CY 2027 Medicare OPPS Proposed Rule Released
This morning, the Centers for Medicare and Medicaid Services (CMS) posted the CY 2027 Medicare Hospital Outpatient Prospective Payment System Proposed Rule. The rule would affect approximately 3,500 hospitals and 6,400 ASCs.
Key Proposals
Update: CMS proposes a 2.4% update to OPPS payment rates for hospitals that meet applicable quality reporting requirements. This update is based on a projected 3.2% increase in the hospital market basket, reduced by a 0.8-percentage-point productivity adjustment. A similar update is proposed for ambulatory surgical centers (ASCs).
Expansion of Excepted Off-Campus Provider-Based Departments (PBDs): CMS is proposing to include imaging without contrast services furnished in excepted off-campus PBDs under this policy. This means that these services would be paid at the Physician Fee Schedule equivalent payment rate. CMS estimates $190 million in Part B savings and approximately $70 million in reduced beneficiary premiums in 2027 from this proposal.
340B Drugs: CMS is proposing to pay for 340B-acquired drugs at the drug’s Average Sales Price (ASP) minus 33.4%. CMS estimates savings of $4.55 billion and beneficiary drug payments of $1.15 billion in the first year under this proposal. This proposal takes into account a survey of drug acquisition costs conducted between January 1, 2026, and April 7, 2026. The agency is also proposing an adjustment intended to balance the goal of restoring hospitals to the financial position they would have been in if the original 340B policy had never existed with avoiding burdening them with an immediate, single-year recovery.
Inpatient Only (IPO) List: 2027 marks the second year of a three-year transition to eliminate the IPO List. CMS proposes removing 638 services from the following clinical families: auditory, digestive, endocrine, female genital, hemic and lymphatic systems, integumentary, male genital, maternity care and delivery, mediastinum and diaphragm, respiratory, and urinary.
Adjustment to Cost-of-Living in Alaska and Hawaii: CMS is proposing this adjustment to address the unique circumstances and higher costs of providing healthcare services that are not currently captured in the nonlabor component of OPPS payment.
Price Transparency: CMS has issued a Request for Information (RFI) seeking public comment on approaches to improve the consistency, comparability, and consumer usability of hospital price transparency data. This RFI aligns with the President’s E.O. 142211422421, “Making America Health Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information.”
Prior Authorization: In 2020, CMS established a prior authorization process for certain OPPS services. In 2027, CMS is proposing to require prior authorization for eight additional botulinum toxin injection codes.
These highlights are based on the CMS fact sheet released with this proposed rule. A more detailed analysis will be released soon.
Comments are due on August 31, 2026.
A press release summarizing the proposed rule is available HERE.
Please let me know if you have any questions or wish to discuss the proposed rule.
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For more information and questions, please contact:
Sheila Madhani
Madhani Healthcare Consulting
Email: smadhani@madhani-health.com
Tel: (202) 679-2977