CMS finalized the FY 2027 inpatient rule (CMS-1849-F), effective October 1, 2026. Here is what changed for hospital payment, MS-DRGs, and the new CJR-X model.
CMS issued the FY 2027 Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital Prospective Payment System (LTCH PPS) final rule, CMS-1849-F. CMS lists a display date of July 31, 2026, and Federal Register publication on August 4, 2026. CMS has since issued correction notices, most recently CMS-1849-CN3 on September 29, 2026.
2. What changed?
3. Effective date
4. Who is affected?
Acute care hospitals paid under the IPPS and long-term care hospitals
Inpatient coders, DRG validators and CDI teams (new MS-DRG weights and CC/MCC changes)
Revenue integrity and finance teams modeling FY 2027 payment
Hospitals and post-acute partners that will participate in CJR-X
5. Why coders should care
MS-DRG assignment drives inpatient payment, and it depends on the principal diagnosis, secondary diagnoses with CC/MCC status, and ICD-10-PCS procedures. When CMS changes a code's CC/MCC designation or moves codes between MS-DRGs, the same documentation can produce a different DRG. The FY 2027 grouper must be paired with the FY 2027 ICD-10-CM/PCS code sets for October 1 discharges.
6. Billing and reimbursement implications
7. Compliance considerations
8. What coders should do now
Key takeaways
Source
CMS — FY 2027 IPPS Final Rule Home Page — Final rule CMS-1849-F, tables, MS-DRG files and correction notices
Medical coding trainer and author with more than 22 years of experience, an AHIMA Approved ICD-10 Trainer, and the managing editor of MedicalCodingUpdates.com.
Disclosure: Dr. Guptha provides medical coding training and medical coding, audit and revenue-cycle services through organizations he founded. Articles on MedicalCodingUpdates.com are educational, are not paid placements, and are written to the site's editorial policy. Enquiries sent through the contact form may be answered by him or his team.
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