CY2027 hospital outpatient and ASC final rule: what to expect
The final rule for 2027 hospital outpatient and ASC payment is due in November. Until it is out, here is what CMS proposed in July: a 2.4% update, a conversion factor 11.6% higher once a 340B drug cut is returned to other services, and a remedy offset six times larger.
- Applies to
- Outpatient and ASC services from January 1, 2027
- Rule
- CMS-1850-P, proposed July 2, 2026
- Final rule
- Expected November 2026
On this page
Where the rule stands
CMS proposed the calendar year 2027 hospital outpatient (OPPS) and ambulatory surgical center (ASC) payment rules on July 2, 2026 as CMS-1850-P, published in the Federal Register on July 7, 2026. Comments closed August 31, 2026. The final rule is expected in November 2026, and its rates apply to outpatient and ASC services on or after January 1, 2027, line by line by date of service.
This page is the place we will keep the CY2027 numbers. Until the final rule is out it shows what CMS proposed; when the final rule is released it will show the final figures, what changed from the proposal, and a claim priced at CY2026 and CY2027 rates.
The proposed numbers
| Item | Proposed for CY2027 | Detail |
|---|---|---|
| Payment update (quality reporting met) | 2.4% | 3.2% market basket less 0.8 point productivity; OPPS and ASC alike |
| Update if quality reporting is not met | 0.4% | 2 percentage points lower (OQR and ASCQR programs) |
| OPPS conversion factor | $102.004 | CY2026: $91.415. Includes the 1.0844 adjustment that returns the 340B drug cut to non-drug services |
| OPPS conversion factor, hospitals under the remedy offset | $99.015 | With the proposed 3% offset; CY2026: $90.967 with the 0.5% offset |
| 340B-acquired drugs | ASP − 33.4% | $4.85 billion less in OPPS drug payment, returned through an 8.44% increase to non-drug rates |
| 340B remedy offset | 3% | Up from 0.5%; until $7.8 billion is recovered, expected by the end of CY2029 |
| Outlier fixed-dollar threshold | $7,100 | With the 1.75 times APC payment multiple; outliers set at 1.0% of OPPS payments |
| Inpatient-only list | 638 removed | Year 2 of a 3-year phase-out, across 11 clinical families |
| ASC covered procedures list | 618 added | Codes proposed for addition to the ASC list |
| Imaging without contrast, excepted off-campus departments | Site-neutral | Paid at the physician fee schedule equivalent rate; rural sole community hospitals exempt |
| Estimated OPPS spending | $110.9 billion | About $9.5 billion more than CY2026 |
| Estimated ASC spending | $9.9 billion | About $520 million more than CY2026 |
The rule also proposes prior authorization for eight more botulinum toxin injection codes, a cost-of-living adjustment to the nonlabor share in Alaska and Hawaii, and a request for information on hospital price transparency data, including outlier, stop-loss and carve-out terms.
Why the conversion factor jumps
The proposed $102.004 is 11.6% above the CY2026 $91.415, far more than the 2.4% update. The rest is budget neutrality. CMS proposed to pay drugs that hospitals buy through the 340B program at ASP minus 33.4%, based on its drug acquisition cost survey, a $4.85 billion reduction in OPPS drug payment. Because the cut is budget neutral, the same amount goes back to every non-drug item and service through an 8.44% increase (a 1.0844 factor in the conversion factor).
The 340B remedy offset works the other way. It claws back, from future non-drug payments, the extra non-drug payments hospitals received from 2018 through 2022, when an earlier 340B drug cut (later overturned) was offset by higher rates for everything else. In CY2026 it takes 0.5% off the non-drug conversion factor; CMS proposed 3% from CY2027, for every hospital paid under the outpatient system except providers with a CCN effective January 2, 2018 or later, until the $7.8 billion total is recovered. For hospitals under the offset the proposed conversion factor is $99.015, 8.8% above their CY2026 $90.967.
| Hospital | CY2026 | CY2027 proposed | Change |
|---|---|---|---|
| Not under the remedy offset | $137.12 | $153.01 | +11.6% |
| Under the remedy offset | $136.45 | $148.52 | +8.8% |
What payers should watch in the final rule
- Whether the 340B drug rate is finalized. It decides both the drug cut and the 8.44% lift for everything else. A percent-of-Medicare contract with a 340B hospital pays less on drug lines and more on the rest; one with a non-340B hospital simply pays more.
- The remedy offset rate. 3% against 0.5% moves every non-drug line at most hospitals by about 2.5%.
- The conversion factor and APC weights. Reload both on January 1; a claim with a 2026 and a 2027 line prices each line at its own year.
- Inpatient-only removals. 638 more services could be billed as outpatient. Claims that used to arrive as inpatient stays priced by MS-DRG may arrive as outpatient claims priced by APC.
- ASC list additions. 618 codes proposed for the ASC list widen where a procedure can be done; for four common procedures the hospital outpatient rate is 1.9 to 2.1 times the ASC rate (see the site-of-service gap).
- Site-neutral imaging. Imaging without contrast at excepted off-campus departments would be paid at the physician fee schedule equivalent rate.
Pricing 2027 claims here
The outpatient pricer carries the CY2026 rates today. A 2027 date of service is priced at CY2026 rates and the result says so. When the final rule and its January 2027 addenda are published we load the CY2027 conversion factors, APC weights, status indicators and ASC rates, and each line prices at the rates for the year of its own date of service. For the comparison of the two settings see the OPPS vs ASC differential guide; for how dates of service pick the rate year see which year’s rates apply.
Questions
When is the CY2027 hospital outpatient and ASC final rule expected?
CMS usually releases it in November. The proposed rule (CMS-1850-P) was issued July 2, 2026 and published July 7, 2026; comments closed August 31, 2026. Whatever the final rule says applies to services on or after January 1, 2027.
What update did CMS propose for 2027?
2.4% for hospital outpatient departments and ASCs that meet quality reporting requirements: a 3.2% hospital market basket increase less a 0.8 percentage point productivity adjustment. Hospitals and ASCs that fail their quality reporting program would get 2 percentage points less.
Why is the proposed OPPS conversion factor 11.6% higher than 2026?
Most of the increase is budget neutrality, not new money. CMS proposed to pay 340B-acquired drugs at ASP minus 33.4%, a $4.85 billion cut to drug payments, and to put the same amount back into non-drug services through an 8.44% increase. With the 2.4% update and other adjustments, the conversion factor would go from $91.415 to $102.004.
Does the 340B remedy offset change?
CMS proposed to raise it from 0.5% to 3% of the non-drug conversion factor from 2027, for every hospital paid under the outpatient system except new providers (CCN effective January 2, 2018 or later), until the $7.8 billion total is recovered, which CMS expects by the end of 2029. For those hospitals the proposed conversion factor is $99.015.
What does the final rule mean for a percent-of-Medicare contract?
A contract that pays a percentage of the Medicare outpatient rate moves with the conversion factor and the APC weights. If the proposal is finalized, non-drug lines at most hospitals would be priced on a higher conversion factor and drug lines at 340B hospitals on a lower one, so the same claim can price higher or lower depending on its mix. Reprice a sample of 2027 claims on the final rates before January 1.
Sources
Every figure on this page is from the proposed rule or CMS’s fact sheet on it, read October 31, 2026, except the CY2026 conversion factors, which are from the CY2026 final rule (CMS-1834-FC), and the 150% illustration, which is arithmetic on those figures. Proposed figures can change in the final rule.