CY2027 OPPS/ASC final: 637 IPO removals, 618 ASC CPL adds, and 340B at ASP−28%

On November 6, 2026, the Federal Register published the CY2027 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment Systems final rule with comment period, CMS-1850-FC. CMS had issued the fact sheet and press release on November 4, 2026. Most provisions take effect January 1, 2027. This is the annual OPPS/ASC package, not the same thing as the quarterly October 2026 OPPS update CR 14589 already on /news.

Payment update: +2.3% for OPPS and ASC

CMS is finalizing a 2.3% update to OPPS payment rates for hospitals that meet applicable quality reporting requirements, based on a 3.2% projected hospital market basket increase reduced by a 0.9 percentage point productivity adjustment. ASC rates that meet quality reporting requirements get the same 2.3% update factor under the continued hospital-market-basket alignment through CY2027.

CMS estimates the package touches roughly 3,500 hospitals and 6,400 ASCs. Hospitals that fail outpatient quality reporting still take the statutory 2.0 percentage point reduction (reporting factor 0.9804).

IPO list: 637 removals in year two of the phase-out

CMS is continuing a three-year phase-out of the inpatient-only (IPO) list. For CY2027 (year two), it is removing 637 services from these clinical families: auditory, digestive, endocrine, female genital, hemic and lymphatic systems, integumentary, male genital, maternity care and delivery, mediastinum and diaphragm, respiratory, and urinary.

That is a setting-of-care coding change, not a diagnosis change. Procedures that sat on the IPO list could only be paid as inpatient. Once they come off, Medicare can pay them in the hospital outpatient department when the clinician decides that setting is clinically appropriate. Pull the CMS addenda on the CMS-1850-FC regulations page before you rewrite scrubber or charge-master rules for those HCPCS lines.

ASC Covered Procedures List gains 618 codes

Alongside the IPO removals, CMS is adding 618 codes to the ASC Covered Procedures List (CPL), including procedures recommended by commenters and nearly all of the services removed from the IPO list for CY2027. For ASC billers, that means a large new set of codes can be paid in the ASC setting starting January 1, 2027. Check the ASC addenda before you open a code that was blocked in CY2026.

340B drugs at ASP minus 28%, and a faster non-drug offset

After the Medicare OPPS Drugs Acquisition Cost Survey (January 1 through April 7, 2026), CMS is finalizing payment for 340B-acquired drugs at ASP minus 28%. The fact sheet estimates that change reduces Original Medicare drug payment by $4.35 billion and beneficiary drug payments by $1.1 billion in the first year, implemented budget-neutrally so non-drug OPPS payments rise by an equivalent amount (the Federal Register summary cites about a 7.50% increase to non-drug service payments for this final).

Separately, the 340B remedy offset on the OPPS conversion factor for non-drug items and services rises from 0.5% to 2% for CY2027 for hospitals subject to the offset (hospitals that enrolled in Medicare after January 1, 2018 stay excluded). CMS estimates the aggregate $7.8 billion non-drug overpayment recovery finishes around CY2031 under the faster pace.

Site-neutral imaging and botulinum toxin prior auth

CMS is expanding its volume-control method for excepted off-campus provider-based departments to imaging without contrast services (certain bone density scans, x-rays, ultrasounds, CT scans, and MRIs), paying the Physician Fee Schedule-equivalent rate instead of the full OPPS rate. Rural Sole Community Hospitals stay exempt, matching the clinic-visit and drug-administration policies already in place. CMS estimates about $260 million in Part B savings in the first year.

On program integrity, CMS is finalizing prior authorization for eight additional botulinum toxin injection codes in the hospital outpatient department for dates of service on or after July 1, 2027. That is a mid-year operations date, not a January 1 cliff. Build the PA workflow against the code list in the final rule and addenda before summer.

CMS is also renaming algorithm-based software services from "Software as a Service" (SaaS) to "Software as a Medical Service" (SaMS) for Medicare payment purposes, with interim New Technology APC assignments, and is moving certain stand-alone algorithmic analyses of prior lab tests from the Clinical Laboratory Fee Schedule onto the OPPS as other diagnostic tests.

What this does and does not change for risk-adjustment desks

This rule rewrites outpatient and ASC payment, packaging, and setting lists. It does not rewrite Medicare Advantage HCC mappings or ICD-10-CM diagnosis rules. When an outpatient encounter also feeds an MA chart, keep using the Code Book and encoder / RAF calculator for the diagnosis side. For Part B fee-schedule coding that landed the same week, see the separate CY2027 PFS final (G2211 → modifier B1; same-day E/M with 0-day globals at 80%).

What to do before January 1, 2027

Download the CMS fact sheet, the published Federal Register text, and the OPPS/ASC addenda from the CMS-1850-FC page. Diff your IPO and ASC CPL files against the CY2027 lists. Flag the eight new botulinum toxin prior-auth codes for a July 1, 2027 go-live. Model 340B line pricing at ASP−28% and the 2% non-drug offset if your hospital is in the remedy group. And treat imaging without contrast at excepted off-campus PBDs as PFS-equivalent unless you are a rural Sole Community Hospital.