The American Hospital Association voiced strong concerns following the July 15 release of CMS’ proposed rule for the 2026 hospital outpatient prospective payment system.
Four things to know:
1. The proposal includes a net 2.4% rate increase — a 3.2% market basket update reduced by a 0.8 percentage point productivity cut. Ashley Thompson, AHA senior vice president of public policy analysis and development, called the update “inadequate,” particularly for hospitals in rural and underserved communities facing significant financial strain.
2. CMS also proposed phasing out the inpatient-only list over three years, starting with 285 mostly musculoskeletal procedures, and expanding site-neutral payment policies, including a 40% OPPS rate for drug administration services in grandfathered off-campus hospital outpatient departments. Ms. Thompson said both policies “fail to account for the real and crucial differences” between hospital outpatient departments and other care settings.
3. The agency is also accelerating a repayment plan requiring hospitals to return $7.8 billion in overpayments related to 340B non-drug services. Instead of 0.5% annual cuts over 14 years, CMS has proposed 2% cuts annually through 2031.
“It is important to remember that this clawback punishes 340B hospitals for the agency’s own mistake in implementing a policy that a unanimous Supreme Court held to be unlawful,” Ms. Thompason said in a statement. “Doubling down on that unlawfulness, the proposed recoupment is both illegal and unwise, and it should not be finalized.”
4. CMS also proposed a new drug acquisition cost survey, quality reporting changes for outpatient, ASC and rural emergency hospitals, and updates to the hospital price transparency rule. Public comments will be accepted for 60 days.
“We look forward to reviewing these proposals in more detail and participating in the comment process with the agency,” Ms. Thompson said.
