Site Neutral Payments Kick-0ff!

• Payments for these services in excepted off-campus PBDs will be set at the Physician Fee Schedule (PFS)-equivalent rate, approximately 40% of the standard OPPS rate, representing a 60% reduction from full OPPS reimbursement.
• This adjustment aligns payment more closely with what Medicare reimburses for similar drug administration in physician office settings.
• Rural sole community hospitals are exempt from this payment reduction.
• Overall, the policy is projected to lower OPPS spending by $290 million in 2026, delivering approximately $220 million in savings to Medicare and $70 million in reduced beneficiary coinsurance and cost-sharing obligations.

These changes continue CMS’s efforts pursuant to prior site-neutral policies, such as those established by the 2015 Bipartisan Budget Act, which applied site-neutral rates to non-excepted/new off-campus PBDs starting in 2017 and to clinic visits in all off-campus PBDs beginning in 2019. In 2018, I wrote a post on the progress of site neutral payments. That post is here: https://rhislop3.com/site-neutral-payment-update/

The 2026 expansion specifically targets drug administration services in the remaining grandfathered/excepted off-campus settings. While the policy takes effect January 1, 2026, CMS has delayed enforcement or compliance for certain related provisions—including select price transparency elements—until April 1, 2026. However, the central payment adjustment for drug administration services becomes effective January 1.

Additionally, CMS is initiating a three-year phase-out of the inpatient only list, which identifies surgical procedures that must be performed in hospitals. Beginning next year, 285 primarily musculoskeletal procedures will be removed from the list.

For calendar year (CY) 2026, CMS finalized revisions to the ASC (Ambulatory Surgery Center) Covered Procedures List (CPL), modifying the general criteria and eliminating five exclusion criteria. These have been reclassified as nonbinding physician considerations for patient safety. As a result, CMS added 289 procedures to the ASC CPL and 271 codes that were removed from the IPO list for CY 2026. These updates are designed to maintain safety for Medicare beneficiaries through physician discretion while affording physicians increased flexibility and expanding patient options for surgical care settings.

These initiatives reflect CMS’s ongoing commitment to advancing site neutrality, minimizing incentives for unnecessary utilization of higher-cost hospital settings, and encouraging the provision of clinically appropriate, cost-effective care. For comprehensive information, consult the official CMS fact sheet on the CY 2026 OPPS/ASC final rule.

Below is a table courtesy of Kaiser (KFF) that outlines the total of sight neutral payment policies currently in-process and the Congressional Budget Office (CBO) estimates of program savings.