CY 2026 Hospital Outpatient Prospective Payment System Final Rule Summary

The Centers for Medicare & Medicaid Servies (CMS) released the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System final rule for CY 2026. The final regulation makes payment and policy changes to the services provided under the OPPS and ASC payment system, including updating payment rates, making updates to quality measures, finalizing changes to the inpatient only procedure list, and other policies.

The final rule is accompanied by a fact sheet and a press release. Page numbers in this summary reflect the page number of the display copy of the final rule linked above.

Payment Rate Update Updates for OPPS and ASC Payment System – p. 845

Payment rates for services performed in the hospital outpatient department will increase by 2.6% in 2026. The payment increase is derived from the inpatient hospital market basket increase of 3.3% for inpatient services paid under the inpatient prospective payment system, and then reduced by a productivity adjustment of 0.7%. The agency estimates that total Medicare payments to OPPS providers, including Medicare beneficiary cost sharing will be $101 billion in 2026. Payment rates in the ASC setting will also increase by 2.4% and total payments will equal approximately $9.2 billion.

Inpatient Only List Will be Phased Out Over a Three-Year Period – p. 864

CMS will phase out the Inpatient Only (IPO) list beginning in 2026, with the full list eliminated by January 1, 2029. The first batch of services slated for removal are 269 musculoskeletal procedures as well as 16 cardiovascular, lymphatic, digestive, gynecological, and endovascular procedures. A complete list of services that will be removed from the IPO list, over the next three years can be found in Table 119 on page 888 of the display copy of the final rule.

The agency states that changes in medical technology, the development of advanced surgical techniques, and quality and safety advances have made the use of the IPO list unnecessary. Additionally, CMS supports that the physician, using clinical knowledge and judgment, coupled with a Medicare beneficiary’s specific needs, has the capability of determining the safest site of service for a particular procedure.

Method to Control Unnecessary Increases in the Volume of Outpatient Services Furnished in Excepted Off-Campus Provider-Based Departments (PBDs) – p. 902

The agency finalized policy to address site-of-service payment differentials for drug administration services delivered in excepted provider-based departments (PBDs). Specifically, CMS will reduce payments for certain drug administration services furnished in excepted off-campus outpatient departments to 40 percent of the OPPS rate, with an exemption for Sole Community Hospitals.

CMS restated that there is continued growth in the volume of outpatient department (OPD) services driven by site of service payment differentials, and that these volume increases are based on financial incentives tied to payment policy and not to clinical necessity. CMS remained concerned with the correlation between the volume of OPD clinic visits, the vertical integration of hospitals and physician practices, and the higher OPPS payment rate for clinical visits. The agency previously noted in the CY 2019 OPPS/ASC final rule that beneficiaries receiving chemotherapy administration receive more sessions on average when treated in the OPD.

Final Additions to ASC Covered Surgical Procedures and Covered Ancillary Services Lists – p. 1,052

For CY 2026, CMS is expanding the Ambulatory Surgical Center (ASC) Covered Procedures List by revising the criteria, removing five exclusion criteria (now reframed as nonbinding physician safety considerations), and adding 276 procedures based on these updates. CMS is also adding 271 additional procedures that are being removed from the inpatient-only (IPO) list. Table 131, page 1,068 lists the ASC covered procedures for 2026.

CMS is required to identify, in consultation with medical organizations, surgical procedures that can be safely performed not only in hospitals but also in ASCs, critical access hospitals (CAHs), or hospital outpatient departments (HOPDs). By law, CMS must review and update the ASC Covered Procedures List (ASC CPL) at least every two years, and it evaluates the list annually to consider adding or removing procedures.

Final Changes to the List of ASC Covered Surgical Procedures for CY 2026

CMS finalized regulatory criteria to add certain surgical procedures to the ASC CPL, beginning in CY 2026, to expand access, while maintaining the safety for Medicare beneficiaries through the nonbinding physician considerations for patient safety. Currently, covered surgical procedures must be separately paid under the OPPS, pose minimal safety risk when performed in an ASC, and typically not require the patient to need active medical care past midnight. While retaining the requirement that procedures must be separately paid under the OPPS, CMS finalized moving the criteria related to patient safety and post-procedure monitoring to a new section that outlines factors physicians should consider when determining the appropriate site of service.

Additionally, CMS finalized elimination five of the current general exclusion criteria, allowing physicians to determine, based on clinical judgement, whether a procedure can be safely performed in an ASC. The five criteria that are eliminated in 2026 include:

1. Generally, result in extensive blood loss.
2. Require major or prolonged invasion of body cavities.
3. Directly involve major blood vessels.
4. Are generally emergent or life-threatening in nature; and
5. Commonly require systemic thrombolytic therapy.

CMS believes these five exclusionary criteria may no longer be necessary, given the current capabilities of many ASCs.

CMS finalized to maintain three general exclusion criteria, excluding procedures from the ASC CPL that:

1. Are designated as requiring inpatient care.
2. Can only be reported using a CPT unlisted surgical procedure code; or
3. Are otherwise excluded.

CMS believes these retained criteria, coupled with physician judgment and appropriate patient selection, will continue to safeguard patient safety on an ambulatory basis.

Graduate Medical Education Accreditation – p. 1,494

CMS finalized its proposal to revise the definition of an “approved medical residency program” to require that accrediting organizations do not use accreditation standards that promote or encourage discrimination based on protected characteristics (race, color, national origin, sex, age, disability, or religion). This includes prohibiting the use of these characteristic or any intentional substitutes for them, in decisions related to employment, program participation, resource allocation, or similar opportunities.

The Trump Administration’s Executive Order 14279, "Reforming Accreditation to Strengthen Higher Education," directs the United States Attorney General, in consultation with the Secretary of Health and Human Services, to investigate and take action to terminate unlawful discrimination in graduate medical education (GME) advanced by the Liaison Committee on Medical Education or the Accreditation Council for Graduate Medical Education (ACGME) or other accreditors of GME, including diversity, equity, and inclusion (DEI) requirements deemed discriminatory.

ACGME is the primary organization in the United States that conducts accreditation for GME programs. ACGME accreditation is a voluntary process; however, GME programs that are not accredited by the ACGME do not receive Medicare funding from CMS for direct GME (DGME) and indirect GME (IME). CMS recognizes that ACGME identifies DEI as a primary value of the organization and believes that such DEI initiatives “unlawfully discriminate against Americans on the basis of race.”

Current regulations define an “approved GME program” as a residency program approved by one of the following national organizations: ACGME, the American Osteopathic Association (AOA), the Commission on Dental Accreditation (CODA) of the American Dental Association, and the Council on Podiatric Medical Education (CPME) of the American Podiatric Medical Association. CMS interprets the statute to say that an “approved” program can be a program that is accredited by one of these national organizations, or one that leads toward board certification by the American Board of Medical Specialties (ABMS).”