The Medicare Payment Advisory Commission (MedPAC) met on Jan. 16 and 17 to review a number of status updates and vote on recommendations for payment updates and payment adequacy for physician services and hospital inpatient and outpatient services, in addition to other care settings.
Commissioners unanimously voted to approve a two-part 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 [refer to Washington Highlights, March 22, 2024]. The index is projected to increase by 2.3% in 2026. If the recommendation is adopted by Congress, it would result in a 1.3% increase. The safety-net add-on payment is projected to increase payments by an estimated 1.7%. The combined effect of these two policies would result in an estimated average increase of 3%, or a 5.7% increase for primary care clinicians and a 2.5% increase for all other clinicians.
Commissioners voted to approve the 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%. As part of the hospital payment update, MedPAC also approved a recommendation 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.
Related to Medicare Part D, commissioners discussed the implications of the Inflation Reduction Act of 2022 (P.L. 117-169) and the interplay between standalone Part D plans and Medicare Advantage (MA). While in the MA status update, commissioners discussed enrollment trends, market structure including vertical integration, the quality bonus program, an analysis of coding intensity and favorable selection, and a comparison of MA and fee-for-service spending. MedPAC plans to include chapters in their March 2025 report on the Part D and MA status reports.