CMS FY 2027 IPPS Final Rule: Key Hospital Payment Updates
What’s happening
On July 31, 2026, the Centers for Medicare & Medicaid Services (CMS) published a final rule updating payments and revising policies within Medicare’s hospital Inpatient Prospective Payment System for fiscal year (FY) 2027.
Of interest
CMS is finalizing changes to the following policies important to hospitals:
Comprehensive Care for Joint Replacement (CJR) demonstration and Transforming Episode Accountability Model (TEAM)
Wage Index
Uncompensated care payments
Quality measure additions and removals
Medicare-dependent hospital and low volume adjustment programs
Our partners at McDermott+, one of healthcare’s most trusted and respected policy and lobbying consulting firms, wrote key takeaways of the final rule that provide valuable information about the changes. McDermott+ also created a dashboard that shows the actual costs to hospitals for providing care to Medicare fee-for-service inpatients given these final policies.
Why you should care
The provisions included in this final rule will impact hospital payment and quality reporting program requirements. Hospital leaders should be informed about these policy changes and prepare for how these changes will impact your organization beginning October 1, 2026.