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MedPAC Releases March 2017 Report to Congress, Recommends Annual Medicare Payment Adjustments

March 17, 2017—The Medicare Payment Advisory Commission (MedPAC) March 15 released its March 2017 Report to Congress, which includes recommended annual adjustments for Medicare’s various payment systems.

MedPAC continues to make recommendations for fee for service (FFS) payments to ensure that high-quality care is delivered to Medicare beneficiaries in a cost-effective manner. The commission’s payment rate recommendations are based on assessments of payment adequacy that examines beneficiaries’ access to care, the quality of care they receive, providers’ access to capital, and providers’ costs and Medicare’s payments. While the commission does not recommend any payment updates for 2018 for four FFS payment systems (long-term care hospital, hospice, ambulatory surgical center (ASC), and skilled nursing facility (SNF)), it encourages Medicare to require ASCs to submit cost data to improve payment accuracy.

For inpatient and outpatient hospital services, the commission recommends that Congress update the inpatient and outpatient payment rates by the amounts specified in current law (1.85 percent). Although hospitals with excess capacity have an incentive to see more Medicare beneficiaries, payment rates remain about nine percent higher than the costs associated with Medicare patients. The commission also recommends tracking claims at off-campus stand-alone emergency department facilities to allow the Centers for Medicare and Medicaid Services (CMS) to monitor the increase in providers.

Additionally, for the post-acute care payment systems, the commission recommends revising the SNFs and home health agencies (HHAs) prospective payment systems to lower costs and ensure access for patients deemed financially less desirable.

Finally, the commission provides a status report on the Part D program and also includes a recommendation to adjust benchmarks within the Medicare Advantage program.


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806