CMS finalizes the increase in the payment rate of hospitalized patients for 2026

Diving brief:

• The CMS finalized on Thursday an increase in payment of 2.6% for hospitals for patients hospitalized in 2026, greater than what regulators were originally proposing this year.
• Hospital payments will now increase by around 5 billion dollars in 2026 – 1 billion dollars more than that was initially offered under payment increase of 2.4% in April.
• Medicare also finalized changes in quality reports, in particular by removing COVVI-19 vaccination requirements for health workers and a compulsory payment model from January.

Diving insight:

The increase in hospital wages reflects an increase in the market basket by 3.3%, reduced by a productivity adjustment of 0.7 percentage points, according to a CMS information sheet on the final rule.

The rule also includes higher payments to hospitals disproportionate for unpaid care in Medicare. Disproportionate action hospitals will now receive approximately $ 2 billion in unpaid care payments, greater than the $ 1.5 billion increase.

Hospital groups said they appreciated the pay bump,, But still considered it inadequate. Hospitals have raised concerns about their salary in parallel with the increase in inflation and imminent health care policies finalized in the “great good bill” which will reduce funds in hospitals and increase the uninsured rate.

“The AHA is also happy that the CMS updates and support for hospitals dealing with a number of disproportionate low income patients are improved in this final rule,” said Ashley Thompson, main vice-president of the analysis and development of public policies at the American Hospital Association, in a press release. “However, we are still concerned about the fact that these updates are not adequate enough for the many hospitals who struggle in the difficult operational environment of today, in particular those of rural and bad communities.”

Other finalized changes include the abolition of certain measures included in the quality declaration of the quality of hospitalized patients. Hospitals declare certain quality measures as condition of their payment rate of hospital patients of Medicare, and those who do not report quality data or who do not meet all the requirements of the program can have their annual payments for hospitalized patients reduced by 25%.

Next year, hospitals will not be required to report measures on vaccination codes among health workers, a metric of health equity and certain projections linked to the social determinants of health. The Trump administration has targeted compulsory hairstyle vaccination policies, including those of public schools and the federal agency that examines vaccines.

The CMS also refines a compulsory payment model which begins next year, entitled Transform Episode Accountability Model. The five -year alternative payment model aims to hold hospitals responsible for the quality of care for patients undergoing traditional medication surgeries. As a team, certain care -active care hospitals in certain geographic areas will assume responsibility for the cost and quality of the care of surgery until the registration in Medicare leaves the hospital.

The final rule includes minor modifications to the team, in particular the expansion of certain derogations for qualified nursing establishments and the use of results reported by outpatient patients.

Hospitals have pushed the compulsory payment model, which they say, could hang hospitals with low resources.

“AHA has long supported the generalized adoption of significant, based on values and alternative payment models to provide high quality care at lower costs. We remain worried that the model of responsibility of the transforming episode (Team) does not progress these objectives and does not put to hospitals at particular risks which are not of a sufficiently large size or in a position to support the necessary investments, “said Thompson. “This is why we continue to urge the agency to make the team volunteer.”

The CMS also said that it interrupts a policy of the low salary index for 2026 and all the following years, after a court of appeal concluded that the CMS lacked statutory authority to adopt the policy. The low salary index policy, adopted for the first time in the final rule of the CMS for 2020, proposed temporarily adjusting the reimbursement rates according to a salary index which would compare regional average wages to national averages. Politics, which was to last four years, aimed to alleviate the disparities in growing wages between hospitals, but a DC circuit courtyard rejected politics in July 2024.

In addition to stopping the policy, the rule also finalized an exception of “close” and non -budgetary transition payment for the calculation of the 2026 hospitalization rates for hospitals considerably affected by the judgment.