Friday, July 3, 2026

CMS released its 2027 Hospital Outpatient Prospective Payment System proposed rule, which includes significant changes for practices with outpatient hospital departments. The rule renews a push to slash 340B drug reimbursement rates and broadens site-neutral payment policies, where services provided in hospital outpatient departments would be paid at physician office rates. CMS frames this as part of a $5.7B Medicare savings plan. For independent practices operating in or alongside hospitals, this signals continued pressure on hospital-owned outpatient margins and could shift service volumes. The public comment period is open, with a final rule expected in early November. Monitor the Federal Register for the official proposal and prepare to assess the operational impact on your affiliated or competing outpatient facilities.

Elevance Health, parent of Anthem and numerous Blue Cross Blue Shield plans, filed a lawsuit against CMS challenging a recalculation of its 2025 Medicare Advantage star ratings. The change dropped Elevance's overall star rating, which directly impacts the quality bonus payments the insurer receives. Elevance contends the recalculation was arbitrary and could cost the company approximately $115 million. For practices contracting with Elevance's MA plans, this lawsuit highlights the financial volatility insurers face under the star rating system. While not a direct payment change for providers, it underscores the payer-side pressures that can influence network stability and contract negotiations. The case is pending.

MedLearn alerted coders to expect Medicare reimbursement increases for specific services, though the details and effective dates are pending further CMS publication. This type of advance notice typically precedes a transmittal or final rule that adjusts payment rates for procedures that have been historically underpaid or are subject to annual updates. For billing teams, this is a signal to watch for official CMS releases in the coming weeks, likely via the Medicare Physician Fee Schedule or a specific Program Memorandum. Do not change coding or billing practices yet. Instead, confirm your software vendor is prepared to update fee schedules promptly upon the official effective date.

CMS issued its proposed 2027 Outpatient Prospective Payment System rule, which includes two major structural changes. First, the agency proposes to permanently slash Medicare reimbursement for 340B-acquired drugs in hospital outpatient departments, a move it estimates would save $5.7 billion. Second, the rule expands site-neutral payment policies, proposing to pay the same rate for clinic visits in any outpatient department setting regardless of hospital ownership. The proposals are part of a broader push to reduce Medicare spending on outpatient care and curb hospital consolidation. The rule is open for comment; final provisions will directly impact hospital margins and could influence referral patterns for independent practices working with hospital outpatient departments.