What’s Changing in 2026
Medicare payment policy is undergoing one of its most consequential shifts in years, and the changes reach far beyond hospital finance departments. From mandatory bundled-payment expansion to a fundamental rebalancing of where care is reimbursed, 2026’s CMS rulemaking is reshaping how healthcare organizations plan, invest, and deliver care. For providers, health systems, and the policymakers who oversee them, understanding this shift is no longer optional.
The Move Toward Mandatory Value-Based Models
On April 10, 2026, CMS released its proposed rule for the Fiscal Year 2027 Hospital Inpatient Prospective Payment System, pairing a modest net payment increase with a significant policy signal: a proposed nationwide expansion of the Comprehensive Care for Joint Replacement (CJR) model. That expansion reflects a broader pattern across CMS’s Innovation Center, which has been moving away from voluntary participation and toward mandatory episode-based payment models.
The Innovation Center has also continued reshaping its state-level total-cost-of-care models. Updates to the AHEAD Model extend the program’s timeline through December 31, 2035, introduce geographic attribution that holds risk-bearing entities accountable for costs and outcomes across entire regions, not just attributed beneficiaries, and shift Primary Care AHEAD toward capitated payments. CMS has also indicated it plans to reopen the model to additional states, widening the footprint of total-cost-of-care accountability.
Rebalancing Where Care Gets Paid
Perhaps the most consequential change for provider organizations is CMS’s move to rebalance reimbursement between facility-based and office-based care. The proposed methodology lowers the share of indirect costs allocated to hospital-based services while increasing the share allocated to non-facility, office-based settings. Facility-based reimbursement could drop as much as 7 percent under the proposal, with a corresponding increase for office-based care. The stated goal is to align payment more closely with where care is actually delivered most efficiently—shifting volume and investment away from hospital-owned settings and toward primary care and freestanding outpatient clinics.
This rebalancing sits alongside continued growth in Medicare Advantage, where CMS finalized a 5.06 percent average payment increase for 2026, well above the initial Advance Notice estimate, driven largely by updated fee-for-service expenditure data. For organizations managing both traditional Medicare and Medicare Advantage populations, the combined effect of these changes touches nearly every line of a health system’s revenue model.
Why Policy Engagement Matters Now
These are not incremental technical updates. A nationwide mandatory bundled-payment model, a double-digit shift in facility-versus-office reimbursement, and an expanding total-cost-of-care framework each carry direct financial consequences for hospitals, physician groups, and the state programs that interact with them—including Medicaid expansion initiatives and hospital-at-home models that rely on aligned commercial and public payer policy. Organizations that engage early in the rule making and legislative process are far better positioned to shape final rules, secure transition support, and avoid being caught flat-footed when mandatory models take effect.
GTB Partners has a direct track record here, having supported the advancement of critical healthcare legislation and worked on initiatives such as expanding hospital-at-home programs to Medicaid and commercial payers. That combination of health policy expertise and legislative relationships is what allows organizations to move from reacting to healthcare payment reform to actively shaping it.
How GTB Partners Helps
- Regulatory and legislative monitoring — tracking CMS rulemaking, state Medicaid policy, and legislative sessions that affect delivery and payment models.
- Advocacy strategy — engaging policymakers to shape emerging payment models before they’re finalized.
- Cross-payer alignment — helping organizations navigate the interplay between Medicare, Medicaid, and commercial payer policy as reform accelerates.
- Coalition and stakeholder engagement — building the relationships needed to influence outcomes on complex, multi-year initiatives like value-based care expansion.