The CY2027 outpatient proposal would reshape off-campus revenue. The final rule is expected next month.
CMS’s proposed CY2027 Outpatient Prospective Payment System rule, released July 2, would raise outpatient payments by a net 2.4%. It applies to roughly 3,500 hospitals and 6,400 ambulatory surgical centers. The rate update is the least consequential part of it. Three structural changes matter more for health system strategy.
CMS proposes paying for imaging services without contrast at the physician-fee-schedule-equivalent rate when they are delivered in off-campus provider-based departments. The agency estimates savings of about $260 million. Rural sole community hospitals would be exempt. If outpatient imaging helps fund your ambulatory network, model the hit department by department.
Drugs acquired through the 340B program would be paid at average sales price minus 33.4%, a reduction of about $4.55 billion. Separately, CMS would raise the offset it applies to non-drug services to 3% through CY2029 to recover $7.8 billion tied to earlier 340B litigation. Covered entities should expect a lot of comment activity and, quite possibly, more legal challenges.
CMS would remove 638 more services from the inpatient-only list, in year two of a three-year phase-out. More procedures will become eligible for outpatient and ASC settings, which affects capacity planning, physician alignment and payer contracting.
The proposal also asks for public input on price transparency and includes about $55 million in cost-of-living adjustments for Alaska and Hawaii.
Executive takeaway: Final rules usually land in early November. Use the weeks in between to stress-test off-campus imaging and 340B scenarios, and decide where volume should move as the inpatient-only list shrinks.
The FY2027 IPPS rule took effect Oct. 1 with a 2.3% update, new quality measures and a mandatory joint-replacement model coming in 2028. Here's what hospital leaders should do now.
Read analysis
September 2026: hospital margins slip in July, Essentia and HealthPartners plan a 22-hospital merger, and Elevance targets off-campus outpatient billing.
Read analysis
August 2026: Fitch warns nonprofit hospital finances may have peaked, AnMed's cyberattack recovery drags on, and Denver and Minnesota deals advance.
Read analysis
