CMS proposes 2.4% annual outpatient, ASC boost

The Centers for Medicare and Medicaid Services is proposing a 2.4% payment rate increase for outpatient and ambulatory surgical centers in its 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Proposed Rule, which the agency expects will affect about 3,500 hospitals and 6,100 ASCs.

The 2.4% increase for hospitals is based on the projected hospital market basket percentage increase of 3.2%, reduced by a 0.8 percentage point productivity adjustment.

The increase for ASCs is based on the proposed IPPS market basket percentage increase of 3.2%, reduced by 0.8 percentage point for the productivity adjustment.

WHAT’S THE IMPACT

In the 2019 final rule, CMS adopted a method to control what it called “unnecessary increases” in the volume of the clinic visit service furnished in excepted off-campus provider-based departments (PBDs). This method prevents Medicare and beneficiaries from paying significantly more in the excepted off-campus PBD setting than in the physician office setting for some services. 

For 2026, CMS is proposing to expand this policy to include drug administration services furnished in excepted off-campus PBDs. 

CMS predicted this provision will reduce OPPS spending by $280 million in 2026, with $210 million of the savings accruing to Medicare, and $70 million saved by Medicare beneficiaries in the form of reduced beneficiary coinsurance.

The agency is also proposing to phase out the Inpatient Only list (IPO) over a three-year period, beginning with removing 285 mostly musculoskeletal procedures for CY 2026. This, said CMS, would allow for these services to be paid by Medicare in the hospital outpatient setting when determined to be clinically appropriate, ostensibly giving clinicians greater flexibility.

Another proposal centers around hospital price transparency regulations, with CMS saying after Jan. 1 it would require hospitals to read the tenth, median and ninetieth percentile allowed amounts in machine readable files when payer-specific negotiated charges are based on percentages or algorithms. CMS also wants hospitals to verify they’ve included dollar amounts when possible.

THE LARGER TREND

CMS also is floating changes to Overall Hospital Quality Star Ratings calculations, saying it wants to cap hospitals at four stars if they rank in the lowest quartile for the Safety of Care measure group in 2026. Subsequently, in 2027, hospitals in that quartile would see a one-star reduction.

The Hospital Outpatient Quality Reporting Program, the Rural Emergency Hospital Quality Reporting Program and the Ambulatory Surgical Center Quality Reporting Program were also singled out for changes.