Inside the 2026 OPPS/ASC final rule

Under the final OPPS/ASC rule, outpatient healthcare facilities and ASCs will receive a net 2.6% payment increase in 2026 compared to 2025. This increase includes a 3.3% market basket update, along with a -0.7 percentage point productivity adjustment. The final payment increase of 2.6% is slightly higher than the 2.4% initially proposed in July.

Aside from the payment updates, CMS also finalized several new policy changes in the rule.

Starting in 2026, CMS will begin phasing out the "inpatient only list," which includes codes that Medicare only reimburses in inpatient settings, over a three-year period. The agency will remove 285 procedures from the list and add 289 procedures to the ASC covered list next year.

The final rule also expands site-neutral payments by reimbursing hospital-owned outpatient facilities at the same rate as physician offices for drug administration services. This change will reduce outpatient facilities' reimbursement to 40% of the OPPS rate — a change CMS says could save $290 million next year.

CMS also finalized several new price transparency policies. Under the rule, hospitals are now required to post actual, consumer-friendly prices in standardized formats. Hospitals are also required to include the median, 10th percentile, and 90th percentile allowed amounts, or the rates they negotiate with health insurance plans, in machine-readable files. Although these new price transparency rules will go into effect Jan. 1, 2026, CMS will delay enforcement until April 1, 2026.

CMS also finalized an update to the hospital star rating system to prevent hospitals in the lowest quartile for health and safety performance from receiving a five-star rating. Starting in 2027, hospitals in the lowest quartile will be downgraded by one star in their ratings. 

"We continue to advance Medicare payment reform by advancing policies that help prevent services from unnecessarily being performed in hospitals when they can be safely provided in less intensive settings, streamlining hospital billing systems, and ensuring patients receive transparent, accurate pricing information," said Chris Klomp, CMS Deputy Administrator and director of the Center for Medicare. "These comprehensive changes deliver greater predictability, accountability, and affordability in hospital care."

However, several healthcare organizations have been critical of the final rule.

According to Ashley Thompson, SVP of public policy analysis and development at the American Hospital Association, the organization is "disappointed" by the "inadequate" payment updates, as well as CMS' decision to finalize new site-neutral payment policies.

"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."

Similarly, Premier released a statement saying it was "deeply disappointed by the final payment rates […] which fail to keep pace with rising costs and the ongoing financial pressures facing providers."

Premier also criticized the delay in the rule being finalized, which will make it harder for hospitals to adjust to the new changes. "This last-minute scramble creates operational chaos and increases administrative burden, making it harder for hospitals to focus on what matters most: delivering high-quality care for patients," Premier said.