CMS Issues FY 2027 IPPS and LTCH Final Rule
CMS released its Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System final rule for fiscal year 2027 on July 31, 2026. The rule establishes Medicare payment rates and policy changes for inpatient hospital services and long-term care hospitals effective October 1, 2026. While the rule primarily governs Medicare fee-for-service payments, it may affect Medicaid programs that reference Medicare payment methodologies for inpatient hospital services or that operate Medicaid managed care arrangements where hospitals negotiate rates benchmarked to Medicare IPPS.
State Medicaid agencies and managed care organizations that tie hospital payment rates to Medicare methodologies will need to review the final rule's rate updates and policy changes when setting Medicaid reimbursement or negotiating provider contracts for FY 2027.
Long-Term Care · Managed Care · Finance
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