Notice2025-20249
Medicare Program; CY 2026 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 19, 2025
Effective
January 1, 2026
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This notice announces the inpatient hospital deductible and the hospital and extended care services coinsurance amounts for services furnished in calendar year (CY) 2026 under Medicare's Hospital Insurance Program (Medicare Part A). The Medicare statute specifies the formulae used to determine these amounts. For CY 2026, the inpatient hospital deductible will be $1,736. The daily coinsurance amounts for CY 2026 will be as follows: $434 for the 61st through 90th day of hospitalization in a benefit period; $868 for lifetime reserve days; and $217 for the 21st through 100th day of extended care services in a skilled nursing facility in a benefit period.
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 221 (Wednesday, November 19, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 221 (Wednesday, November 19, 2025)]
[Notices]
[Pages 52075-52078]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-20249]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8089-N]
RIN 0938-AV54
Medicare Program; CY 2026 Inpatient Hospital Deductible and
Hospital and Extended Care Services Coinsurance Amounts
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This notice announces the inpatient hospital deductible and
the hospital and extended care services coinsurance amounts for
services furnished in calendar year (CY) 2026 under Medicare's Hospital
Insurance Program (Medicare Part A). The Medicare statute specifies the
formulae used to determine these amounts. For CY 2026, the inpatient
hospital deductible will be $1,736. The daily coinsurance amounts for
CY 2026 will be as follows: $434 for the 61st through 90th day of
hospitalization in a benefit period; $868 for lifetime reserve days;
and $217 for the 21st through 100th day of extended care services in a
skilled nursing facility in a benefit period.
DATES: The deductible and coinsurance amounts announced in this notice
are effective on January 1, 2026.
FOR FURTHER INFORMATION CONTACT: Suzanne Codespote, (410) 786-7737 or
Yaminee Thaker (410) 786-7921.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1813 of the Social Security Act (the Act) provides for an
inpatient hospital deductible to be subtracted from the amount payable
by Medicare for inpatient hospital services furnished to a beneficiary.
It also provides for certain coinsurance amounts to be subtracted from
the amounts payable by Medicare for inpatient hospital and extended
care services. Section 1813(b)(2) of the Act requires the Secretary of
the Department of Health and Human Services (the Secretary) to
determine and publish each year the amount of the inpatient hospital
deductible and the hospital and extended care services coinsurance
amounts applicable for services furnished in the following calendar
year (CY).
II. Computing the Inpatient Hospital Deductible for CY 2026
Section 1813(b) of the Act prescribes the method for computing the
amount of the inpatient hospital deductible. The inpatient hospital
deductible is an amount equal to the inpatient hospital deductible for
the preceding CY, adjusted by the Secretary's best estimate of the
payment-weighted average of the applicable percentage increases (as
defined in section 1886(b)(3)(B) of the Act) used for updating the
payment rates to hospitals for discharges in the fiscal year (FY) that
begins on October 1 of the same preceding CY, and adjusted to reflect
changes in real casemix. The adjustment to reflect real casemix is
determined on the basis of the most recent case-mix data available. The
amount determined under this formula is rounded to the nearest multiple
of $4 (or, if midway between two multiples of $4, to the next higher
multiple of $4).
Under section 1886(b)(3)(B)(i)(XX) of the Act, the percentage
increase used to update the payment rates for FY 2026 for hospitals
paid under the inpatient prospective payment system (IPPS) is the IPPS
operating market basket percentage increase, otherwise known as the
IPPS market basket update, reduced by an adjustment based on changes in
the economy-wide productivity (productivity adjustment) (see section
1886(b)(3)(B)(xi)(II) of the Act). Under section 1886(b)(3)(B)(viii) of
the Act, for FY 2026, the applicable percentage increase for hospitals
that do not submit quality data as specified by the Secretary is
reduced by one quarter of the market basket update. We are estimating
that after accounting for those hospitals receiving the lower market
basket update in the payment-weighted average update, the calculated
deductible will not be affected, since the majority of hospitals submit
quality data and receive the full market basket update. Section
1886(b)(3)(B)(ix) of the Act requires that any hospital that is not a
meaningful electronic health record (EHR) user (as defined in section
1886(n)(3) of the Act) will have three-quarters of the market basket
update reduced by 100 percent for FY 2017 and each subsequent FY. We
are estimating that after accounting for these hospitals receiving the
lower market basket update, the calculated deductible will not be
affected, since the majority of hospitals are meaningful EHR users and
are expected to receive the full market basket update.
Under section 1886 of the Act, the percentage increase used to
update the payment rates (or target amounts, as applicable) for FY 2026
for hospitals excluded from the inpatient prospective payment system is
as follows:
<bullet> The percentage increase for long term care hospitals
(LTCH) is the LTCH market basket percentage increase reduced by the
productivity adjustment (see section 1886(m)(3)(A) of the Act). In
addition, these hospitals may also be impacted by the quality reporting
adjustments and the site-neutral payment rates (see section 1886(m)(5)
and (6) of the Act).
<bullet> The percentage increase for inpatient rehabilitation
facilities (IRF) is the IRF market basket percentage increase reduced
by the productivity adjustment in accordance with section
1886(j)(3)(C)(ii)(I) of the Act. In addition, these hospitals may also
be impacted by the quality reporting adjustments (see section
1886(j)(7) of the Act).
<bullet> The percentage increase used to update the payment rate
for inpatient psychiatric facilities (IPF) is the IPF market basket
percentage increase reduced by the productivity adjustment (see section
1886(s)(2)(A)(i) of the Act). In addition, these hospitals may also be
impacted by the quality reporting adjustments (see section 1886(s)(4)
of the Act).
<bullet> The percentage increase used to update the target amounts
for other types of hospitals that are excluded from the inpatient
prospective payment system and that are paid on a reasonable cost
basis, subject to a rate-of-increase ceiling, is the IPPS operating
market basket percentage increase, which is described at section
1886(b)(3)(B)(ii)(VIII) of the Act and 42 CFR 413.40(c)(3). These other
types of hospitals include cancer hospitals, children's hospitals,
extended neoplastic disease care hospitals, and hospitals located
outside the 50 States, the District of Columbia, and Puerto Rico.
The IPPS operating market basket percentage increase for FY 2026 is
3.3 percent and the productivity adjustment is 0.7 percentage point, as
announced in the final rule that appeared in the Federal Register on
August 04, 2025 entitled, ``Medicare Program; Hospital Inpatient
Prospective Payment Systems for Acute Care Hospitals (IPPS) and the
[[Page 52076]]
Long-Term Care Hospital Prospective Payment System and Policy Changes
and Fiscal Year (FY) 2026 Rates; Changes to the FY 2025 IPPS Rates Due
to Court Decision; Requirements for Quality Programs; and Other Policy
Changes; Health Data, Technology, and Interoperability: Electronic
Prescribing, Real-Time Prescription Benefit and Electronic Prior
Authorization'' (90 FR 36536). Therefore, the percentage increase for
hospitals paid under the inpatient prospective payment system that
submit quality data and are meaningful EHR users is 2.6 percent (that
is, the FY 2026 IPPS operating market basket update of 3.3 percent less
the productivity adjustment of 0.7 percentage point). The average
payment percentage increase for hospitals excluded from the inpatient
prospective payment system is 2.7 percent. This average includes long
term care hospitals, inpatient rehabilitation facilities, inpatient
psychiatric facilities and other hospitals excluded from the inpatient
prospective payment system. Weighting these percentages in accordance
with payment volume, our best estimate of the payment-weighted average
of the increases in the payment rates for FY 2026 is 2.62 percent.
To develop the adjustment to reflect changes in real casemix, we
first calculated an average casemix for each hospital that reflects the
relative costliness of that hospital's mix of cases compared to those
of other hospitals. We then computed the change in average casemix for
hospitals paid under the Medicare inpatient prospective payment system
in FY 2025 compared to FY 2024. (We excluded from this calculation
hospitals whose payments are not based on the inpatient prospective
payment system because their payments are based on alternate
prospective payment systems or reasonable costs.) We used Medicare
bills from prospective payment hospitals that we received as of July
2025. These bills represent a total of about 5.4 million Medicare
discharges for FY 2025 and provide the most recent case-mix- data
available at this time. Based on these bills, the change in average
casemix in FY 2025 -is 0.9 percent. Based on these bills and past
experience, we expect the overall FY 2025 casemix change to be 0.9
percent as the year progresses and more FY 2025 data become available.
Section 1813(b) of the Act requires that the inpatient hospital
deductible be adjusted only by that portion of the case mix change that
is determined to be real. Real casemix is that portion of casemix that
is due to changes in the mix of cases and not due to coding
optimization. We are assuming that this increase in casemix is real and
not a result of coding optimization.
Thus, the estimate of the payment-weighted average of the
applicable percentage increases used for updating the payment rates is
2.62 percent, and the real case-mix adjustment factor for the
deductible is 0.9 percent. Therefore, using the statutory formula as
stated in section 1813(b) of the Act, we calculate the inpatient
hospital deductible for services furnished in CY 2025 to be $1,736.
This deductible amount is determined by multiplying $1,676 (the
inpatient hospital deductible for CY 2025 (89 FR 68986)) by the
payment-weighted average increase in the payment rates of 1.0262
multiplied by the increase in real casemix of 1.009, which equals
$1,735.39 and is rounded to $1,736 (based on rounding to the nearest
multiple of 4).
III. Computing the Inpatient Hospital and Extended Care Services
Coinsurance Amounts for CY 2026
The coinsurance amounts provided for in section 1813 of the Act are
defined as fixed percentages of the inpatient hospital deductible for
services furnished in the same CY. The increase in the deductible
generates increases in the coinsurance amounts. For inpatient hospital
and extended care services furnished in CY 2026, in accordance with the
fixed percentages defined in the law, the daily coinsurance for the
61st through 90th day of hospitalization in a benefit period will be
$434 (one-fourth of the inpatient hospital deductible as stated in
section 1813(a)(1)(A) of the Act); the daily coinsurance for lifetime
reserve days will be $868 (one-half of the inpatient hospital
deductible as stated in section 1813(a)(1)(B) of the Act); and the
daily coinsurance for the 21st through 100th day of extended care
services in a skilled nursing facility (SNF) in a benefit period will
be $217 (one-eighth of the inpatient hospital deductible as stated in
section 1813(a)(3) of the Act).
IV. Cost to Medicare Beneficiaries
Table 1 summarizes the deductible and coinsurance amounts for CYs
2025 and 2026, as well as the number of each that is estimated to be
paid.
TABLE 1--Medicare Part A Deductible and Coinsurance Amounts for CYs 2025
and 2026
------------------------------------------------------------------------
Value Number paid (in
---------------------- millions)
Type of cost sharing -------------------
2025 2026 2025 2026
------------------------------------------------------------------------
Inpatient hospital deductible. $1,676 $1,736 5.55 5.63
Daily coinsurance for 61st-- 419 434 1.39 1.41
90th day.....................
Daily coinsurance for lifetime 838 868 0.71 0.72
reserve days.................
SNF coinsurance............... 209.50 217.00 28.33 28.88
------------------------------------------------------------------------
The estimated total increase in costs to beneficiaries is about
$860 million (rounded to the nearest $10 million) due to: (1) the
increase in the deductible and coinsurance amounts; and (2) the change
in the number of deductibles and daily coinsurance amounts paid. We
determine the increase in cost to beneficiaries by calculating the
difference between the 2025 and 2026 deductible and coinsurance amounts
multiplied by the estimated change in the number of deductible and
coinsurance amounts paid.
V. Waiver of Proposed Rulemaking
We ordinarily publish a notice of proposed rulemaking in the
Federal Register and invite public comment prior to a rule taking
effect in accordance with section 1871 of the Act. Section 1871(a)(2)
of the Act provides that no rule, requirement, or other statement of
policy (other than a national coverage determination) that establishes
or changes a substantive legal standard governing the scope of
benefits, the payment for services, or the eligibility of individuals,
entities, or organizations to furnish or receive services or benefits
under Medicare shall take effect unless it is promulgated through
notice and comment rulemaking. Unless there is a statutory exception,
section 1871(b)(1) of the Act generally requires the Secretary to
[[Page 52077]]
provide for notice of a proposed rule in the Federal Register and
provide a period of not less than 60 days for public comment before
establishing or changing a substantive legal standard regarding the
matters enumerated by the statute. Section 1871(b)(2)(C) of the Act
provides exceptions from the notice and 60-day comment period, under
the good cause standard set forth in 5 U.S.C. 553(b)(B). Section
553(b)(B) authorizes an agency to dispense with notice and comment
rulemaking for good cause if the agency makes a finding that notice and
comment procedures are impracticable, unnecessary, or contrary to the
public interest.
The annual inpatient hospital deductible and the hospital and
extended care services coinsurance amounts announcement set forth in
this notice does not establish or change a substantive legal standard
regarding the matters enumerated by the statute or constitute a
substantive rule which would be subject to the notice requirements in
section 1871(b) of the Act. However, to the extent that an opportunity
for public notice and comment could be construed as required for this
notice, we find good cause to waive this requirement.
Section 1813(b)(2) of the Act requires publication of the inpatient
hospital deductible and the hospital and extended care services
coinsurance amounts between September 1 and September 15 of the year
preceding the year to which they will apply. Further, the statute
requires that the agency determine and publish the inpatient hospital
deductible and hospital and extended care services coinsurance amounts
for each CY in accordance with the statutory formulae, and we are
simply notifying the public of the changes to the deductible and
coinsurance amounts for CY 2026. We have calculated the inpatient
hospital deductible and hospital and extended care services coinsurance
amounts as directed by the statute; the statute establishes both when
the deductible and coinsurance amounts must be published and the
information that the Secretary must factor into the deductible and
coinsurance amounts, so we do not have any discretion in that regard.
We find notice and comment procedures to be unnecessary for this
notice, and we find good cause to waive such procedures under section
553(b)(B) and section 1871(b)(2)(C) of the Act, if such procedures may
be construed to be required at all. Through this notice, we are simply
notifying the public of the updates to the inpatient hospital
deductible and the hospital and extended care services coinsurance
amounts, in accordance with the statute, for CY 2026.
VI. Collection of Information Requirements
This document does not impose information collection requirements,
that is, reporting, recordkeeping or third-party disclosure
requirements. Consequently, there is no need for review by the Office
of Management and Budget under the authority of the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.).
VII. Regulatory Impact Analysis
We have prepared this Regulatory Impact Analysis (RIA) section in
the interest of ensuring that the impacts of this notice are fully
understood.
A. Statement of Need
This notice announces the Medicare Part A inpatient hospital
deductible and associated coinsurance amounts for hospital and extended
care services applicable for care provided in CY 2026, as required by
section 1813 of the Act. It also responds to section 1813(b)(2) of the
Act, which requires the Secretary to provide for publication of these
amounts in the Federal Register between September 1 and September 15 of
the year preceding the year to which they will apply. As this statutory
provision prescribes a detailed methodology for calculating these
amounts, we do not have the discretion to adopt an alternative approach
to these issues.
B. Overall Impact
We have examined the impacts of this notice as required by
Executive Order 12866, ``Regulatory Planning and Review''; Executive
Order 13132, ``Federalism``; Executive Order 13563, ``Improving
Regulation and Regulatory Review''; Executive Order 14192, ``Unleashing
Prosperity Through Deregulation''; the Regulatory Flexibility Act (RFA)
(Pub. L. 96-354); section 1102(b) of the Social Security Act; section
202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4); and
the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select those regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; distributive impacts).
Section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as any regulatory action that is likely to result
in a rule that may: (1) have an annual effect on the economy of $100
million or more or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities; (2) create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raise novel legal or policy issues arising out of legal
mandates, or the President's priorities.
A regulatory impact analysis (RIA) must be prepared for a
regulatory action that is significant under section 3(f)(1) of E.O.
12866. As stated in section IV. of this notice, we estimate that the
total increase in costs to beneficiaries is about $860 million due to:
(1) the increase in the deductible and coinsurance amounts; and (2) the
change in the number of deductibles and daily coinsurance amounts paid.
Based on our estimates, OIRA has determined this notice is significant
under section 3(f)(1). Accordingly, we have prepared an RIA that to the
best of our ability presents the costs and benefits of this notice.
In accordance with subtitle E of the Small Business Regulatory
Enforcement Fairness Act of 1996 (also known as the Congressional
Review Act), OIRA has determined that this notice meets the criteria
set forth in 5 U.S.C. 804(2). For the reasons given, however, we find
for good cause that notice and public procedure are impracticable,
unnecessary, and contrary to the public interest and have determined
that this policy will take effect on January 1, 2026, pursuant to 5
U.S.C. 808(2).
C. Accounting Statement and Table
As required by OMB Circular A-4 (available at <a href="https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf">https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf</a>), in Table 2, we have prepared an accounting
statement showing the estimated total increase in costs to
beneficiaries of about $860 million. As stated in section IV. of this
notice, we determined the increase in cost to beneficiaries by
calculating the difference between the 2025 and 2026 deductible and
coinsurance amounts multiplied by the estimated change in the number of
deductible and coinsurance amounts paid.
[[Page 52078]]
Table 2--Estimated Transfers for CY 2026 Deductible and Coinsurance
Amounts
------------------------------------------------------------------------
Period
Category Transfers covered
------------------------------------------------------------------------
Annualized Monetized Transfers...... $860 million........... 2026
From Whom to Whom................... Beneficiaries to
Providers.
------------------------------------------------------------------------
D. Regulatory Flexibility Act
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Most hospitals and most other providers and
suppliers are small entities, either by being nonprofit organizations
or by meeting the Small Business Administration's definition of a small
business (having revenues of less than $9.0 million to $47.0 million in
any 1 year). Individuals and States are not included in the definition
of a small entity. This annual notice announces the Medicare Part A
deductible and coinsurance amounts for CY 2026 and will have an impact
on the Medicare beneficiaries. As a result, we are not preparing an
analysis for the RFA because the Secretary has certified that this
notice will not have a significant economic impact on a substantial
number of small entities.
In addition, section 1102(b) of the Act requires us to prepare an
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 604 of the RFA. For purposes of section
1102(b) of the Act, we define a small rural hospital as a hospital that
is located outside of a metropolitan statistical area and has fewer
than 100 beds. This annual notice announces the Medicare Part A
deductible and coinsurance amounts for CY 2026 and will have an impact
on the Medicare beneficiaries. As a result, we are not preparing an
analysis for section 1102(b) of the Act because the Secretary has
certified that this notice will not have a significant impact on the
operations of a substantial number of small rural hospitals.
E. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2025, that
threshold is approximately $187 million. This notice would not impose a
mandate that will result in the expenditure by State, local, and Tribal
Governments, in the aggregate, or by the private sector, of more than
$187 million in any 1 year.
F. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. This notice will not have a substantial direct effect on
State or local governments, preempt State law, or otherwise have
Federalism implications.
G. Congressional Review
This notice is subject to the Congressional Review Act and has been
transmitted to the Congress and the Government Accountability Office's
Comptroller General for review.
Mehmet Oz, Administrator of the Centers for Medicare & Medicaid
Services, approved this document on October 31, 2025.
Robert F. Kennedy, Jr.,
Secretary, Department of Health and Human Services.
[FR Doc. 2025-20249 Filed 11-14-25; 4:45 pm]
BILLING CODE 4120-01-P
</pre></body>
</html>Indexed from Federal Register on November 19, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.