CMS Proposes FY 2027 Payment Policies for Acute and Post-Acute Care Settings

May 27, 2026

The Centers for Medicare & Medicaid Services (CMS) has issued several proposed rules updating Medicare payment policies for fiscal year (FY) 2027. These proposals apply to acute care hospitals, long-term care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), and skilled nursing facilities (SNFs). Key proposals include:

• A 2.4% payment update for acute care hospitals, LTCHs, IRFs, and SNFs;
• New and revised quality reporting requirements across several care settings;
• Potential changes to IRF payment policy, including how diagnoses and comorbidities are used to classify patients; and
• A request for information on "case mix creep" in SNFs, including the possibility of future targeted payment adjustments for specific clinical specialties, such as speech-language pathology services.

ASHA is reviewing the proposed rules and will submit comments to CMS. Final rules are expected in early August for implementation on October 1, 2026.

ASHA reviews and comments on these proposals each year to help ensure that Medicare payment and coverage policies support access to medically necessary audiology and speech-language pathology services.

ASHA's comments on federal proposals are available on ASHA's website.

Inpatient Acute Care Hospitals

Payment Update

CMS proposes a 2.4% increase in Inpatient Prospective Payment System (IPPS) payment rates, which will increase payments to acute care hospitals by approximately $1.4 billion in FY 2027 compared to FY 2026.

IPPS Quality Reporting Program (QRP)

CMS proposes to adopt three new measures for the IPPS QRP:

• Excess Days in Acute Care After Hospitalization for Diabetes, beginning with the FY 2029 payment determination;
• Hospital Harm-Postoperative Venous Thromboembolism electronic clinical quality measure (eCQM), beginning with the FY 2030 payment determination; and
• Advance Care Planning eCQM, beginning with the FY 2030 payment determination.

CMS is also soliciting feedback on the adoption of additional measures in future years, including measures related to emergency care access and timeliness and adult community-onset sepsis mortality.

Medicare Promoting Interoperability Program

CMS also proposes several updates to the Medicare Promoting Interoperability Program, including changes related to certified electronic health record technology, electronic prior authorization, public health and clinical data exchange, and electronic clinical quality measures.

These changes are primarily focused on how hospitals use and report health information, including how data is exchanged and documented across health care systems.

Resources

• FY 2027 IPPS Proposed Rule [PDF]
• FY 2027 IPPS Proposed Rule Fact Sheet

Long-Term Care Hospitals

Payment Update

CMS proposes a 2.4% annual payment update for LTCHs in FY 2027.

LTCH QRP

CMS proposes to remove two COVID-19 vaccination measures from the LTCH QRP beginning with the FY 2028 program year:

• COVID-19 Vaccination Coverage among Healthcare Personnel; and
• COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date.

Inpatient Rehabilitation Facilities

Payment Update

CMS proposes to update the IRF payment rates by 2.4% for FY 2027.

Request for Information

CMS is seeking feedback on potential enhancements to the IRF prospective payment system (PPS), including updates to how primary diagnoses and comorbidities are used to classify patients by case mix. These potential updates would build on selected elements of the case mix classification methodology used in the SNF Patient Driven Payment Model.

ASHA will ask CMS for more detail on how this transition would be implemented. ASHA will also urge CMS to provide additional opportunities for stakeholder engagement, including a technical expert panel, to ensure modifications are in the best interest of Medicare beneficiaries and the clinicians and facilities that treat them.

Resources

• FY 2027 IRF PPS Proposed Rule [PDF]
• FY 2027 IRF PPS Proposed Rule Fact Sheet
• IRF Quality Reporting Program
• CMS IRF PPS Resource Center

Skilled Nursing Facilities

Payment Update

CMS proposes a 2.4% update to SNF payment rates for FY 2027.

SNF QRP

CMS proposes several changes to the SNF QRP, including:

• Removing two COVID-19 measures;
• Revising the data submission deadline; and
• Requiring the submission of Minimum Data Set (MDS) data on all SNF residents receiving covered skilled care in a SNF, regardless of payer.

CMS is also seeking feedback on a potential future quality measure related to advanced care planning (ACP). CMS defines ACP as a continuous process of conversation and documentation to align a patient's care and interventions with their beliefs, values, and preferences, if they become unable to make those decisions.

Request for Information on "Case Mix Creep"

One of the most significant issues that could impact ASHA members in SNFs is CMS' request for information on "case mix creep."

In the proposed rule, CMS seeks feedback on whether it should target future payment adjustments to specific clinical specialties, such as speech-language pathology services, based on changes in coding behavior since implementation of the Patient Driven Payment Model (PDPM). CMS previously implemented negative payment adjustments to SNF payments over several years to address budget neutrality requirements associated with the transition to PDPM. CMS took this action because payments to SNFs far exceeded the cost of delivering care.

ASHA has consistently engaged with CMS on this issue and has discouraged both blunt across-the-board and targeted payment adjustments as we believe they do not ensure that SNFs comply with payment and coverage guidelines.

Based on CMS' analysis in the request for information, speech-language pathology services could see future payment reductions as high as 16% if CMS attributes certain coding changes to "case mix creep"-that is, instances where coding appears to be inconsistent with the clinical characteristics of patients.

ASHA will continue to urge CMS to focus any policy response to budget neutrality concerns on identifying and addressing inappropriate coding or billing practices, rather than penalizing SNFs and clinicians who have worked hard to improve the accuracy and completeness of the MDS and claims submission information CMS receives. ASHA will also continue to partner with CMS, as it did in 2022, to prevent targeted payment reductions for speech-language pathology services.

Resources

• FY 2027 SNF PPS Proposed Rule [PDF]
• FY 2027 SNF PPS Proposed Rule Fact Sheet
• SNF QRP

Questions?

Contact ASHA's health care and education policy team at [email protected].