Medicare rule finalizes site neutral, inpatient only list elimination, and updates ASC changes and 340B policies for 2026.
Hospital outpatient prospective payment system (OPPS) and Ambulatory Surgical Centers (ASCs) Medicare payment and policies for 2026 were released by the Centers for Medicare & Medicaid Services (CMS) in the OPPS-ASC calendar (CY) year 2026 final rule.
Key insights
- Both hospitals and ambulatory surgical centers to see a positive 2.6% update in 2026
- Inpatient only list phases out over three years
- Expedited 340B funding claw back delayed until 2027, drug acquisition survey in 2026
- Site neutral payment policy finalized for grandfathered off-campus hospital outpatient departments
- More price transparency policy changes
Payment updates
CMS finalizes a net 2.6% increase for hospitals and ASCs in 2026. Both increases are based on a market basket update of 3.3%, reduced by a productivity adjustment of 0.7%.
Site neutral payment cut
CLA Insight
CMS continues advancing site neutral payments. This is the most recent example. Hospitals should understand the impact and prepare for more site neutral in the future. While these payment changes impact off-campus PBDs, CMS has previously discussed on-campus PBDs; an area that must be watched closely in the future. Further, this movement away from higher outpatient hospital department reimbursements may introduce new opportunities for ASCs and physicians to consider.
Drugs administered in off-campus grandfathered (CMS terms them “excepted”) provider-based outpatient departments (PBDs) will now be paid a site-neutral rate. This means those drugs will be paid at the physician fee schedule rate, which is roughly 40% of the OPPS rate.
One bit of good news is that sole community hospitals are exempt from the cut.
340B policies
CMS does not finalize for 2026 its expedited claw back of the $7.8 billion related to a prior 340B lawsuit. CMS had proposed an offset of 2% per year from 2026 to 2031 but delayed any changes to the current offset of 0.5% until 2027. In 2027, CMS plans to increase the offset above 0.5%, possibly up to 2.0%.
CMS also intends to conduct a drug acquisition cost survey in 2026 for each separately payable drug acquired by all hospitals paid under the OPPS. This survey may be the basis to again propose 340B payment reductions under the OPPS.
Drug acquisition cost survey launches January 1, 2026
Hospitals receiving OPPS payments for outpatient drugs between July 1, 2024 – June 30, 2025, face a drug acquisition cost survey that launches January 1, 2026 and runs through March 31, 2026. Learn more at CMS.gov.
Inpatient only list, ASC covered procedures list
CMS will eliminate the inpatient only list (IPO) over three years, beginning in 2026. Procedures may still be done in the inpatient setting but eliminating the IPO means they would not have to be done there. For 2026, CMS removes 285 codes, many musculoskeletal, from the IPO.
Simultaneously, CMS added over 500 procedures to the ASC covered procedures list (CPL). By revising its review criteria for the CPL, some 275 codes were added, plus an additional 271 codes it removed from the IPO list.
Price transparency
CLA Insight
These are major shifts related to the allowable setting for a procedure. Hospitals, physicians, and ASCs should review these changes for potential impacts or growth opportunities.
For post-acute providers, these shifts could also have impacts. For skilled nursing facilities (SNF), it could result in fewer SNF stays since a three-day inpatient stay is still a Medicare requirement. However, it could increase home health or outpatient care opportunities.
More hospital price transparency changes are coming due to CMS finalizing policies related to negotiated charges when based on percentages or algorithms. The final rule requires hospitals to disclose the tenth, median, and ninetieth percentile allowed amounts, not the estimated amounts, in machine-readable files in these instances. Hospitals will be required to use an electronic data interchange 835 electronic remittance advice or an alternative, equivalent source of remittance data to calculate and encode this information.
CMS also finalizes a civil monetary penalty reduction of 35% for noncompliance with price transparency if the hospital waives its right for a hearing.
Though effective January 1, 2026, CMS is delaying enforcement of these changes until April 1, 2026.
How CLA can help
Since Medicare is the country’s largest health care payer, understanding payment and policy changes are important for strong financial footing. Many of these changes also continue CMS’s push towards clinically appropriate but lower cost of care settings. This creates both threats and opportunities to address.
If you need insights or assistance, CLA can help.