National Daily Hospital Executive Briefing Friday November 21st, 2025

 

National Daily Hospital News Executive Briefing
Friday, November 21, 2025

Today:  

> Hospital Finances Pressed (AHA, CMS, MedPAC)

> Medicare Bad Debt Reimbursement Changes

> EHR / Risk Assessment: LOS and Readmissions

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Global & Health Sector Headlines

1. [News] CMS has finalized the CY 2026 Medicare Physician Fee Schedule (PFS) rule, setting payment and Quality Payment Program policy changes for services on or after January 1, 2026, with implications for employed and aligned physician groups.
   https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-final-rule-cms-1832-f Centers for Medicare & Medicaid Services

2. [News] CMS’ FY 2026 IPPS/LTCH PPS final rule outlines the next round of Medicare inpatient and long-term care hospital payment and policy changes, including updated rates and continued value-based and bundled payment initiatives.
   https://www.cms.gov/newsroom/fact-sheets/fy-2026-hospital-inpatient-prospective-payment-system-ipps-and-long-term-care-hospital-prospective-0 Centers for Medicare & Medicaid Services

3. [News] The AHA reports that the FY 2026 IPPS final rule will increase Medicare inpatient payments by a net 2.6%—about $5 billion overall—while rebasing the market basket to 2023 and maintaining mandatory bundled payment for select surgical episodes beginning January 1, 2026.
   https://www.aha.org/news/headline/2025-07-31-cms-issues-hospital-ipps-final-rule-fy-2026 American Hospital Association

4. [News] A November 20 CMS MLN Connects newsletter details 2026 Medicare Part A and B premiums and deductibles, including a Part A inpatient hospital deductible of $1,736 (up $60 from 2025), signaling continued cost shifting to beneficiaries and potential downstream bad-debt risk for hospitals.
   https://www.cms.gov/training-education/medicare-learning-network/newsletter/mln-connects-newsletter-november-20-2025 Centers for Medicare & Medicaid Services

5. [News] MedPAC’s March 2025 report to Congress finds that while hospitals’ all-payer operating margin improved to 5.1% in 2023, the aggregate FFS Medicare margin remained deeply negative at about –13%, with relatively efficient hospitals still at a median of –2%.
   https://www.medpac.gov/wp-content/uploads/2025/03/Mar25_Ch3_MedPAC_Report_To_Congress_SEC.pdf MedPAC

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Hospital Finance, Including Margin, Charges and Reimbursements

1. [News] CMS’ FY 2026 IPPS final rule delivers a 2.6% net payment update (3.3% market basket minus a 0.7% productivity adjustment), plus about $2 billion more in DSH payments and $192 million for new technology, but these gains sit against persistently negative Medicare margins.
   https://www.aha.org/news/headline/2025-07-31-cms-issues-hospital-ipps-final-rule-fy-2026 American Hospital Association+1

2. [News] CMS’ CY 2026 PFS final rule adjusts physician payment, telehealth, and Quality Payment Program policies, further tightening reimbursement for professional services that many hospitals rely on to support employed and contracted medical staff.
   https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-final-rule-cms-1832-f Centers for Medicare & Medicaid Services

3. [News] A Commonwealth Fund modeling brief projects that federal Medicaid work requirements would reduce coverage, decrease Medicaid revenues, increase uncompensated care, and erode operating margins at hospitals in expansion states, particularly safety-net facilities.
   https://www.commonwealthfund.org/publications/issue-briefs/2025/sep/impact-medicaid-work-requirements-hospital-revenues-margins Commonwealth Fund

4. [New Case Study] A JAMA Network Open analysis of eliminating Medicare bad-debt reimbursement shows that hospitals currently receive reimbursement for 65% of unpaid Traditional Medicare cost-sharing, and a phase-out would disproportionately hurt organizations caring for higher-need, lower-income beneficiaries.
   https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2837380 JAMA Network

5. [Recommendation] MedPAC recommends maintaining current-law update trajectories while tying additional resources more tightly to low-margin, high-MSNI hospitals, suggesting that leaders should model 2026–2028 margin scenarios under both baseline policy and potential safety-net targeted adjustments.
   https://www.medpac.gov/wp-content/uploads/2025/03/Mar25_Ch3_MedPAC_Report_To_Congress_SEC.pdf MedPAC

6. [Recommendation] Legal and regulatory alerts summarizing the CY 2026 PFS and related policies (for example, Holland & Knight’s analysis) can be used to prioritize which fee-schedule and QPP changes most affect your hospital-employed and aligned physician groups.
   https://www.hklaw.com/en/insights/publications/2025/11/cms-releases-cy-2026-medicare-physician-fee-schedule-final-rule Holland & Knight

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Hospital Quality, Infection Control, and Hospital Readmissions / Transitional Care Management / Case Management

1. [New Case Study] A JAMA Network Open systematic review and meta-analysis finds that EHR-integrated interventions—such as risk stratification, discharge decision support, and automated follow-up prompts—are associated with reduced 30-day and longer-term hospital readmissions.
   https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2836552 JAMA Network

2. [New Case Study] A national quasi-experimental evaluation of the Hospital Quality Improvement Contractor (HQIC) program shows participating hospitals achieved a 1.4% reduction in 30-day all-cause readmissions and a 17.4% decline in CAUTI events compared with matched non-HQIC hospitals.
   https://www.researchgate.net/publication/395992823_Impact_of_Quality_Improvement_Support_on_Hospital_Readmissions_and_Patient_Safety_Outcomes_A_Quasi-Experimental_Study_of_a_National_Quality_Improvement_Initiative ResearchGate

3. [New Case Study] A UC San Diego–led study of a virtual transition-of-care clinic found 30-day readmissions of 14.9% among patients seen in the virtual clinic versus 20.1% in a benchmark group, demonstrating the value of structured post-discharge telehealth follow-up.
   https://health.ucsd.edu/news/press-releases/2025-09-24-study-finds-virtual-clinics-lower-hospital-readmissions/ UC San Diego Health

4. [News] CMS’ Hospital Readmissions Reduction Program (HRRP), updated August 2025, continues to tie inpatient payment adjustments to excess 30-day readmission ratios across key conditions such as AMI, HF, COPD, pneumonia, CABG, and THA/TKA.
   https://www.cms.gov/medicare/quality/value-based-programs/hospital-readmissions Centers for Medicare & Medicaid Services

5. [New Case Study] American Data Network’s 2025 patient safety strategy report highlights hospital leaders who are reducing readmissions through proactive discharge planning, rapid post-discharge follow-up, multidisciplinary review of readmitted cases, and targeted management of high-cost, high-risk populations.
   https://www.americandatanetwork.com/patient-safety/patient-safety-strategy-2025/ American Data Network

6. [Recommendation] HRRP guidance and recent evidence suggest that integrating readmission risk scoring into discharge workflows, standardizing transitions of care, and focusing on infection control for HAIs such as CAUTI yield both quality gains and direct financial benefit.
   https://www.cms.gov/medicare/quality/value-based-programs/hospital-readmissions American Data Network+4Centers for Medicare & Medicaid Services+4ResearchGate+4

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Early Morning Briefing Highlights

1. Hospitals enter 2026 with modest Medicare rate relief—a 2.6% net IPPS update and CY 2026 PFS adjustments—but FFS Medicare margins remain around –13%, forcing continued discipline on cost, service mix, and payer strategy.
   https://www.aha.org/news/headline/2025-07-31-cms-issues-hospital-ipps-final-rule-fy-2026 American Hospital Association+1

2. New federal policy discussions—such as Medicaid work requirements and possible elimination of Medicare bad-debt reimbursement—could materially increase uncompensated care and further compress margins, especially for safety-net hospitals.
   https://www.commonwealthfund.org/publications/issue-briefs/2025/sep/impact-medicaid-work-requirements-hospital-revenues-margins Commonwealth Fund+1

3. 2026 Medicare premium and deductible increases—including a higher Part A inpatient deductible—will likely shift more cost burden to seniors, amplifying the importance of up-front financial counseling, charity-care screening, and collections policies.
   https://www.cms.gov/training-education/medicare-learning-network/newsletter/mln-connects-newsletter-november-20-2025 Centers for Medicare & Medicaid Services+1

4. Evidence continues to accumulate that targeted quality programs (HQIC), EHR-integrated decision support, and virtual post-discharge clinics can reliably reduce readmissions and certain HAIs while supporting HRRP performance.
   https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2836552 Centers for Medicare & Medicaid Services+3JAMA Network+3ResearchGate+3

5. Patient safety leaders are pivoting toward integrated strategies—readmission prevention, CMS Star Ratings, structural patient-safety measures, and high-cost patient management—as core levers for both clinical quality and margin protection in 2025–2027.
   https://www.americandatanetwork.com/patient-safety/patient-safety-strategy-2025/ American Data Network+2MedPAC+2

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Strategic Implications for Leadership

1. Reconcile your 2026 operating budget and capital plan with the combined impact of the FY 2026 IPPS update, CY 2026 PFS changes, and MedPAC’s projection that FFS Medicare margins will stay near –13% absent policy shifts or major cost redesign.
   https://www.medpac.gov/wp-content/uploads/2025/03/Mar25_Ch3_MedPAC_Report_To_Congress_SEC.pdf MedPAC+2Centers for Medicare & Medicaid Services+2

2. Use Commonwealth Fund and JAMA bad-debt analyses to model “stress scenarios” where Medicaid coverage shrinks and Medicare bad-debt reimbursement phases out, identifying which service lines and campuses become structurally unprofitable without further redesign.
   https://www.commonwealthfund.org/publications/issue-briefs/2025/sep/impact-medicaid-work-requirements-hospital-revenues-margins Commonwealth Fund+1

3. Prioritize a portfolio of proven readmission-reduction strategies—EHR-embedded decision support, standardized discharge and follow-up, targeted HQIC-style quality collaboratives, and virtual transition-of-care clinics—to protect HRRP performance and reduce penalty exposure.
   https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2836552 Centers for Medicare & Medicaid Services+3JAMA Network+3ResearchGate+3

4. Align patient safety, quality, and finance teams around CMS’ new structural measures and Star Ratings pressures, recognizing that safety culture, infection control, and high-cost patient management are now core margin strategies—not just compliance items.
   https://www.americandatanetwork.com/patient-safety/patient-safety-strategy-2025/ American Data Network+2MedPAC+2

5. Ensure your board and executive team receive concise dashboards that connect Medicare policy shifts, HRRP and Star Ratings performance, and key readmission and HAI trends so they can make faster, evidence-based decisions about service redesign.
   https://www.cms.gov/medicare/quality/value-based-programs/hospital-readmissions ResearchGate+3Centers for Medicare & Medicaid Services+3MedPAC+3

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Quality Metrics to Share with Your Team (≤7)

1. Medicare Part A inpatient hospital deductible will be $1,736 in 2026, an increase of $60 from the 2025 deductible of $1,676, raising the risk that more seniors will struggle to pay their inpatient cost-sharing.
   https://www.cms.gov/training-education/medicare-learning-network/newsletter/mln-connects-newsletter-november-20-2025 Centers for Medicare & Medicaid Services

2. The FY 2026 IPPS final rule provides a net 2.6% Medicare inpatient payment update (3.3% market basket minus 0.7% productivity adjustment), with an aggregate $5 billion increase in payments compared with FY 2025.
   https://www.aha.org/news/headline/2025-07-31-cms-issues-hospital-ipps-final-rule-fy-2026 American Hospital Association

3. Hospitals’ aggregate FFS Medicare margin was –13.0% in 2023 (excluding relief funds), while relatively efficient hospitals still had a median FFS Medicare margin of –2%, highlighting the structural gap between Medicare payment and cost.
   https://www.medpac.gov/wp-content/uploads/2025/03/Mar25_Ch3_MedPAC_Report_To_Congress_SEC.pdf MedPAC

4. Hospitals’ all-payer operating margin improved from 2.7% in 2022 to 5.1% in 2023, but a quarter of hospitals still reported all-payer operating margins below –4%, underscoring wide variation in financial resilience.
   https://www.medpac.gov/wp-content/uploads/2025/03/Mar25_Ch3_MedPAC_Report_To_Congress_SEC.pdf MedPAC

5. Receiving HQIC support was associated with a 1.4% reduction in 30-day all-cause readmissions and a 17.4% reduction in CAUTI events compared with matched hospitals without HQIC support.
   https://www.researchgate.net/publication/395992823_Impact_of_Quality_Improvement_Support_on_Hospital_Readmissions_and_Patient_Safety_Outcomes_A_Quasi-Experimental_Study_of_a_National_Quality_Improvement_Initiative ResearchGate

6. A UCSD virtual transition-of-care clinic cut 30-day readmissions from 20.1% in a benchmark group to 14.9% among patients seen in the virtual clinic, a 5.2-percentage-point absolute reduction.
   https://health.ucsd.edu/news/press-releases/2025-09-24-study-finds-virtual-clinics-lower-hospital-readmissions/ UC San Diego Health

7. Medicare currently reimburses hospitals for 65% of unpaid Traditional Medicare cost-sharing classified as bad debt, a support Congress is considering phasing out with potentially significant distributional impacts.
   https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2837380 JAMA Network

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Leadership Call to Action (≤5)

1. Direct your finance and strategy teams to refresh 2026–2028 financial scenarios using the FY 2026 IPPS and CY 2026 PFS rules plus MedPAC’s projected –13% FFS Medicare margin, identifying which service lines require redesign, volume growth, or payer mix change to stay solvent.
   https://www.medpac.gov/wp-content/uploads/2025/03/Mar25_Ch3_MedPAC_Report_To_Congress_SEC.pdf MedPAC+2Centers for Medicare & Medicaid Services+2

2. Assign a policy and revenue-cycle task force to quantify the exposure your system would face if Medicaid work requirements expand and Medicare bad-debt reimbursement is reduced or eliminated, including potential impacts on uncompensated care and days cash on hand.
   https://www.commonwealthfund.org/publications/issue-briefs/2025/sep/impact-medicaid-work-requirements-hospital-revenues-margins Commonwealth Fund+1

3. Charge your CMO, CNO, and CQO to build a focused “readmission and HAI reduction bundle” that combines EHR-embedded decision support, HQIC-style collaborative methods, and virtual transition-of-care clinics, with clear ROI and HRRP penalty-avoidance targets.
   https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2836552 Centers for Medicare & Medicaid Services+3JAMA Network+3ResearchGate+3

4. Have your quality and patient-safety leaders map current initiatives against CMS structural measures and Star Ratings domains, using the American Data Network strategies as a checklist to close gaps in safety culture, infection prevention, discharge planning, and high-cost patient management.
   https://www.americandatanetwork.com/patient-safety/patient-safety-strategy-2025/ American Data Network+1

5. Schedule a board-level education session that links Medicare policy changes, readmission and HAI performance, and financial results, using a concise one-page dashboard built from the metrics above to guide discussion and decision-making.
   https://www.cms.gov/medicare/quality/value-based-programs/hospital-readmissions Centers for Medicare & Medicaid Services+1

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