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The Centers for Medicare & Medicaid Services today finalized a 3.0% payment update for for fiscal year 2026 relative to FY 2025. This includes a 3.4% market basket update, reduced by a 0.7 percentage point productivity adjustment. In addition, although CMS will increase the outlier threshold from $77,048 to $78,936, it says outlier payments will increase by 0.3%.  

In a statement shared with today, Ashley Thompson, AHA’s senior vice president for public policy analysis and development, said, “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.”  

For the LTCH Quality Reporting Program, CMS will remove four patient assessment data elements related to social drivers of health and modify the COVID-19 vaccine among patients and residents measure.  

The will become effective Oct. 1, 2025. AHA members will receive a Regulatory Advisory with additional information.