The Centers for Medicare & Medicaid Services (CMS) on Nov. 21 finalized the Calendar Year (CY) 2026 Outpatient Prospective Payment System (OPPS) Rule, including updates to payment rates that will affect facilities. Among other policies, the rule cuts outpatient drug administration payments in off-campus settings, maintains the existing planned recoupment methodology for the 340B Drug Pricing Program remedy, implements new transparency requirements, authorizes CMS to survey hospital drug acquisition costs, and begins eliminating the Inpatient Only (IPO) list. America’s Essential Hospitals commented on the proposed rule in September.
The final rule increases payment rates by a net 2.6% in CY 2026 compared with 2025, reflecting a 3.3% market basket update offset by a -0.7% productivity adjustment. CMS also finalized its policy to extend so-called “site-neutral” cuts in grandfathered off-campus hospital outpatient departments. Under the new policy, drug administration services will be paid 60% less in 2026 in those settings. CMS anticipates the policy will cut hospital payments by $290 million in CY 2026.
Critically, and following feedback from America’s Essential Hospitals, CMS did not finalize its planned adjustment to the 340B remedy recoupment policy. CMS is maintaining the previously finalized 0.5% cut to non-drug items and services paid under OPPS, withdrawing its proposed 2% cut for CY 2026. The policy derives from illegal cuts to outpatient drug payments for 340B hospitals, unanimously overturned by the Supreme Court in 2022. While 340B hospitals were made whole for those illegal cuts, CMS finalized a policy to do so in a budget-neutral manner—cutting payments over 16 years with a 0.5% cut to OPPS payments.
CMS also finalized its transparency requirements for 2026. Beginning Jan. 1, hospitals will be required to calculate and encode details of both allowed amounts and counts of allowed amounts in machine readable files. Additionally, CMS finalized its proposal to reduce the amount of a hospital’s civil monetary penalties by 35% if the hospital waives its right to a hearing in certain circumstances. Lastly, CMS finalized its proposal to phase out the IPO list over three years, removing 285 services from the list in CY 2026.
Contact Policy Analyst Evan Schweikert at eschweikert@essentialhospitals.org or 202.585.0124 with questions.
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