CMS finalized its 2026 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System rule Nov. 21, with changes that aim to boost price transparency and expand outpatient access, but hospitals argue the rule will deepen financial pressures on facilities serving vulnerable populations.
The rule includes a 2.6% payment rate increase for hospitals meeting quality reporting requirements. CMS also finalized a three-year phase-out of the inpatient-only list and expanded the list of procedures covered in ambulatory surgical centers.
One of the most contentious components of the rule is the expansion of site-neutral payment policies in 2026, which would align reimbursement for certain outpatient services provided at hospital outpatient departments and off-campus facilities. CMS said the goal is to reduce unnecessary spending and copays based on site of care, not clinical need.
Ashley Thompson, senior vice president of public policy analysis and development for the American Hospital Association, said the policies ignore the complex needs of hospital outpatient department patients and widen financial strain.
“The AHA is disappointed that CMS has finalized cuts to hospital and health system services, including those in rural and underserved communities,” Ms. Thompson said in a Nov. 21 statement. “Combined with its continued inadequate market basket updates, the agency is exacerbating the challenging financial pressures under which hospitals are operating to serve their patients and communities.”
The AHA is particularly concerned with site-neutral cuts and the elimination of the inpatient-only list, arguing these moves “ignore the important differences between hospital outpatient departments and other sites of care.” Ms. Thompson said Medicare patients in HOPDs are “sicker, more clinically complex, and more often disabled or residing in rural or low-income areas” than those seen in physician offices.
CMS anticipated the site-neutral policy and other reforms will save Medicare and beneficiaries $11 billion over the next decade.
Jennifer DeCubellis, president and CEO of America’s Essential Hospitals, echoed concerns about site-neutral payments and the burden of new data reporting requirements, especially for hospitals serving underserved communities.
“These Medicare cuts threaten hospitals’ ability to deliver high-quality care to their patients and communities,” Ms. DeCubellis said. “We urge CMS to implement policies that protect and strengthen America’s healthcare system, rather than dragging it down with draconian cuts and needless administrative work.”
While both AHA and America’s Essential Hospitals commended CMS for delaying an accelerated repayment timeline related to the 340B drug pricing program remedy, they remain opposed to implementing that acceleration in 2027.
Ms. Thompson said moving forward with an expedited 340B repayment schedule “either now or in the future, is both bad policy and unlawful.”
Other changes finalized in the rule include requiring hospitals to post actual, consumer-friendly prices in standardized formats beginning Jan. 1, 2026. Hospitals must also include data on median, 10th percentile and 90th percentile allowed amounts in machine-readable files — a requirement CMS will begin enforcing April 1, 2026.
“We are strengthening Medicare’s foundation by protecting beneficiaries, eliminating fraud, and advancing medical innovation — all while maintaining strict provider accountability and responsible use of taxpayer funds,” CMS Administrator Mehmet Oz, MD, said. “These comprehensive reforms expand patient choice and establish the price transparency Americans need for confident healthcare decisions.”
