The Centers for Medicare & Medicaid Services (CMS) on July 31 released the fiscal year (FY) 2027 Inpatient Prospective Payment System (IPPS) final rule. All finalized policies are effective Oct. 1, unless otherwise noted.
The CMS finalized an increase of 2.3% for items and services paid under IPPS, reflecting an FY 2027 hospital market basket percentage increase of 3.2%, reduced by a 0.9 percentage point productivity adjustment. Also finalized were total uncompensated care-based payments equal to $7.94 billion (an increase of $230 million from FY 2026) and empirically justified disproportionate share hospital payments equal to $3.94 billion in FY 2027 (a decrease of $200 million from FY 2026).
For graduate medical education (GME) updates, the CMS finalized modifications to the criteria for new residency programs based on at least 90% of residents being new (having no previous training experience in the specialty), with exceptions for certain matched and displaced residents and small programs accredited for 16 or fewer residents. The agency also finalized modifications to the criteria for approved programs. The CMS announced Section 5506 slot redistributions — Rounds 30 and 31 — from the closure of Insight Hospital and Medical Center Trumbull, located in Warren, Ohio, and M Health Fairview St. Joseph’s Hospital located in Saint Paul, Minnesota.
The rule finalized several changes to the inpatient quality reporting and performance programs, including new measure adoptions, measure modifications, and measure removals over varying periods depending on a given program. Finally, the rule finalized changes to the mandatory Transforming Episode Accountability Model, which began earlier this year and establishes the expanded Comprehensive Care for Joint Replacement model that will begin January 2028.