AHA Statement on FY 2026 Final IPPS & LTCH Payment Rule

Ashley Thompson
Senior Vice President, Public Policy Analysis and Development
American Hospital Association

July 31, 2025

The AHA appreciates CMS’ recognition of the importance of an appropriate balance of burden and value in quality measurement programs, especially the sunsetting of the COVID-19 vaccination coverage among healthcare personnel measure. 

The AHA is also pleased that CMS’ payment updates and support for hospitals that treat a disproportionately high number of low-income patients are improved in this final rule. However, we are still concerned that these updates are not adequate enough for the many hospitals that are struggling in today’s challenging operating environment, especially those in rural and underserved communities.

The AHA has long supported widespread adoption of meaningful, value-based and alternative payment models to deliver high-quality care at lower costs. We remain worried that the Transforming Episode Accountability Model (TEAM) will not advance these objectives and puts at particular risk hospitals that are not of a large enough size or in a position to support the investments needed. This is why we continue to urge the agency to make TEAM voluntary.

Finally, while we are relieved CMS finalized an outlier threshold for long-term care hospitals (LTCHs) that is only slightly higher than last year and much less than proposed, we remain concerned about the overall payment increase for LTCHs. Given the changes in the rule, LTCHs will have an increasingly difficult time caring for some of the sickest Medicare patients and may be unable to continue relieving pressure on their acute-care hospital partners.
 

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