CMS unveils 2027 outpatient payment plan: Questions and answers

Hospitals and health systems are expressing concerns about the federal government’s planned payments for outpatient services for 2027.

The Centers for Medicare & Medicaid Services released the 2027 Hospital Outpatient Prospective Payment System (OPPS) proposed rule late last week. It offers an increase for outpatient services, but hospitals are speaking out about some elements of the proposal.

Here’s a quick rundown of questions and answers about the CMS outpatient payment proposal.

Q: How much will outpatient payments rise?

A: CMS has proposed a 2.4% increase in 2027 payments for outpatient services.

Technically, it’s a 3.2% increase to reflect hospital’s higher costs for goods and services, but it’s offset by a 0.8% “productivity adjustment.” Ultimately, it results in a 2.4% bump in outpatient payments.

CMS is also proposing a 2.4% increase in payments for ambulatory surgical centers for the 2027 calendar year.

The administration is proposing more aid to Alaska and Hawaii, to deal with the higher costs those states face. CMS is proposing an increase of $55 million in payments for the two states.

Q: What about the 340B program?

A: CMS has proposed reductions in the federal government’s 340B drug discount program, which allows hospitals to buy outpatient medications at lower costs.

For 2027, CMS is proposing that the 340B discount be reduced to 33.4% of the drug’s average sales price, instead of the current discount of about 40%. CMS says a survey of hospitals revealed “significant disparities” between hospital acquisition costs for drugs in the 340B program. CMS says the proposal would cut Medicare drug payments by $4.55 billion.

Some lawmakers have pushed to revamp the 340B program, saying it’s grown beyond its purpose of helping safety net hospitals. Health systems say the program provides critical services for vulnerable urban and rural communities.

Q: Is CMS continuing to phase out the “inpatient only list”?

A: Yes, CMS says it is moving ahead with the three-year phase out of the inpatient only list, which includes procedures that are only to be performed on an inpatient basis. CMS is adding more procedures that can be performed on an outpatient basis.

CMS is looking to remove 638 services from the inpatient only list, including some endocrine, maternity care and delivery, digestive and auditory services. CMS says it’s looking to give patients more options to obtain some services at lower costs.

Q: Is CMS moving ahead with “site neutral” proposals?

A: Yes, to the chagrin of hospitals. CMS has proposed to reduce reimbursements for some imaging services to hospitals. CMS has been pushing to reimburse hospitals and clinics at similar levels for some outpatient services.

Q: What about price transparency?

A: Hospitals continue to face more pressure to be more transparent with their prices for services. CMS has included a plan to seek public comment on ways to improve hospital price transparency.

Q: How are hospitals reacting to the proposals?

A: Groups representing hospitals have widely panned the proposals.

Jennifer DeCubellis, president and CEO of America’s Essential Hospitals, said the proposals will deliver a blow to safety net hospitals.

“The proposed OPPS rule from CMS takes an axe to critical funding that supports essential hospitals without concern for how it will affect the patients they serve,” she said in a statement. “CMS is proposing unlawful cuts to Medicare outpatient drug payments that will disproportionately harm essential hospitals, using a flawed methodology that is based on data from less than a quarter of 340B covered entities.”

She also said the CMS’ site-neutral proposal is “yet another cut to Medicare payments that hospitals desperately need to stay open and serve their communities.”

Ashley Thompson, senior vice president of public policy analysis and development for the American Hospital Association, adds more financial headaches to hospitals.

“CMS’ proposed outpatient policies would further reduce resources available, including another insufficient reimbursement update, an excessive productivity adjustment, and additional payment reductions affecting key hospital services,” Thompson said in a statement.

Q: Will the proposed rule be changed?

A: CMS has adjusted payments rates in the past after introducing its proposed rules before finalizing its payments.

Q: How long do hospitals have to speak out?

A: The agency will take comments on its proposals until Aug. 31.