CMS finalizes increases to Medicare hospital outpatient department payment rates, changes to site-neutral and 340B for 2027

The Centers for Medicare & Medicaid Services Nov. 4 issued a final rule that increases Medicare hospital outpatient prospective payment system rates by a net 2.3% in calendar year 2027 compared to 2026. This includes a 3.2% market basket update, offset by a 0.9 percentage point cut for productivity.

In a statement shared with the media, Ashley Thompson, AHA senior vice president of public policy analysis and development, said, “CMS’ Medicare outpatient hospital payment rate does not adequately take into account the financial challenges facing hospitals today. These challenges are amplified for hospitals serving rural and underserved communities, many of which are already making hard decisions about how they will maintain access to healthcare services in their communities.”

In addition, CMS finalized its proposal to expand its site-neutral payment policy to imaging without contrast services furnished in grandfathered off-campus hospital outpatient departments, setting the site-neutral rate at 40% of the outpatient PPS rate. As with the other site-neutral policies, CMS exempts rural sole community hospitals from this policy. The agency estimates this policy will cut outpatient PPS spending by $260 million in CY 2027.

Thompson said the AHA was disappointed by the site-neutral payment policy, emphasizing that “hospital outpatient departments treat sicker and more complex groups of patients than independent physician practices, including those with higher rates of disability and who are more likely to come from low-income and rural communities.”

Beginning Jan. 1, 2027, CMS finalized payment for separately payable 340B drugs at average sales price of the drug minus 28%, rather than the proposed ASP minus 33.4%. The new payment rate is based on 340B ceiling price data it received from the Health Resources and Services Administration rather than the results of the drug acquisition cost survey the agency conducted earlier this year. The payment reduction will be implemented in a budget-neutral manner, meaning CMS will increase payments for non-drug items and services by 7.5%. CMS will exempt rural sole community hospitals as well as PPS-exempt cancer hospitals and children’s hospitals. Non-340B hospitals will continue to be paid for separately payable drugs at ASP plus 6%.

Separately, CMS finalized a policy to accelerate recoupment of the prior 340B payment remedy by increasing the annual outpatient PPS conversion-factor reduction from 0.5% to 2% beginning in CY 2027, with recoupment of the estimated $7.8 billion expected to be completed by 2031.

“We remain deeply concerned about CMS’ continued assault on the 340B program by reducing reimbursement rates and the accelerated clawback of funds from hospitals, both of which will further stress hospitals' ability to care for their patients,” Thompson said.

In addition, CMS finalized its proposal to remove 637 additional services from the inpatient-only list. It also authorizes CMS-approved accrediting organizations to assess compliance with certain Emergency Medical Treatment and Labor Act administrative requirements; adds botulinum toxin injection codes to the services subject to prior authorization (as of July 1, 2027); and requires that by Jan. 1, 2028, hospitals must, for each of their off-campus outpatient departments, obtain a separate national provider identifier and attest to compliance with the provider-based rules in order to bill under the outpatient PPS as an off-campus provider-based department.

AHA members will receive a Regulatory Advisory with more details.

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.