September MedPAC Meeting Highlights Medicare Policy

The September Medicare Payment Advisory Commission (MedPAC) meeting included discussions about improving payment accuracy and the Medicare program’s overall financial situation. MedPAC staff gave presentations as a backdrop for the commission’s work leading up to next year’s Report to Congress. MedPAC is a non-partisan, independent legislative branch commission created to advise Congress about Medicare-related issues.

CMS expects Medicare spending to double over the next decade, increasing from about $1 trillion in 2023 to $2 trillion by 2031, with Part B growing faster than Part A. This increase is partly driven by increasing numbers of beneficiaries aging into the program, as well as growth in the volume and intensity of services provided. 

MedPAC commissioners were joined by the comptroller general of the United States to discuss the Government Accountability Office’s work related to improper Medicare payments and opportunities to improve the program’s sustainability. The magnitude of improper payments in fee-for-service (FFS) Medicare for fiscal year (FY) 2024 was $32 billion, representing 7.7% of Medicare FFS payments, down from a high of 12.7% in FY2012.

MedPAC staff also gave background regarding the association between changes in Medicare Advantage (MA) enrollment and hospital finances. With more than 50% of Medicare beneficiaries being enrolled in an MA plan, MedPAC’s analysis found this led to lower revenue but also lower costs and stable margins. Integrated hospitals were less affected than unintegrated ones, and commissioners shared concerns about prior authorization burdens and market concentration.

Meeting presentation materials are on the MedPAC website.

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