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  • Washington Highlights

    MedPAC Discusses Payment Adequacy, Updates for Professional and Hospital Services

    Katherine Gaynor, Hospital Policy and Regulatory Analyst
    Phoebe Ramsey, Director, Physician Payment & Quality
    For Media Inquiries

    The Medicare Payment Advisory Commission (MedPAC) met on Dec. 7 and 8 to discuss payment adequacy and updates for physician and other health professional services and hospital inpatient and outpatient services.  

    Commissioners discussed a draft recommendation to Congress that, for 2025, it should update the 2024 Medicare base payment rate under the Physician Fee Schedule by the 0% increase in current law plus 50% of the projected increase in the Medicare Economic Index. Based on recent Medicare projections, MedPAC staff stated this would result in a 1.3% increase over current law for 2025. Additionally, the chair proposed that the commission reiterate its March 2023 recommendation for additional payments to support safety-net clinicians [refer to Washington Highlights, Mar. 17]. 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.  

    The commissioners later discussed a draft recommendation to Congress related to Medicare hospital payments. The draft recommendation asked that for fiscal year (FY) 2025, Congress update the 2024 Medicare base payment rates for general acute care hospitals by the amount specified in current law plus 1.5%. The chair also proposed a recommendation for Congress to redistribute existing disproportionate share hospital and uncompensated care payments through the Medicare Safety-Net Index (MSNI) using MedPAC’s mechanism described in their March 2023 report. The recommendation also included an additional $4 billion be added to the MSNI pool. 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.  

    Commissioners will vote on final payment recommendations in the January 2024 meeting.