What are the key changes in the IRF final rule for 2027?
The FY 2027 IRF PPS Final Rule (CMS-1845-F) increases overall Medicare payments to Inpatient Rehabilitation Facilities by 2.3% ($340 million) starting October 1, 2026.
📊 Payment & Rate Updates
- Net Payment Increase: 2.3% boost, reflecting a 3.2% market basket update minus a 0.9% productivity adjustment.
- Outlier Threshold: Adjusted to $8,857 to maintain outlier payments at 3.0% of total aggregate payments.
- Rural Adjustment: Finalizes the third and final year of the rural adjustment phase-out for reclassified facilities.
- Wage Index Cap: Maintains a permanent 5% cap on annual decreases for provider wage indices.
✅ Operational & Clinical Policies
- 36-Hour Therapy Rule: Requires all ordered therapy treatments or evaluations to begin within 36 hours from midnight on admission day.
- Team Meetings: Mandates the initial Interdisciplinary Team (IDT) meeting by the fourth day of admission, with weekly follow-ups.
- Omitted Proposal: CMS did not finalize the proposed requirement to document current functional status within preadmission screening.
🗒 Quality Reporting (QRP)
- Shorter Timelines: Data submission timeframes drop from 4.5 months to 45 days, taking effect in FY 2029.
What is the significant change CMS is finalizing for FY 2027 to the hospital readmissions reduction measures?
For fiscal year (FY) 2027, the Centers for Medicare & Medicaid Services (CMS) is finalizing the inclusion of Medicare Advantage (MA) beneficiaries into condition-specific readmission measures under the Hospital Readmissions Reduction Program (HRRP), alongside adopting a new measure for readmission following sepsis hospitalization.
Key Details on FY 2027 HRRP Changes
- Medicare Advantage Expansion: CMS is modifying key condition-specific measures to expand the patient population from traditional fee-for-service Medicare to also include Medicare Advantage beneficiaries.
- New Sepsis Measure: CMS is adopting a new quality measure tracking 30-day, all-cause, risk-standardized readmission rates following sepsis hospitalizations.
- Broader Rule Context: These changes are part of the broader FY 2027 Hospital Inpatient Prospective Payment System (IPPS) Final Rule issued by CMS on July 31, 2026.
What are the key changes introduced by the 2026 Medicare Advantage final rule?
The Centers for Medicare & Medicaid Services (CMS) finalized the Contract Year 2026 Medicare Advantage and Part D Final Rule on April 4, 2025, focusing heavily on implementing Inflation Reduction Act (IRA) mandates, strengthening patient appeal rights, and updating plan operations rather than introducing broad new coverage requirements.
Key Regulatory and Policy Changes
- Prior Authorization & Inpatient Protections: Prohibits Medicare Advantage plans from retroactively denying previously approved inpatient admissions unless there is an obvious error or fraud, ensuring approvals are honored through discharge.
- Expanded Appeal Rights: Clarifies "organizational determinations" to include concurrent decisions, strengthening patient and provider appeal rights for ongoing treatment and post-payment reviews.
- Medicare Prescription Payment Plan: Implements operational updates for the prescription payment plan, including automatic annual re-enrollment for participating enrollees unless they opt out, and a 3-calendar-day processing window for plan sponsors to handle voluntary opt-out requests.
- Part D and Drug Pricing: Codifies vaccine cost-sharing eliminations and insulin caps ($35 per month with no deductible), and requires network pharmacies to enroll in the Medicare Drug Price Negotiation Program’s data module.
- Provider Directory Access: Requires Medicare Advantage organizations to submit provider directory data directly to CMS for the Medicare Plan Finder platform and update changes within 30 days.
- Deferred Proposals: CMS chose not to finalize several controversial proposed rules, placing prior authorization data transparency expansions, health equity analysis reporting, and artificial intelligence utilization management guardrails on indefinite hold.
What changes are expected to occur on the inpatient Only List in 2026?
For 2026, the Centers for Medicare & Medicaid Services began a three-year phase-out of the Inpatient-Only (IPO) list, with full elimination planned by 2028/2029.
Key 2026 Changes to the IPO List
- Initial Removals: CMS removed 285 procedures from the IPO list starting January 1, 2026.
- Types of Procedures: The first wave targets predominantly musculoskeletal, orthopedic, and spine procedures, plus a small number of cardiovascular, digestive, and gynecological codes.
- Setting Flexibility: These removed procedures can now be performed and billed in hospital outpatient departments (HOPDs) and Ambulatory Surgical Centers (ASCs) if deemed appropriate.
- Physician Judgment: Setting determinations shift from rigid list requirements to clinical judgment and the Two-Midnight Rule.
What is the final rule in Medicare?
The most recent major policy update is the Contract Year 2027 Medicare Advantage and Part D Final Rule, released by the Centers for Medicare & Medicaid Services (CMS) to adjust plan quality, marketing, and costs.
CMS also released a separate final rule for the GLOBE Model in September 2026 to lower drug prices in Original Medicare Part B.
Key Changes in the 2027 Medicare Advantage & Part D Rule
- Marketing Rollbacks: CMS removed the 48-hour cooling-off period before discussing plans with an agent and eased certain disclaimer requirements on sales calls.
- Star Ratings Updates: The agency streamlined quality measures by removing administrative metrics and focusing more on clinical outcomes.
- Supplemental Benefits: Rules for special debit cards for chronically ill enrollees now require real-time eligibility verification at checkout.
- Part D Changes: The rule codifies 2022 Inflation Reduction Act updates, which eliminate the coverage gap and lower annual out-of-pocket costs.
The GLOBE Drug Pricing Rule
- Focus: Sets up a five-year mandatory payment model starting January 1, 2027.
- Goal: Aims to lower out-of-pocket prescription drug costs for a targeted percentage of beneficiaries in Original Medicare.
2027 CMS Medicare Final Rule: What Agents Need to Know
9 related questions found
What are the proposed changes to Medicare for 2027?
You can review the official breakdown of upcoming policy shifts in the Medicare 2027 Publication, which outlines key updates to drug negotiations, out-of-pocket limits, and operational rules.
Prescription Drug and Part D Changes
- Drug Price Negotiations: Medicare adds 15 new prescription drugs to its price negotiation list starting January 1, 2027, including popular GLP-1 medications like Ozempic, Rybelsus, and Wegovy.
- Out-of-Pocket Cap: The maximum out-of-pocket spending limit for Part D prescription drugs increases to $2,400, up from $2,100 in 2026.
- Standard Deductible: The standard Part D prescription drug deductible increases to $700.
- Continued Savings: Insulin costs remain capped at $35 per month for a covered supply, and recommended adult vaccines stay free under Part D.
Projected Costs and Premiums
- Part B Premium: The standard Medicare Part B monthly premium is projected to rise to $209.50, up from $202.90 in 2026.
- Part B Deductible: The annual Part B deductible is projected to increase to around $292.
- Medicare Advantage Stability: According to the CMS Medicare Advantage Press Release, the weighted average monthly premium for Medicare Advantage plans is expected to drop by 16.5% to $12.00.
Operations and Care Access
- Electronic Prior Authorizations: Medicare Advantage plans must adopt electronic prior authorizations starting January 1, 2027.
- Telehealth Extension: Medical telehealth coverage is officially extended through December 31, 2027.
- Open Enrollment: The annual enrollment period runs from October 15 through December 7, 2026.
Which hospitals are implementing Epic in 2027?
Several major hospitals and health systems are scheduled to complete or launch their Epic electronic health record (EHR) implementations in 2027:
- Nicklaus Children's Health System4.4(8)Non-profit organizationMiami, FL
Set to complete its systemwide Epic implementation by summer 2027 across its three hospital campuses and numerous clinics. - Indiana University Health / IU Health2.2(55)Medical CenterIndianapolis, IN
Plans a systemwide go-live with Epic in mid-2027. - Children's National Hospital3.5(1.4K)Medical clinicWashington, DC
Scheduled to transition its pediatric health system to Epic by mid-2027. - Union Health3.4(8)Medical officeTerre Haute, IN
Slated for a two-hospital Epic go-live in January 2027. - Bergen New Bridge Medical Center2.9(773)HospitalParamus, NJ
Set for an early 2027 go-live following an 18-month implementation across the 1,070-bed facility. - Saint Peter's Healthcare System4.4(2.0K)University hospitalNew Brunswick, NJ
Full integration and platform unification expected by 2027. - MedStar Health
Planning to replace Oracle Health with Epic targeting a fall 2027 go-live.
You can track ongoing industry data and updates via Becker's Hospital Review.
What are the projected disruptions in Medicare Advantage plans for 2026 and 2027?
Seniors face widespread disruptions in Medicare Advantage plans for 2026 and 2027 as major insurers exit unprofitable markets and scale back benefits to restore profit margins.
⚠️ Market Exits & Discontinued Plans
- 2026 Impact: Up to 2.9 million enrollees lost coverage or faced plan exits.
- 2027 Exits: Humana alone expects to drop 600,000 members.
- Carrier Pullbacks: Clear Spring Health and Molina are cutting entire lines or regions.
- Geographic Losses: Plan choices fall in over half of U.S. states.
💡 Reduced Benefits & Higher Costs
- Narrow Networks: Doctor and specialist networks are shrinking significantly.
- Higher Copays: Specialist care and out-of-pocket costs are rising.
- Slashed Perks: Dental, vision, and wellness supplemental benefits are less generous.
- National Totals: Overall plan numbers remain near 5,532 despite regional cuts.
📊 Financial Comparison for 2026 vs. 2027
| Metric / Feature | 2026 Value | 2027 Projected / Final |
|---|---|---|
| National MA Plans | 5,553 | 5,532 |
| Average Monthly Premium | $14.37 | $12.00 |
| Part B Standard Premium | Lower | $209.50 |
| Part D Out-of-Pocket Cap | Varies | $2,400 |
What major changes are expected for Medicare plans in 2026?
Major changes for Medicare plans in 2026 include lower negotiated prices for 10 high-cost prescription drugs, an increase in the Part D out-of-pocket spending cap to $2,100, and higher standard Part B premiums and deductibles.
Prescription Drug & Part D Updates
- Negotiated Drug Prices: New lower prices take effect for the first 10 high-cost drugs negotiated under the Inflation Reduction Act.
- Out-of-Pocket Cap: The annual maximum out-of-pocket spending limit for Medicare Part D prescription drugs rises from $2,000 to $2,100.
- Deductible Maximum: The maximum allowable Part D deductible increases to $615.
- Payment Plan Renewal: Enrollees using the Medicare Prescription Payment Plan will see automatic re-enrollment for the following year.
- Insulin and Vaccines: Recommended adult vaccines remain at no cost, and copays for covered insulin are capped at $35 per month.
Cost Changes for Original Medicare
- Part B Premium: The standard monthly premium for Part B rises to $202.90 (or $206.50 depending on specific adjustments).
- Part B Deductible: The annual deductible increases to $283.
- Part A Deductible: The inpatient hospital deductible increases to $1,736.
Medicare Advantage (Part C) & Supplemental Benefits
- Out-of-Pocket Limits: The maximum out-of-pocket limit for in-network Medicare Advantage services slightly decreases to $9,250.
- Supplemental Benefits (SSBCI): Restrictions tighten on non-medical Special Supplemental Benefits for the Chronically Ill, banning allowances for items like unhealthy foods, tobacco, cannabis, and cosmetic procedures.
- Prior Authorization Pilot: A 6-year pilot program tests prior authorization for specific Original Medicare Part B items and services across six states.
- Directory Error Protections: A special election period is introduced for beneficiaries who selected a Medicare Advantage plan based on inaccurate provider directory information.
What does Trump's new bill do to Medicare?
President Donald Trump's recently announced initiative involving Medicare provides a one-time $90 payment to more than 20 million enrollees to help cover their Medicare Part B premiums, while his broader legislative package, the "One Big Beautiful Bill Act," implements spending cuts to Medicare and safety-net programs.
The $90 Medicare Part B Rebate
- Funding: The White House Fact Sheet states that these $90 direct payments are drawn from the unused $2 billion in the federal Medicare Improvement Fund.
- Eligibility: Most traditional Medicare Part B enrollees qualify, except for those whose premiums are covered by Medicaid or who pay an Income-Related Monthly Adjustment Amount. Beneficiaries in Medicare Advantage plans generally do not qualify.
- Distribution: Payments are sent out via direct deposit or mail in early October.
Impact of the "One Big Beautiful Bill Act" (OBBB)
- Funding Reductions: Signed into law, the legislation includes cuts to overall Medicare spending starting in 2026.
- Potential Effects: Policy analysts and advocacy groups note that these reductions could lead to higher premiums, fewer plan options, or reduced services for beneficiaries over time.
- Medicaid and Long-Term Care: The law also cuts funding to Medicaid, which can affect low-income seniors relying on the program for nursing home or long-term care access.