MedPAC Assesses Payment Adequacy and Physician and Hospital Services

The Medicare Payment Advisory Commission (MedPAC) convened a public meeting Dec. 7–8 to discuss its 2024 recommendations Congress for the 2025 Medicare program year. MedPAC is an independent congressional agency established by the Balanced Budget Act of 1997 to advise Congress on issues that affect the Medicare program. The commission met to review Medicare’s fee-for-service (FFS) payment policies and make payment update recommendations.

For its March 2024 Report to Congress, MedPAC considers whether payments to physicians and other health professionals, and Medicare inpatient and outpatient payments to general acute care hospitals, are adequate and how they should be updated in 2025. Senior Analysts presented key findings and data to support MedPAC's draft recommendation statements. Commissioners then held a 45-minute Q&A session to reflect on key proposals.

Two sessions — including summaries and MedPAC recommendations to Congress — are particularly relevant to radiologists:

• Assessing payment adequacy and updating payments: Physician and other health professional services

Draft Recommendation:

For calendar year 2025, Congress should update the 2024 Medicare base payment rate for physicians and other health professional services by the amount specified in current law plus 50% of the projected increase in the Medicare Economic Index. The Centers for Medicare and Medicaid Services is forecasting a 2.6% increase in MEI for 2025, so if that forecast stays the same, the update would be 1.3%. The chair proposed that the Commission reiterate its March 2023 recommendation for additional payments to support Medicare’s safety-net clinicians. If adopted by Congress, this is projected to result in a 5.7% increase for primary care physicians who are safety-net clinicians and 2.5% for nonprimary care safety-net clinicians. This recommendation implies increased spending relative to current law. It is important to note MedPAC found no adverse effect on beneficiary access to care and providers are willing to treat fee-for-service beneficiaries despite existing payment challenges.

• Assessing payment adequacy and updating payments: Hospital inpatient and outpatient services

Draft Recommendation:

For fiscal year 2025, Congress should update the 2024 Medicare base payment rates for general acute care hospitals by the amount specified in current law plus 1.5%. In addition, Congress should redistribute disproportionate share hospital and uncompensated care payments through the Medicare Safety-Net Index (MSNI) using the mechanism described in the March 2023 report and add $4 billion to the MSNI pool. This recommendation implies increased spending relative to current law. If this proposal were to be adopted, the commission estimated that this would result in a 2.8% increase to current law for safety-net hospitals. MedPAC believes this recommendation will help maintain hospitals’ willingness to treat fee-for-service beneficiaries and improve the financial stability of hospitals serving large shares of low-income Medicare beneficiaries.

Public comments on these draft recommendations can be submitted to meetingcomments@medpac.gov. Official public comment letters submitted within 14 days following the associated public meeting will be posted on MedPAC’s website. Commissioners will vote on final payment recommendations at the January meeting.

The next MedPAC public meeting is Jan. 11–12. For more information, visit www.medpac.gov.

For questions related to the MedPAC meeting and actions taken, contact Christina Berry, American College of Radiology® (ACR®) Team Lead, Economic Policy, or Kimberly Greck, ACR Senior Economic Policy Analyst.