The Medicare Payment Advisory Commission’s (MedPAC) has issued its March 2026 Report to the Congress: Medicare Payment Policy which provides a comprehensive, data-driven assessment of how well current Medicare payment systems are performing and where targeted changes are needed. Prepared annually for lawmakers, this report fulfills MedPAC’s statutory mandate to evaluate payment adequacy, beneficiary access, quality of care, and the sustainability of Medicare spending across all major provider sectors.
Modest Payment Update Recommended
In the March 2026 issue, the Commission recommends that 2027 physician payment rates be increased by 0.5 percentage points above current law and that the 2026 temporary 2.5 percent statutory increase be allowed to expire at the end of the year. The Commission is recommending the 0.5 rate increase be permanent and on the basis that current payments to clinicians “appear to be adequate to ensure access to care,” but that clinicians are projected to face moderate rates of input cost growth that could be difficult to absorb.
E&M Growth Surpasses All Other Services
From 2023 to 2024, the number of services overall per fee-for-services (FFS) beneficiary grew by 7.1 percent. The greatest contributor to that growth was evaluation and management (E&M), which increased by 10.9 percent, driven largely by the use of add-on code G2211. Major procedures increased by 3.1 percent.
From 2023 to 2024, across all services, allowed charges per beneficiary rose by 4.1 percent. Spending growth for E&M services was 5.1 percent, while spending for major procedures fell (-0.3 percent).
The drop in spending for major procedures could be exempted by decreased payment rates or may be associated with a shift of services to the hospital outpatient setting.
Volume of ASC Services per FFS Beneficiary Grows
MedPAC reports the number of services per FFS beneficiary increased by 3.5 percent in 2024, resulting in an aggregate increase in ASC services provided of 0.8 percent.
The growth in volume in 2024 was partly driven by large percentage increases in the volume of orthopedic services. Smaller growth in volume was observed for some colonoscopy procedures, while some endoscopy procedures saw volume declines.
Extracapsular cataract removal with intraocular lens was the most frequently provided ASC service in 2024, constituting 18 percent of total volume. Colonoscopy with lesion removal, snare technique ranked second with 8 percent of volume, followed by upper GI endoscopy, with biopsy: single or multiple (7.3 percent) and colonoscopy and biopsy (6.4 percent).
Payments per FFS beneficiary rose at an average annual rate of 9.4 percent from 2019 through 2023 and by 15.9 percent in 2024. The increase in 2024 reflects a 3.2 percent increase in the ASC conversion factor, a 0.8 percent increase in per capita volume, an 8.4 percent increase in the average relative weight of ASC services provided, and a 0.4 percent effect from an increase in spending from 2023 to 2024 on separately paid drugs provided to FFS Medicare beneficiaries treated in ASCs.
ASC revenue for services provided to FFS Medicare beneficiaries is concentrated in a relatively small number of procedures. In 2024, 12 procedures accounted for 50 percent of the FFS Medicare revenue from surgical procedures. The highest revenue services included orthopedic and cataract procedures.