CMS Proposes Rule Changes to Medicare Outpatient Payment Policies for 2027

The Centers for Medicare & Medicaid Services (CMS) has announced a proposed rule to modify payment policies for Medicare outpatient services starting in 2027. This proposal includes reduced payments for hospital-provided drugs and imaging services, which CMS anticipates could lead to significant savings for both beneficiaries and taxpayers.

With these changes, CMS aims to recalibrate payment structures for hospital outpatient departments and ambulatory surgical centers. A primary focus is aligning reimbursement for drugs within the federal 340B Drug Pricing Program to the actual acquisition costs reported by hospitals. This adjustment is projected to cut overall drug spending by approximately $5.7 billion in 2027, translating to savings for Medicare beneficiaries and taxpayers alike.

A budget-neutral requirement means the savings will be redistributed, increasing reimbursement rates for non-drug outpatient services. The rule also targets the utilization management of botulinum toxin injection services, following a surge in claims, with expected net savings of over $17 million annually.

Additionally, CMS's proposal seeks to address payment disparities for imaging services such as X-rays and MRIs, aligning rates between hospital-owned and independent facilities. Standardized payment rates could reduce Medicare Part B expenses by an estimated $260 million in the first year, benefiting both the program and patients financially.

CMS plans to continue phasing out the inpatient-only list, expanding the range of procedures authorized for ambulatory surgical centers. This initiative enhances healthcare providers' decision-making flexibility regarding outpatient surgeries.

Furthermore, CMS is actively seeking public feedback to improve hospital price transparency. With hospitals required to publicly disclose pricing details since 2021, standardizing these disclosures could make them more accessible and useful for patients, employers, and researchers. These regulatory updates are part of ongoing efforts to streamline healthcare spending and optimize Medicare reimbursement efficiency while advancing transparency in the healthcare system.