Federal Policy
CMS Releases FY 2027 IPPS Final Rule
On July 31, 2026, CMS issued the FY 2027 Inpatient Prospective Payment System (IPPS) final rule. The rule sets Medicare payment rates and policies for inpatient hospital services for the fiscal year beginning October 1, 2026. While the IPPS primarily governs Medicare payments, the rule's rate methodologies and quality measures often influence Medicaid supplemental payment programs, state upper payment limit calculations, and hospital financial stability that affects Medicaid providers. The rule takes effect October 1, 2026.
Why it mattersHospital payment rate changes under Medicare IPPS often serve as benchmarks for Medicaid supplemental payments and affect the financial condition of dual-eligible serving hospitals.