CMS Finalizes 2026 Medicare Outpatient Payment Rule, Sparks Hospital Concerns
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The Centers for Medicare & Medicaid Services (CMS) issued a final rule on November 21, 2025, outlining changes to Medicare hospital outpatient prospective payment system (OPPS) rates for calendar year 2026. The rule increases rates by a net 2.6% compared to 2025, a figure arrived at after a 3.3% market basket update was offset by a 0.7 percentage point reduction for productivity.However, the final rule also incorporates payment reductions through site-neutral payment policies and the elimination of the inpatient-only list, prompting disappointment from industry stakeholders.
Impact of the Final Rule
The 2.6% increase in OPPS rates represents a mixed bag for hospitals and health systems. While the market basket update provides some financial relief, the productivity adjustment and other policy changes will significantly impact revenue. The elimination of the inpatient-only list,a long-debated issue,is intended to promote more appropriate site of care,but hospitals fear it will lead to reduced reimbursement for certain procedures.
Site-neutral payments, which aim to equalize reimbursement rates for services provided in hospital outpatient departments versus independent physician offices, are a key driver of the projected reductions. These policies have been a point of contention for hospitals, who argue thay do not account for the unique costs and complexities of hospital-based care.
AHA Expresses Disappointment
The American Hospital Association (AHA) swiftly voiced its concerns following the release of the final rule. “The AHA is disappointed that CMS has finalized cuts to hospitals and health system services, including those in rural and underserved communities,” stated Ashley thompson, AHA senior vice president of public policy analysis and growth, in a statement shared with the media. the AHA argues that the cuts, combined with what they deem inadequate market basket updates, will exacerbate existing financial pressures on hospitals, potentially limiting access to care for vulnerable populations.
The association has long advocated for more accurate and equitable payment policies that reflect the value hospitals provide to patients and communities. The finalized rule, according to the AHA, fails to adequately address these concerns.
Looking Ahead
The implementation of this rule will be closely watched by hospitals and health systems across the country.The impact of the site-neutral payment policies and the elimination of the inpatient-only list will likely vary depending on the specific services offered and the patient populations served.
Further analysis will be needed to fully understand the financial implications of the rule and its potential effects on access to care. The healthcare industry will undoubtedly continue to engage with CMS on these critical issues in the coming months and years.
Why: CMS finalized changes to Medicare outpatient payment rates for 2026,aiming to adjust for market conditions and promote appropriate site of care.
Who: The key players are CMS (the rule-maker), hospitals and health systems (affected by the changes), and the AHA (advocating for hospitals).
What: The final rule increases OPPS rates by 2.6% but includes cuts through site-neutral payments and the elimination of the inpatient-only list.
How did it end?: The rule was finalized on November 21, 2025, despite opposition from the AHA
