OPPS proposed rule would cut 340B payments and widen site-neutral policy

CMS issued its calendar year 2027 OPPS and ASC proposed rule on July 2, covering roughly 3,500 hospitals and 6,400 ambulatory surgical centers. If finalized, both settings would see a 2.4% payment update, built from a 3.2% market basket increase minus a 0.8 percentage point productivity adjustment. However, that headline number is not where the money actually moves in this rule.

340B drug payment would drop from Average Sales Price (ASP) plus 6% to ASP minus 33.4%. CMS surveyed acquisition costs for every separately payable drug at all OPPS hospitals between January 1 and April 7 of this year, reporting significant disparities between 340B and non-340B acquisition costs. The proposed cut would reduce total drug payment by $5.7B in year one, redistributed under budget neutrality as higher payment for non-drug services. However, hospital advocacy groups may use the survey’s response rate and methodology to challenge this proposal if finalized.

A second 340B provision would accelerate the clawback for prior-year overpayments. The November 2023 remedy rule set a 0.5% annual reduction to the OPPS conversion factor for non-drug items and services, running until CMS recovers $7.8 billion. CMS now proposes raising that offset to 3% annually effective CY2027, which would finish the recovery around CY2029. Hospitals that enrolled in Medicare after January 1, 2018 remain excluded.

Site-neutral policy expands to imaging without contrast, and 638 more services leave the inpatient-only list. CMS would pay the same rate for imaging without contrast whether it happens in a physician’s office or in an off-campus hospital department that currently bills at hospital rates. That means bringing the hospital rate down, rather than raising the office rate. The agency estimates a $260 million reduction in Part B expenditures in year one. Additionally, inpatient-only list removals are in the second year of a three-year phase-out.

CMS looks to standardize data reporting requirements under the Hospital Price Transparency Rule. The proposed rule included an RFI asking for input on strengthening its hospital price transparency requirements, including standardizing machine-readable file data and improving accuracy in free-text fields. It also seeks comment on consumer-facing tools, like online price estimators, and on required shoppable services.

So What?

• Budget neutrality means aggregate outpatient spending barely moves. However, the distribution does — heavy 340B users absorb the loss, while for-profit hospitals (which are ineligible for 340B) and those with small 340B volumes are positioned to gain from the non-drug redistribution.

• Imaging without contrast would be the third service area CMS wants to pay at physician-office rates instead of hospital rates when provided off-campus,

  after clinic visits in CY2019 and drug administration services in CY2026. Treat this proposal as a signal that CMS intends to continue adding site-neutral categories, rather than a one-off.

• If the RFI does lead to more standardized price transparency data, it could sharpen how third-party care navigation services (like Surest and Garner Health) steer commercial volume, particularly to lower cost providers.