Article
The headline update
CMS proposed a net 2.4% update to outpatient payments for 2027, which includes a 0.8 percentage point productivity cut. In its Aug. 28 letter, the AHA called the update inadequate given hospitals’ financial pressures and urged CMS to work with Congress to reduce or eliminate the productivity adjustment.
Four proposals to model
- A faster 340B remedy clawback. To recoup the remedy payments hospitals received after the Supreme Court struck down earlier 340B drug cuts, CMS has been reducing non-drug outpatient payments by 0.5% a year. It now proposes raising that reduction to 3%. In an Aug. 26 letter, the AHA argued that any clawback is unlawful and asked CMS to at least keep or extend the existing timeline.
- A new 340B drug payment cut. CMS would pay for 340B-acquired drugs at average sales price minus 33.4%, based on a drug acquisition cost survey. The AHA said the survey’s method and response rates do not support the cut and that the policy repeats one the Supreme Court already struck down.
- Site-neutral imaging. CMS would lower payment for imaging without contrast at off-campus provider-based departments that are currently exempt from site-neutral rates. The AHA opposes the change.
- Separate NPIs for off-campus sites. Each off-campus outpatient department would need its own national provider identifier, adding enrollment and billing work.
The rule also proposes changes to the inpatient-only list, prior authorization for more botulinum toxin injection codes and an expanded list of procedures payable in ambulatory surgery centers. The AHA warned these could limit access to hospital-level care and add burden.
How the pieces stack
The clawback and the 340B cut would both weigh most heavily on 340B hospitals, many of them safety-net and rural facilities. A hospital could see its effective outpatient increase shrink well below 2.4%, and in some cases turn negative, once a sixfold faster clawback and lower drug payments are combined. Systems with large off-campus imaging volume face a third reduction on top.
What to do before the final rule
- Run three scenarios. Model the update alone, the update plus the clawback, and all four proposals together, by hospital and site.
- Quantify 340B exposure. Have pharmacy and finance estimate outpatient 340B drug revenue at ASP minus 33.4% against current rates.
- Map off-campus imaging. Identify excepted sites and non-contrast imaging volumes that would be repriced.
- Prepare the NPI work. Inventory off-campus departments and estimate the enrollment and billing changes needed.
- Brief lawmakers. Share local impact estimates with your congressional delegation while the rule is still open to change.
Archive entry for Aug 29, 2026, added Nov. 11, 2026.