CMS just dropped its proposed 2027 outpatient payment rule — and hospitals aren't happy. The rule includes a steep cut to 340B drug reimbursements (down 33.4% below average sales price) and expands site-neutral payment policies to imaging services. Hospital groups are calling the changes "shocking" and "destructive," warning they'll hurt safety-net providers and underserved communities.
CMS released its proposed 2027 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) rule, and it's packed with major changes. The headline item: a dramatic cut to 340B drug reimbursements, dropping payments to 33.4% below average sales price — a move CMS says is backed by a new acquisition cost survey showing significant disparities between what hospitals pay for drugs through 340B versus outside the program. To keep the policy budget-neutral, CMS is simultaneously hiking non-drug service payments by 8.44%, which critics note would benefit for-profit hospitals that don't participate in 340B.
The rule also broadens site-neutral payment policies by applying physician fee schedule rates to imaging services at off-campus hospital outpatient departments — building on last year's move to equalize drug administration payments. CMS argues this curbs hospital consolidation incentives and reduces unnecessary cost inflation for Medicare beneficiaries. Hospital groups, however, say these cuts come at the worst possible time, with rising uncompensated care and increasingly complex patients.
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Why it matters: This rule could significantly reshape hospital finances — especially for safety-net and rural hospitals that rely heavily on 340B savings to fund care for low-income patients. If finalized, it would mark the most aggressive federal rollback of 340B reimbursements to date, and is widely expected to face legal challenges.
