MedPAC Proposes Reforming PFS Payment Updates

The Medicare Payment Advisory Commission (MedPAC) met virtually March 6–7 to work on several draft recommendations, including one on reforming Medicare Physician Fee Schedule (PFS) payment updates for its June 2025 Report to Congress. MedPAC is a non-partisan, independent legislative branch commission created to advise Congress regarding Medicare-related issues.

The Commission has longstanding concerns over whether current law updates to the PFS will continue to be adequate, given current inflation trends. Concerns over the accuracy of relative value units (RVUs) under the PFS were also reiterated. 

During this session, the MedPAC chair presented a potential draft recommendation that would require  Congress to direct the Secretary of the Department of Health and Human Services to regularly update the cost data used to update relative value units (RVUs) under the Medicare PFS, and to ensure that the methodology for updating RVUs reflects the cost differentials when physician services are provided in different settings. Updating cost shares on a more regular basis would help ensure that RVUs reflect the most up-to-date information about practice costs and would reduce the chances that RVUs will experience large changes each time the Medicare Economic Index (MEI) is updated.

Commissioners were generally supportive of this work, and this recommendation is expected to be presented with the Commission’s final recommendation for physician payment updates at the next MedPAC meeting, to be held April 10–11. 

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