FY 2026 IPPS: Hospital Strategy for Risk Adjustment, Equity, and Reimbursement

The fiscal year (FY) 2026 Inpatient Prospective Payment System (IPPS) proposed rule introduces significant reforms to hospital reimbursement, risk adjustment, and performance measurement.

Key changes include the Centers for Medicare & Medicaid Services (CMS) transition to HCC Version 28, the use of the Community Deprivation Index (CDI) for socioeconomic risk adjustment and expanded inclusion of Medicare Advantage data in quality metrics.

Launching in 2026, the proposed rule mandates episode-based payments with enhanced pricing accuracy. Hospitals must adapt by updating financial models, realigning quality strategies, and fostering cross-departmental collaboration. These changes emphasize equity, accountability, and transparency, all of which is designed to help in the positioning hospitals to lead in a value-driven healthcare environment.

Strategic readiness is critical to thrive under IPPS 2026. Reporting this story, during the next live edition of Monitor Mondays, will be the broadcast’s special guest Penny Jefferson.

The long-running broadcast will also include these instantly recognizable features:

• Monday Rounds: Ronald Hirsch, MD, vice president of R1 RCM, will be making his Monday Rounds.

• Risky Business: Healthcare attorney David Glaser, shareholder in the law offices of Fredrikson & Byron, will join the broadcast with his trademark segment.

• The RAC Report: Healthcare attorney Knicole Emanuel, partner at the law firm of Nelson Mullins, will report the latest news about auditors.

• Legislative Update: Folana Houston, senior government affairs liaison for Zelis, will report on congressional action taking place in Washington, D.C.

• News Update: Dr. Drew Update will have an update to his recent reporting on transgender treatment practices.