MedPAC Meets to Assess Updates for Physician and Hospital Services

The Medicare Payment Advisory Commission (MedPAC) discussed its recommendations to Congress for the 2025 Medicare program year during its December public meeting. MedPAC is a non-partisan, independent legislative branch commission created to advise Congress about Medicare-related issues.

In its March report to Congress, MedPAC will include recommendations that consider whether payments to physicians and other health professionals are adequate and how they should be updated for 2026. MedPAC’s draft payment recommendations are:

• For calendar year 2026, Congress should update the 2025 Medicare base payment rate for physicians and other health professional services by the projected increase in the Medicare Economic Index (MEI) minus one percentage point. MEI is projected to increase by 2.3% for 2026, so if that forecast stays the same, the update would be 1.3%.
• For calendar year 2026, Congress should enact the Commission’s March 2023 recommendation to establish safety-net add-on payments under the physician fee schedule for services delivered to low-income Medicare beneficiaries.

During the meeting MedPAC also pondered draft recommendations for Medicare inpatient and outpatient payments to general acute care hospitals, as well as a mandated report on rural emergency hospitals. MedPAC is considering recommending:

• For fiscal year 2026, Congress should update the 2025 Medicare base payment rates for general acute care hospitals by the amount specified in current law plus 1%. 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 leads to increased spending relative to current law, but 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.

Commissioners will vote on final payment recommendations at its January public meeting.

For questions related to the MedPAC meeting, contact Kimberly Greck, American College of Radiology® Senior Economic Policy Analyst.