CMS Publishes Outpatient Proposed Rule, with 2.4-Percent Payment Boost in 2026

Senior officials at the federal Centers for Medicare & Medicaid Services (CMS) on Tuesday afternoon, July 15, released the agency’s proposed rule on outpatient payment for 2026, with several key provisions impacting provider organizations nationwide. Among other provisions, hospital outpatient departments and ambulatory clinics would receive a 2.4-percent payment boost next year; hospitals would have to publish detailed ranges of rates they negotiate with health plans, called “allowed amounts”; and hospitals determined to be in the lowest quartile in their safety scores, would be made ineligible for five-star ratings under CMS’s ratings system.

A press release posted to CMS’s website on Tuesday afternoon began thus: “The Centers for Medicare & Medicaid Services (CMS) today issued the Calendar Year (CY) 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System proposed rule (CMS-1834-P), introducing a series of patient-focused reforms that would modernize payments, expand access to care, and enhance hospital accountability. “

“We are advancing our mission to protect Medicare and its beneficiaries, fight fraud, and empower patients with access to the latest innovations, all while holding providers accountable and ensuring taxpayer dollars are spent wisely,” said CMS Administrator Dr. Mehmet Oz, said in a statement. “These reforms expand options and enforce the transparency Americans deserve to ensure they receive high-quality care without hidden costs.”

According to the press release, “The proposed changes are designed to: reduce out-of-pocket costs for Medicare beneficiaries; expand choices in where patients can receive care; increase hospital accountability and transparency; and safeguard the Medicare Trust Fund from waste and abuse.”

“We are building on our efforts to modernize Medicare payments by advancing site neutrality, simplifying hospital billing, and ensuring real prices—not estimates—are available to patients,” Chris Klomp, Deputy Administrator and Director of the Center for Medicare at CMS, said in a statement. “These changes help make hospital care more predictable, accountable, and affordable.”

The press release went on to state that “CMS seeks to equalize payments for certain services delivered in hospitals and off-campus facilities, helping ensure beneficiaries aren’t penalized with additional copays simply based on where they receive care. The rule also proposes phasing out the inpatient-only list, which would give physicians greater flexibility to determine the most clinically appropriate setting for care and allow more patients to choose outpatient surgical options. To give consumers meaningful price information, CMS is also improving hospital price transparency rules. The proposed changes would require hospitals to post real, consumer-usable prices, not estimates, and provide data in standardized formats that allow patients to understand what their care will actually cost. Hospitals that fail to comply could face civil monetary penalties.”

The press release went on to state that, “As part of its efforts to Make America Healthy Again, CMS is also taking steps to elevate patient safety and wellness. The agency is proposing updates to the Hospital Star Rating system so hospitals performing in the lowest quartile for safety can no longer receive a 5-star rating. In future years, those hospitals would face an automatic 1-star downgrade. In addition, proposed updates to quality reporting programs would remove burdensome health equity and COVID vaccine reporting requirements, as well as adopt a measure to evaluate long wait times in emergency departments. CMS is also seeking public input on potential quality measures focused on nutrition, wellness, and preventive health.”

As the press release noted, “CMS projects these proposals will improve access to outpatient care, reduce unnecessary costs, and deliver savings for both the Medicare program and beneficiaries, estimated at nearly $11 billion over the next ten years. The changes also support program sustainability by aligning payments more closely with the actual cost of care, helping ensure Medicare continues to deliver high-quality, patient-centered services nationwide.” And the press release directed readers to an associated fact sheet, which can be found here.

Among the first national healthcare associations to react to the proposed rule’s publication was the Charlotte-based Premier Inc. health alliance. In a statement released on the association’s website, Soumi Saha, vice president of government affairs at Premier, stated, “Not only is reimbursement failing to keep up with the cost of providing care, the proposed policies contained in this rule will further degrade the critical healthcare infrastructure patients rely on. Transforming healthcare is a must do. However, putting forward policies in isolation does more harm than good. Premier urges the Centers for Medicare & Medicaid Services to engage patients and providers to collectively and holistically design the future of healthcare that is accountable, transparent, saves federal taxpayer dollars – and most importantly, puts the patient first.”

This is a developing story. Healthcare Innovation will update its readers as new developments emerge.