CMS Finalizes FY2027 Medicare Rules With 2.3% Hospital Pay Boost and Mandatory Joint‑Replacement Model

Modest rate increases come with a nationwide bundled payment test and tougher hospice transparency rules, raising budget and access questions for rural and safety‑net hospitals unless Congress extends expiring add‑ons.

Overview

CMS finalized the FY2027 package on July 31, locking in 2.3% payment updates for most hospitals, IRFs, IPFs and hospices while SNFs receive a 2.4% increase.
The agency set Jan. 1, 2028 as the start date for the Comprehensive Care for Joint Replacement Expanded (CJR‑X) model, a mandatory nationwide bundled payment program for hip, knee and ankle replacements.
Hospice rules add new program‑integrity tools including a Service and Spending Variation Index, a universal hospice election‑statement addendum, a Care Compare icon for nonreporters, and a 1.7% payment cut for poor reporting.
CMS raised projected new‑technology add‑on payments to about $779 million and moved toward faster, modern data reporting by incorporating Medicare Advantage encounters and shortening quality‑data windows to roughly 45 days beginning in FY2029.
Special add‑on payments for Medicare‑dependent and low‑volume rural hospitals are scheduled to expire Dec. 31, 2026, which could remove roughly $300 million in support unless Congress acts and may heighten financial risk for small and safety‑net providers.