Article
The rate math
CMS released the proposed rule today. The update combines a 3.2% market basket increase with a 0.8-point productivity cut, for a net 2.4% for hospitals that report quality data and are meaningful EHR users. New technology add-on payments would rise about $464 million.
Disproportionate share and uncompensated care payments would fall by $564 million, AHA News reported, even though the estimated uninsured rate rises from 8.7% to 9.1%. The Medicare-dependent hospital and low-volume adjustments expire Dec. 31 unless Congress acts; CMS estimates an extension would add about $400 million. Comments are due June 9.
A joint replacement bundle for nearly everyone
The largest strategic item is CJR-X, a proposed nationwide expansion of the Comprehensive Care for Joint Replacement model beginning Oct. 1, 2027. If finalized, it would be mandatory for acute care hospitals except those in the TEAM model and those in Maryland. CMS also proposes refinements to TEAM and seeks input on including ambulatory surgery center episodes and letting some physician-owned hospitals opt in.
The AHA welcomed payment innovation but warned that mandatory participation is hard for hospitals without the scale or capital to manage episode risk, and urged a phased or voluntary approach. It also called the rate update inadequate.
Quality program changes
- A sepsis readmission measure would join the Hospital Readmissions Reduction Program for fiscal 2029.
- Several mortality measures would add Medicare Advantage patients and shorten the performance period from three years to two.
- CMS is seeking comment on emergency care access and timeliness, sepsis mortality and the Birthing Friendly Hospital designation.
What CFOs should model now
- Margin gap. Compare 2.4% with your projected wage and supply cost growth for fiscal 2027.
- DSH exposure. Estimate your share of the uncompensated care reduction.
- Rural cliff. Qualifying hospitals should model fiscal 2027 with and without the MDH and low-volume adjustments.
- Joint replacement readiness. Hospitals outside TEAM should review joint volumes, implant costs and post-acute use by surgeon. Eighteen months is short for building episode management from scratch.
Archive entry for Apr 10, 2026, added Nov. 11, 2026.