The Centers for Medicare & Medicaid Services (CMS) announced the finalization of CMS-1833-F, FY 2026 Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital Prospective Payment System (LTCH PPS).
Fast facts:
- CMS is omitting the low wage index hospital policy going forward and “will no longer apply a low wage index budget neutrality factor to the standardized amounts.” There will be a transition period in FY 2026 for affected hospitals.
- IPPS operating payment rates for general acute care hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) program and are meaningful electronic health record (EHR) users under the Medicare Promoting Interoperability Program will rise by 2.6%.
- Additionally, “based on the 2023-based IPPS market basket, CMS is also establishing a national labor‑related share of 66%.”
- CMS forecasts hospital payments to go up by $5 billion. The rates for inpatient cases that require “new medical technologies” is expected to go up by $192 million.
- LTCH rates will be revised by 2.7%.
- Updates are being made to the following programs: Hospital Inpatient Quality Reporting (IQR), Medicare Promoting Interoperability, PPS-Exempt Cancer Hospital Quality Reporting (PCHQR), Hospital Readmissions Reduction, Hospital-Acquired Condition (HAC) Reduction, Hospital Value-Based Purchasing (VBP), Long-Term Care Hospital Quality Reporting Program (LTCH QRP).
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