WEEKLY UPDATE: 06/12/25
On Tuesday, June 10, the Connecticut Hospital Association (CHA) submitted comments to the Centers for Medicare & Medicaid Services (CMS) regarding the Fiscal Year (FY) 2026 Inpatient Prospective Payment System Proposed Rule.
The proposed rule would update Medicare fee-for-service payment rates and policies for inpatient hospitals and long-term care hospitals (LTCH) for FY 2026. The law requires CMS to update payment rates for inpatient prospective payment system (IPPS) hospitals annually and to account for changes in the prices of goods and services these hospitals use when treating Medicare patients, as well as for other factors. The index used to do this is known as the hospital “market basket.” The IPPS pays hospitals for services provided to Medicare beneficiaries using a national base payment rate, adjusted for a number of factors that affect hospitals’ costs, including the patient’s condition and the cost of hospital labor in the hospital’s geographic area. CMS updates LTCHs’ payment rates annually according to a separate market basket based on LTCH-specific goods and services.
CMS proposes that the payment rate for hospitals will increase by 2.4% for FY 2026. This reflects a 3.2% projected increase in the hospital market basket for FY 2026, reduced by a 0.8% productivity adjustment. In the comment letter, CHA urged CMS to implement an additional upward adjustment in FY 2026 to account for the inadequate market basket updates that have been implemented over the past few fiscal years and asked CMS to eliminate the productivity cut.
CHA also provided comments on the proposed changes to the hospital wage index for acute care hospitals, low-volume hospital payment adjustment, Medicare-dependent hospital (MDH) program, Transforming Episode Accountability Model (TEAM), and Hospital Inpatient Quality Reporting (IQR) Program.
Click here to read CHA’s comment letter.
Click here for more information on CMS’s FY 2026 IPPS Proposed Rule.
