CMS Releases FY 2027 Inpatient Proposed Rule
Hospitals get a 2.4% pay bump and a mandatory nationwide joint-replacement payment model.
On April 10, 2026, the Centers for Medicare and Medicaid Services (CMS) released its FY 2027 Hospital Inpatient Prospective Payment System (IPPS) Proposed Rule. CMS estimates the rule would increase IPPS hospital payments by $1.4 billion. Comments on the rule are due June 9.
Key Takeaways
Payment Update: CMS proposed a 2.4% increase in inpatient payments for FY 2027. By comparison, hospitals received a 2.6% increase in 2026. This update reflects a projected 3.2% increase in the FY 2027 hospital market basket, adjusted downward by a 0.8 percentage point productivity adjustment. To earn the full rate update, hospitals must successfully participate in the Hospital Inpatient Quality Reporting (IQR) program and be meaningful users of electronic health records.
Nationwide, Mandatory Payment Model: CMS is proposing a return to the Comprehensive Joint Replacement Model (CJR), an episode-based payment model tested from April 2016 through December 2024. In this iteration, it will be called CJR-X and, according to the press release, will start on October 1, 2027, making it the first nationwide mandatory episode-based payment model in fee-for-service Medicare. The American Hospital Association released a statement opposing the model’s mandatory nature and urged CMS to consider a phased or voluntary approach.
New Technology Payments: CMS estimates $464 million in payments for inpatient services using new medical technologies.
Medicare Dependent Hospitals: The proposed rule also included an estimated $400 million in FY 2027 for Medicare-Dependent Hospitals and low-volume hospitals, provided Congress once again extends the temporary payment changes to the facilities. The payments are slated to expire on Dec. 31, 2026.
Quality Reporting: CMS is proposing making a number of changes to measures for its quality programs, including removing the COVID–19 Vaccination Coverage Among Healthcare Personnel measure beginning with the FY 2028 program year.
