CMS Deputy Chief Operating Officer John Czajkowski | cms.gov/about-cms/leadership/deputy-chief-operating-officer
The Centers for Medicare & Medicaid Services (CMS) has released a proposed rule on July 15, 2025, suggesting updates to Medicare payment policies and rates for hospital outpatient and Ambulatory Surgical Center (ASC) services for the calendar year 2026. This proposal is part of CMS's annual obligation to update these payment policies.
The proposed changes will impact approximately 3,500 hospitals and around 6,100 ASCs. A key aspect of this year's proposal is an update to the methodology used for calculating the Overall Hospital Quality Star Rating, with a focus on emphasizing the Safety of Care measure group in hospitals' ratings.
CMS is also seeking public feedback on future measure concepts related to well-being and nutrition. For hospitals meeting quality reporting requirements, CMS proposes a 2.4% update in OPPS payment rates. This figure results from a projected hospital market basket increase of 3.2%, reduced by a productivity adjustment of 0.8 percentage points.
In addition, CMS plans to expand its policy controlling unnecessary increases in outpatient service volumes to include drug administration services in off-campus provider-based departments (PBDs). The agency estimates this expansion could reduce OPPS spending by $280 million.
Another significant proposal involves phasing out the Inpatient Only (IPO) list over three years, starting with removing 285 musculoskeletal procedures in CY 2026. CMS argues that advancements in medical practice allow more procedures to be performed on an outpatient basis.
Furthermore, CMS proposes changes to the ASC Covered Procedures List (ASC CPL), including adding new procedures and codes while maintaining safety standards for Medicare beneficiaries.
A notable change involves adjusting payments for non-drug items and services under the OPPS conversion factor due to past policy impacts from CY 2018 through CY 2022. The agency proposes revising the annual offset percentage from 0.5% to 2% effective CY 2026.
For skin substitutes used in surgical procedures, CMS suggests unpackaging these products from application services and establishing APCs based on product characteristics rather than prices.
Additionally, CMS seeks comments on payment policies for software as a service (SaaS) technologies supporting clinical decision-making in outpatient settings.
A survey on acquisition costs for specified covered outpatient drugs will be conducted by early CY 2026, aiming to inform policymaking starting with the CY 2027 OPPS/ASC proposed rule.
Other proposals include revising methodologies for Intensive Outpatient Program (IOP) and Partial Hospitalization Program (PHP) rate settings, modifying quality reporting programs across various healthcare settings, and seeking input on streamlining regulations within Medicare programs.
Finally, changes are suggested regarding hospital price transparency regulations following an executive order aimed at providing clearer healthcare pricing information to patients.
Information from this article can be found here.
