CMS Releases Hospital Outpatient Prospective Payment System Final Rule

On Friday, November 21, the Centers for Medicare & Medicaid Services (CMS) announced updates to Medicare payment policies and rates for hospital outpatient and Ambulatory Surgical Center (ASC) services under the Hospital Outpatient Prospective Payment System (OPPS) and ASC Payment System Final Rule. According to the press release, these payment policies impact approximately 4,000 hospitals and roughly 6,000 ASCs.

This year’s rule update revises the methodology for calculating the Overall Hospital Quality Star Rating. According to CMS, this change aims to emphasize the Safety of Care measure group in hospitals’ star ratings. CMS is also finalizing changes to the Hospital Outpatient Quality Reporting (OQR), Rural Emergency Hospital Quality Reporting (REHQR), and Ambulatory Surgical Center Quality Reporting (ASCQR) programs.

CMS is finalizing a 2.6 percent update to the OPPS payment rates for hospitals that meet applicable quality reporting requirements. The update is based on the hospital market basket percentage increase of 3.3 percent, reduced by a 0.7 percentage point productivity adjustment. 

For CY 2026, using the hospital market basket update, CMS finalized an update factor of 2.6 percent for ASC rates. The update applies to ASCs that meet the relevant quality reporting requirements. This update is based on the finalized IPPS market basket percentage increase of 3.3 percent, reduced by 0.7 percentage points for the productivity adjustment.

Anthony Wright, the executive director of the advocacy group Families USA, commented on the release of the final OPPS rules and the Medicare Physician Fee Schedule (MPFS) that dropped earlier this month with: “For too long, specialty interests and corporate health systems have been allowed to rig the system for their benefit, unfairly jacking up healthcare prices with no accountability and forcing our nation’s families to receive care at higher cost settings for routine care. Families USA is encouraged to see CMS approving some of the critically needed reforms we have long advocated for that move our health care system toward better, more fair pricing and will help address the real drivers of high health care costs.” 

Families USA listed some key wins in the OPPS CY 2026 Final Rule, including: 

• Extending site-neutral payments to drug administration services delivered by most “grandfathered” off-campus provider-based departments to ensure consumers pay the same price for the same service for physician-administered drugs in more outpatient care settings.  
• Requiring hospitals to encode a senior official’s name and a strengthened attestation statement to help verify the accuracy and completeness of the hospital price transparency data.

Key wins advocated by Families USA in the MPFS CY 2026 Final Rule include: 

• Updating the physician payment rate setting methodology to reflect changes in the healthcare system and gains in efficiency in the delivery of many professional services, which will result in higher payments for primary care services. 
• Reducing the reliance on the American Medical Association survey data when setting physician payment rates.  
• Expanding the scope of the Advanced Primary Care Management (APCM) service codes to include collaborative behavioral health and psychiatric care.
• Introducing a new alternative payment model, the Ambulatory Specialty Model (ASM), focused on improving cost and quality outcomes for patients experiencing heart failure and low back pain. 

“We also applaud the changes CMS finalized in the Medicare Physician Fee Schedule to address payment rules that have led to overpayments for hospital and specialty care at the expense of primary care and independent practices,” Wright added in a statement.