In the calendar year (CY) 2026 Outpatient Prospective Payment System (OPPS) final rule issued by the Centers for Medicare & Medicaid Services (CMS) on Nov. 21, the agency updated outpatient hospital payment rates by 2.6% and finalized “site neutral” payment policies, among other changes. AAMC President and CEO David J. Skorton, MD, and AAMC Chief Health Care Officer Jonathan B. Jaffery, MD, MS, MMM, FACP, issued a statement the same day, noting the AAMC’s strong opposition to the provisions in the final rule, “which will disproportionately impact AAMC-member health systems and teaching hospitals and harm their ability to care for the most complex patients.”
The final rule delays by one year the proposal to accelerate the reduction in OPPS payment rates for nondrug items and services to offset lump sum payments previously paid to 340B hospitals. The CMS had initially proposed to increase the annual offset to 2 percentage points to recoup $7.8 billion over five years. Citing stakeholder feedback, including concerns raised by the AAMC, the CMS will maintain the 0.5 percentage point offset in 2026 and noted it will revisit the increased offset percentage in rulemaking for 2027. Additionally, the CMS finalized the expansion of so-called site-neutral payment policies by reducing payment to excepted off-campus hospital outpatient departments for drug administration services to 40% of the OPPS rate. Other provisions finalized phasing out the inpatient-only list over three years, modifying hospital price transparency rules and enforcement, updating the Medicare Severity Diagnosis Related Groups relative weights in the inpatient setting using median payer-specific charges as negotiated by hospitals with Medicare Advantage organizations, and finalizing the agency’s plan to survey all hospitals for Medicare OPPS drugs acquisition costs.
Specific to graduate medical education, the CMS finalized, with modification, the proposal to modify the definition for approved medical residency programs to include that accrediting organizations must not use accreditation criteria that promote or encourage discrimination.
The CMS also finalized changes to the Outpatient Quality Reporting Program’s measure set by adopting one new measure on Emergency Care Access and Timeliness and removing six measures. Regarding the Overall Hospital Quality Star Ratings, the agency finalized modifications to the methodology to emphasize patient safety by adopting a phased approach to penalizing hospitals in the bottom quartile of performance in the Safety of Care measure group.
- Washington Highlights