Drugs Acquisition Cost Survey
Section 1833(t)(14)(D)(ii) of the Social Security Act requires the Secretary to periodically conduct surveys of hospital acquisition costs for each specified covered outpatient drug for use in setting the payment rates for such drugs. Accordingly, CMS will be conducting a survey by early 2026 on the acquisition costs for each separately payable drug acquired by all hospitals paid under the OPPS. CMS intends for the survey to be completed in time for the survey results to be used to inform policymaking beginning with the 2027 OPPS proposed rule.
Non-Opioid Treatments for Pain Relief
The proposed rule would continue policies to provide temporary additional payments for certain non-opioid treatments for pain relief in the hospital outpatient department (HOPD) from January 1, 2025, through December 31, 2027, consistent with the statute. CMS is proposing five drugs and six devices to qualify as non-opioid treatments for pain relief, and CMS proposes these products be paid separately in the HOPD setting, starting in 2026.
Payment for Technetium-99m
In the 2025 OPPS final rule, CMS finalized a proposal to incentivize domestic production of Molybdenum-99 (Mo-99) by establishing a new add-on payment of $10 per dose of Technetium-99m (Tc-99m) derived from domestically produced Mo-99, starting on January 1, 2026. In this 2026 OPPS proposed rule, CMS would codify the definition for domestically produced Mo-99 and establish a new HCPCS C-code C917X [Tc-99m from domestically produced non-HEU Mo-99 (minimum 50 percent), full cost recovery add-on, per study dose].
CMS also proposes that at least fifty percent of the Mo-99 used in the Tc-99m generator that produced a dose of Tc-99m must have been domestically produced for the dose to qualify for the add-on payment.
Graduate Medical Education Accreditation
In order to ensure that graduate medical education (GME) accreditation for approved medical residency programs complies with applicable laws related to race-based admission policies and to improve the accreditation process, CMS is proposing that accreditors may not require as part of accreditation, or otherwise encourage institutions, to put in place diversity, equity and inclusion programs that encourage unlawful discrimination on the basis of race or other violations of Federal law. CMS also notes that the secretary of the U.S. Department of Health and Human Services (HHS), hereinafter “Secretary,” may certify other organizations as accreditors to increase the potential for competition in the accreditation space and improve the quality of the accreditation process.
Hospital Price Transparency
Consistent with the president’s Executive Order #14221, “Making America Healthy Again by Empowering Patients with Clear, Accurate and Actionable Healthcare Pricing Information,” CMS is proposing several modifications to the Hospital Price Transparency (HPT) regulations. They are as follows:
- Require that, beginning January 1, 2026, hospitals disclose the tenth, median and ninetieth percentile allowed amounts in machine-readable files (MRFs) when payer-specific negotiated charges are based on percentages or algorithms, as well as the count of allowed amounts used to determine these percentiles, to more accurately reflect the distribution of actual prices that the hospital has received for an item or service.
- Require hospitals to use electronic data interchange (EDI) 835 electronic remittance advice (ERA) transaction data to calculate and encode allowed amounts when a payer-specific negotiated charge is based on a percentage or algorithm. Hospitals must comply with specific instructions regarding the methodology, including the lookback period, that must be used to calculate the tenth, median and ninetieth percentile allowed amounts.
- Require hospitals to attest that they have included all applicable payer-specific negotiated charges in dollars that can be expressed as a dollar amount, and for payer-specific negotiated charges that are not knowable in advance or cannot be expressed as a dollar amount, the hospital has provided in the MRF all necessary information available to the hospital for the public to be able to derive the dollar amount, and included the name of the hospital’s chief executive officer, president or senior official designated to oversee the encoding of true, accurate and complete data.
- Require hospitals to encode their national provider identifiers (Type 2 NPIs) in their MRF.
- Reduce the amount of civil monetary penalty for noncompliance with the HPT requirements by 35 percent when a hospital agrees with CMS’ determination of their noncompliance and waives the right to a hearing by an Administrative Law Judge.
These changes will ensure that patients have more accurate information about actual prices rather than estimates or algorithms.
Intensive Outpatient Program
Intensive Outpatient Program (IOP) Rate Setting
The 2026 OPPS proposed rule would update Medicare payment rates for intensive outpatient program services furnished in hospital outpatient departments and CMHCs. The IOP is a distinct and organized outpatient program of psychiatric services provided for individuals who have an acute mental illness or substance use disorder, consisting of a specified group of behavioral health services paid on a per diem basis for a minimum of 9 hours of IOP services per week under the OPPS, or other applicable payment system, when furnished in hospital outpatient departments, Community Mental Health Centers (CMHCs), Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs). IOP services may also be furnished in Opioid Treatment Programs (OTPs) for the treatment of opioid use disorder (OUD).
Update to IOP Payment Rates in Hospital Outpatient Departments and CMHCs
CMS is proposing to maintain the existing rate structure, with two IOP APCs for each provider type; one for days with three services per day and one for days with four or more services per day. CMS is proposing to use the 2024 claims data and the latest available cost information, from cost reports beginning three fiscal years prior to the year that is the subject of the rulemaking. For 2026, CMS is proposing to maintain the calculation of hospital-based IOP payment rates for three services per day and four or more services per day based on cost per day using OPPS data that includes IOP or PHP and non-IOP or PHP days.
CMS proposes to change the methodology for calculating the CMHC IOP costs for three services per day and four or more services per day. Specifically, CMS is proposing to calculate the CMHC costs based on 40 percent of the proposed hospital-based IOP costs.
Partial Hospitalization Program
Partial Hospitalization Program (PHP) Rate Setting
The CY 2026 OPPS/ASC proposed rule would update Medicare payment rates for partial hospitalization program services furnished in hospital outpatient departments and CMHCs. The PHP is an intensive, structured outpatient program provided as an alternative to psychiatric hospitalization, consisting of a specified group of mental health services paid on a per diem basis for a minimum of 20 hours of PHP services per week under the OPPS, based on PHP per diem costs.
Update to PHP Per Diem Rates
CMS is proposing to maintain the existing rate structure, with two PHP APCs for each provider type; one for days with three services per day and one for days with four or more services per day. CMS is proposing to use the CY 2024 claims data and the latest available cost information, from cost reports beginning three fiscal years prior to the year that is the subject of the rulemaking. For 2026, CMS is proposing to maintain the calculation of hospital-based PHP payment rates for three services per day and four or more services per day based on cost per day using OPPS data that includes IOP or PHP and non-IOP or PHP days.
CMS is proposing to change the methodology for calculating the CMHC PHP costs for three services per day and four or more services per day. Specifically, CMS is proposing to calculate the CMHC costs based on 40 percent of the proposed hospital-based PHP costs.
We will provide a final update on the 2026 OPPS proposed rule in our next alert.