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IPPS
May 28, 2026
2027 IPPS Proposed Rule: The Rest of the Story

2027 IPPS Proposed Rule: The Rest of the Story

Over the last two Wednesdays, we have brought you important highlights from the Inpatient Proposed Payment System (IPPS) proposed rule for fiscal year (FY) 2027, as recently published by the Centers for Medicare and Medicaid Services (CMS). Previous alerts addressed payment and quality proposals affecting the inpatient hospital setting. Today’s alert will complete our treatment of the proposed rule by providing you a rundown of its remaining provisions.

2027 IPPS Proposed Rule: The Rest of the Story

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Promoting Interoperability Program

The Medicare Promoting Interoperability Program encourages eligible hospitals and critical access hospitals to adopt, implement, upgrade and demonstrate meaningful use of certified electronic health record technology (CEHRT).

In the FY 2027 IPPS proposed rule, CMS is proposing to:

  • Update the definition of CEHRT for the Medicare Promoting Interoperability Program based on updates proposed by the Office of the National Coordinator for Health IT (ONC).
  • Remove ONC Direct Review and ONC-Authorized Certification Body (ONC-ACB) Surveillance attestations.
  • Remove the Support Electronic Referral Loops by Sending Health Information and Support Electronic Referral Loops by Receiving and Reconciling Health Information measures.
  • Modify the Electronic Prior Authorization measure.
  • Modify the reporting requirements for the Public Health and Clinical Data Exchange objective by adding the Unique Device Identifiers for Implantable Medical Devices measure.
  • Adopt two new eCQMs beginning with the FY 2030 payment determination in alignment with the Hospital Inpatient Quality Reporting Program (the Hospital Harm-Postoperative Venous Thromboembolism and the Advance Care Planning eCQMs).
  • Remove three eCQMs beginning with the FY 2030 payment determination in alignment with the Hospital Inpatient Quality Reporting Program (Venous Thromboembolism Prophylaxis – VTE-1, Intensive Care Unit Venous Thromboembolism Prophylaxis – VTE-2 and Discharged on Antithrombotic Therapy – STK-02– eCQMs).

So, there will be several changes that hospital administrators can expect for next year relative to the Promoting Interoperability Program should these proposals become finalized.

Hospital Reduction Programs

The Hospital Readmissions Reduction Program is a value-based purchasing program that reduces payments to hospitals with excess readmissions. In the proposed rule, CMS is planning to adopt the Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate Following Sepsis Hospitalization measure beginning with the 2029 program year.

The Hospital-Acquired Condition Reduction Program creates an incentive for hospitals to improve patient safety and reduce the rate of hospital-acquired conditions. Hospitals in the worst performing quartile receive a payment reduction of one percent on overall Medicare fee-for-service payments. In the FY 2027 IPPS proposed rule, CMS is not proposing any updates to this program.

Hospital Value-Based Purchasing Program

The Hospital Value-Based Purchasing Program is a budget-neutral program funded by reducing participating hospitals’ base operating DRG payments each fiscal year by two percent and redistributing the entire amount back to the hospitals as value-based incentive payments. In proposed rule, CMS plans modifications to five condition-specific and procedure-specific mortality measures beginning with the FY 2032 program year. Modifications include adding Medicare Advantage patients and shortening the performance period:

  • Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Acute Myocardial Infarction (AMI) Hospitalization measure.
  • Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Heart Failure Hospitalization measure.
  • Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Pneumonia Hospitalization measure.
  • Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Chronic Obstructive Pulmonary Disease (COPD) Hospitalization measure.
  • Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Coronary Artery Bypass Graft (CABG) Surgery Acute Ischemic Stroke measure.

Again, these three most recent alerts have acted to update our readers on are the changes to the programs involving IPPS for FY 2027. We will be bringing you an update on IPPS once CMS publishes its final rule. For more on the proposed rule, please go to the following link: FY 2027 Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital Prospective Payment System (LTCH PPS) Proposed Rule — CMS-1849-P | CMS.