June 11, 2026- Premier submitted comments to the Centers for Medicare & Medicaid Services (CMS) on the fiscal year (FY) 2027 Inpatient Prospective Payment System (IPPS) proposed rule. In its comments, Premier expressed continued concern that Medicare annual updates continue to fail to account for rising labor costs, inflation and tariffs, contributing to a growing gap between hospitals’ payment and cost. To address chronic underpayment that hurts the stability and resilience of the health system on which patients depend, Premier urged CMS:
- Raise the market basket update to reflect the impact of labor expenses, inflation and exogenous factors;
- Adopt new or supplemental data sources to ensure labor costs, inclusive of contract labor, are adequately reflected in the Medicare hospital payment; and
- Implement the transitional policy in place of the low-wage index policy in a non-budget neutral manner.