MedPAC Assesses Rural Payments and Medicare Advantage Program

The Medicare Payment Advisory Commission (MedPAC) met virtually March 7–8 to further its understanding of rural payment policies and the Medicare Advantage program. MedPAC is a non-partisan, independent legislative branch commission created to advise Congress about Medicare-related issues.

MedPAC is developing a rural hospital and clinician payment policy workplan for 2024–2025 to examine the effects of the different special fee-for-service Medicare payments established to preserve access to care for beneficiaries living in rural areas. The discrepancy in Medicare margins between rural, urban and critical access hospitals narrowed because about 95% of rural hospitals receive special payments, but the all-payer operating margins at rural hospitals are still disparate. MedPAC staff also presented information on the presence of Medicare Advantage (MA) in rural areas, and commissioners urged a closer look at cost sharing as well as how travel times for rural MA beneficiaries can affect their care.

MedPAC strongly supports the inclusion of private plans in the Medicare program. Both rural and urban beneficiaries are increasingly choosing MA plans over traditional Medicare, with 31.6 million beneficiaries currently enrolled and more than $455 billion in spending during 2023. The commission discussed assessing encounter data sources for measuring MA utilization, because there is an incomplete understanding of service use in MA. MedPAC reiterated its past recommendations to combat the issue and expressed concern about lack of outpatient physician data.

MedPAC staff presented commissioners with background information on MA quality, including a preliminary analysis of evaluating MA using ambulatory care-sensitive hospitalizations. They also provided a comparison of MA and FFS quality, outlining the methodological issues with comparisons between the two programs.

For questions, contact Kimberly Greck, American College of Radiology® Senior Economic Policy Analyst.