The Centers for Medicare and Medicaid Services (CMS) released the federal fiscal year (FY) 2026 Hospital Inpatient Prospective Payment System (IPPS) proposed rule April 11, which includes a 2.4% update above the FY 2025 base. This payment update reflects a hospital market basket increase of 3.2% and a 0.8% productivity cut.
The IPPS proposed rule provides updates for Medicare fee-for-service payment rates and policies for inpatient hospitals and long-term care hospitals for FY 2026. ACR prepared a detailed summary of all relevant policy proposals.
CMS proposes several updates to the quality programs. Under the Hospital Value-based Payment Program, proposed changes include establishing new benchmarks and performance standards for existing quality measures, expanding the measures’ denominators to include Medicare Advantage beneficiaries, and removing the Health Equity Adjustment and bonus points.
Under the Hospital Inpatient Quality Reporting Program, CMS is considering quality measures that focus on overall health, happiness, and satisfaction in life, including emotional well-being, social connections, purpose and fulfillment. The agency proposes modifications to the Hospital 30-day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following Acute Ischemic Stroke Hospitalization measure, and removal of health equity and social determinants of health measures.
The proposed rule also includes the Toward Digital Quality Measurement in the CMS Quality Programs – Request for Information, for which it provides updates and seeks public feedback about the digital quality measurement transition.
ACR will provide comments to CMS regarding these proposals. Comments are due to CMS by June 10.
If you have questions or would like more information, contact Christina Berry, ACR Team Lead, Economic Policy.
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