HRA Continues to Monitor MedPAC Recommendations on Physician Payment Reform

The Medicare Payment Advisory Commission (MedPAC), which advises Congress on Medicare payment policy issues, reconvened in mid-April to examine a variety of Medicare payment issues, several of which will be featured in the Commission’s June 2025 Report to Congress.

During the meeting, Commissioners unanimously approved two recommendations aimed at reforming Medicare physician payments. The first calls for replacing current-law updates to the Physician Fee Schedule (PFS) with a single annual update tied to a portion of the Medicare Economic Index (MEI). The second recommends that the Secretary improve the accuracy of the PFS relative payment rates by updating cost data regularly and ensuring the methodology used for setting different payment rates reflects the setting in which clinicians practice medicine.

The Commission also explored several other emerging topics which may inform future MedPAC work, including:

• Impact of Medicare Advantage on rural hospitals, including how enrollment trends and payment structures may influence rural access and financial sustainability
• Coverage and payment of medical software technologies in Medicare, with a focus on supporting innovation and integration of digital tools into care delivery.

While MedPAC’s recommendations are nonbinding, they provide a critical roadmap for Congress and CMS as they consider changes to Medicare policy. The full MedPAC meeting materials from April are available online.  This was the last meeting of MedPAC this cycle. The next cycle will begin in the fall, with the first meeting on September 4-5, 2025.