CMS has penned their 2027 proposed rule for the outpatient payment system (OPPS) and Medicare Physician Fee Schedule (MPFS). The OPPS-related proposed rules include a couple of site neutral proposals to start, both of which are around the change that came through the 2026 Appropriations Act, as well as expanding CMS’ authority around off-campus clinics. It also touches on continuing items (like 340B pass-through payments and the inpatient only list). A summary of our favorites follow. The MPFS rule spends some time talking about what our healthcare system would look like if we focused on primary care as an avenue to keeps folks healthy rather than reacting to an illness.
Separate NPI for Each Off-campus Location
This is the change that came through the 2026 Appropriations Act. It requires that by January 1, 2028, all off-campus locations for PPS hospitals will require a separate NPI and an updated registration. If you recall from that DZA newsletter, CMS was tasked with setting parameters around this rule, including a hint they needed to design how often hospitals should attest. Now, the moment we have all been waiting for—the parameters!!
CMS has proposed that hospitals must submit an initial attestation within two years prior to providing services and then every five years after that.
Because of the two-year prior rule above, that means to meet the January 1, 2028 date, you have from January 1, 2026, till December 31, 2027, to get your attestation in. But remember: you will need a separate NPI, so that is first in the order of operation: get an NPI for each off-campus location as soon as possible. Once you have that shiny new NPI in hand, submit an attestation for that exact off-campus location stating it meets the provider-based standards before the end of next year. The proposed rule states the attestation must be submitted, so I have taken the liberty of telling you all that means it needs to be submitted in PECOS, not necessarily “approved” by the MAC.
CMS has proposed a new attestation form for hospitals to use. This form would replace the current attestation from your MAC (although you can continue to use the current version until it is finalized). The MACs each have an attestation for hospitals to use, but by CMS issuing one, we will have a more consistent reporting of these items. You can take a gander at that proposed form here: Click Me!
Did you click that? Your entire IT department is probably worried now. You can also just google “CMS proposed attestation form”.
Next, CMS proposes to devise a standard way to electronically upload the attestation.
You will be attesting that you meet all the provider-based standards. We suggest starting by getting the separate NPI. Then, while you are waiting on your new NPI, do a mock survey to ensure you are indeed meeting the provider-based standards. That way when your NPI arrives, you will already feel comfortable that you are attesting correctly or have time to bring the hospital into compliance.
For the distance requirements, CMS is hoping the attestation system will be able to measure the distance on your behalf.
Finally, CMS did some magic with words and decided that provider-based standards apply to remote locations of a hospital as well. A remote location is a location which provides inpatient services under the main provider’s number. Under this proposal, the provider-based regulation would include language that clarifies that off-campus rules apply to locations more than 250 yards from the main hospital and any remote location.
In the first paragraph, we stated for “PPS” hospitals—that claim is based on the original Act which codifies this change into 42 USC 1395l(t), titled “Prospective Payment System for Hospital Outpatient Department Services.” While DZA has some of the world’s finest accountants, we are not lawyers—but feel like we could play one on TV using this scenario. We would make the case that critical access hospitals are, therefore, exempt from this rule. A clarifying question will be submitted by DZA.
RHCs Providing Diabetes Management and Medical Nutrition Therapy
Currently, RHCs are allowed to provide diabetes self-management training and medical nutrition therapy. They are not currently separately billable. However, CMS is proposing to recognize these services as separately billable services, paid the all-inclusive rate (the RHC rate).
To qualify, these services must be provided by a certified provider under direct supervision of a qualified practitioner (like the MD or APP).
If diabetes management or medical nutrition therapy is provided on the same day as another encounter, only one encounter may be billed.
Pass-through Payments for Drugs Purchased via 340B Pricing
Do you remember when CMS first decided that when a PPS hospitals purchased drugs via the 340B discounted drug program that the associated pass-through payment would be less and the savings would be added to the market basket updates? Remember that? Then the courts said, “Nice try, reverse it,” and they had to decrease the market basket updates and pay those hospitals back?
Well, CMS is again proposing to decrease pass-through payments for these drugs, this time proposing to pay ASP minus 33.4 percent (the original rule was minus 22.5%) and, again, to make it site neutral, increase payment to all hospitals (essentially increasing payments to non-340B hospitals).
They are trying this proposal again using a survey to match the payment to actual cost survey data as opposed to the first method which was based on estimates.
Since critical access hospitals are paid cost, the amount Medicare pays for drugs at those facilities decreases “naturally” via their payment structure. Meaning this policy relates only to you, PPS facilities.
More Site-neutral
For more fun with PPS site-neutral policies, CMS is proposing to continue its payment for non-exempted off-campus locations at 40%. Non-exempted off-campus locations paid at 40% of APC includes the services noted in the 2019 OPPS rule that are billed using G0463 (clinic visit), and the addition of “any HCPCs code assigned to the drug administration services APCs” in 2026.
Proposed for 2027 is the addition of imaging services without contrast. Specifically, services paid through APCs 5521 through 5 -> 524 (level 1-4 X-Rays), 8004 (Ultrasound Composite), 8005 (CT and CTA without Contrast Composite), and 8007 (MRI and MRA without Contrast Composite). If you want to pull the rule, it has a nice table of APCs effected by these policies. If you find the same copy as mine, it is page 183.
Rural sole community hospitals remain exempted from this policy.
Prior Authorization
CMS added prior authorization a few years ago to include items that were used for both medical purposes as well as for vanity purposes (like a nose job). In its proposed rule it is looking to add additional codes related to botulinum injections.
Inpatient Only List
CMS declared last year it would rid us of the inpatient only list. Meaning if the prescribing doctor documents the surgery can be safely done on an outpatient basis, that is the correct site of service. Keep in mind that CMS defines inpatient as generally requiring to be in the hospital for two midnights.
In 2027, CMS proposes to remove 637 more services from the inpatient only list.
The results of these rules will shift cost from Medicare part A and onto, well, the patient (in the case of critical access hospitals) and their part B coverage.
The intent is to move as many services as possible into what CMS considers lower cost areas like ambulatory surgery centers.
Closing
If you have questions on any of these items, or per changes other items that were not covered here, please contact me or your favorite DZA representative!
