This proposed rule from the Centers for Medicare & Medicaid Services (CMS) seeks public comment on payment updates and policy changes to Medicare’s acute care inpatient hospital and long-term care hospital prospective payment system (IPPS/LTCH). For fiscal year 2026, CMS proposes a 2.4 percent increase to base rates for acute care hospitals that successfully participate in the Inpatient Quality Reporting program and are meaningful electronic health record users. Additionally, CMS proposes to discontinue the low wage index hospital policy, which provided an upward adjustment for hospitals in areas with the lowest wages, and a transition policy for hospitals significantly impacted by the discontinuation of this policy. There are several proposed changes to the suite of quality programs – Inpatient Quality Reporting, Value Based Purchasing, Hospital Readmission Reductions, Hospital Acquired Conditions, Medicare Promoting Interoperability, and LTCH Quality Reporting. Finally, CMS proposes several changes to the Transforming Episode Accountability Model (TEAM), the Innovation Center mandatory payment model in which hospitals in select geographic areas coordinate care for people undergoing one of five surgical procedures, including allowing post-acute care to occur in rural swing beds without a prior 3-day hospitalization.
