Medicare Payment Advisory Commission Recommends Tying 2026 Physician Payment Changes to Inflation

Earlier this month, the Medicare Payment Advisory Commission (MedPAC) recommended that Congress tie 2026 physician payment updates to a measure of inflation called the Medicare Economic Index (MEI). Doing so would result in a 1.3% increase and introduce additional safety-net payments for those providing care to low-income Medicare fee-for-service (FFS) beneficiaries. The recommendation is expected to boost average FFS payments by 3%, according to the commissioners.

This important recommendation comes in the wake of the -2.83% provider payment cuts that went into effect on January 1 – despite practice costs rising by 3.5% this year. Years of continued cuts are impeding the ability of physical and occupational therapists to provide care for older Americans including, preventing dangerous falls, regaining strength and mobility after a serious illness or injury, and improving patients’ overall quality of life. As costs continue to rise, it’s critical that physical and occupational therapists receive annual inflationary-based updates to their Medicare reimbursement.

APTQI plans to work with Congress to address the provider payment cuts for 2025 as soon as possible to strengthen the Medicare system, help stabilize reimbursement for physical and occupational therapists, and protect patient access to care.

To read more about MedPAC’s recommendation, CLICK HERE.

To read APTQI’s comments on the 2025 provider payment cuts, CLICK HERE.