CMS released the calendar year 2027 proposed rule for Medicare’s hospital outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) payment system (CMS-1850-P) on July 2, 2026. Policies in the proposed rule will generally go into effect on January 1, 2027, unless otherwise specified. The proposed rule was published on July 7, 2026, in the Federal Register. The public comment period will close on August 31, 2026.
The proposed rule updates OPPS payment policies that apply to outpatient services provided to Medicare beneficiaries by general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute care hospitals, children’s hospitals, cancer hospitals and partial hospitalization services in community mental health centers. Also included is the annual update to the ASC payment system and updates and refinements to the requirements for the Hospital Outpatient Quality Reporting Program, the ASC Quality Reporting Program and Rural Emergency Hospital Quality Reporting Program.
Among other provisions, CMS proposes:
- To reduce the otherwise applicable update for non-drug OPPS services by 3 percent as part of a recouping additional spending resulting from adverse litigation against the Secretary for 340B acquired drugs.
- Change the payment for 340B acquired drugs from ASP+6 percent to ASP-33.4 percent based on a drug cost survey done earlier this year. This proposed reduction in payments for 340B acquired drugs will be offset by an 8.4 percent increase to non-drug OPPS services.
- Reduce payments for imaging services without contrast furnished in off-campus provider-based departments to a physician equivalent rate.
- Continue elimination of the inpatient only (IPO) list by pricing 638 additional procedures under the OPPS.
- Consistent with its FY 2027 inpatient prospective payment system (IPPS) proposal, eliminate the alternative pathway for pass-through beginning with applications submitted on or after October 1, 2026.
