The Centers for Medicare & Medicaid Services' (CMS) finalized updates to the FY 2026 Hospital Inpatient Prospective Payment System (IPPS) rule.
The final rule establishes the following policies:
· Increase hospital operating payment rates by 2.6 percent rate based on market basket and productivity adjustments[1]
· Recalibrate MS-DRG weights using updated claims and cost data
· Increase Disproportionate Share Hospital (DSH) uncompensated care payments by 35 percent
· Discontinue the low wage index policy, with transitional relief for impacted hospitals
· Update quality reporting programs with measure removals, Medicare Advantage integration, ICD-10 risk models, and data submission changes,
· Codify changes to the Extraordinary Circumstances Exception (ECE)
· Finalize New Technology Add-on Payments (NTAPs) for 27 continuing and 27 new technologies,
· Increase Long-Term Care Hospital payments by 2.7%
· Remove Social Determinant of Health (SDOH ) elements from LTCH Quality Reporting Program, and
· Update the TEAM model with changes to participation, pricing, quality, care coordination, and low-volume protections