • Evaluation and Analysis (E&A)

E&A’s goal is to ensure continuous improvement in the quality, efficiency, and effectiveness of PCORI’s work through:

  • Assessing the work’s impact
  • Understanding what PCORI funds
  • Informing PCORI process improvement
  • Building eviidence supporting the science of engagement
  • Engagement

Engagement brings together all the various healthcare stakeholders to help set research priorities and evaluate applications. Its primary goal is to ensure PCORI funds and conducts research relevant to its priorities.

  • Research Infrastructure

Research Infrastructure spearheads the creation of a national network, PCORnet, to foster clinical effectiveness research studies and develop faster, more cost-effective research methods to improve healthcare and healthcare delivery.

Funding and Research

  • PCORI Funding Fees

As a nonprofit organization, PCORI depends on outside funding. The Affordable Care Act (ACA) initially required some Insurance companies and employers to pay a fee to the nonprofit. After the ACA mandate expired in September 2019, Congress voted to reauthorize PCORI funding for ten more years.

The amount of an insurance company’s or employer’s annual PCORI fee is based on the average number of lives covered under the policy or plan and the ending date for the plan year. To calculate the amount due, entities multiply their average number of plan lives by an amount set by Health and Human Services. The IRS announces updated PCORI fees annually. For plans that end on or after October 1,2023, and before October 1, 2024, is $3.22.

The payment is due at the end of the seventh month following the end of the plan year, which for most plans (calendar-year plans) is annually on July 31. The fee is filed using Form 720, the Quarterly Federal Excise Tax Return.  PCORI fees have provided $2.8 billion in cumulative funding commitments as of FY2020.

  • Research

One indication of the quality of PCORI’s work is the growing number of funded research studies being summarized in leading medical journals and presented at major scientific meetings.

For example, a recent PCORI-funded study focused on reducing hospital errors through improved communication between staff and the patient’s family. Another PCORI-funded study examined how chronic pain disproportionately affects less educated and low-income patients. 

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