Medicare Payment Advisory Commission Proposes 2027 Payment Updates with Focus on Safety-Net Hospitals

The Medicare Payment Advisory Commission proposed draft payment updates for 2027, recommending that Congress maintain Medicare payment rates for hospital inpatient and outpatient services at the current law levels. The commission also suggests implementing a safety-net index policy to allocate an additional $1 billion to safety-net hospitals, addressing funding distribution concerns within the system. For physician and health professional services, an increase of 0.5% above current law is recommended, while payment rates for inpatient rehabilitation facilities, home health agencies, and skilled nursing facilities are proposed to be reduced by 7%, 7%, and 4% respectively. Beyond payment adjustments, the commission discussed enhancing Medicare's payment methodologies by examining trends in post-acute care and improving data collection for ground ambulance services. These measures aim to refine payment accuracy and support policy adjustments based on evolving healthcare service utilization and cost patterns. The commission's final recommendations are set to be voted on in January, providing key guidance for Medicare reimbursement policy in 2027.