The Medicare Payment Advisory Commission recently released “Report to the Congress:  Medicare Payment Policy,” its required March report to Congress.  In addition to addressing a variety of Medicare issues, MedPAC presented its 2026 Medicare rate recommendations to Congress.  Those recommendations are:

  • Hospital inpatient and outpatient services – the rate increase in current law plus one percent. MedPAC also reiterated its past recommendation that Medicare redistribute current Medicare disproportionate share (Medicare DSH) and uncompensated care payments through MedPAC’s own mechanism, the Medicare Safety-Net Index (MSNI) it introduced in 2023, maintaining that doing so, when supplemented with an additional $4 billion in federal funds, “…would better target limited Medicare resources toward those hospitals that are key sources of care for low-income Medicare beneficiaries and are facing particularly significant financial challenges.”
  • Physician fees – MedPAC called for replacing the updates included in current law, which would be approximately a 0.75 percent increase for clinicians participating in advanced alternative payment models (APMs) and 0.25 percent for others – with “…a single update equal to the projected increase in MEI [the Medicare Economic Index] minus one percentage point,” which would amount to an increase of approximately 1.3 percent.
  • Dialysis rates – the rate increase in current law.
  • Skilled nursing facilities – a base rate reduction of three percent.
  • Home health services – a base rate reduction of seven percent.
  • Inpatient rehabilitation facilities – a base rate reduction of seven percent.

In addition, MedPAC recommends eliminating both the 190-day lifetime limit on covered days at inpatient psychiatric facilities and the reduction of the number of covered inpatient psychiatric days available to some beneficiaries during their initial benefit period.

Learn more from MedPAC’s “Report to the Congress:  Medicare Payment Policy” and the news release that accompanies the report.

MedPAC is an independent congressional agency that advises Congress on issues involving Medicare.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.