The Centers for Medicare & Medicaid Services (CMS) on Friday released 2026 final rules that update policies and payment rates for hospices, inpatient rehabilitation facilities, and inpatient psychiatric facilities. All three final rules will be published in the Federal Register on August 5 and will take effect October 1. Here is a summary of the changes:
Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Final Rule
CMS said in the final rule that it will update the hospice payment rate by 2.6 percent, an estimated increase of $750 million in payments from fiscal year 2025. The agency determined the increase based on the 3.3 percent inpatient hospital market basket percentage increase reduced by a proposed 0.7 percentage point productivity adjustment.
In a fact sheet, CMS said the fiscal year 2026 rates for hospices that do not submit the required quality data would reflect the FY 2026 hospice payment update percentage of 2.6 percent minus four percentage points as required by law, which would result in a 1.4 percent reduction over the previous year’s payment rate.
The rule also:
· Allows the physician member of the interdisciplinary group to recommend admission to hospice care.
· Restores the signature and date requirements for the face-to-face attestation.
· Eliminates the requirement that the attestation must be a separate and distinct document.
· Clarifies that attestation may be fulfilled not only as either a clearly titled section of or an addendum to the recertification form, but also as part of a signed and dated clinical note within the medical record.
Inpatient Rehabilitation Facilities Prospective Payment System Final Rule
In the 2026 final rule, CMS finalizes a 2.6 percent increase to payment rates, which reflects a 3.3 percent market basket update, offset by a 0.7 percentage point productivity adjustment. In a fact sheet, CMS also explains that it has updated the outlier threshold to maintain outlier payments at 3.0 percent of total payments and made updates to the prospective payment rates, wage index, case-mix group relative weights, and average length of stay values.
CMS estimates these updates will result in an overall increase of $340 million in aggregate inpatient rehabilitation facilities payments for fiscal year 2026.
The final rule also removes two quality measures: the COVID-19 vaccination coverage among health care personnel beginning with fiscal year 2026 and the percent of patients/residents who are up to date on the COVID-19 vaccine measure beginning with fiscal year 2028.
CMS will also remove four social determinants of health (SDoH) standardized patient assessment data elements: Living Situation, two items for food, and one item for utilities with fiscal year 2028, beginning with patients admitted on or after October 1, 2026.
Medicare Inpatient Psychiatric Facility Prospective Payment and Quality Reporting Updates Final Rule
The final rule updates the payment rates for inpatient psychiatric facilities by 2.5 percent, based on the final 2021-based inpatient psychiatric facilities market basket increase of 3.2 percent reduced by a 0.7 percentage point productivity adjustment. CMS also updates the outlier threshold so that outlier payments remain at 2.0% of total payments. The result, payments are expected to increase by 2.4 percent, or $70 million, compared to fiscal year 2025.
In a fact sheet, CMS said that it is also increasing the adjustment factors for facility teaching status and rural location beginning in fiscal year 2026. In addition, CMS will recognize increases to inpatient psychiatric facility teaching caps for resident full-time equivalents.
In addition, CMS has:
· Modified the reporting period of one measure, the 30-day risk-standardized all-cause emergency department visit following an inpatient psychiatric facility discharge measure, from a one-year, calendar year reporting period to a two-year, fiscal year reporting period.
· Removed four measures beginning with the calendar year 2024 reporting period/fiscal year 2026 payment determination: facility commitment to health equity; COVID–19 vaccination coverage among health care personnel; screening for social drivers of health; and screen positive rate for social drivers of health.