UHS · 10-Q · 2026Q3 · Full report

Medicare IPPS Payment Update

UNIVERSAL HEALTH SERVICES INC · 2026-11-06 · Importance 37 · Surprise 32

CMS's 2027 IPPS final rule provides a 3.2% base MS-DRG market-basket increase, but UHS estimates its overall IPPS payment increase at approximately 0.1% after DSH and other adjustments. UHS estimates a 2.0% increase in behavioral health Psych PPS payments for federal fiscal 2027. The 2027 OPPS final rule produces an estimated 8.9% overall Medicare OPPS update for UHS, including a favorable 7.5% 340B drug-cost-survey budget-neutrality adjustment and a 2.0% 340B remedy reduction. CMS's OPPS rule also phases out the Inpatient Only list over three years, with 637 services removed in the second year; UHS says the policy may shift some services to outpatient settings.

Key facts

• UNIVERSAL HEALTH SERVICES INC states Medicare sequestration payment reductions of up to 2% per fiscal year were extended through 2032. source
• UNIVERSAL HEALTH SERVICES INC estimates the final FY 2027 Medicare IPPS rule will increase its overall payments approximately 0.1% for October 1, 2026 through September 30, 2027. source
• CMS's FY 2027 IPPS final rule provides a 3.2% market basket increase to the base Medicare MS-DRG blended rate; after specified adjustments excluding DSH and outlier changes, overall IPPS payments increase approximately 0.4%. source
• UNIVERSAL HEALTH SERVICES INC estimates its overall increase from the final FY 2026 IPPS rule was approximately 2.7% for October 1, 2025 through September 30, 2026. source