In addition to the proposed rule for inpatient hospital and long-term care hospitals, the Centers for Medicare & Medicaid Services (CMS) on Friday released four proposed rules for other provider settings. Here is a summary of the proposed payment updates:
Inpatient Psychiatric Facility Prospective Payment System (IPF PPS) and Quality Reporting (IPFQR) Updates Proposed Rule
In a fact sheet about the proposal, CMS said it would update the IPF PPS payment rates by 2.4 percent, based on the proposed 2021-based IPF market basket increase of 3.2 percent less a proposed 0.8 percentage point productivity adjustment. CMS said that if more recent data become available (for example, a more recent estimate of the market basket update or productivity adjustment), CMS would use this data, if appropriate, to determine the FY 2026 market basket update percentage increase and the productivity adjustment in the final rule. Additionally, CMS proposes to update the outlier threshold so that estimated outlier payments remain at 2.0 percent of total payments. Total estimated payments to IPFs would increase by 2.4 percent, or $70 million, in FY 2026, relative to IPF payments in FY 2025.
The agency also proposes updates to the IPF PPS facility-level adjustment factors for teaching status and rural location. Based on its analysis of more recent claims and costs data, along with the public comments received in response to the FY 2025 IPF PPS proposed rule’s request for information on facility-level adjustment factors, CMS proposes to increase the adjustment factors for facility teaching status and rural location. It also plans to recognize increases to IPF teaching caps for resident full-time equivalents.
Fiscal Year 2026 Hospice Wage Index and Payment Rate Update Proposed Rule
Since the inpatient hospital market basket is being proposed to be rebased and revised to a 2023 base year in the FY 2026 Inpatient Prospective Payment System (IPPS) proposed rule, CMS said the hospice rule will align with these proposed IPPS updates. The current inpatient hospital market basket reflects the 2018 base year.
For FY 2026, CMS proposes to update the hospice payment rate by 2.4 percent (an estimated increase of $695 million in payments from FY 2025). The agency said these results from the proposed 3.2 percent inpatient hospital market basket percentage increase reduced by a proposed 0.8 percentage point productivity adjustment, required by law. The proposed FY 2026 rates for hospices that do not submit the required quality data would reflect the proposed FY 2026 hospice payment update percentage of 2.4 percent minus four percentage points as required by law, which would result in a 1.6 percent reduction over the previous year’s payment rate. These proposed payment rates reflect the most accurate, updated data available on the cost of goods, services, and labor.
Hospice payments are subject to a statutory aggregate cap which limits the overall payments made to a hospice annually. The proposed hospice cap amount for FY 2026 is $35,292.51 (FY 2025 cap amount of $34,465.34 increased by the FY 2026 hospice payment update percentage of 2.4 percent).
Fiscal Year 2026 Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) Proposed Rule
For FY 2026, CMS proposes to update the IRF PPS payment rates by 2.6 percent based on the proposed IRF market basket update of 3.4 percent, less a proposed 0.8 percentage point productivity adjustment.
CMS proposes that if more recent data becomes available (for example, a more recent estimate of the market basket update or productivity adjustment), CMS would use this data, if appropriate, to determine the FY 2026 market basket percentage increase and the productivity adjustment in the final rule. Additionally, CMS proposes to update the outlier threshold to maintain outlier payments at 3.0 percent of total payments. CMS estimates the proposed technical rate setting changes would result in a preliminary estimated increase in IRF payments of $295 million for FY 2026.
Fiscal Year 2026 Skilled Nursing Facility Prospective Payment System (SNF PPS) Proposed Rule
For FY 2026, CMS proposes updating SNF PPS rates by 2.8 percent based on the proposed SNF market basket of 3.0 percent, plus a 0.6 percent market basket forecast error adjustment, and a negative 0.8 percent productivity adjustment. These impact figures do not incorporate the SNF Value-Based Purchasing (VBP) reductions for certain SNFs subject to the net reduction in payments under the SNF VBP. Those adjustments are estimated to total $196.5 million in FY 2025.