CMS Releases 2027 OPPS Proposed Rule: Key Changes For Hospitals, Health Systems And Healthcare Providers

The Centers for Medicare & Medicaid Services (CMS) recently released its proposed Calendar Year (CY) 2027 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Proposed Rule. While annual payment rules are a familiar part of the Medicare landscape, this proposal includes several policy changes that could have meaningful operational and financial implications for hospitals, health systems, ambulatory surgery centers and other healthcare providers.

Among the proposal’s most closely watched provisions are changes to Medicare reimbursement for drugs purchased through the 340B Drug Pricing Program, continued movement toward site-neutral payments, expansion of procedures eligible for ambulatory surgery centers, additional utilization management measures and renewed attention to hospital price transparency. Although these policies remain subject to public comment until August 31 and may change before a final rule is issued, healthcare organizations should begin evaluating their potential impact now.

Proposed Changes to 340B Drug Reimbursement

One of the proposal’s most closely followed provision concerns reimbursement for drugs purchased under the federal 340B Drug Pricing Program.

CMS proposes replacing the current Average Sales Price (ASP)-based reimbursement methodology for separately payable 340B drugs with reimbursement based on surveyed acquisition costs. According to CMS, survey data indicates that many hospitals acquire these drugs at prices below current Medicare reimbursement levels.

CMS estimates that the proposal would reduce Medicare drug spending by approximately $5.7 billion during CY 2027 while lowering beneficiary cost-sharing by approximately $1.15 billion. Consistent with Medicare’s budget neutrality requirements, CMS proposes redistributing those savings through increased reimbursement for other outpatient hospital services. 

For hospitals participating in the 340B Program, these proposed reimbursement changes warrant careful review. Many organizations will likely begin assessing how the proposal could affect outpatient reimbursement, budgeting, and long-term financial planning if adopted substantially as proposed.

Continued Focus on Site-Neutral Payments

CMS also continues to advance policies intended to reduce payment differences between hospital outpatient departments and lower-cost care settings when similar services are provided.

Among other changes, CMS proposes expanding site-neutral payment policies for certain imaging services performed in off-campus provider-based departments. CMS estimates that this policy would reduce Medicare spending by approximately $260 million during the first year while also reducing beneficiary cost-sharing. 

Site-neutral payment reform has remained an area of interest for policymakers across multiple administrations, and the current proposal reflects CMS’s continued focus on aligning reimbursement more closely with the setting in which services are furnished.

Additional Opportunities for Ambulatory Surgery Centers

The proposed rule would also expand the list of procedures eligible to be performed in ASCs while continuing the agency’s gradual transition away from the inpatient-only list.

For ASC operators, physician groups, and health systems, these proposals may create additional opportunities to provide appropriate procedures in outpatient settings while maintaining patient access and quality of care. Organizations considering the expansion of outpatient surgical services should monitor the final rule closely.

Utilization Management and Program Integrity

CMS also proposes expanding medical necessity review requirements for certain hospital outpatient services, including selected botulinum toxin injections. According to CMS, these proposals are intended to promote appropriate utilization and reduce unnecessary Medicare expenditures. 

Although narrower in scope than other portions of the proposal, these changes reflect CMS’s continued emphasis on program integrity and utilization management within the Medicare program.

Continued Emphasis on Price Transparency

The proposed rule also includes a Request for Information seeking public input on additional improvements to hospital price transparency.

CMS is requesting feedback on ways to improve the consistency, usability, and comparability of publicly available pricing information. While this portion of the proposal does not immediately create new compliance obligations, it signals that price transparency remains an ongoing policy priority.

Healthcare organizations should continue monitoring this area, as additional rulemaking may follow.

Legal and Regulatory Considerations

Given the history of litigation surrounding Medicare reimbursement for 340B drugs, it would not be surprising if aspects of the proposal receive careful legal scrutiny should they become final.

Among the issues stakeholders may evaluate are CMS’s statutory authority, the methodology supporting its acquisition cost survey and whether the agency has adequately explained its proposed reimbursement approach under the Administrative Procedure Act.

The proposal also follows several years of continued legal and regulatory activity involving the 340B Program, including litigation over contract pharmacy arrangements and manufacturer rebate models. As a result, many healthcare organizations will likely view this rulemaking within the broader context of ongoing developments affecting the program.

Considerations for Healthcare Providers

Although the proposal remains subject to public comment, healthcare organizations may benefit from beginning their evaluation now.

Hospitals participating in the 340B Program should consider modeling the potential reimbursement impact under various scenarios. Health systems should assess whether expanded site-neutral payment policies could affect outpatient strategy, and ASC operators should evaluate opportunities presented by the proposed expansion of covered procedures. Organizations may also wish to consider whether participation in the public comment process would be appropriate based on their operational experience and business objectives.

Looking Ahead

CMS’s CY 2027 OPPS Proposed Rule reflects the agency’s continued focus on Medicare payment reform, transparency, and cost containment. Whether each proposal is finalized in its current form remains to be seen, but the rule offers an early indication of the policy priorities that may shape Medicare outpatient reimbursement in the coming years.

As the rulemaking process moves forward, hospitals, health systems and other stakeholders should continue to monitor developments and evaluate how the final rule may affect reimbursement, compliance and long-term operational planning.

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