Medicare's Mega-Rule Bundles Prices, Transparency, Emergency Care, and Closures
Published Date: 11/6/2026
Rule
Summary
Starting in 2027, Medicare is updating how hospitals and surgery centers get paid for outpatient care and surgeries. These changes affect hospitals, surgery centers, and patients by adjusting payment rates and improving quality reporting. Plus, CMS is asking for ideas to make hospital price info clearer and easier to compare, while also handling rules about emergency care and teaching hospital closures.
Analyzed Economic Effects
5 provisions identified: 3 benefits, 1 costs, 1 mixed.
Medicare OPPS and ASC Payments Rise 2.3%
Starting January 1, 2027, Medicare increases hospital outpatient (OPPS) and ambulatory surgical center (ASC) payment rates by an OPD fee schedule update factor of 2.3 percent. CMS estimates total OPPS payments for CY 2027 will be about $114.4 billion (roughly $11 billion more than CY 2026) and total ASC payments about $9.9 billion (about $560 million more than CY 2026).
340B-Acquired Drugs: Payment Set to ASP‑28%
For calendar year 2027, Medicare will pay for drugs acquired under the 340B program at Average Sales Price (ASP) minus 28 percent. CMS states this change will be budget‑neutral by increasing payments for non‑drug OPPS services by an estimated 7.50 percent and estimates that hospitals subject to the 340B remedy offset will see payment reductions (the 340B remedy offset is estimated to reduce payments by $1.6 billion in CY 2027).
Prior Authorization for Botulinum Injections
Hospital outpatient prior authorization is expanded to include Botulinum Toxin Injection services for dates of service on or after July 1, 2027. If you need a covered Botulinum Toxin Injection on or after that date, hospitals must follow the prior authorization process before Medicare pays.
More Procedures Move to ASCs; IPO List Shrinks
For CY 2027, CMS is expanding the Ambulatory Surgical Center (ASC) covered procedures list by adding 618 HCPCS/CPT codes and is removing 637 services from the Inpatient Only (IPO) list across many clinical families. These changes allow more procedures to be billed and performed in ASC or outpatient settings beginning in 2027.
Big Payment Increase for CMHC PHP/IOP Services
CMS estimates a 29.0 percent increase in Medicare payments to Community Mental Health Centers (CMHCs) for calendar year 2027 compared to CY 2026, reflecting the finalized policy for Partial Hospitalization Program (PHP) and Intensive Outpatient Program (IOP) payment rates. The estimate is based on calculating CMHC PHP and IOP costs as 40 percent of corresponding hospital-based costs.
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Key Dates
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