MedPAC Meets to Recommend Physician and Hospital Payment Updates

The Medicare Payment Advisory Commission (MedPAC) discussed its recommendations to Congress for the 2026 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.

Commissioners supported draft recommendations that consider whether payments to physicians and other health professionals are adequate and how they should be updated for 2027. MedPAC’s draft payment recommendations are for Congress to increase payment rates for physicians and other health professional services by 0.5 percentage points more than current law. They also pondered draft recommendations for Medicare inpatient and outpatient services, and showed general support for Congress to update the 2026 Medicare base payment rate in 2027 for general acute care hospitals by the amount specified in current law, and implement the Medicare-Safety Net Index (MSNI) described in MedPAC's March 2023 report, with $1 billion added to the MSNI pool.

MedPAC also was briefed on site-neutral payments. Commissioners have long supported implementing site-neutral payments to align rates for certain services across ambulatory settings when safe and appropriate. This approach aims to improve efficiency by basing payments on care delivery rather than location, reducing incentives for provider consolidation.

If you have questions or would like more information, contact Kimberly Greck, ACR® Senior Economic Policy Analyst.