The Medicare Payment Advisory Commission (MedPAC) released its March 2024 Report to Congress on Medicare payment policy recommending minor increases to physician reimbursement in 2025. MedPAC is an independent government agency that advises Congress on issues related to the Medicare program. The annual report to Congress includes an analysis of the Medicare fee-for-service (FFS) payment systems, the Medicare Advantage (MA) program, and the Medicare prescription drug program (Medicare Part D). Based on its analyses, MedPAC proposes adjustments to Medicare payments for health care providers. Traditionally, MedPAC does not recommend payment rate increases, but for 2024, and again for 2025, it is recommending increases in physician payment due to higher-than-normal inflation.

For 2025, MedPAC is recommending the following:

• Medicare Physician Fee Schedule (MPFS)
  • Update the base payment rate by the amount specified under current law plus 50% of the projected increase in the Medicare Economic Index (MEI) (for 2025, it is estimated that this would be 1.3%); and
  • Enact safety-net add-on payments under the MPFS for services delivered to low-income Medicare beneficiaries, which were originally discussed in the March 2023 Report
• Hospital Outpatient Prospective Payment System (HOPPS)
  • Update the base payment rate by the amount specified under current law plus 1.5%

Next steps: MedPAC only issues recommendations, therefore Congress may choose whether or not to implement them.