CMS Releases Fiscal Year 2027 Inpatient Hospital Proposed Rule

On April 10, 2026, the Centers for Medicare & Medicaid Services (CMS) released the fiscal year (FY) 2027 Hospital Inpatient Prospective Payment System (IPPS) proposed rule. Acute care hospitals that successfully report quality data and meet electronic health record (EHR) meaningful use requirements would receive a 2.4%. Overall, CMS estimates that total IPPS payments will increase by approximately $1.9 billion in FY 2027.

The rule also outlines several proposed policy changes relevant to electrophysiology services. These include proposed updates to MS-DRG classifications, revisions to the New Technology Add-On Payment (NTAP) policies, and adoption of a Unique Device Identifier (UDI) for Implantable Devices measure within the hospital Promoting Interoperability Program.

HRS is continuing to review the proposed rule and assess its potential impact on the electrophysiology community. CMS will accept public comments on the proposed rule until June 9, 2026.

FY 2027 EP Relevant MS-DRG Proposed Payment Changes

While facilities receive hospital-specific payment adjustments based on underlying cost reporting and other factors, Medicare hospital IPPS payments are generally calculated based on the “standardized amount” for the fiscal year (similar to the Medicare Physician Fee Schedule’s conversion factor) and the relative weight of the MS-DRG to which the inpatient case is assigned.

For FY 2027, CMS has proposed a standardized amount of $6,967.87, which is a 3.19% increase over FY 2026 for hospitals that meet their quality and EHR reporting requirements. In addition, several of the MS-DRGs to which certain inpatient electrophysiology cases can be assigned have proposed increases to their relative weights as follows:

Proposed FY 2027 Relative Weight Changes For Select EP-Related MS-DRGs

Combined, the proposed increases to the IPPS standardized amount and relevant MS-DRG relative weights could lead to substantial increases in payments to hospitals for inpatient admissions involving electrophysiology procedures, if finalized.

New Technology Add-On Payments (NTAPs)

Medicare provides additional payment under the IPPS to offset the cost of new medical services and technologies that are not yet reflected in the MS-DRG rates. To qualify technologies must (1) be new, (2) be costly enough that the standard DRG is deemed inadequate and (3) demonstrate substantial clinical improvement over existing services or technologies.

CMS received several NTAP applications for FY 2027, including the CARA System which the agency is proposing to approve, subject to the technology receiving FDA marketing authorization for the indication corresponding to the breakthrough device designation by May 1, 2026.  The CARA System is a medical device comprising two integrated functions:

1. CARA Metis Simulator is a diagnostic imaging software as a medical device that identifies the personalized anatomical location of the cardiac conduction system derived from the patient’s computed tomographic angiography, and
2. CARA Atlas Navigator is an imaging guidance system (hardware and software) that overlays the personalized anatomical location of the cardiac conduction system (generated by the CARA Metis Simulator) onto real-time, intra-procedural, fluoroscopic imaging to assist in fluoroscopic-guided interventional heart procedures.

The CARA System is billed to hospitals on a per use basis, and costs vary depending on whether the procedure is an interventional procedure done in the catheterization lab with the CARA Atlas™ Navigator ($10,500) and CARA Metis™ Simulator ($7,000) for a total cost of $17,500, or if it is a surgical procedure done in the operating room with the CARA Atlas™ Navigator ($6,500) and CARA Metis™ Simulator ($7,000) for a total cost of $13,500, or if only CARA Metis™ Simulator ($7,000) is used for procedural planning.  CMS proposes that the maximum new technology add-on payment for a case involving the use of the CARA System would be $10,205.00 for FY 2027.  CMS will make a final decision based on public comment whether to approve the technology for NTAP in the final rule.

For FY 2027, CMS proposes to continue NTAPs for 41 technologies, including PulseSelect™ Pulsed Field Ablation (PFA) Loop Catheter and the WiSE CRT System.

Alternative Inpatient New Technology Add-on Payment Pathway

Beginning FY 2028, CMS proposes to repeal the alternative pathway for NTAP citing concern about the limited evaluation process and value of meeting the substantial clinical improvement criterion as reasons for the removal.  The alternative pathway has been available for certain technologies and services that have special FDA status, such as breakthrough devices, and are automatically deemed to be new and not substantially similar to existing technology, meaning they only needed to meet the cost criterion for NTAP.  Under the proposal, medical devices with breakthrough device designation would be required to meet the same eligibility criteria as other available technologies to receive the additional payments under the NTAP program.

MS-DRG-Specific Changes

WiSE® Cardiac Resynchronization Therapy (CRT) System

As a recently introduced technology, CMS continues to refine its inpatient hospital payment policy for the WiSE® CRT System.  The WiSE® CRT system received approval for NTAP in FY 2026.  Devices that qualify for NTAPs are generally eligible for the first three years that the technology is “new.”  CMS proposes that the WiSE® CRT system will continue as “new” through April 11, 2028.

In order to administer the NTAP policy, CMS identifies the cases through ICD-10 procedure code taxonomy. For WiSE® CRT, cases have been identified by the following ICD-10 procedure code combination:

• X2HN37B (Insertion of endocardiac pacing electrode into left ventricle, percutaneous approach, new technology group 11); and
• XHH80HB (Insertion of ultrasound transmitter and battery for endocardiac pacing electrode into chest subcutaneous tissue and fascia, open approach, new technology group 11)

CMS received requests to reorganize these cases under the IPPS. While the Medicare claims data does not yet reflect performance of the procedure on Medicare patients, CMS still attempts to make assignments based on clinical coherence and resource use wherever possible.  In order to conduct its assignment analysis, CMS relied on its assumption that the WiSE® CRT system shares clinical coherence and resource use similarities with leadless pacemakers (as opposed to conventional pacemakers).

After its analysis and in order to direct these cases to what it believes is the most appropriate payment assignment, CMS proposes to remove the code combination mentioned above for the assignment logic and instead will direct cases that report X2HN37B (Insertion of endocardiac pacing electrode into left ventricle, percutaneous approach, new technology group 11) to the following MS-DRGs:

• MS-DRG 228 (Other Cardiothoracic Procedures with MCC)
• MS-DRG 229 (Other Cardiothoracic Procedures without MCC)

In addition, CMS proposes that reporting of ICD-10 procedure code XHH80HB (Insertion of ultrasound transmitter and battery for endocardiac pacing electrode into chest subcutaneous tissue and fascia, open approach, new technology group 11) as a standalone procedure will be assigned to the following new MS-DRGs:

• MS-DRG 210 (Cardiac Pacemaker Revision or Device Replacement with MCC)
• MS-DRG 211 (Cardiac Pacemaker Revision or Device Replacement without MCC)

Unique Device Identifier for Implantable Devices Measure

As part of the Medicare Promoting Interoperability Program for hospitals, CMS proposes adopting a new measure focused on Unique Device Identifiers (UDIs) for implantable devices. Under this measure, hospitals would attest to using certified electronic health record technology (CEHRT) to electronically capture and store within the patient’s EHR the complete UDI for each implantable medical device (subject to UDI requirements) used for patient care delivery.

Although the measure is initially proposed as attestation-based, CMS is seeking feedback on transitioning to a performance-based approach in future years. Additionally, CMS requests input on challenges related to UDI capture and data exchange, as well as additional care settings beyond inpatient care where UDI capture and exchange should be addressed.