Costs & IRMAA
Medicare Rehab Hospital Rules Change October 1, Requiring All Therapy to Begin Within 36 Hours of Admission
The FY 2027 inpatient rehabilitation facility rule takes effect in 13 days, extending the 36-hour therapy-start deadline to all prescribed treatments, not just some. Medicare payments to these facilities rise by 2.3 percent, and a rural payment adjustment is fully eliminated for certain facilities.
By the Goodsurance editorial teamSeptember 18, 2026
Medicare payment and coverage rules for inpatient rehabilitation facilities will change on October 1, 2026, when the fiscal year 2027 final rule takes effect.
The most patient-facing change is a clarification to the therapy-start requirement. Previous policy required only that some therapies begin within 36 hours of midnight on the day of admission. The updated rule specifies that all therapy treatments and evaluations, without exception, must begin within that window. For patients admitted to a rehabilitation hospital after a stroke, hip replacement, or other qualifying event, this provides a clearer benchmark: every prescribed therapy service should be initiated promptly after arrival.
Starting October 1, every prescribed therapy at a Medicare rehab hospital must begin within 36 hours of admission, not just some of them.
On the payment side, CMS finalized a 2.3 percent rate update based on a 3.2 percent market basket increase minus a 0.9 percentage point productivity adjustment. CMS estimates the update adds approximately 340 million dollars to total Medicare payments for inpatient rehabilitation facilities in fiscal year 2027.
The rule also completes the third and final year of a phase-out of the rural payment adjustment for facilities that were reclassified from rural to urban status under updated federal statistical-area boundaries. Those facilities received one-third of the rural adjustment in fiscal year 2026 and receive none starting October 1.
A free provider education webinar is scheduled for September 29 to prepare rehabilitation hospital staff for the changes ahead of the October 1 effective date.
In plain words
Starting October 1, rehab hospitals that treat Medicare patients have a new rule. All therapy for a patient must now start within 36 hours of the patient arriving. Before, only some therapy had to start that fast. This is a change that patients can ask about: if you go to a rehab hospital after a stroke or surgery, all of your therapy should begin right away. Medicare also raises the payment rate for these hospitals by 2.3 percent. Some rural rehab hospitals will stop getting a bonus payment they used to receive. A training for hospital staff is set for September 29.
Understand the basics first
Source: CMS
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