1. Rural Relevance
Directly affects acute care rural hospitals, Sole Community Hospitals (SCHs), Medicare-Dependent Small Rural Hospitals (MDHs), and Rural Emergency Hospitals (REHs) across Ohio, Kentucky, West Virginia, Virginia, Pennsylvania, and Illinois. Specifically, it adjusts statewide rural wage indexes (including Ohio's rural wage index and rural floor), recalculates uncompensated care DSH payments, and corrects budget neutrality factors that set Medicare reimbursement rates for rural inpatient stays starting October 1, 2026.
2. Federal Register Overview
ACTION TYPE: Final Rule; correction
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS)
DOCKET / RIN: Docket Nos. CMS-1849-CN3 and CMS-0062-CN; RIN 0938-AV79 and RIN 0938-AV44
PUBLISHED: September 29, 2026
EFFECTIVE: October 1, 2026
COMMENT DEADLINE: Not open for comment
3. What It Does
Corrects technical, typographical, and data-processing errors in the FY 2027 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) PPS final rule published on August 4, 2026. Key technical changes include:
Restores wage and discharge data for an IPPS hospital (CCN 250078) that was inadvertently misclassified as having converted to Rural Emergency Hospital (REH) status.
Corrects the rural classification of an urban hospital in Ohio (CCN 360068) that canceled its rural reclassification request, removing its data from the calculation of the Ohio rural wage index and rural floor.
Recalculates national MS-DRG relative weights, national average hourly wages, budget neutrality factors, outlier fixed-loss cost thresholds (revised to $49,331), standardized amounts, and hospital-specific Factor 3 Medicare Disproportionate Share Hospital (DSH) uncompensated care payment allocations.
Fixes amendatory text errors under 42 CFR 412.87, 413.85, and 495.40, and corrects ICD-10 coding and EHR reporting date references.
4. Why The Agency Says It’s Doing This
CMS states that the corrections are necessary to ensure that the published rates, payment methodologies, and regulations accurately reflect the policies previously proposed and finalized for FY 2027 without making substantive policy changes. CMS invoked "good cause" under 5 U.S.C. 553(b)(B) to waive standard notice-and-comment rulemaking, stating that delaying these technical corrections would be contrary to the public interest by risking incorrect Medicare payments to healthcare providers.
Social Security Act sections 1871, 1886(d), 1886(m) (42 U.S.C. 1395hh, 1395ww); 5 U.S.C. 553(b)(B).
6. Who It Affects
Acute care hospitals operating under IPPS, Long-Term Care Hospitals (LTCHs), Medicare-Dependent Small Rural Hospitals (MDHs), Sole Community Hospitals (SCHs), Rural Emergency Hospitals (REHs), and hospitals eligible for Medicare DSH uncompensated care payments across all states, including OH, KY, WV, VA, PA, and IL.
7. How to Comment
Not applicable.
8. Source
Federal Register Vol. 91, No. 187 PDF (Refers to FR Doc. 2026-19946)
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