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The Centers for Medicare and Medicaid Services is increasing Medicare hospital outpatient payment by 2.6% in 2026.
This compares to an increase of 2.9% for 2025.
Next year’s payment includes a 3.3% market basket update, offset by a 0.7 percentage point cut for productivity.
In addition, CMS approved a 2.6% increase for ambulatory surgical centers.
The rule also includes payment reductions through site-neutral payment policies and the elimination of the inpatient-only list for services, to which the American Hospital Association objects.
“The AHA is disappointed that CMS has finalized cuts to hospitals and health system services, including those in rural and underserved communities. Combined with its continued inadequate market basket updates, the agency is exacerbating the challenging financial pressures under which hospitals are operating to serve their patients and communities," said Ashley Thompson, AHA senior vice president of public policy analysis and development.
WHY THIS MATTERS
CMS released the 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Final Rule on Nov. 21.
The rule finalizes a proposal to pay for drug administration services furnished in grandfathered off-campus hospital outpatient departments at the site-neutral rate of 40% of the OPPS rate. Rural sole community hospitals will be exempt from this payment reduction.
The agency estimated this policy will cut OPPS spending by $290 million in 2026.
CMS also finalized the phase-out of the inpatient-only list over a three-year period.
Eliminating the inpatient-only list gives beneficiaries more choices on where to obtain care with the potential for lower out-of-pocket expenses, CMS said. The agency will phase out the IPO list over a three-year period, beginning with the removal of 285 mostly musculoskeletal procedures for 2026.
CMS also finalized its proposal to change the criteria for excluding services from coverage in ambulatory surgical centers. This will add 547 procedures to the ASC-covered procedures list, according to the AHA.
“Specifically, we oppose expanding ‘site-neutral’ cuts and eliminating the inpatient-only list,” Thompson said. “Both policies ignore the important differences between hospital outpatient departments and other sites of care. The reality is that hospital outpatient departments serve Medicare patients who are sicker, more clinically complex, and more often disabled or residing in rural or low-income areas than the patients seen in independent physician offices.”
THE LARGER TREND
These and other payment policies in the final rule affect approximately 4,000 hospitals and 6,000 ASCs.
In addition to finalizing the payment rates, this year’s rule includes an update to the methodology used to calculate the overall hospital quality star rating to emphasize the Safety of Care measure group in hospitals’ star ratings.
Email the writer: SMorse@himss.org