Higher Payments, Tighter Reporting: Medicare Changes for 2027

Changes are now finalized for 2027 under multiple payment rules for skilled nursing facilities (SNFs), hospices, and inpatient hospitals. Each carries a modest payment update — and each carries policy changes that will demand operational attention. Here's what stands out across all three.

Skilled nursing facilities: A modest update + big data lift

The final SNF rule delivers a 2.4% net update for 2027, built from a 3.3% market basket increase offset by a 0.9% productivity adjustment. In aggregate, that translates to an estimated $882.74 million increase in payments to SNFs for the year.

Policy changes sit in the SNF quality reporting program (QRP), as the Centers for Medicare & Medicaid Services (CMS) finalized the removal of two COVID-19 vaccination measures beginning in FY 2028 — the vaccination coverage measure among healthcare personnel and the percent of patients and residents who are up to date measure.

The rule also compresses data submission timeframes from roughly 4.5 months to about 45 days, starting with the fiscal year 2029 SNF quality reporting program.

Looking further out, CMS finalized a requirement that SNFs submit the minimum data set on all residents admitted or readmitted for covered skilled services regardless of payer, beginning in the 2031 reporting year. The lead time is generous, but the data capture burden is large.

Hospice: Payment up, scrutiny up

The final 2027 hospice rule includes a 2.3% net update (a 3.2% update less the 0.9% productivity adjustment), with payments to hospices estimated to rise by $755 million. The hospice cap amount for 2027 is set at $36,174.75.

Perhaps the headline policy development is that CMS finalized its Service & Spending Variation Index (SSVI). This scoring system monitors nine claims-based metrics and applies a 16-point framework to assess hospice services and produce a provider ranking.

CMS frames the index as useful both to beneficiaries evaluating providers and to the agency's own program integrity work — meaning it doubles as a tool for identifying waste, fraud, and abuse. Hospices should assume their claims patterns will be visible and comparable in a way they haven't been before.

Two other finalized items deserve attention: 

• The Hospice Election Statement Addendum is now mandatory, requiring hospices to provide it to all Medicare beneficiaries at the time of election. 
• The HOPE Tool icon on Medicare Care Compare is now final. The icon flags hospices that fail to submit Hospice Outcomes Patient Evaluation data. The icon will be adjusted annually to reflect submission performance. This means there is now a public-facing consequence for this failure to submit.

Inpatient hospitals: A new nationally mandatory bundle arrives

The final inpatient prospective payment system (IPPS) Medicare rule sets a 2.3% net inpatient update (3.2% less 0.9% productivity), an estimated $2.1 billion increase for hospitals in 2027. Long-term care hospitals receive the same 2.3% net update, worth roughly $54 million.

CJR-X model requirements for inpatient hospitals

The big story, though, is CJR-X — the Comprehensive Care for Joint Replacement Expanded Model. It is national, mandatory, value-based model launching January 1, 2028. CMS provides no model end date.

All acute care hospitals paid under IPPS and outpatient PPS across the 50 states, DC, and U.S. Territories are mandate to participate, with narrow exclusions for Transforming Episode Accountability Model (TEAM) participants and Maryland hospitals.

Episodes trigger from certain hospitalizations or outpatient procedures for lower extremity joint replacements (MS-DRGs 469, 470, 521, 522; HCPCS 27447 and 2713) and run 90 days post-discharge. A five-measure quality set feeds a Composite Quality Score that directly affects reconciliation payments.

Hospitals may enter gainsharing and downside-risk arrangements with a broad set of collaborators — SNFs, home health, inpatient rehab facilities, long-term care hospitals, physician groups, therapy practices, accountable care organizations.

CJR-X waivers cover post-discharge home visits, telehealth, and the three-day inpatient stay requirement for SNF coverage.

In the final rule, CMS also modified the existing TEAM model, adding spinal fusion MS-DRGs 523, 524, and 525 as anchor hospitalizations.

2027 uncompensated care payments

For disproportionate share hospitals, uncompensated care payments for 2027 are estimated at approximately $8.049 billion, up about 2.9%.

Tighter rules for off-campus provider-based hospital locations

CMS also revised its provider-based policies to exclude inpatient locations of off-campus locations from being able to use the 75% referral-based test pathway related to the patient population criteria.

Instead, the inpatient location must meet the provider-based requirements test based on 75% of patients served residing in the same zip code as the patients served by main hospital.

How CLA can help

Shorter reporting windows, public performance measures, claims scrutiny, and mandatory payment models can strain your people, processes, and systems.

CLA can help you assess reimbursement impacts, prepare for bundled-payment risk, and identify gaps in data collection. Our health care, regulatory, risk, and digital professionals can help you prioritize near-term work and build a practical plan for later requirements. Reach out to your CLA advisor to discuss where support may be useful.