2027 OPPS proposed rule: Hospitals could face major cuts to payments, more complex price transparency rules
Hospitals could be facing lower reimbursement for non-drug items and services, 340B drugs, excepted off-campus provider-based department (PBD) services, as well as additional price transparency and prior authorization requirements, according to CMS’ 2027 Outpatient Prospective Payment System (OPPS) proposed rule. The proposed rule, released July 2, covers changes to payments for hospital outpatient services and other guidance and requirements.
CMS is proposing a 2.4% increase to OPPS payments. In comparison, for 2026 CMS proposed a 2.4% increase and finalized a 2.6% increase.
Off-campus PBD cuts
CMS is proposing to reduce payment for imaging without contrast services furnished in excepted off-campus PBDs to the Medicare Physician Fee Schedule (MPFS) rate, expanding the policy that already applies to drug administration services. As with the current policy, the agency frames this as a measure to control what it calls an unnecessary increase in volume. According to the proposed rule, the policy would reduce Medicare Part B spending by approximately $260 million in the first year of the policy if it is finalized. CMS also projects that the proposal would decrease beneficiary cost-sharing obligations by approximately $70 million in the first year.
However, it’s also important to consider how these cost savings measures may end up affecting beneficiaries’ access to care, says NAHRI Advisory Board member Tiffany LaPlante, RMC, RMM, system manager revenue integrity-charge capture at Bronson Healthcare Group in Kalamazoo, Michigan.
“I would like to better understand how CMS evaluated patient access when considering additional site-neutral payment reductions,” LaPlante says. “Many health systems have developed off-campus locations to bring outpatient services closer to the communities they serve, so I would be interested in understanding how CMS assessed the potential impact on access to care and service availability.”
It’s also notable that CMS proposes to implement this policy as a permanent, non-budget-neutral cut, which means the savings don't get redistributed anywhere else in the OPPS system, instead the dollars leave and as I have joked in the past, points out NAHRI Advisory Board member Jugna Shah, MPH, CHRI, founder and CEO of Nimitt Consulting Inc. in Spicer, Minnesota. “If finalized, this would be the third time in under a decade that CMS would have succeeded in using this specific policy lever (clinic visits in 2019, drug administration in 2026, and now imaging for CY 2027), each time using the theory that redistributing the savings would just shift ‘unnecessary’ spending around in the OPPS system, rather than eliminating it altogether,” Shah says.
The proposed rule does not fully address the differences between the OPPS and MPFS payment systems, such as packaging, and, therefore, does not resolve questions about CMS’ logic and methodology behind the policy, Shah says.
340B payment and remedy changes
As experts predicted, CMS is proposing to reduce payments for 340B drugs based on the results of the 340B drug acquisition cost survey it conducted earlier this year. Based on the survey data, CMS is proposing to pay for 340B acquired drugs at the drug’s Average Sales Price (ASP) minus 33.4%. Currently, CMS pays for 340B drugs at ASP plus 6%. In comparison, under CMS’ previous policy to reduce 340B payments, which was vacated after a lengthy legal battle, the agency paid ASP minus 22.5%
The proposed rule discusses an alternative methodology based on the Health Resources and Services Administration’s (HRSA) 340B ceiling price data. According to CMS’ calculations, using this methodology would result in a payment of ASP minus 28%.
CMS does not address how these proposed reductions relate to the purpose of the 340B drug discount program, Shah says. Under HRSA, the purpose of the discount is to offer savings to provider organizations that these organizations are to invest in their communities to expand service delivery and reach. “For me, the problem continues to be that it feels like the wrong survey/wrong sort of review was done,” she says. “If the problem is that CMS and HRSA believe there are hospitals who are getting the discount and not reinvesting, then it seems like the lens should be on the bad actors and holding them accountable.”
CMS is also proposing changes to how it will address the increased OPPS payments it made to non-drug items and services to preserve budget neutrality in 2018 to 2022 to offset cuts to 340B reimbursement under the vacated policy.
In 2023, CMS released a final rule outlining its plans to repay organizations that were negatively affected and 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 will remain in effect until the full $7.8 billion is offset, which CMS estimates will take 16 years. Providers who enrolled in Medicare after January 1, 2018, are excluded from the rate reduction.
In the 2026 OPPS proposed rule, CMS proposed to increase the annual reduction to the OPPS conversion factor from 0.5% to 2% effective January 1, 2026. The agency opted not to move forward with the proposal in the final rule.
However, CMS is revisiting an even greater accelerated repayment schedule in the 2027 OPPS proposed rule. Under the new proposal, reduction would jump from 0.5% to 3%. This reduction would be in place until the estimated payment reduction reaches $7.8 billion, which CMS estimates will occur in 2029. Providers who enrolled in Medicare after January 1, 2018, are excluded from the rate reduction.
Price transparency, IPO, and other proposals
CMS is requesting feedback on adding more details to its requirements for reporting hospital price data. According to the proposed rule, CMS is specifically seeking stakeholder input on ways to strengthen machine-readable file (MRF) requirements and ways to improve the usefulness of the consumer-friendly display requirements.
Other notable proposals include the elimination of more services from the inpatient-only (IPO) list, including maternity care and delivery. This is part of CMS’ policy, finalized in the 2026 OPPS final rule, to eliminate the IPO list. Although only a minority of maternal cases are covered by Medicare several factors, including increased rates of maternal and fetal mortality and the influence the policy could have on commercial payers, make it notable, according to NAHRI Advisory Board member Stephanie Ellis, RN, BSN, COC, CHRI, CRCR, director of revenue performance and audit management at UChicago Medicine in Chicago, Illinois.
“Given the rise in maternal and fetal mortality, removing maternity care and delivery services from facilities with immediate acute care access poses significant safety risks,” Ellis says. “If complications occur, transferring patients to acute care hospitals incurs additional costs and potential delays, such as ambulance transport and emergency evaluations, which may negate any cost savings.”
CMS is also considering implementing prior authorization requirements for eight additional botulinum toxin injection codes.
The proposed rule also includes changes to partial hospitalization programs, quality reporting measures, and other updates.
Comments on the proposed rule are due August 31.
Revenue integrity professionals should read the proposed rule carefully, paying particular attention to proposals that may directly affect their job duties, program, organization, and the community their organization serves. Identify proposals that may have cross-functional impacts and meet with colleagues in those departments to discuss the potential effects. Analyze the financial impact the proposal might have if they are finalized and share your findings with your department and leaders. Consider how existing workflows would need to be modified to comply with changes and what resources would be required to implement them. Consider submitting comments on specific proposals that are of interest to them, as well as responding to CMS’ requests for information. For guidance on writing an effective comment, refer to NAHRI’s white paper Advocacy in Action: Commenting on Proposed Rules.