LUGPA Policy Alert: 
CMS Finalizes CY 2026 OPPS and ASC Payment Rule
(CMS-1834-FC)

The Centers for Medicare & Medicaid Services (CMS) has released the Calendar Year (CY) 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Final Rule. The Trump Administration reaffirmed strong support for site-neutral payment initiatives first advanced in earlier rulemaking, resulting in major alignment of reimbursement across sites of service. These reforms will have substantial implications for independent urology groups operating ASCs, off-campus provider-based departments (PBDs), and hospital outpatient departments (HOPDs).

Key Payment Updates

OPPS and ASC Rate Increases

• Both OPPS and ASC payment rates will increase by 2.6% for CY 2026 (3.3% market basket minus 0.7% productivity adjustment) for facilities meeting all quality reporting requirements.
• CMS extended use of the hospital market basket for ASC rate-setting through CY 2026 and signaled intent to make this methodology permanent.

Site-Neutral Drug Administration Payments (All Off-Campus OPDs)

• Beginning CY 2026, drug administration services—including chemotherapy, immunotherapy, BCG, ADT injections, and related services—provided in all off-campus provider-based departments will be reimbursed at non-facility Physician Fee Schedule (PFS) rates, typically 40–60% of current OPPS levels.
• Exemptions: On-campus departments and Sole Community Hospitals.
• CMS also expressed interest in expanding site-neutral payment policies to additional clinical services in future years.

340B Program Updates

• CMS will conduct a mandatory acquisition cost survey in Q1 2026 (required by the Supreme Court’s 2022 AHA v. Becerra decision). Survey findings will inform potential 340B drug reimbursement adjustments starting in CY 2027.
• To repay hospitals for unlawful 340B cuts from 2018–2022, CMS finalized a prospective 0.5% reduction to the OPPS conversion factor beginning in 2026—rejecting its earlier proposal for a steeper 2% cut. This recoupment will extend for roughly 16 years and applies to nearly all hospitals except those enrolling after January 1, 2018.

Major Procedural & Site-of-Service Changes

Inpatient Only (IPO) List Phase-Out Resumes

• CMS will fully eliminate the IPO List by January 1, 2029.
• For CY 2026, 285 procedures—primarily musculoskeletal and orthopedic—will be removed.
• Procedures removed from the IPO List remain exempt from Two-Midnight Rule medical review through at least 2026.

ASC Covered Procedures List (CPL) Expansion

• CMS removed five longstanding exclusion criteria and replaced them with non-binding physician-judgment considerations.
• A total of 560 procedures were added to the ASC CPL for CY 2026 (13 more than proposed):
• 271 of the 285 procedures removed from the IPO List
• 289 additional surgical or surgery-like codes
• While no urology-specific procedures were added this cycle, several urology-adjacent and general surgical codes are now ASC-eligible, further accelerating site-of-service migration opportunities.

Radiation Oncology

• No external beam radiation therapy (XRT) codes were added to the ASC CPL. Practices should monitor the CY 2026 PFS Final Rule for updates related to practice expense and delivery codes.

Other Notable Policies

Software as a Service (SaaS) and Technology Valuation

CMS continues to seek stakeholder feedback on SaaS payment policy and risk-bearing arrangements, with parallel requests for information in the CY 2026 PFS rule.

Hospital Price Transparency Enhancements

Effective January 1, 2026 (enforcement begins April 1, 2026):

• Hospitals must display median payer-negotiated rates and 10th/90th percentile allowed amounts.
• CMS will require adoption of the EDI 835 electronic remittance advice (ERA) standard to improve comparability and audit readiness.