CMS releases FY 2027 final rule for long-term care hospitals 

The Centers for Medicare & Medicaid Services today finalized a 2.3% payment update for long-term care hospitals for fiscal year 2027 relative to FY 2026. This includes a 3.2% market basket update, reduced by a 0.9 percentage point productivity adjustment. In addition, CMS finalized its decision to freeze the outlier threshold at $78,936, the same level as FY 2026. For the LTCH Quality Reporting Program, CMS finalized the removal of two measures related to COVID-19 vaccination and a shortened data reporting timeline. 

In a statement shared with media today, Joanna Hiatt Kim, AHA’s vice president of payment policy, said, “[W]e remain concerned about continued inadequacies in the LTCH payment system that have contributed to declining patient volumes and the closure of facilities across the country, threatening access to care for medically complex patients. Although the AHA appreciates that CMS did not further raise the outlier threshold in this final rule, broader reforms are needed to support the LTCH field. We remain committed to working with the Administration and Congress to advance the AHA’s LTCH reform principles and promote a more sustainable payment framework that preserves patient access to LTCH services.” 

The rule will become effective Oct. 1, 2026. AHA members will receive a Regulatory Advisory with additional information.