Medicare Overhauls Hospital Pay and E-Prescriptions for 2026
Published Date: 8/4/2025
Rule
Summary
Starting in FY 2026, Medicare is updating how it pays hospitals for inpatient care, including teaching and long-term care hospitals. These changes affect hospital budgets, quality programs, and health tech rules, with some payment fixes rolling back FY 2025 rates after a court decision. Hospitals and patients can expect clearer rules and smarter tech for better care and smoother billing.
Analyzed Economic Effects
5 provisions identified: 4 benefits, 0 costs, 1 mixed.
FY2026 Hospital IPPS Payment Update
Starting in FY 2026, Medicare updates its inpatient prospective payment system (IPPS) that pays for hospitals' operating and capital costs. This changes how Medicare pays acute care hospitals and is intended to affect hospital budgets and billing rules for Medicare patients.
Long-Term Care Hospital Payment Update
For FY 2026, Medicare updates payment policies and the annual payment rates for long-term care hospitals (LTCHs) under the LTCH prospective payment system (PPS). These changes affect how Medicare pays for inpatient services at LTCHs.
Quality Program Requirement Changes
The rule updates and changes requirements for certain Medicare quality programs that hospitals participate in. These requirement changes are intended to affect hospital quality oversight and the care Medicare patients receive.
FY2025 IPPS Rate Changes Finalized
The rule finalizes provisions of an interim final action that change the FY 2025 IPPS payment rates in response to the court decision in Bridgeport Hosp. v. Becerra. Those finalized changes adjust how Medicare paid hospitals for FY 2025.
ONC Health IT Certification Updates Finalized
The rule finalizes certain updates to the Office of the National Coordinator (ONC) Health Information Technology Certification Program, updating health IT rules tied to Medicare hospital policies. The changes are intended to support clearer rules and improved technology for hospitals and patients.
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Key Dates
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