CMS has finalized the FY 2027 Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) Final Rule, establishing payment rates and policy updates effective October 1, 2026.
- CMS finalized a 2.3% payment update for LTCHs paid under the standard federal rate, slightly below the 2.4% update proposed earlier this year and down from the 2.7% update finalized for FY 2026. The change reflects updated market basket and productivity estimates. CMS estimates payments for standard-rate LTCH cases will increase by approximately 2.2%, or $54 million, in FY 2027.
- The LTCH fixed-loss outlier threshold remains at $78,936, unchanged from FY 2026.
- Updates to the LTCH Quality Reporting Program (QRP) were finalized, including the removal of two COVID-19 vaccination measures beginning with the FY 2028 program year and revisions to certain data submission requirements.
- Compared with the proposed rule released in April, CMS made relatively few substantive policy changes affecting LTCH payment methodology. The most notable revisions from proposal to final rule reflect updated economic assumptions.
- The LTCH Payment System Remains Stable. The FY 2027 LTCH PPS Final Rule continues CMS's gradual refinement of LTCH payment policies and quality reporting requirements.
The Long Term Care Hospital Final Rule: LTCH Final Rule