2027 Inpatient Prospective Payment System (IPPS) final rule released
August 12, 2026
On July 31, 2026, the Centers for Medicaid & Medicare Services (CMS) issued the 2027 Inpatient Prospective Payment System (IPPS) final rule. The final rule updates Medicare payment policies and rates for inpatient and long-term care hospitals under the Medicare hospital IPPS and Long-Term Hospital Prospective Payment System (LTCH PPS). The final rule increased IPPS payment rates by 2.3%, 0.1 percentage points lower than the proposed rule. The update reflects a projected FY 2027 hospital market basket increase of 3.2%, offset by a 0.9 percentage-point productivity adjustment. Hospitals participating in IPPS must meet requirements under the Hospital Inpatient Quality Reporting (IQR) program and demonstrate meaningful use of electronic health records (EHRs) to receive the full payment update.
Items of interest in the 2027 IPPS final rule include:
- New Technology Add-On Payments (NTAP) for New Services and Technologies
- CYTALUX ® MS-DRG Classifications
- Changes to the PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program
- Hospital Inpatient Quality Reporting Program
- Medicare Promoting Interoperability Program
