CMS Proposes FY 2026 Hospital IPPS Increase – AHA Asks Agency to Reconsider

The Centers for Medicare and Medicaid Services issued a proposed rule for the Medicare inpatient prospective payment system (IPPS) for fiscal year (FY) 2026. The rule includes a proposed pay bump of 2.4% for hospitals.

CMS said that the rate reflects a 3.2% projected hospital market basket increase with a 0.8% productivity adjustment due to anticipated improvements in efficiency, Healthcare Finance News reports. The agency stated that the proposed changes in operating and capital inpatient payment rates would increase hospital payments by $4 billion, including a projected increase in Medicare uncompensated care payments.

CMS included a previously published request for information seeking input on streamlining regulations and reducing administrative burdens for providers. The American Hospital Association (AHA) replied via Ashley Thompson, senior vice president for public policy analysis and development:

We are disappointed to see that the agency proposed an inadequate inpatient hospital payment update of 2.4%, including of particular concern an extremely high proposed productivity cut of 0.8%. … We urge CMS to reconsider its policy in the final rule to enable all hospitals to provide high-quality, around-the-clock, essential care for their patients and communities.