CMS has released its Outpatient Prospective Payment System proposed rule for 2026, which would raise Medicare outpatient payment rates next year.
Five things to know:
1. Payment update. CMS proposed increasing OPPS rates for hospitals that meet quality reporting requirements by 2.4% in 2026. The increase is based on the projected hospital market basket percentage increase of 3.2%, minus a 0.8 percentage point productivity adjustment. CMS also proposed a 2.4% pay increase for ambulatory surgery centers in 2026.
2. Inpatient-only list. CMS plans to phase out the IPO list over a 3-year period, beginning with removing 285 mostly musculoskeletal procedures from the list in 2026. The proposal would allow for these services to be paid by Medicare in the hospital outpatient setting when determined to be clinically appropriate — giving physicians greater flexibility in determining the most appropriate site of service, according to the agency.
3. ASC covered procedures list. CMS aims to revise the ASC CPL by updating its general criteria and shifting five exclusion criteria into a new, nonbinding section focused on physician-led safety considerations. As a result, 276 procedures would be added to the ASC CPL. Additionally, 271 codes slated for removal from the IPO list are proposed for inclusion.
4. 340B. In the 340B Final Remedy Rule, CMS finalized a change to the OPPS conversion factor for non-drug items and services starting in 2026. Initially, a 0.5% pay cut was set to remain in place until recouping $7.8 billion in overpayments made between 2018 and 2022 — a process estimated to extend through 2041. However, CMS now plans to up the pay cut to 2% in 2026, shortening the repayment timeline to 2031.
5. Hospital price transparency. CMS proposed several hospital price transparency updates following President Donald Trump’s recent executive order, including reducing the civil monetary penalty by 35% for hospitals that accept CMS’ noncompliance determination and waive their right to an administrative hearing. Beginning Jan. 1, 2026, CMS also proposes that hospitals:
- Report the 10th, median and 90th percentile allowed amounts in machine-readable files when negotiated charges are based on percentages or algorithms.
- Include the count of allowed amounts used to determine these percentiles.
- Use EDI 835 electronic remittance advice transaction data to calculate and encode allowed amounts for algorithm-based negotiated charges.
- Follow standardized methodology and lookback period requirements to ensure data consistency.
- Attest to the completeness of payer-specific negotiated charges in dollar amounts and — when charges can’t be expressed in dollars — provide sufficient data for the public to derive them.
“We are building on our efforts to modernize Medicare payments by advancing site neutrality, simplifying hospital billing, and ensuring real prices — not estimates — are available to patients,” Chris Klomp, deputy administrator and director of CMS, said in a July 15 news release. “These changes help make hospital care more predictable, accountable and affordable.”
Click here to read the 913-page proposed rule in full.
