MedPAC report recommends increased pay for physicians, increased oversight of Medicare Advantage

WASHINGTON – The Medicare Payment Advisory Committee (MedPAC) recommends updating payments above current law for physicians and other health care professional services. It also recommends eliminating the update for outpatient dialysis services and hospice services; and reducing payments for skilled nursing facilities, home health agencies and inpatient rehabilitation facilities.

In its March 2026 Report to the Congress: Medicare Payment Policy, MedPAC also recommends updating payments at current law for acute care hospitals, combined with the Medicare Safety-Net Index (MSNI) described in a previous report.

The state of Medicare Advantage

As part of the report, MedPAC also reports on the state of the Medicare Advantage program,

For 2025, MedPAC shared:

• The program included 5,492 plan options offered by 164 organizations.
• It enrolled about 34.9 million beneficiaries (55% of Medicare beneficiaries with both Part A and Part B coverage).
• It paid these plans about $537 billion (not including Part D drug plan payments).

For 2026, MedPAC shared:

• The average Medicare beneficiary had a choice of 39 plans offered by an average of eight organizations.
• Payments are expected to average $16,242 per beneficiary, including rebate payments of $2,660 per beneficiary per year.

Disconnect between Medicare Advantage, traditional Medicare payments

MedPAC also estimates that Medicare spent about 14% more for MA enrollees than it would spend if those beneficiaries were enrolled in FFS Medicare – a difference that translates into a projected $76 billion in 2026.

That difference varies by MA organization and stems largely from two factors: favorable selection of beneficiaries into MA and coding intensity.

“The commission holds the goal of meaningful and transparent competition in MA to create incentives for plans to improve quality and reduce costs for beneficiaries and taxpayers,” MedPAC stated. “Over the past several years, the commission has made several recommendations to improve the program. These recommendations call for the Congress and CMS to make reforms to address imbalances related to coding intensity, replace the quality bonus program, establish more equitable benchmarks, and improve the completeness of encounter data.”

• Here is a link to the entire report.
• Here is a link to an executive summary.