Federal Policy
CMS Finalizes FY 2027 IRF Payment Rule with 2.6% Rate Increase
CMS issued the final rule for inpatient rehabilitation facility payment rates effective October 1, 2026. The rule implements a 2.6% payment rate increase for FY 2027, resulting in an estimated $280 million increase in aggregate IRF payments. The rule updates wage index values, adjusts the case-mix group relative weights, and modifies quality reporting program requirements. While the rule primarily affects Medicare IRF payments, it may have indirect implications for Medicaid beneficiaries who receive post-acute rehabilitation services in dual-eligible or Medicaid-participating IRFs.
Why it mattersPayment rate changes and quality measure updates in Medicare IRF settings can influence provider participation and service delivery models that also serve dual-eligible Medicaid beneficiaries requiring intensive rehabilitation.