On November 21, 2025, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System final rule, which includes finalized policies to update payment rates and regulations affecting Medicare services furnished in hospital outpatient and ambulatory surgical center settings beginning in CY 2026.
For CY 2026, CMS increased payment rates under the Hospital Outpatient Prospective Payment System and the ASC Payment System by 2.6%. This increase factor is based on a hospital market basket percentage increase of 3.3%, reduced by a productivity adjustment of 0.7 percentage points. In continuation of an existing policy, hospitals and ASCs that fail to meet their respective quality reporting program requirements will be subject to a statutory 2.0 percentage point reduction in payments for all applicable services. CMS did not finalize a proposed policy change affecting hospitals subject to the 340B remedy offset. Instead, CMS is maintaining a 0.5% reduction for CY 2026.
Based on the finalized policies, CMS estimates that total payments to OPPS and ASC providers (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix) for CY 2026 will be approximately $101.0 billion and $9.2 billion, respectively. This growth represents an increase of approximately $8.0 billion and $450 million, respectively, from CY 2025 payment levels.
key takeaways from the cy 2026 opps and asc payment system final rule
- Inpatient only (IPO) list: CMS finalized the elimination of the IPO list with a transition period of three years. For CY 2026, CMS predominantly removes musculoskeletal procedures from the IPO list and assigns them to clinical ambulatory payment classifications (APCs), including a finalized new Level 7 Musculoskeletal Procedures APC.
- 340B: CMS is not finalizing its proposed revision to the annual reduction to the OPPS conversion factor for non-drug items and services. Instead, CMS is maintaining a 0.5% reduction for CY 2026. However, CMS is anticipating implementing a larger reduction (such as 2.0% or other reduction greater than 0.5%) beginning in CY 2027.
- Skin substitutes: Consistent with its finalized policy in the Medicare Physician Fee Schedule for CY 2026, CMS finalized the unpackaging of skin substitutes, paying separately for the products as incident-to supplies based on a flat fee.
- Site-neutral payments: CMS is moving forward with its proposal policy to expand site-neutral payments to drug administration services furnished by excepted off-campus provider-based outpatient departments and will exempt rural sole community hospitals from this policy. CMS estimates that this policy will decrease total Medicare payments in 2026 by $290 million, with Medicare OPPS payments decreasing $220 million and beneficiary copayments decreasing $70 million.
- Diagnostic radiopharmaceuticals: CMS is finalizing its proposal to continue to pay separately for high-cost diagnostic radiopharmaceuticals whose per-day cost exceeds the annually adjusted threshold.
- Hospital price transparency: CMS finalized policies aimed at strengthening price transparency requirements and providing actual prices, rather than estimates, to the public.
- ASC covered procedures list: CMS finalized its proposal to expand the ASC covered procedures list by revising its criteria and adding 560 procedures, which includes 271 codes CMS is removing from the IPO list for CY 2026 and 13 additional procedures identified by stakeholders.
- ASC payments: CMS finalized its proposal to continue to apply a productivity-adjusted hospital market basket update to ASC payments for CY 2026.
- Quality reporting programs: CMS finalized a subset of the updates proposed to the Outpatient, ASC, and Rural Emergency Hospital Quality Reporting Programs.
- Market-based MS-DRG data collection: CMS finalized a proposal to require hospitals to report on their Medicare cost report the median payer-specific negotiated charge with all of its Medicare Advantage organizations by MS-DRG. This information will be used by CMS for calculating MS-DRG payment weights for the inpatient prospective payment system starting with fiscal year 2029 (October 1, 2028 – September 30, 2029).
Comments on the final rule are due January 20, 2026.
The full summary of the final rule is for McDermott+ clients and McDermott+ Insider subscribers only; please contact your relationship consultant with questions. For inquiries, please contact info@mcdermottplus.com.
updated opps-pfs data dashboard
McDermott+’s new, interactive dashboard for PFS, Outpatient Prospective Payment System (OPPS), and Ambulatory Surgical Care (ASC) shows finalized Medicare fee-for-service payment rates for 2026 at the national level for services paid under the OPPS, ASC, and Physician Fee Schedule (PFS) payment systems. This dashboard provides other helpful information by procedure code for 2026, including the geometric mean cost calculated by CMS for the OPPS, and the device offset for the OPPS and ASC.
This dashboard can be used by providers, device manufacturers, and the general public to see how Medicare payment rates for services of interest have changed across years.
ACCESS DASHBOARD
opps-asc final rule resources
