Medicare Outpatient Rules Expand Again in 2027
Published Date: 7/7/2026
Proposed Rule
Summary
Starting in 2027, Medicare is updating how it pays hospitals and surgery centers for outpatient care, aiming to make payments fairer and clearer. They’re also improving quality reporting and asking for ideas to make hospital price info easier to understand and compare. These changes affect hospitals, surgery centers, and patients, with some new rules and opportunities coming soon.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 2 costs, 1 mixed.
Medicare OPPS/ASC Rates Rise 2.4%
Starting January 1, 2027, CMS proposes an OPD fee schedule increase factor of 2.4 percent to update payment rates under the Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgical Center (ASC) payment system. CMS estimates total OPPS payments for CY 2027 will be about $110.9 billion and that the OPPS policies in this rule will yield an estimated 1.9 percent increase in OPPS payments to providers (about a $9.5 billion increase compared to CY 2026 estimates).
Change to 340B Drug Payments (ASP-33.4%)
For CY 2027, CMS proposes to pay ASP minus 33.4 percent for drugs acquired under the 340B program and to apply this policy in a budget-neutral way by increasing OPPS payments for non-drug services by an equivalent amount (estimated as an 8.44 percent increase to non-drug service payments). CMS also proposes increasing an annual conversion factor reduction (the 340B-related percent reduction) from 0.5 percent to 3 percent for hospitals to prospectively adjust payments for non-drug items and services.
Botulinum Toxin Prior Authorization
CMS proposes to expand the Hospital Outpatient Department prior authorization requirement to add Botulinum Toxin Injection codes for dates of service on or after July 1, 2027. Facilities and Medicare patients receiving those services will face the expanded prior authorization process beginning July 1, 2027.
Inpatient-Only List Shrinks by 637 Codes
CMS proposes to remove 637 services from the Inpatient Only (IPO) list for CY 2027, including services across multiple clinical families (for example, auditory, digestive, respiratory, and maternity care), continuing the phase-out of the IPO list.
Standardizing Hospital Price Data (RFI)
CMS requests information on approaches to strengthen standardization and comparability of Hospital Price Transparency (HPT) data reported in machine-readable files and consumer-friendly displays, including contract mechanisms (outlier payments, rate tiering, carve-outs) and whether to modify or eliminate the current deemed compliance policy for internet-based price estimator tools.
Alaska & Hawaii Outpatient COLA
For CY 2027, CMS proposes a cost-of-living adjustment (COLA) for outpatient hospital services in Alaska and Hawaii that mirrors the COLA provided for inpatient hospital services in those States, including any changes finalized in the IPPS for FY 2027. The proposal applies to outpatient services in Alaska and Hawaii for CY 2027.
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Key Dates
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