CMS Finalizes 2.3% Medicare Hospital Payment Increase for FY 2027
CMS issued a final rule increasing Medicare inpatient payment rates by a net 2.3% for FY 2027, reflecting a 3.2% market basket increase offset by a 0.9% productivity adjustment. The rule adds $2.9 billion in total hospital payments, including $228 million in DSH and uncompensated care payments and $779 million in new technology payments. The rule expands the Comprehensive Care for Joint Replacement bundled payment model nationwide starting January 1, 2028, making it mandatory for most acute care hospitals with accountability for spending and quality during inpatient stays and 90 days post-discharge. Changes to quality reporting programs include eight new measures for the Inpatient Quality Reporting Program and electronic prior authorization requirements extending to medical benefit drugs beginning in 2028.
While focused on Medicare rates, these payment policies and bundled payment expansions often signal broader trends that influence Medicaid rate-setting methodologies, supplemental payment programs, and state adoption of similar value-based care models.
Finance · Managed Care
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