MedPAC Finds Dialysis Spending Adequate, Physician Payments Too Low

By Charlotte Robinson - Last Updated: April 1, 2024

In its latest biannual report to Congress, the Medicare Payment Advisory Commission (MedPAC) stated that a planned 1.8% uptick in the bundled payment rate for dialysis services for 2025 was adequate.

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The commission estimated that dialysis providers earned 18% marginal profit in 2022, suggesting a financial incentive to continue serving Medicare beneficiaries. It also indicated that there may be more dialysis facility capacity than needed. Between 2021 and 2022, the number of in-center treatment stations was steady while the number of Medicare beneficiaries on dialysis declined. Meanwhile, the share of total treatments provided by freestanding dialysis facilities in the home continued to increase.

However, MedPAC’s advice on physician payments differed significantly. It recommended that payments to physicians should increase to 1.3% above the current law for 2025 and that there should be a permanent update to provide the amount specified in the current law plus 50% of the projected increase in the Medicare Economic Index (MEI).

While Medicare fee-for-service (FFS) spending on clinician services was $1.1 million lower in 2022 than in 2021, physicians’ costs have increased due to a decline in the number of beneficiaries enrolled in FFS Medicare. However, MEI growth is expected to subside.

MedPAC is a nonpartisan, independent legislative branch agency that provides the US Congress with analysis and policy advice on the Medicare program, including payments, care quality, and access to care. It was established by the Balanced Budget Act of 1997.

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