CMS Proposes 2.4% Medicare Payment Increase for Hospitals in FY 2026

Under a proposed fiscal 2026 inpatient payment rule, hospitals are set to receive a $4 billion increase from Medicare, representing a 2.4% boost in payments. This follows a larger recent payment increase to Medicare Advantage plans, which hospitals argue often result in lower reimbursements and more administrative hurdles.

The proposal includes an additional $1.5 billion in payments to hospitals that serve a high proportion of uninsured and low-income patients, aiming to support struggling rural hospitals. However, the Centers for Medicare and Medicaid Services plans to eliminate several quality measures, including those related to health equity, COVID-19 vaccination among healthcare workers, and social determinants of health.

These metrics currently affect hospital payment levels if benchmarks are not met. The American Hospital Association expressed concern that the proposed changes could negatively impact hospitals' ability to serve their communities.​