Proposed Changes to Medicare Payment Systems for 2027

The Centers for Medicare & Medicaid Services (CMS) has unveiled a proposed rule set to impact the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgical Center (ASC) Payment System in 2027. Key changes include a 2.4% payment increase for providers meeting quality reporting standards, with extensions in site-neutral payment policies and efforts to reduce prescription drug costs.

The proposal, published in the Federal Register on July 7, forecasts a potential $9.5 billion payment increase under the OPPS, totaling an estimated $110.9 billion for 2027. Hospitals participating in the Hospital Outpatient Quality Reporting Program could see a 3.2% market basket increase, slightly offset by a 0.8% productivity adjustment. Failing to meet quality metrics, hospitals would incur a 2% annual payment reduction.

Similar payment upticks of 2.4% are proposed for ASCs, aligning updates with the hospital market basket. This alignment seeks to support access to outpatient surgical services and account for rising provider costs. The proposal also extends site-neutral payment policies, suggesting off-campus hospital outpatient departments conform to the Physician Fee Schedule-equivalent rate, aiming to lower excessive expenditures.

In drug reimbursement, CMS plans to adjust policies for the 340B Drug Pricing Program to standardize pricing and lessen out-of-pocket costs for beneficiaries. These changes are paired with updates to quality reporting programs for hospitals and ASCs, which intend to alleviate reporting burdens and improve pricing information accuracy.

Further updates encompass outpatient behavioral health services, rural emergency hospitals, and intensive outpatient programs, ensuring continued service accessibility. The expansion of site-neutral payment policies remains a prominent discussion point, especially considering the cost differences between outpatient departments and physician offices.

Healthcare professionals must examine these proposed rules closely due to their potential financial and operational implications. CMS invites public comments on these proposed revisions until August 31, with a final rule expected later this year, effective January 1, 2027.