Calendar Year 2027 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Final Rule (CMS-1850-F)

On November 4, 2026, CMS issued the CY 2027 OPPS/ASC Final Rule (CMS-1850-F), updating Medicare payment policies and rates for hospital outpatient departments and ASCs effective January 1, 2027. The rule finalizes a 2.3% payment rate update for both OPPS and ASC settings for providers meeting applicable quality reporting requirements, based on a projected IPPS market basket increase of 3.2% reduced by a 0.9 percentage point productivity adjustment. The rule affects approximately 3,500 hospitals and 6,400 ASCs. For 340B-acquired drugs, CMS finalized payment at Average Sales Price (ASP) minus 28%, following a drug acquisition cost survey conducted from January 1, 2026 through April 7, 2026 under section 1833(t)(14)(D)(ii) of the Social Security Act. The survey revealed that beneficiary cost-sharing amounts, typically 20% of total payment, in some instances exceeded the total price the hospital paid for 340B-acquired drugs. This payment change is estimated to reduce Original Medicare drug payments by $4.35 billion and beneficiary drug payments by $1.1 billion in the first year. Per statute, the policy is implemented budget-neutrally, with OPPS payments for non-drug services increased by an equivalent amount. CMS also finalized a revision to the annual prospective offset for non-drug items and services from 0.5% to 2% effective CY 2027, excluding hospitals that enrolled in Medicare after January 1, 2018. This offset applies until the estimated aggregate payment reduction reaches $7.8 billion, which CMS estimates will occur in CY 2031, addressing increased non-drug payments made from CY 2018 through CY 2022 under the prior 340B payment policy. The rule expands the volume control method under section 1833(t)(2)(F) of the Social Security Act to imaging without contrast services, including certain bone density scans, x-rays, ultrasounds, CT scans, and MRIs, furnished in excepted off-campus provider-based departments. The applicable rate is the Physician Fee Schedule equivalent payment rate for affected HCPCS codes. This provision is estimated to reduce Medicare Part B expenditures by approximately $260 million in the first year, with rural Sole Community Hospitals exempted. CMS is also finalizing prior authorization requirements for eight additional botulinum toxin injection codes in the hospital outpatient setting, and is allowing hospital accrediting organizations with deeming authority to assess compliance with EMTALA administrative requirements under 42 CFR 489.20, while CMS and OIG retain exclusive enforcement authority over substantive patient care protections under 42 CFR 489.24.