CMS finalizes 2027 outpatient payment rule with steep 340B cuts and site-neutral shifts

CMS has finalized its 2027 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) rule, and it's landing hard for safety-net hospitals. The rule includes a 2.3% reimbursement increase — slightly below the proposed 2.4% — but the bigger story is a dramatic cut to 340B drug reimbursements, dropping from ASP+6% to ASP-28%. To keep the change budget-neutral, non-drug OPPS payments will be bumped up by 7.5%, a move that benefits non-340B (often for-profit) hospitals at the expense of those serving low-income communities.

Hospital groups including the AHA, AAMC, and America's Essential Hospitals have condemned the rule, warning it threatens access to critical services for vulnerable populations. The Federation of American Hospitals, representing for-profit systems, praised the changes as fairer and more cost-efficient for patients and taxpayers.

The rule also pushes forward site-neutral payment policies — applying lower Physician Fee Schedule rates to some imaging services at off-campus hospital departments — and removes 647 services from the inpatient-only list.

By the Numbers:

• 2.3% outpatient reimbursement increase finalized (vs. 2.4% proposed)
• 340B drug payments cut from ASP+6% to ASP-28%
• $4.35B reduction in Original Medicare drug payments in year one
• $1.1B reduction in beneficiary drug cost-sharing (~$900/affected patient)
• $260M projected reduction in Medicare Part B expenditures from site-neutral imaging changes

Why it matters: These sweeping payment changes could reshape how safety-net hospitals fund critical services, with ripple effects for millions of low-income and rural patients who depend on 340B-supported care.