News: MedPAC issues FY 2026 payment updates to Congress

The Medicare Payment Advisory Commission (MedPAC) released its 2026 recommendations to Congress. Included in MedPAC’s recommendations are a number of alterations to Medicare’s Fee-For-Service payment systems. The following recommendations from the Commission are among the most prominent proposed modifications to existing policy:

• Hospital inpatient and outpatient services (acute care hospitals): 2026 Medicare base payment rates for general acute care hospitals should be increased from the 2025 base rates by 1 percent.
• Physician services: Congress should “replace the current-law updates to Medicare payment rates” for physician services with “a single update” equal to approximately 1.3 percent.
• Skilled nursing facilities: Congress reduce the 2025 skilled nursing facility Medicare base payment rates by 3 percent.
• Home healthcare services: Congress should reduce the 2025 base payment rate for home health agencies by 7 percent.
• Inpatient rehabilitation services: The 2025 base payment rate for inpatient rehabilitation facilities should be reduced by 7 percent.

The MedPAC proposal also contained significant policy changes to hospice care, ambulatory surgical centers, Medicare Part D, inpatient psychiatric facilities, and dialysis services.

In response to an earlier draft of the MedPAC proposal released in December 2024, the AHA issued an open letter addressing some of their harsher criticisms of the proposals.

Editor’s note: To read the MedPAC proposals, click here. To read the AHA’s open letter, click here. To read previous ACDIS coverage on this topic, click here.