CMS Issues Proposed Hospital Payment Rule
Per the notice below, the Centers for Medicare and Medicaid Services (CMS) has issued its proposed hospital payment rule.
CMS Proposes Bold Reforms to Modernize Hospital Payments, Strengthen Transparency, and Put Patients Back in Control
Proposed rule advances administration’s vision to “Make America Healthy Again”
The Centers for Medicare and 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. “These reforms expand options and enforce the transparency Americans deserve to ensure they receive high-quality care without hidden costs.”
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,” said Chris Klomp, Deputy Administrator and Director of the Center for Medicare at CMS. “These changes help make hospital care more predictable, accountable, and affordable.”
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. 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. 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.
The proposed rule will be open for public comment for 60 days following its publication in the Federal Register and can be viewed online at: https://www.federalregister.gov/d/2025-13360. CMS encourages patients, providers, and stakeholders to review and submit feedback. A fact sheet with additional information is available at: https://www.cms.gov/newsroom/fact-sheets/calendar-year-2026-hospital-outpatient-prospective-payment-system-opps-and-ambulatory-surgical.
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