The comment period closed Aug. 31 for CMS’ CY 2027 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center proposed rule, and healthcare groups laid out their objections in formal letters to the agency.
The AHA, AAMC and AMGA each submitted comments in late August urging CMS to withdraw or scale back key provisions, from 340B drug payment cuts to site-neutral payment expansion and new prior authorization requirements.
Here’s what the groups told CMS:
The AHA said the proposed 2.4% net payment update isn’t enough given continued cost pressure — total hospital expenses rose 7.5% in 2025, and MedPAC projects 2026 Medicare margins at -10%. The group asked CMS to work with Congress to shrink or eliminate the rule’s proposed 0.8-percentage-point productivity cut.
AHA also urged CMS to withdraw its proposed cut to imaging-without-contrast payments at off-campus provider-based departments, and to return to its 2025 process for removing procedures from the inpatient-only list rather than the broader approach proposed for 2027 — flagging procedures like open lung, stomach and colon resections as too high-risk for outpatient status.
On prior authorization, AHA urged CMS to drop the proposed expansion to more botulinum toxin injection codes, calling the affected services predominantly medical rather than cosmetic. The group also pushed back on the ASC covered procedures list expansion, citing safety concerns, and asked CMS to delay enforcement of new off-campus National Provider Identifier requirements by at least 12 months.
The AAMC called on CMS to withdraw the proposed 340B payment cut outright, arguing it exceeds the agency’s statutory authority. The group noted CMS’ 2018-2022 version of this cut was unanimously struck down by the Supreme Court, and said the new proposal is “just as unlawful.”
By AAMC’s count, the cut totals $5.77 billion, and would produce a -7.3% change in OPPS payments specifically for AAMC member hospitals — institutions whose Medicare fee-for-service margins were already -18.5% as of fiscal year 2023. The group also asked CMS to raise the overall 2027 payment update and abandon its plan to accelerate 340B remedy recoupment.
Beyond 340B, AAMC urged CMS to withdraw the botulinum toxin prior-authorization expansion entirely (not just add safeguards), slow the inpatient-only list phase-out, and reinstate the pre-2026 ASC covered procedures list criteria.
AMGA
AMGA said the rule’s headline 2.4% facility payment increase is largely funded by an 8.44% budget-neutral reallocation tied to the 340B drug cut — meaning much of the “increase” is 340B hospitals’ own losses redistributed elsewhere. Jerry Penso, MD, AMGA’s president and CEO, said CMS should calibrate policy changes to actual risk or cost rather than apply them broadly for administrative convenience.
AMGA’s recommendations included withdrawing the proposed increase to the annual 340B remedy offset (from 0.5% to 3%), reconsidering the drug payment cut given limited survey response rates, assessing the cumulative impact of site-neutral imaging cuts before finalizing them, and setting clearer safeguards before expanding prior authorization to more botulinum toxin codes.
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