Yesterday, the Centers for Medicare & Medicaid Services (CMS) released one of its largest annual proposed payment rules — the Hospital Outpatient Prospective Payment System (OPPS) for calendar year 2026. ASHP is analyzing the proposed rule and developing an issue brief outlining key provisions of interest to our members.
The draft rule includes several concerning proposals that would reduce Medicare funding for patient care services provided by hospital outpatient departments, including:
- Site-Neutral Payment for Drug Administration Services: CMS is proposing to extend site-neutral policies to drug administration services in hospital provider-based departments (PBDs), previously referred to as hospital outpatient departments or HOPDs. CMS proposes to reimburse drug administration services (any HCPCS codes assigned to the drug administration ambulatory payment classifications) in excepted off-campus provider-based departments at the Physician Fee Schedule rate. This proposal would reduce Medicare payment by $210 million for 2026 and would not be implemented in a budget-neutral manner, meaning there would be no payment offsets to make up for the reduced payment. The proposed rule also seeks feedback on how CMS should implement similar proposals for on-campus PBDs.
ASHP has consistently advocated against site-neutral payment changes in legislation and will advocate against finalizing them through regulation. These policies fail to take into account the additional regulation and service requirements in PBDs, which must be considered when making payment decisions.
- Accelerated Timeline for Recouping Non-Drug Services Payments from 2018-2022: CMS cuts to 340B reimbursement from 2018-2022 were offset by increased payment for non-drug services. However, when the courts struck down the 340B cuts, CMS indicated it would recoup the increased non-drug services payment to ensure budget neutrality. CMS implemented recoupment with a timeframe designed to avoid burdening hospitals via a 0.5% reduction in the OPPS conversion factor for non-drug supplies and services until 2041. CMS is now proposing to significantly accelerate the recoupment of funds from hospitals by reducing the conversion factor by 2%, clawing back $7.8 billion over the next six years.
Hospitals worked with CMS to arrive at the 0.5% conversion factor that would allow CMS to recoup payments with minimal disruption to patient care. ASHP is concerned these new, accelerated payment cuts will harm hospitals and their patients.
- Survey of Actual Acquisition Costs: In order to reduce reimbursement for drugs under 340B, CMS must conduct a survey of actual acquisition costs for each separately-payable drug purchased under OPPS. The 2018-2022 cuts to 340B reimbursement (to ASP – 22.5%) were struck down by courts because CMS failed to conduct this survey. CMS is now undertaking the required survey, as a prerequisite for likely reductions in reimbursement for 340B drugs. CMS is proposing that the survey will begin at the end of 2025 and close in early 2026, with policy changes based on the survey results expected for CY 2027 (i.e., next year’s OPPS proposed rule). The survey is not currently mandatory and CMS includes several questions related to survey design in the proposed rule.
The proposed rule also includes provisions addressing the elimination of the inpatient only list, changes to payment for skin substitutes, a comment request on payment for clinical decision-making technologies (software as a service), changes to quality reporting programs, and additional hospital price transparency requirements.
“We are concerned that the combined impact of these proposed Medicare cuts, along with the recently enacted Medicaid restrictions, threatens the care that patients and communities rely on,” said Tom Kraus, ASHP vice president of government relations. “We urge CMS to reconsider these proposals and will advocate for policies that protect access to high-quality hospital pharmacy services.”
ASHP is seeking member input to inform our comments on OPPS, which are due in September. Please email feedback on the proposed rule to Jillanne Schulte Wall, ASHP senior director of health and regulatory policy, at [email protected], by Aug. 30.
