CMS Releases CY 2026 Hospital OPPS and ASC Proposed Payment and Policy Updates

CMS released the proposed Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center payment and policy updates for calendar year 2026. The proposed rule contains updates to the payment rates, quality reporting programs and method used to calculate the Overall Hospital Quality Star Rating system. Highlights include the following.

Outpatient PPS

• Rate increase of 2.4% (3.2% market basket reduced by 0.8% for the productivity adjustment)
• Reduction in payments for drug administration services furnished in excepted off-campus, provider-based departments
• Phaseout of the inpatient-only list over a three-year period, including eliminating 285 procedures from the CY 2026 list
• Revision of the annual offset percentage for nondrug items and services increase from 0.5% to 2.0% starting in CY 2026 due to the 340B remedy rule
• Revision of the CMS hospital price transparency rules including requirement for hospitals to report the median payer-specific charges that are negotiated with Medicare Advantage organizations
• Proposal to set new Ambulatory Payment Classifications for intensive outpatient program settings
• Updates to the Hospital OPPS and Rural Emergency Hospital quality reporting program
• Reduction in civil monetary penalties for noncompliance with the hospital price transparency requirements by 35% when a hospital agrees with CMS’ determination of their noncompliance and waives the right to a hearing

ASC

• Rate increase of 2.4% (3.2% reduced by 0.8% for the productivity adjustment)
• Extension of the use of the hospital market basket updates as the update factor for an additional year

Comments are due 60 days after the filing of the rule in the Federal Register. MHA published an issue brief with additional information.