2027 OPPS final rule: CMS cuts reimbursement for 340B, non-drug items and services

Hospitals will be facing lower reimbursement for certain services at expected off-campus provider-based departments (PBD), 340B drugs, and non-drug items and services, according the 2027 Outpatient Prospective Payment System (OPPS) final rule, released November 4. The final rule details numerous changes to reimbursement policies, quality and reporting programs, and more.

CMS finalized a 2.3% increase to OPPS payments, slightly lower than the 2.4% it proposed.

CMS is moving ahead with significant cuts to reimbursement for drugs acquired under the 340B program. According to the final rule, starting in 2027 the agency will pay average sales price (ASP) minus 28%. Although this is still a major decrease, it’s slightly less than the minus 33% the agency initially proposed.

CMS also finalized its proposal to reduce reimbursement for certain imaging without contrast services at excepted off-campus PBDs to the Medicare Physician Fee Schedule (MPFS) rate. The affected services include certain bone density scans, x-rays, ultrasounds, CT scans and MRIs. This provision expands on existing policy that previously lowered the reimbursement for drug administration services at excepted off-campus PBDs. CMS introduced these policies to control what it describes as an unnecessary increase in volume.

Starting in 2027, hospitals will face a new, more aggressive plan to recoup higher payments CMS made for non-340B drugs and items under the OPPS from 2018 to 2022. These higher payments were made as part of a previous policy that lowered 340B reimbursement. That policy was the subject of a lengthy court battle and was eventually vacated. Because the vacated policy was budget neutral, during the time it was in effect, CMS had redistributed those funds by increasing OPPS payments for non-drug items and services. CMS determined that the remedy should be budget neutral as well, so to offset the repayments to organizations affected by the vacated policy, it finalized a plan to recoup funds from organizations that received increased payments. Under that final rule, CMS reduced the OPPS conversion factor by 0.5% starting in 2026. The reduction would remain in effect until the full $7.8 billion is offset, which CMS estimated would take 16 years. Providers who enrolled in Medicare after January 1, 2018, are excluded from the rate reduction.

In 2026, CMS proposed increasing the reduction to 2% to accelerate the recoupment timeline. Although it opted not to move forward with the policy at that time, the agency stated that it would revisit the issue in the future. In the 2027 OPPS proposed rule, CMS again proposed increasing the reduction to 3%.

According to the final rule, CMS has chosen to finalize its proposal to reduce the OPPS conversion factor for non-drug items and services by 2% until the estimated payment reduction reaches $7.8 billion, which the agency estimates will occur in 2031.

CMS is eliminating another batch of service from the IPO list. For 2027, 637 services will be removed as part of its plan to gradually the eliminate the IPO list. The current batch of include auditory, digestive, endocrine, female genital, hemic and lymphatic systems, integumentary, male genital, maternity care and delivery, mediastinum and diaphragm, respiratory, and urinary services.

Other provisions cover updates to quality reporting programs, prior authorization for additional botulinum toxin injection, as well as updates for partial hospitalization and intensive outpatient programs.

Revenue integrity professionals should read the final rule carefully. Pay close attention to provisions that will directly affect your job duties, department, organization, and community. Reach out to colleagues in other departments to discuss changes with cross-functional impacts and collaborate with them to develop and deliver education. Ensure systems are updated and tested and adjust any financial and revenue calculations as needed.

NAHRI will provide additional, more detailed analysis of the final rule in upcoming issues of the NAHRI Journal, Quarterly Members Calls, and our members-only webinar library.