CMS 2026 OPPS Final Rule: Site-Neutral Payments Are Here – CMS Phasing out Inpatient-Only list

Last week, the Centers for Medicare and Medicaid Services made hospitals very unhappy with the 2026 Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System (OPPS) final rule, which includes major plans for site-neutral payments and price transparency policies.

The rule gives both outpatient departments and ambulatory surgical centers (ASCs) a 2.6% reimbursement bump, which is higher than the rate proposed by CMS in July. The rate reflects a 3.3% increase in expenses and the across-the-board -0.7% productivity adjustment that the agency attributes to technological advancements in medical delivery, Modern Healthcare explains. The OPPS states that hospital-owned outpatient facilities will receive the same rate of reimbursement as physician offices for the administration of medications and CMS will phase out the Inpatient-Only list of procedure codes over three years.

Hospital groups were less than thrilled with the payment rates and site-neutral policies. Hospital representatives told Chief Healthcare Executive that the increases simply don’t keep pace with inflation and “unprecedented demand for care.” Hospitals also argue that the phasing out of inpatient-only procedures means they will be faced with reduced Medicare payments for outpatient services. Further, many Congressional lawmakers support the plan, arguing it could be better for consumers and taxpayers, lowering hospital hopes that changes to the law could circumvent the upcoming changes.

In a statement, American Hospital Association SVP of Public Policy Ashley Thompson addressed the argument that CMS will save $290 million in 2026 through site-neutrality and the phasing out of the inpatient-only list:

Both policies ignore the important differences between hospital outpatient departments and other sites of care. The reality is that hospital outpatient departments serve Medicare patients who are sicker, more clinically complex, and more often disabled or residing in rural or low-income areas than the patients seen in independent physician offices.

The proposed rule had included a plan to speed up the process of recouping overpayments from hospitals related to the 340B Drug Pricing Program, but the plan did not survive finalization. The full final rule can be reviewed at the CMS website.