MedPAC Recommends 0.5% Physician Fee Schedule Update

The Medicare Payment Advisory Commission (MedPAC) 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. Treatments and non-major procedures increased by 7.6 percent and 3.6 percent, respectively.

Other Findings

• In the Commission’s 2025 survey of Medicare beneficiaries, respondents reported access to clinician services that was generally better than that of privately insured people.
• Among MedPAC survey respondents looking for a new clinician, a higher share of beneficiaries reported a problem finding a new primary care physician than a new specialist.
• A higher share of rural beneficiaries reported receiving “all” or “most” of their primary care from an NP or PA (28 percent) compared with urban beneficiaries (16 percent).