The Medicare Payment Advisory Commission (MedPAC) met Dec. 12-13 to discuss payment updates and payment adequacy for physician services and hospital inpatient and outpatient services, in addition to other care settings.
Commission staff presented the chair’s two-part draft recommendation for calendar year 2026 to update the 2025 Medicare base payment for physicians and other health care professionals by the Medicare Economic Index minus one percentage point and establish safety-net add-on payments for services provided to low-income Medicare beneficiaries. Commissioners expressed support for the draft recommendation, which will be voted on in January. During the discussion, opinions differed as to whether this update would be sustainable in the future beyond 2026 and stressed the importance of the recommended add-on payment for services provided to low-income beneficiaries to ensure adequate access to care. Commissioners foreshadowed upcoming discussions on broader physician payment reform beyond their annual review of payment adequacy to inform payment update recommendations to Congress.
Commission staff also presented the chair’s draft recommendation for fiscal year 2026 to update the 2025 Medicare base payment rates for general acute care hospitals for inpatient and outpatient settings by the amount specified in current law plus 1%. MedPAC also recommended that Congress redistribute existing disproportionate share hospitals and uncompensated care payments through the Medicare Safety-Net Index (MSNI) and add $4 billion to the MSNI pool, as described in MedPAC’s March 2024 report [refer to Washington Highlights, March 22] Throughout the discussion, commissioners continued to explore the idea of separate payment recommendations for the inpatient and outpatient settings, including consideration to revisit outpatient payment in separate discussions around site neutral policies.