# 2026-15652: CMS Tunes 2027 Rehab Facility Medicare Pay Rates

2026-15652, Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2027 and Updates to the IRF Quality Reporting Program, is a Federal Register rule from Health and Human Services Department, Centers for Medicare & Medicaid Services published 2026-08-03, effective 2026-10-01; deemed significant under Executive Order 12866; PRIA reads it as touching household money (as of 2026-11-04).

- Canonical: https://policyrisk.com/federal-register/2026-15652
- As of: 2026-11-04
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Document number: 2026-15652
- Title: Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2027 and Updates to the IRF Quality Reporting Program
- Type: Rule
- Agencies: Health and Human Services Department; Centers for Medicare & Medicaid Services
- Citation: 91 FR 48982
- Published: 2026-08-03
- Effective: 2026-10-01
- Comments close: not stated
- Significant: yes (OIRA_API)
- Touches household money: yes
- Regulation identifier numbers: 0938-AV76
- Last updated: 2026-11-04

## In one line

CMS Tunes 2027 Rehab Facility Medicare Pay Rates

## Summary

This final rule updates the prospective payment rates for inpatient rehabilitation facilities (IRFs) for Federal fiscal year (FY) 2027. As required by statute, this final rule includes the classification and weighting factors for the IRF prospective payment system's (PPS) case-mix groups and a description of the methodologies and data used in computing the prospective payment rates for FY 2027. It also finalizes the third and final of the 3-year phaseout of the rural adjustment, which began in FY 2025. This final rule includes a solicitation for public comments on alternative data sources for the IRF PPS wage index; requires all therapy treatments and/or therapy evaluations to begin no later than 36 hours from midnight on the day of admission; finalizes requirements for the initial Interdisciplinary Team meeting to occur on or before 4 days from the date the patient is admitted; and summarizes a request for information on potential future IRF PPS payment reform. Additionally, this final rule includes updates to the IRF Quality Reporting Program and changes to the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program.

## Effects PRIA read

- FY2027 IRF Payment Update: benefit, medium. Medicare inpatient rehabilitation facility (IRF) payment rates for Federal Fiscal Year 2027 are updated effective October 1, 2026. CMS calculated a 3.2 percent market-basket increase for FY2027 and applied a productivity adjustment of 0.9 percentage point, resulting in a net FY2027 update of 2.3 pe…
- 36‑Hour Therapy Start Requirement: benefit, low. Beginning for discharges on or after October 1, 2026, all therapy treatments and/or therapy evaluations in IRFs must begin no later than 36 hours from midnight on the day of admission. This requirement is codified in Sec. 412.622(a)(3)(ii).
- Initial Interdisciplinary Team Timing: benefit, low. For IRF admissions on or after October 1, 2026, the initial Interdisciplinary Team (IDT) meeting must occur on or before 4 days from the date the patient is admitted (Sec. 412.622(a)(5)(ii)). This aligns IDT timing with the Plan of Care timeframe.
- CMG Weights and ALOS Update: mixed, low. CMS updated the IRF case-mix group (CMG) relative weights and average length of stay (ALOS) values for FY2027 using FY2025 claims and FY2024 cost report data, effective for discharges on or after October 1, 2026. CMS applied a budget-neutrality factor of 0.9990 and estimates 99.4 percent of IRF cas…
- Final Phaseout of Rural Adjustment: mixed, medium. The rule finalizes the third and final year of a 3-year phaseout of the rural adjustment for IRFs that began in FY2025; this phaseout is applied in the FY2027 wage index update effective October 1, 2026. The phaseout is described as the final year of the 3-year process.

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## Sources
- [2026-15652 on federalregister.gov](https://www.federalregister.gov/documents/2026/08/03/2026-15652/medicare-program-inpatient-rehabilitation-facility-prospective-payment-system-for-federal-fiscal)
- [2026-15652 as published (PDF)](https://www.govinfo.gov/content/pkg/FR-2026-08-03/pdf/2026-15652.pdf)

## Related
- [Previous: 2026-15650, Suitability Action Appeals](https://policyrisk.com/federal-register/2026-15650)
- [Next: 2026-15654, Streamlining Probationary and Trial Period Appeals](https://policyrisk.com/federal-register/2026-15654)
- [All Federal Register documents](https://policyrisk.com/federal-register)

Source: PRIA, https://policyrisk.com/federal-register/2026-15652 (as of 2026-11-04).