CMS CY 2027 OPPS/ASC Proposed Rule: Key Payment and Policy Changes for Hospitals, Health Systems, and ASCs

On 2 July 2026, the Centers for Medicare and Medicaid Services (CMS) released its proposed CY 2027 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment Rule (CMS-1850-P). Several of the policy proposals could have a meaningful operational and financial impact for hospitals and health systems, particularly those participating in the 340B Drug Pricing Program or operating off-campus hospital outpatient departments. Comments are due 31 August 2026, and CMS expects to publish a final rule later this year. The major provisions are summarized below. 

Annual Payment Update

CMS proposes a 2.4% increase to OPPS payment rates for hospitals that satisfy Hospital Outpatient Quality Reporting Program requirements. The same update would apply to qualifying ASCs and reflects a projected 3.2% market basket increase offset by a 0.8 percentage point productivity adjustment. Facilities that do not meet quality reporting requirements would remain subject to the existing statutory 2.0 percentage point reduction. 

340B Drug Payment Changes and Remedy Offset

The proposal includes a significant change to reimbursement for drugs acquired through the 340B Drug Pricing Program. Based on results from CMS’s recent acquisition cost survey, the agency proposes paying for 340B-acquired drugs at the average sale price (ASP) minus 33.4%, replacing the current ASP plus 6% methodology. CMS also proposes accelerating recovery of the additional nondrug payments made under the 340B remedy rule. Beginning in CY 2027, the conversion factor reduction for affected hospitals would increase from 0.5% to 3%, with CMS estimating that the recovery of the previously identified US$7.8 billion would conclude in CY 2029. Hospitals that first enrolled in Medicare after 1 January 2018 would remain exempt.

Expansion of Site-Neutral Payment Policy

CMS also proposed extending its existing volume-control methodology to certain noncontrast imaging services furnished in excepted off-campus provider-based departments. Under the proposal, those services would be paid at the Physician Fee Schedule-equivalent rate rather than the higher OPPS rate. Rural Sole Community Hospitals would remain exempt from this policy.

Continued Phaseout of the Inpatient-Only List

As part of its three-year effort to eliminate the Inpatient-Only (IPO) List, CMS proposes removing 638 additional procedures across multiple clinical families. If finalized, these procedures could be reimbursed in the outpatient setting when clinically appropriate, providing providers with greater flexibility regarding site of service.

Off-Campus Hospital Outpatient Department Enrollment

To implement Section 6225 of the Consolidated Appropriations Act, 2026, CMS proposes new enrollment conditions for off-campus hospital outpatient departments beginning 1 January 2028. Each department would bill under its own National Provider Identifier, and the main provider would be required to submit a provider-based attestation demonstrating compliance with applicable provider-based rules.

The proposed rule also includes expansion of prior authorization requirements for certain botulinum toxin injections, authorization for accrediting organizations to assess certain Emergency Medical Treatment and Active Labor Act administrative requirements during surveys, technical payment adjustments affecting Alaska and Hawaii, and a request for information on improving hospital price transparency data.

Key Takeaways

• The proposed 340B reimbursement changes are likely to have the greatest financial impact, as CMS would substantially reduce payment for 340B-acquired drugs while accelerating recovery of prior 340B remedy payments.
• CMS continues to expand site-neutral payment policies, proposing to expand reduced payment rates to outpatient imaging services and moving forward with new enrollment requirements for off-campus hospital outpatient departments.
• Hospitals and ASCs should assess the operational and financial implications now, particularly organizations participating in the 340B program, operating provider-based outpatient departments, or performing procedures affected by the continued phaseout of the IPO List. We suspect that many health systems will want to submit comments on these policies. Comments are due on 31 August 2026.

Our Healthcare and FDA practice group routinely assists health systems, hospitals, ASCs, and other providers with legal advice on 340B and reimbursement matters. Contact the authors of this article or another one of our Healthcare and FDA practice group lawyers for assistance with any of these important issues.