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

The Centers for Medicare & Medicaid Services April 11 proposed increasing the long-term care hospital standard rate payments by 2.4% in fiscal year 2027 relative to FY 2026. This includes a 3.2% market basket update, reduced by a 0.8 percentage point productivity adjustment. In addition, CMS proposes to maintain the outlier threshold at $78,936, the same level as FY 2026. Overall, CMS says LTCH prospective payment system payments will increase by $55 million relative to FY 2026. For the LTCH Quality Reporting Program, CMS would remove two measures related to COVID-19 vaccination among staff and patients. 

In a statement shared with the media, Ashley Thompson, AHA’s senior vice president for public policy analysis and development, said, “The AHA remains concerned about ongoing shortfalls in reimbursement for Long-term Care Hospitals (LTCHs). Under the current payment system, LTCHs have been unable to maintain the same volume of care, and many LTCHs have been forced to close. We appreciate that CMS did not increase the outlier threshold this year. However, additional reforms are needed to stabilize the LTCH sector and ensure critically ill patients continue to have the ability to receive care at LTCHs. We will work with the Administration and Congress to pursue the AHA’s LTCH reform principles to protect access to LTCHs.” 

CMS will accept comments on the proposed rule through June 9, 2026. AHA members will receive a Regulatory Advisory with additional information.