CMS Finalizes 2026 Medicare OPPS and ASC Payment Rule with Site-neutral and Transparency Updates

The Centers for Medicare & Medicaid Services (CMS) released its final rule for Medicare payment under the Outpatient Prospective Payment System (OPPS) and Ambulatory Surgery Centers (ASC) for calendar year 2026. This rule implements policies aligned with directives from the previous administration, focusing on cost-efficiency and modernization of payment structures. A key change is the phased removal of Medicare payment restrictions based on site of service, beginning with the elimination of 285 musculoskeletal-related services from the Inpatient Only list. This enables more procedures to be performed in lower-cost hospital outpatient departments and ASCs. CMS also expanded site-neutral payment policies to drug administration services, including chemotherapy, in off-campus hospital departments. This payment model reimburses at rates closer to physician office fees, reducing payments to some hospital outpatient departments by an estimated $290 million nationwide. Rural sole community hospitals are exempted from these reductions to preserve access to care. On hospital price transparency, CMS enhanced reporting requirements effective January 2026, requiring hospitals to provide detailed payer-specific negotiated charge data and signed attestations of data accuracy by senior executives. Enforcement of new reporting starts April 2026, with penalty reductions for hospitals admitting noncompliance unless core transparency requirements are unmet. Digital and virtual health supervision policies were updated to permanently permit real-time audio-video remote supervision for specific rehabilitation and diagnostic services, excluding audio-only communication. CMS also set payment rates for several software-as-a-service medical imaging services. Adjustments were made to graduate medical education program eligibility criteria to prohibit accreditation practices involving discrimination. Additionally, CMS announced a 2026 nationwide survey to collect hospital acquisition costs for outpatient drugs, including 340B and non-340B drugs, aiming to inform future payment policy changes. The survey requires participation from hospitals receiving OPPS drug payments from mid-2024 to mid-2025. CMS deferred increasing payment reductions tied to correcting previous 340B payment issues, signaling potential implementation in 2027. The rule finalizes a 2.6% payment increase for OPPS and ASC rates for 2026, with a 2% reduction for providers not meeting quality reporting standards. Overall, the policies collectively seek to modernize outpatient payment systems, encourage cost efficiencies, increase pricing transparency, and support regulatory compliance while cautiously managing impacts on access to care in rural areas.