What are the key 2026 CMS IPPS and LTCH payment updates, including the final IPPS operating update percentage?
For 2026, CMS finalized an IPPS operating update of 2.6%, derived from a 3.3% hospital market-basket increase offset by a 0.7% statutory productivity adjustment. CMS also rebased the market-basket to a 2023 base year and established a national labor-related share at 66%. Overall, these updates — together with other policy changes — are projected to increase hospital payments by about $5.0 billion in FY-2026. Long-Term Care Hospitals (LTCHs) receive a separate update of 2.7%, reflecting LTCH-specific market-basket inputs.
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