CMS Releases FY 2027 Hospital Payment Rule With Mandatory CJR-X and EHR Updates

The rule also finalizes the nationwide expansion of the Comprehensive Care for Joint Replacement (CJR) Model, known as CJR-X, beginning January 1, 2028.

The Centers for Medicare & Medicaid Services (CMS) has released the Fiscal Year (FY) 2027 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) final rule, introducing a 2.3% net payment rate increase for IPPS acute care hospitals and LTCHs. The rule also finalizes the nationwide expansion of the Comprehensive Care for Joint Replacement (CJR) Model, known as CJR-X, beginning January 1, 2028.

According to CMS, the payment updates and statutory policy changes are expected to increase overall IPPS hospital payments by approximately $2.1 billion in FY 2027, while an additional $779 million has been allocated for new technology add-on payments (NTAP).

The final rule establishes CJR-X as a mandatory bundled payment model covering inpatient and hospital outpatient lower extremity joint replacement procedures, including hip, knee, and ankle replacements.

CMS has also updated quality reporting programs by modifying claims-based mortality, excess days in acute care, and readmission measures under the Hospital Inpatient Quality Reporting (IQR), Hospital Readmissions Reduction Program (HRRP), and Hospital Value-Based Purchasing (VBP) Program. The changes incorporate Medicare Advantage patient data into these measures and reduce the performance evaluation period from three years to two years.

For the Inpatient Quality Reporting Program, the agency adopted new electronic clinical quality measures (eCQMs), including Postoperative Venous Thromboembolism and Advance Care Planning for FY 2030. The rule also establishes mandatory reporting for the Malnutrition Care Score eCQM.

Under the Medicare Promoting Interoperability Program, Electronic Prior Authorization will become an optional bonus measure during calendar year (CY) 2027 before becoming mandatory in CY 2028. CMS also finalized mandatory reporting of Unique Device Identifiers (UDIs) for implantable medical devices beginning in CY 2027.

The rule further codifies anti-discrimination requirements for approved medical residency, nursing, and allied health training programs as a condition for receiving Medicare Graduate Medical Education (GME) reimbursement.

The FY 2027 IPPS and LTCH PPS final rule introduces payment updates alongside changes to bundled payment models, quality reporting requirements, interoperability measures, and Graduate Medical Education standards that will apply to hospitals and long-term care facilities in the coming years.

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