CMS issued a final rule updating payment rates under the Medicare inpatient prospective payment system (IPPS) for operating and capital-related costs of acute care hospitals in fiscal year 2014 (FY14). Some of the proposed changes implement certain statutory provisions contained in the Affordable Care Act (ACA) and other legislation. It also updates annual payment rates for inpatient hospital services provided by long-term care hospitals (LTCHs). These changes are applicable to discharges occurring on or after October 1, 2013. CMS proposes to update the rate-of-increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis subject to these limits. The final updated rate-of-increase limits would be effective for cost reporting periods beginning on or after October 1, 2013. The final rule establishes new or revised requirements for quality reporting by specific providers that are participating in Medicare. Additionally, CMS updates policies relating to the Hospital Value-Based Purchasing (VBP) Program and the Hospital Readmissions Reduction Program, and a number of changes relating to direct graduate medical education.