CMS Releases CY 2026 Medicare OPPS and ASC Payment System Proposed Rules
The Centers for Medicare & Medicaid Services (CMS) released its Calendar Year (CY) 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) proposed rules. The final rules are expected to be issued in early November. Comments to CMS are due September 15, 2025.
Key takeaways from the proposed rules include:
- Increasing OPPS and ASC payment rates by 2.4%.
- Applying site-neutral reimbursement to drug administration services within non-excepted/non-grandfathered off-campus hospital outpatient departments (HOPDs) (Sole Community Hospitals are exempted).
- Phasing out the Inpatient Only (IPO) List over the next 3 years.
- Revising the criteria used to identify covered surgical procedures resulting in an addition of 270+ codes and procedures to the ASC CPL.
- Revising the annual offset percentage, stemming from the previously overturned 340B reimbursement reductions, for non-drug items and services from 0.5% to 2% effective CY 2026, excluding hospitals that enrolled in Medicare after January 1, 2018.
- Taking the next step toward reintroducing 340B reimbursement cuts in the future by announcing a hospital drug acquisition cost survey.
- Modifying price transparency requirements for hospitals.
CMS is requesting comments on a host of potential impactful changes, including whether to expand site-neutral reimbursement to on-campus HOPD clinic visits. This is the first time CMS has suggested the potential of site neutrality on the main hospital campus. Advis is available to assist providers in preparing feedback on the questions posed by CMS on this topic, as well as to help estimate the financial impacts of site-neutral and 340B-related proposals.
Advis summarizes the key components of the proposed rules in more detail below.
- Updates to OPPS and ASC payment rates
CMS proposes to increase OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.4%. Similarly, using the hospital market basket update, CMS proposes to increase ASC payment rates by 2.4%.
- Site-Neutral Reimbursement for Drug Administration Services in Off-campus HOPDs
Starting in CY 2026, CMS proposes applying the MPFS equivalent (site-neutral) rate for any HCPCS codes assigned to drug administration services Ambulatory Payment Classifications (APCs) when the service is provided at excepted/grandfathered off-campus HOPDs (note, the MPFS equivalent/site-neutral rate is already applied at non-excepted/non-grandfathered off-campus PBDs). CMS proposes to exempt Sole Community Hospitals (SCH).
In addition, CMS indicates it is investigating expansion of its volume control method to on-campus clinic visits. CMS plans to review the potential impact of a policy to pay the MPFS equivalent of 40% of the OPPS rate for clinic visit services furnished in on-campus HOPDs.
As noted above, Advis recommends estimating the impact of these proposals on your organization and is available to assist. Given the potential significant implications of the on-campus site-neutral discussion, Advis is also available to help prepare responsive feedback to CMS on the questions posed in this proposal.
- Eliminating the Inpatient Only (IPO) List
CMS proposes phasing out the IPO list over the course of the next three years. For CY 2026, CMS proposes to remove 285 musculoskeletal services. Additionally, CMS proposes to continue its existing policy exempting procedures that are removed from the IPO list under the OPPS from certain medical review activities related to the two-midnight policy.
- ASC Covered Procedures List (CPL)
CMS proposes to expand the ASC CPL by revising the criteria used to identify covered surgical procedures. As a result, CMS proposes to add 276 procedures to the ASC CPL and an additional 271 codes to the ASC CPL that are proposed for removal from the IPO list for CY 2026.
In the proposed rule, CMS has also requested feedback as it reviews the potential of additional rulemaking around ambulatory services at a high risk of shifting to the hospital setting. Advis is available to assist with drafting responses to these comments.
- Changes to Implementing the 340B Final Remedy Rule
Previously, The 340B Final Remedy rule had established a 0.5% reduction in the OPPS conversion factor applicable to non-drug items and services beginning in CY 2026. Under the rule, the 0.5% reduction would remain in effect until the aggregate payment reduction reached the estimated $7.8 billion of increased non-drug item and services payments made from CY 2018 through CY 2022.
Under this proposed rule CMS is revising the annual offset percentage for non-drug items and services from 0.5% to 2% effective CY 2026. The rule will continue to exclude hospitals that enrolled in Medicare after January 1, 2018. This 2% reduction would remain in effect through CY 2031 instead of CY 2041.
As with the site-neutral proposals above, Advis encourages covered entities to review the potential impact of these proposed rules on your organization and is available to assist in this regard.
- Notice of Intent to Conduct Medicare OPPS Drugs Acquisition Cost Survey
In accordance with Section 1833(t)(14)(D)(ii) of the Social Security Act, CMS will be conducting a survey, with the submission window opening by early CY 2026, on the acquisition costs for each separately payable drug acquired by all hospitals paid under the OPPS. CMS intends to use the survey results to inform policymaking beginning with the CY 2027 OPPS/ASC proposed rule.
In the first term of the current administration, CMS implemented Medicare reimbursement reductions for 340B-acquired drugs. CMS reimbursed these drugs at ASP-22.5% as opposed to the standard ASP+6%, significantly reducing reimbursement. The United States Supreme Court overturned this reimbursement reduction yet outlined a pathway for it to be reinstated. The drug acquisition cost survey announced in this proposed rule is the next step in reimplementing these 340B reimbursement cuts.
To prepare for potential reimbursement cuts, Advis can help your organization project the impact to inform responsive strategies.
- Market-Based MS-DRG Relative Weight Data Collection and Methodology Proposal
To help determine relative Medicare payment rates for inpatient hospital services, CMS proposes to collect data from hospitals such as the median payer-specific charges they have negotiated with Medicare Advantage organizations and disclosed under CMS’ hospital price transparency rules.
- Hospital Price Transparency (HPT)
CMS is proposing several modifications, beginning January 1, 2026, to the HPT regulations to ensure that hospitals provide meaningful, accurate information about the amount they charge for healthcare items and services. Proposals include but are not limited to:
- Add definitions for “median allowed amount”, “ninetieth (90th) percentile allowed amount”, and “tenth (10th) percentile allowed amount.”
- Remove the requirement to report “estimated allowed amount” in machine-readable files (MRFs).
- Where payer-specific negotiated charge is based on a percentage or algorithm, hospitals would be required to disclose the tenth, median, and ninetieth percentile allowed amounts, as well as the count of allowed amounts in MRFs.
- Require that hospitals use electronic data interchange (EDI) 835 electronic remittance advice (ERA) transaction data to calculate and encode the above values.
- Standardize time frame and other methodologies related to calculating allowed amounts.
- Update the language hospitals must include in the MRF attestation.
- Require hospitals to encode the name of a senior official (CEO, CFO, president, etc.) who oversees the accuracy of the data in the attestation included in the MRF.
- Require hospitals to encode their national provider identifiers (Type 2 NPIs) in their MRF.
- Reduce the amount of civil monetary penalty for noncompliance with the HPT requirements by 35% when a hospital agrees with CMS’ determination of their noncompliance and waives the right to a hearing by an Administrative Law Judge.
Contact Advis to assess your organization’s position and technical standards as it relates to these proposals.
Reach out to Advis today to discuss the impact of the above proposed rules. As seasoned consultants with deep expertise in CMS regulations, payment models, and quality reporting programs, Advis offers actionable guidance to ensure your organization is compliant, financially optimized, and strategically positioned for the future.
Published July 17, 2025
