The Medicare Payment Advisory Commission (MedPAC) is required by law to annually review Medicare payment policies and make recommendations to the Congress. The 2014 report includes payment policy recommendations for 10 of the health care provider sectors in fee-for-service (FFS) Medicare. MedPAC also reviews the status of Medicare Advantage (MA) plans and makes recommendations regarding the Medicare Advantage program (Part C), as well as reviewing the status of prescription drug plans (Part D).

FFS Sectors addressed:

  • Inpatient and outpatient hospitals
  • Physicians and other health professionals
  • Ambulatory surgical centers (ASCs)
  • Outpatient dialysis
  • Skilled nursing facilities (SNFs)
  • Home health agencies
  • Inpatient rehabilitation facilities
  • Long-term care hospitals
  • Hospice

MA Part C recommendations:

  • The Congress should direct the Secretary to determine payments for employer-group Medicare Advantage plans in a manner more consistent with the determination of payments for comparable non-employer group plans.
  • The Congress should include the Medicare hospice benefit in the Medicare Advantage benefits package beginning 2016
  • MA Part C recommendations:

Medicare Part D prescription drug program status:

  • In 2013, about 68 percent of Medicare beneficiaries (over 35 million beneficiaries) were enrolled in Part D plans. An additional 6 percent received their drug coverage through employer-sponsored plans that receive Medicare’s retiree drug subsidy. Among Part D plan enrollees, 11.2 million individuals (about 32 percent) received the low-income subsidy (LIS).
  • About 64 percent of Part D enrollees are in stand-alone prescription drug plans (PDPs); the rest are in Medicare Advantage–Prescription Drug plans (MA–PDs).
  • The number of plan offerings remained stable between 2013 and 2014, with a modest increase in PDP offerings and slightly fewer MA–PDs. Beneficiaries will continue to have between 28 and 39 PDPs to choose from in their region, depending on where they live, along with many MA–PDs.

For a full summary, or to view the full report, please visit

In addition, on March 6-7, 2014, MedPAC met to discuss select policy initiatives. The March MedPAC meeting was divided into six sessions. For more details, download our summary.