MLN Connects Newsletter for April 9, 2026

Date
2026-04-09
Title
In This Edition: FY 2027 Proposed Payment Rules | Lab Reporting
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Proposed Payment Rules

News

Compliance

Claims, Pricers & Codes

Events

MLN Matters® Articles

From Our Federal Partners

 

 

Proposed Payment Rules

Skilled Nursing Facility Prospective Payment System Proposed Rule: FY 2027

CMS issued a proposed rule for updates to Medicare payment policies and rates for skilled nursing facilities (SNFs) under the SNF Prospective Payment System (PPS) for FY 2027.

For FY 2027, CMS proposes updating SNF PPS rates by 2.4% based on the proposed SNF market basket of 3.2%, and a negative 0.8% productivity adjustment. Note that these impact figures do not incorporate the SNF Value-Based Purchasing (VBP) reductions for certain SNFs subject to the net reduction in payments under the SNF VBP Program. The SNF VBP adjustments are estimated to total $208.4M in FY 2026. 

The proposed rule also includes:

  • Proposed updates to the SNF Quality Reporting Program (QRP) and SNF VBP
  • SNF QRP Request for Information (RFI)
  • Updating the Patient Driven Payment Model payment system to address Case Mix Upcoding RFI 

More Information:

 

Inpatient Rehabilitation Facility Prospective Payment System Proposed Rule: FY 2027

CMS issued a proposed rule that proposes updates to Medicare payment policies and rates for inpatient rehabilitation facilities (IRFs) under the IRF Prospective Payment System (PPS) and the IRF Quality Reporting Program (QRP) for FY 2027. 

For FY 2027, CMS proposes to update the IRF PPS payment rates by 2.4% based on the proposed IRF market basket percentage increase of 3.2%, less a proposed 0.8 percentage point productivity adjustment. CMS is proposing that if more recent data becomes available, CMS would use this data, if appropriate, to determine the FY 2027 market basket percentage increase and the productivity adjustment in the final rule. This proposed rule would also apply the third and final year of the phase-out of the rural adjustment for IRFs transitioning from rural to urban that were reclassified due to updated Core-Based Statistical Area delineations. Additionally, CMS proposes to update the outlier threshold to maintain outlier payments at 3.0% of total payments. CMS estimates the proposed technical rate setting changes would result in a preliminary estimated increase in IRF payments of $355M for FY 2027.

The proposed rule also includes:

  • Proposed updates to the IRF QRP
  • IRF PPS and QRP Requests for Information
  • Proposed change to DMEPOS Competitive Bidding Program

More Information:

 

Inpatient Psychiatric Facility Prospective Payment System Proposed Rule: FY 2027

CMS issued a proposal to update Medicare payment policies and rates for inpatient psychiatric facilities (IPFs) under the IPF Prospective Payment System (PPS) for FY 2027.

For FY 2027, CMS is proposing to update the IPF PPS payment rates by 2.3%, based on the proposed 2021-based IPF market basket increase of 3.1% less a proposed 0.8 percentage point productivity adjustment. CMS is proposing that if more recent data become available, CMS would use this data, if appropriate, to determine the FY 2027 market basket update percentage increase and the productivity adjustment in the final rule. Additionally, CMS proposes to update the outlier threshold so that estimated outlier payments remain at 2.0% of total IPF PPS payments. Total estimated payments to IPFs would increase by 2.1%, or $50M, in FY 2027, relative to IPF payments in FY 2026.

The proposed rule also includes proposed updates to the IPF Quality Reporting Program.

More Information:

 

Hospice Wage Index and Payment Rate Update & Hospice Quality Reporting Program Requirements: FY 2027

CMS issued a proposed rule (CMS-1851-P) that would update Medicare hospice payments and the aggregate cap amount for FY 2027 in accordance with existing statutory and regulatory requirements.

For FY 2027, CMS proposes to update the hospice payment rate by 2.4% (an estimated increase of $785M in payments from FY 2026). This results from the proposed 3.2% inpatient hospital market basket percentage increase reduced, as required by law, by a proposed 0.8 percentage point productivity adjustment. The proposed FY 2027 rates for hospices that do not submit the required quality data would reflect the proposed FY 2027 hospice payment update percentage of 2.4% minus 4 percentage points as required by law, which would result in a 1.6% reduction over the previous year’s payment rate. These proposed payment rates reflect the most accurate, updated data available on the cost of goods, services, and labor.

Hospice payments are subject to a statutory aggregate cap which limits the overall payments made to a hospice annually. The proposed hospice cap amount for FY 2027 is $36,210.11 (FY 2026 cap amount of $35,361.44 increased by the FY 2027 hospice payment update percentage of 2.4%).

The proposed rule also includes:

  • Service and spending variation index
  • Proposed mandatory hospice election statement addendum
  • Hospice Quality Reporting Program

More Information:

 

 

News

Hospital Price Transparency: Get Guidance on New Requirements

CMS updated the Hospital Price Transparency FAQs (PDF) and posted new FAQs on Encoding Algorithms with Example Scenarios (PDF) to provide additional information on implementation of the CY 2026 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center final rule.

Visit the Resources webpage for more information.

 

Short-Term Acute Care Hospitals: Download Your Quarter 4 FY 2025 PEPPER

CMS released Quarter 4 FY 2025 Program for Evaluating Payment Patterns Electronic Reports (PEPPERs) for short-term acute care hospitals. PEPPER helps hospitals review their billing data to make sure claims are accurate. They can use it to:

  • Spot billing patterns that may need improvement
  • Identify areas that may need audits or closer monitoring
  • Find Diagnosis-Related Groups that may be under-coded or over-coded
  • Track areas where patient stays are getting longer

How to Get Your PEPPER

Authorized officials (AOs), access managers (AMs), and staff end users (SEU) can download their organization’s report from the PEPPER Portal:

Review the User Guide for more information.

 

Clinical Diagnostic Laboratories: Get Ready to Report Starting May 1

Are you an independent laboratory, physician office laboratory, or hospital outreach laboratory that meets the definition of an applicable laboratory under the Clinical Laboratory Fee Schedule (CLFS)? If so, you must report data from May 1 – July 31, 2026, based on an updated data collection period of January 1 – June 30, 2025, including:

  • Applicable HCPCS codes
  • Associated private payor rates 
  • Volume data

How do I report?

  1. Review CLFS Data Collection System resources:
  2. View the applicable HCPCS codes (ZIP) 
  3. Use the Data Reporting Template (ZIP) 

More Information:

 

 

Compliance

Skilled Nursing Facilities: Accurately Report Your Related Party Costs

In a report, the Office of Inspector General found that some skilled nursing facilities (SNFs) didn’t comply with Medicare requirements for reporting related party costs. These SNFs failed to report related parties on their Medicare Cost Reports or reported the costs inaccurately, resulting in overstated costs to the Medicare Program.

Review the SNF Billing Reference educational tool to find out:

  • Why related party costs must be reported accurately
  • How to accurately report these costs and required documentation

 

 

Claims, Pricers & Codes

Integrated Outpatient Code Editor Version 27.1

CMS posted the April 2026 Integrated Outpatient Code Editor files. Learn about claims processing changes effective April 1, 2026.

See the instruction to your Medicare Administrative Contractor (PDF). 

 

 

Events

Clinical Lab Fee Schedule Data Collection Webinar – April 16

Thursday, April 16 from 3–4 pm ET

Register for the webinar.

Clinical laboratory representatives: You may be required to submit data to CMS in the Fee-for-Service Data Collection System Clinical Lab Fee Schedule (CLFS) Module starting May 1. During this webinar, we’ll:

  • Provide an overview of this data collection initiative
  • Highlight how clinical laboratories can determine whether they’re applicable labs
  • Discuss preparation activities and resources
  • Demonstrate the CLFS Module, including user roles and how to register

We encourage you to submit your questions in advance to CLFS_Inquiries@cms.hhs.gov with “CLFS Webinar” in the subject line.

More Information:

  • Visit the CLFS webpage for official guidance on reporting data
  • Read the FAQs

 

Medicare Cost Report E-Filing System Webinar – April 22

Wednesday, April 22 from 1–3 pm ET 

Register for the webinar.

Learn about new and upcoming functionality for Medicare Part A cost reports and hospice cap determinations in the Medicare Cost Report e-filing (MCReF) system, including: 

  • Ready-made Provider Statistical & Reimbursement summary reports on the home page 
  • New dashboard for tracking hospice cap status, review dates, and documentation for cap determinations 
  • Tips and reminders on common questions, like how to e-file Home Office Cost Statements, get feedback on cost report exhibits, and avoid common problems
  • Quick refresher on how to e-file one cost report or many 

The webinar will include a live Q&A session and an opportunity to provide feedback. You may also send questions in advance to OFMDPAOQuestions@cms.hhs.gov with “MCReF Webinar” in the subject line. We’ll answer your questions during the webinar or use them to develop educational materials.

 

 

MLN Matters® Articles

DMEPOS Fee Schedule: April 2026 Quarterly Update

Learn about updates (PDF), effective April 1, 2026:

  • Added and deleted codes
  • Fees for new codes

 

National Coverage Determination 20.19: Ambulatory Blood Pressure Monitoring – Revised

CMS added information (PDF) which updates the Medicare Claims Processing Manual for Ambulatory Blood Pressure Monitoring services.

 

 

From Our Federal Partners

Medetomidine in the U.S. Illegal Fentanyl Supply Increasing Risk for Overdose & Severe Withdrawal Syndrome

The CDC, in conjunction with the White House Office of National Drug Control Policy issued this Health Advisory to notify public health professionals, clinicians, laboratorians, and people at risk for overdose about increasing reports from U.S. jurisdictions detecting medetomidine in the illegal drug supply and a severe withdrawal syndrome due to medetomidine exposure. Medetomidine (also known as 'rhino tranq,' 'mede,' or 'dex') is not approved for human use but is approved for sedation and analgesia in dogs. Its dextro-isomer, dexmedetomidine, is approved for procedural sedation in humans. Medetomidine has been increasingly detected in law enforcement drug seizures, drug product and paraphernalia samples, and in wastewater samples, with the highest concentrations in the Northeast region. Testing of illegal drug samples and clinical specimens has identified racemic mixtures of levomedetomidine and dexmedetomidine isomers without the preservatives commonly found in medical or veterinary formulations, making diversion of pharmaceutical products unlikely. Since pharmaceutical-grade products contain only dexmedetomidine, these findings suggest medetomidine is being synthesized in clandestine laboratories.

See the full Health Advisory for more information, including recommendations for public health professionals, clinicians, laboratories, and people at risk for overdose.

 

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