A key Medicare panel recommended a 1% increase to hospital Medicare payments for 2024 as well as a 1.25% bump for doctors coupled with add-ons to safety-net primary and specialty care providers. 

The Medicare Payment Advisory Commission (MedPAC)—a panel that makes payment and policy recommendations to Congress on Medicare issues—approved several payment recommendations during its virtual meeting.

The panel called on Congress to update acute hospital Medicare payment rates by the amount determined under current law and a 1% boost.

MedPAC also wants to start a process to transition the redistribution of payments to disproportionate share hospitals and uncompensated care through a Medicare safety-net index.

It also called for adding $2 billion distributed to facilities via a Medicare safety-net index, which appropriates money to safety-net hospitals. The index would scale fee-for-service Medicare payments in proportion to each hospital’s score on the index and distribute funding via a percentage of add-on payments.

MedPAC sought to add $2 billion to the safety index pool for 2024.

For physicians, the panel recommended updating doctors’ reimbursement under the 2024 Physician Fee Schedule at 50% of the Medicare economic index (MEI), which is the impact of inflation on physician operating costs. This would lead to a 1.25% boost to payments for 2024.

The panel also called for add-on payments of 15% for primary care and 5% to specialty care going toward safety-net providers.

The American Hospital Association (AHA) had hoped MedPAC would go higher than the 1% boost due to several factors still affecting facilities.

“The current inflationary economy and ongoing workforce challenges have put unprecedented pressure on America’s hospitals and health systems,” the AHA wrote in a Jan. 3 letter to MedPAC leadership.

Accounting for such pressures in the hospital payment updates is “essential to ensure that Medicare payments for hospital services more accurately reflect the cost of providing care,” the letter added.

AHA wanted the commission to instead recommend a pay bump of 2.8% for inpatient and outpatient hospitals as well as a 2.7% bump for long-term care facilities.

The association also called for a higher update to physician reimbursements that accounts for the rise of inflation and a 2% pay cut for the 2023 fiscal year that will go up to 3.25% next year.

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