2027 Updates on Medicare Payment Structures and Rates

The Centers for Medicare & Medicaid Services (CMS) have finalized updates to Medicare payment structures and rates for skilled nursing facilities for the fiscal year 2027. This comes under the Skilled Nursing Facility (SNF) Prospective Payment System, resulting in a 2.4% increase in SNF PPS rates. This adjustment includes a 3.3% SNF market basket update, offset by a 0.9% reduction due to productivity adjustments, leading to an additional $882.74 million in payments for skilled nursing facilities.

Additionally, CMS has released a final rule affecting Medicare payment rates for inpatient psychiatric facilities (IPFs) for FY 2027. This rule features updates to payment rates, the threshold for outlier payments, and adjustments to the wage index. Starting FY 2028, outlier payments will be capped at 20% of total annual IPF PPS payments for facilities with at least 50 stays. Furthermore, the rule incorporates a standardized assessment tool for the IPF Quality Reporting Program and removes two program measures, with overall payment rates for IPFs seeing a 2.3% increase.

Moreover, CMS has reported significant progress in preventing improper Medicaid payments through its Medicaid Fraud War Room initiative. Since April, this effort has blocked over $203 million in potentially erroneous payments, focusing on 50 high-risk Medicaid providers identified through advanced analytics.

In separate news, laboratories under the Clinical Laboratory Fee Schedule (CLFS) must report relevant data by July 31, 2026, covering January 1 to June 30, 2025. Non-compliance could result in monetary penalties. Additionally, the CMS has updated the Master List for Medicare-related DMEPOS, adding 20 items potentially subject to additional payment conditions.

Detailed compliance guidelines on health and safety for nursing homes are now accessible, prioritizing information based on the level of harm. Furthermore, CMS provides a resource for current vaccine pricing, detailing Medicare payment allowances for influenza and COVID-19 vaccines for 2026-2027, urging stakeholders to consult these listings for any updates.

Lastly, industry professionals are encouraged to subscribe to the MLN Connects newsletter. This publication delivers the latest updates and insights from CMS, ensuring stakeholders remain informed on crucial policy and regulatory developments impacting the insurance sector.