Medicare tweaks hospital payments: Yawn, another fiscal year shuffle
Published Date: 4/30/2025
Proposed Rule
Summary
Starting in fiscal year 2026, hospitals that treat Medicare patients will see updated payment rates and new rules to keep care quality high. Teaching hospitals will get changes to how they’re paid for training new doctors, and long-term care hospitals will have updated payment policies too. These updates aim to make sure hospitals get fair money while improving patient care and meeting new quality standards.
Analyzed Economic Effects
4 provisions identified: 4 benefits, 0 costs, 0 mixed.
Acute Hospital Payment Rate Update
Starting in fiscal year 2026, Medicare will revise the inpatient prospective payment system (IPPS) rates that pay for acute care hospitals' operating and capital-related costs. If you get care at a hospital that treats Medicare patients, the way hospitals are paid for inpatient stays will change beginning in fiscal year 2026.
Teaching Hospitals' GME Payment Changes
For fiscal year 2026, Medicare proposes changes related to graduate medical education (GME) payments for teaching hospitals. Teaching hospitals that receive Medicare GME funding will see changes to how they are paid for training new doctors.
Long‑Term Care Hospital Payment Policy Update
Beginning in fiscal year 2026, Medicare will update payment policies and the annual payment rates for the prospective payment system (PPS) that pays long-term care hospitals (LTCHs) for inpatient services. If you receive inpatient care at an LTCH that bills Medicare, those payment rules will be updated.
Changes to Quality Program Requirements
The rule proposes updates and changes to requirements for certain Medicare quality programs starting in fiscal year 2026. These changes are intended to support higher quality care for patients treated at Medicare-participating hospitals.
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