CMS is accepting public comments on the proposed rule through Aug. 31 before issuing a final rule later this year. The agency expects the final payment policies to take effect Jan. 1, 2027.
WASHINGTON — The Centers for Medicare & Medicaid Services (CMS) has proposed a broad package of changes to Medicare payment policies for hospital outpatient departments and ambulatory surgical centers (ASCs) for calendar year 2027, including a 2.4% payment increase for providers that meet quality reporting requirements, expanded site-neutral payment policies and new initiatives aimed at lowering prescription drug costs and improving transparency.
The proposed rule, published in the Federal Register on July 7, would update the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the ASC Payment System beginning Jan. 1, 2027, if finalized. CMS estimates the changes would increase total OPPS payments by approximately $9.5 billion over 2026 payment levels, bringing total outpatient payments to roughly $110.9 billion.
Under the proposal, hospitals that successfully participate in the Hospital Outpatient Quality Reporting Program would receive a net payment increase of 2.4%. The update reflects a projected hospital market basket increase of 3.2%, offset by a 0.8 percentage-point productivity adjustment required by federal law. Hospitals that fail to meet quality reporting requirements would continue to receive a 2 percentage-point reduction in their annual payment update.
ASCs also would receive a 2.4% payment increase under the proposal, continuing CMS’ policy of aligning the update with the hospital market basket rather than the Consumer Price Index for All Urban Consumers. Agency officials said the approach is intended to support beneficiary access to outpatient surgical services while recognizing increases in provider costs.
Among the proposal’s most significant policy changes is an expansion of site-neutral payment policies. CMS is proposing to pay for clinic visit services provided at off-campus hospital outpatient departments using the Physician Fee Schedule-equivalent payment rate. The agency said the proposal is intended to reduce unnecessary spending and eliminate incentives for hospitals to acquire physician practices solely to receive higher outpatient reimbursement.
CMS also is proposing additional changes intended to reduce Medicare spending on certain drugs. The rule would expand payment policies for separately payable drugs acquired through the 340B Drug Pricing Program and proposes several updates affecting drug reimbursement and packaging under OPPS. Agency officials said the proposals are designed to improve consistency while lowering out-of-pocket costs for Medicare beneficiaries.
The proposed rule includes updates to quality reporting programs for both hospitals and ASCs. CMS would add, modify and remove several quality measures while seeking to reduce provider reporting burden. The agency also issued requests for information on future quality measurement priorities and opportunities to streamline existing reporting requirements.
Another component of the proposal focuses on increasing price transparency. CMS is seeking to strengthen hospital compliance with existing transparency requirements by improving the accuracy and completeness of publicly available pricing information. Agency officials said the effort is intended to help patients better understand expected healthcare costs before receiving services.
The proposal also includes updates affecting hospital outpatient behavioral health services, rural emergency hospitals, intensive outpatient programs and payment policies for various categories of outpatient care. CMS said the changes are intended to maintain access to services while supporting care delivery in a variety of clinical settings.
Hospitals, health systems, physician organizations and other healthcare stakeholders are expected to closely examine the proposed rule because of its potential financial and operational implications. The proposed expansion of site-neutral payment policies, in particular, has been the subject of ongoing debate between hospital groups and policymakers, with hospitals arguing that outpatient departments face higher regulatory and operational costs than physician offices.
CMS is accepting public comments on the proposed rule through Aug. 31 before issuing a final rule later this year. The agency expects the final payment policies to take effect Jan. 1, 2027.