March 24, 2022

MedPAC Makes Recommendations for 2022 Medicare Payments

The Medicare Payment Advisory Commission (MedPAC)’s March 2022 Report to the Congress was released March 15. In its report the commission addressed the short-term context for Medicare spending with the disproportionately higher impact of the COVID-19 pandemic on beneficiaries and providers. The report also recognized the long-term implications involving Medicare’s Hospital Insurance Trust Fund, which is projected to become insolvent by 2026 or 2027. Medicare’s annual spending is projected to double between 2020 and 2030 due to growth in the volume and intensity of services provided to beneficiaries and a growth in the number of beneficiaries.

The report states that the most likely path forward for Medicare is reducing the quantity of services used by beneficiaries, specifically low-value care. The report also discussed paying the same rate for the same service across all clinical settings (e.g., hospital versus freestanding center) and a need to increase reimbursement for primary care physicians relative to specialists.

For calendar year 2022, MedPAC recommends Congress update 2022 Medicare payment rates for physician and other health professional services by the amount determined by current law. The Consolidated Appropriations Act, 2021, included a provision to scale back a large budget neutrality adjustment to the conversion factor as a result of increased relative value units (RVUs) for evaluation and management (E/M) services. This 3.75% increase expired after 2021, however, the Protecting Medicare and American Farmers from Sequester Cuts Act, passed in December 2021, included a 3% conversion factor increase for 2022 to mitigate most of the anticipated 3.75% cut. Without congressional action in 2022, the 3% increase will expire on Dec. 31, 2022.

While MedPAC concludes that Medicare beneficiaries have sufficient access to healthcare services, the commission recognizes disparities that exist, including life expectancy related to race and ethnicity and different care experiences.

The American College of Radiology® (ACR®) staff have created a detailed summary of relevant sections of the MedPAC report. Questions about the MedPAC report should be directed to Katie Keysor, ACR Senior Director of Economic Policy.