MedPAC Talks Payment Updates, Site Neutral Cuts at December Meeting

The Medicare Payment Advisory Commission (MedPAC) held its second meeting of the 2025-2026 meeting cycle from Dec. 4-5. Commissioners heard presentations about and discussed major aspects of their upcoming March 2026 report to Congress.

The conversation focused on payment adequacy and updating payments for physicians, hospital inpatient and outpatient care, skilled nursing facilities, home health care services, hospice, and dialysis. The commission recommends updating the 2027 Medicare base payment amount by the amount specified in current law. MedPAC also recommends implementing its previously proposed Medicare Safety-Net Index (MSNI), with an additional $1 billion added to the MSNI pool. America's Essential Hospitals has urged MedPAC to consider alternatives to their flawed MSNI methodology.

MedPAC commissioners also discussed the current state of outpatient cuts to align payments with the Physician Fee Schedule. Commissioners noted that future rulemaking or legislation could expand so-called "site-neutral" policies to clinic visits in on-campus hospital outpatient departments and services provided in off-campus provider-based departments. The commission was divided on how or if future outpatient cuts should be made.

The commission also heard a presentation on overall Medicare trends, including patient satisfaction, spending growth, and details on how payment model incentives change provider behavior. The presentation indicated future directions from MedPAC could include alternative cost-sharing arrangements, new clinician-service payment rates, and Medicare Advantage program changes.

The commission will vote on the recommendations proposed at this meeting in January 2026.

A full summary of the discussion is available to members of the America's Essential Hospitals Federal Action Network (FAN). To access this summary and other policy resources, join the FAN today.