CMS 2026 proposed rule: Expanded ASC access, higher payments, tighter quality reporting

Editor's Note

The Centers for Medicare & Medicaid Services (CMS) just proposed sweeping changes to the Medicare Shared Savings Program and Physician Fee Schedule for calendar year 2026, including extensive changes to outpatient Medicare policy such as payment increases, expanded procedural access, and new quality reporting updates, as outlined in its July 15 newsroom release.

Payment rates for both hospital outpatient departments (HOPD) and ambulatory surgery centers (ASCs) would increase by 2.4% for providers that meet quality reporting requirements. This reflects a 3.2% inflation update minus a 0.8% productivity adjustment and continues the ASC-HOPD rate alignment through 2026, as ASCA requested. CMS also proposes to phase out the inpatient-only (IPO) list over 3 years, starting with 285 procedures, and to expand the ASC Covered Procedures List (ASC-CPL) by 547 codes—271 of which are directly from the IPO list and include many ASCA-recommended cardiovascular, spine, and vascular procedures.

CMS would apply physician office-equivalent rates to drug administration services delivered in excluded off-campus outpatient departments, projecting $280 million in annual savings. For skin substitutes, it proposes shifting away from current packaging policy and instead paying based on product characteristics aligned with Food & Drug Administration classifications, with a uniform payment rate in 2026 and stratified rates in future years.

New policies include a 2% annual offset to Hospital Outpatient Prospective Payment System (OPPS) non-drug payments to recoup $7.8 billion in prior 340B overpayments by 2031. CMS is also soliciting comment on payment for Software as a Service (SaaS) tools; planning to survey drug acquisition costs in early 2026; and proposing expanded access to non-opioid pain therapies, with separate payments for select drugs and devices. Behavioral health services would see refinements to payment for Intensive Outpatient Programs and Partial Hospitalization Programs, with cost methodology changes for community mental health centers.

Quality reporting requirements would see multiple measure removals across OPPS, ASC Quality Reporting (ASCQR), and Rural Emergency Hospital programs. CMS proposes replacing the CAHPS mail-phone survey with a web-based format by 2027. In the ASCQR Program, it would remove three ASCA-opposed measures and add one new patient-reported outcome measure, with voluntary reporting beginning in 2027. Changes to the Hospital Star Ratings would also more visibly penalize low safety performers starting in 2026 and 2027.

Here are other overarching key proposals:

• Stripping the health equity adjustment: Starting in 2025, CMS would eliminate the health equity quality score adjustment, citing overlap with other incentives such as the Complex Organization Adjustment and eCQM/MIPS CQM reporting bonuses.
• Terminology and monitoring refinements: The “health equity benchmark adjustment” would be renamed “population adjustment,” and CMS would begin monitoring compliance with both standard and alternative quality performance thresholds.
• Refining Medicare CQM beneficiary definitions: New criteria would reduce reporting burden on Accountable Care Organizations (ACOs) by increasing alignment between eligible CQM populations and assignable beneficiaries.
• Updating quality measure sets: Quality ID 487 (social drivers of health screening) would be removed from the APP Plus set. Additional updates include removing outdated measures and phasing in new ones through 2028.
• Adding cybersecurity relief: Cyberattacks, including ransomware, would be recognized under extreme and uncontrollable circumstances policies, allowing affected ACOs to seek performance reporting exceptions.
• Exploring future metrics and regulatory streamlining: CMS seeks input on integrating well-being and nutrition metrics into future reporting and invites feedback on simplifying Medicare regulations.

Public comments on the proposed rule are open through September 12.