MedPAC Releases Report to Congress on Payment Recommendations


Today, the Medicare Payment Advisory Commission (MedPAC) made recommendations intended to balance payment updates to providers and to streamline Medicare by encouraging payment and delivery system reforms.

MedPAC recommended no update or increase in 2014 for five fee-for-service payment systems and a 1 percent update or increase for the hospital inpatient and outpatient payment systems. In three sectors (physician, skilled nursing, and home health), the commission evaluated current payment adequacy indicators but did not take new votes on their recommended payment updates.

The report addressed the need to manage the current fee-for-service (FFS) system even as initial delivery system reforms, like accountable care organizations and bundled payments, are being adopted.

“We recognize that managing updates and relative payment rates alone will not solve the fundamental problem with current Medicare FFS payment systems—that providers are paid more when they deliver more services without regard to the quality or value of those additional services,” the report said.

The report is at