CMS Empowers Patients and Boosts Transparency by Modernizing Hospital Payments

The Centers for Medicare & Medicaid Services (CMS) is improving the quality of care for Medicare beneficiaries while significantly reducing unnecessary spending and improving choices and hospital price transparency for Medicare beneficiaries. The calendar year (CY) 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System final rule (CMS-1834-FC) advances a series of patient-focused reforms that will modernize payments, expand access to care, enhance hospital accountability, and safeguard the Medicare Trust Funds from fraud, waste, and abuse.

“This final rule from CMS closes the loopholes hospitals exploit to hide real prices and advances President Trump’s demand for radical hospital price transparency,” said Health and Human Services Secretary Robert F. Kennedy, Jr. “We are also confronting addiction head-on by expanding access to non-opioid treatments and implementing common-sense payment policies that make care more affordable and accessible for seniors.”

“We are strengthening Medicare’s foundation by protecting beneficiaries, eliminating fraud, and advancing medical innovation —all while maintaining strict provider accountability and responsible use of taxpayer funds,” said CMS Administrator Dr. Mehmet Oz. “These comprehensive reforms expand patient choice and establish the price transparency Americans need for confident healthcare decisions.”

CMS will use its statutory authority to control unnecessary increases in the volume of covered outpatient department services to align payments for certain services delivered in hospitals and off-campus facilities. In addition to encouraging appropriate care delivery, this policy will help ensure beneficiaries aren’t penalized with additional copays simply based on where they receive care. The rule also finalizes phasing out the inpatient-only list and expanding the ambulatory surgical center covered procedures list, which will give physicians greater flexibility to determine the most clinically appropriate setting for care and allow more patients to choose outpatient surgical options while maintaining patient safety.

“We continue to advance Medicare payment reform by advancing policies that help prevent services from unnecessarily being performed in hospitals when they can be safely provided in less intensive settings, streamlining hospital billing systems, and ensuring patients receive transparent, accurate pricing information,” said Chris Klomp, CMS Deputy Administrator and Director of the Center for Medicare. “These comprehensive changes deliver greater predictability, accountability, and affordability in hospital care.”

To give consumers meaningful price information, CMS is also improving hospital price transparency rules. The finalized changes require hospitals to post real, consumer-usable prices, not estimates, and provide data in standardized formats so patients can understand what their care will actually cost. Hospitals that fail to comply will face civil monetary penalties.

As part of its efforts to Make America Healthy Again, CMS is also taking steps to elevate patient safety and wellness. The Overall Hospital Star Rating system will be updated so hospitals performing in the lowest quartile of the Safety of Care measure group can no longer receive a 5-star rating. In future years, hospitals performing in the lowest quartile of the Safety of Care measure group will face an automatic 1-star downgrade. In addition, updates to quality reporting programs remove burdensome health equity and COVID vaccine reporting requirements, as well as adopt a measure to evaluate long wait times in emergency departments. CMS also received public input on potential quality measures focused on nutrition, wellness, and preventive health that will help future policy decisions.

CMS projects these final updates will improve access to outpatient care, reduce unnecessary costs, and deliver $11 billion in savings for both the Medicare program and beneficiaries over the next ten years. The changes also support program sustainability by aligning payments more closely with the actual cost of care, helping ensure Medicare continues to deliver high-quality, patient-centered services nationwide.

The final rule can be viewed at the Federal Register at: www.federalregister.gov/public-inspection/.

View the fact sheet on the final rule at: www.cms.gov/newsroom/fact-sheets/calendar-year-2026-hospital-outpatient-prospective-payment-system-opps-ambulatory-surgical-center.

For a fact sheet on the hospital price transparency policy changes in the final rule, visit: www.cms.gov/newsroom/fact-sheets/cy-2026-opps-ambulatory-surgical-center-final-rule-hospital-price-transparency-policy-changes.