FFY 2026 IPPS Proposed Rule: National Medicare IPPS Estimates
I. FY26 IPPS Proposed Rule Summary
II. ”Unleashing Prosperity through Deregulation of the Medicare Program”
III. National Medicare IPPS Estimates
IV. Provider Rates
CMS estimates hospitals are projected to receive an overall change of $4.0 billion in IPPS payments, as compared to FFY25. Table 1 below details the FFY26 market basket update, as well as the impact of various budget neutrality factors that impact the market basket.
Table 1 - Proposed Market Basket Adjustment
Toyon’s Take
Table 1 shows the actual increase to provider operating (labor and non-labor) rates3. Although the market basket is used in each year’s update, it is impacted by various budget neutrality adjustments. For instance, although CMS increased the market basket from proposed to final in FFY25, rates actually decreased due to budget neutrality changes4. It is likely the 3.19% change in operating rates will decrease in the FFY26 Final Rule. Also, as stated above, Toyon advises providers comment to CMS requesting at least a 1% increase to the proposed FFY 26 market basket, mirroring MedPAC's recommendation.
For more information, please contact Fred Fisher at 888.514.9312 or fred.fisher@toyonassociates.com.
2Budget Neutrality Factors account for
3Providers can see the actual change in operating rates by comparing the amounts published in Tables 1A-1E of the respective year’s proposed and final IPPS rules.
4The budget neutrality factor that changes the most from proposed to final relates to Medicare geographic wage index reclassifications.