CMS Proposes FY 2027 Hospital Payment Updates

CMS released the federal fiscal year (FY) 2027 Hospital Inpatient Prospective Payment System (IPPS) proposed rule April 10, which includes a 2.4% update above the FY 2026 base. This 2.4% payment update reflects a hospital market basket increase of 3.2%, and a productivity cut of 0.8%. Overall, CMS estimates the changes would raise hospital payments by about $1.9 billion in FY 2027.

The proposed rule updates how CMS sets payment rates, including use of recent claims and cost report data and revised cost-to-charge ratios. The agency also proposes to repeal the alternative pathway for new technology add on payments in federal FY 2028. The agency says all new technologies should meet the same standards and show clear clinical improvement.

Other proposals include changes to payments for hospitals serving low-income patients, updates to labor-related payment shares, and expanded accountability models for certain surgeries. CMS also proposes new anti-discrimination rules for medical education programs and plans to expand a joint replacement payment model nationwide in 2027.

ACR^® generated a detailed summary of the proposed rule. CMS will accept public comments through June 9.

If you have questions or would like more information, contact Kimberly Greck, ACR Senior Economic Policy Analyst.