Aug 5, 2026 · 7 min · 7 segments
The Centers for Medicare and Medicaid Services finalizes Medicare hospital inpatient payment rates for fiscal year 2027. Two deaths in Michigan have been linked to the nationwide cyclospora outbreak…
Acute care hospitals will see a slight pay bump for Medicare inpatient services next year.
In the inpatient perspective payment system final rule that was released by the Centers for Medicare and Medicaid Services on Friday, hospitals will see a 2.3% increase in IPPS payment rates in 2027.
The rate reflects a projected hospital market basket increase of 3.2%, reduced by a 0.9 percentage point productivity adjustment, according to a statement from CMS.
The agency said that it expects the final changes in the inpatient payment rate to increase hospital payments by around $2.1 billion for the 2027 fiscal year.
It also estimates that additional payments for inpatient cases that involve new medical technologies will increase by around $779 million during the same period, which it said was primarily driven by approvals for new technology add-on payments.
Long-term care hospitals will see the same pay rate as IPPS hospitals, and CMS said it estimates these facilities will see an additional $54 million in payments.
CMS also announced the expansion of its Comprehensive Care for Joint Replacement Expanded, or CJRX, model, which covers hip, knee, and ankle replacements, and is mandatory for most hospitals under IPPS.
According to the agency, hospitals will be accountable for Medicare expenditures related to joint replacement surgery, hospitalization, and the initial 90 days of recovery following hospital discharge, including follow-up treatments like physical therapy.
CMS said that the episode-based payments will motivate hospitals and clinicians to collaborate in order to help patients recover while reducing avoidable hospitalizations, complications, and costs for the program.
The American Hospital Association said it was both disappointed in the agency for not making what it said were meaningful improvements to the joint replacement program and and that the payment rate next year was inadequate amid hospitals' financial pressures, including a growing number of uninsured patients and a rising need for care.
While the Federation of American Hospitals said in a statement that the increased use of mandatory payment models limits hospitals' and physicians' flexibility, and the growing number of uninsured patients makes what it said were adequate Medicare reimbursements more critical.
Nearly 1.3 million knee replacements and up to 760,000 hip replacements are performed on Americans each year as of 2024 data.
Acute care hospitals will see a slight pay bump for Medicare inpatient services next year.
In the inpatient perspective payment system final rule that was released by the Centers for Medicare and Medicaid Services on Friday, hospitals will see a 2.3% increase in IPPS payment rates in 2027.
The rate reflects a projected hospital market basket increase of 3.2%, reduced by a 0.9 percentage point productivity adjustment, according to a statement from CMS.
The agency said that it expects the final changes in the inpatient payment rate to increase hospital payments by around $2.1 billion for the 2027 fiscal year.
It also estimates that additional payments for inpatient cases that involve new medical technologies will increase by around $779 million during the same period, which it said was primarily driven by approvals for new technology add-on payments.
Long-term care hospitals will see the same pay rate as IPPS hospitals, and CMS said it estimates these facilities will see an additional $54 million in payments.
CMS also announced the expansion of its Comprehensive Care for Joint Replacement Expanded, or CJRX, model, which covers hip, knee, and ankle replacements, and is mandatory for most hospitals under IPPS.
According to the agency, hospitals will be accountable for Medicare expenditures related to joint replacement surgery, hospitalization, and the initial 90 days of recovery following hospital discharge, including follow-up treatments like physical therapy.
CMS said that the episode-based payments will motivate hospitals and clinicians to collaborate in order to help patients recover while reducing avoidable hospitalizations, complications, and costs for the program.
The American Hospital Association said it was both disappointed in the agency for not making what it said were meaningful improvements to the joint replacement program and and that the payment rate next year was inadequate amid hospitals' financial pressures, including a growing number of uninsured patients and a rising need for care.
While the Federation of American Hospitals said in a statement that the increased use of mandatory payment models limits hospitals' and physicians' flexibility, and the growing number of uninsured patients makes what it said were adequate Medicare reimbursements more critical.
Nearly 1.3 million knee replacements and up to 760,000 hip replacements are performed on Americans each year as of 2024 data.
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