Executive Summary
By law, the Medicare Payment Advisory Commission reports to the Congress each March on the Medicare fee-for-service (FFS) payment systems, the Medicare Advantage (MA) program, and the Medicare prescription drug program (Medicare Part D).
In this year’s report, we consider the context of the Medicare program, including the near-term consequences of the end of the coronavirus public health emergency and higher-than-usual inflation, and the longer-term effects of program spending on the federal budget and the program’s financial sustainability. We evaluate the adequacy of Medicare’s FFS payments to providers and make recommendations for how payments should be updated in 2025 for seven FFS payment systems: acute care hospital inpatient and outpatient services, physicians and other health professional services, outpatient dialysis facilities, skilled nursing facilities, home health agencies, inpatient rehabilitation facilities, and hospice providers. We also report on the MA program (including the Commission’s methods for estimating coding intensity and favorable selection in MA), the Part D prescription drug program, and ambulatory surgical centers (ASCs). In addition, the report satisfies two congressional mandates: one to review special needs plans for beneficiaries dually eligible for Medicare and Medicaid and another on a new provider designation, rural emergency hospitals.