Read More on Politics<\/p>\n
CMS Administrator Dr. Mehmet Oz said in a statement, “This proposed rule focuses squarely on patient affordability by strengthening our utilization management tools, aligning drug payments with actual acquisition costs, and removing site-of-care disparities that have unnecessarily driven up costs for millions of seniors.”<\/p>\n
Why It Matters<\/p>\n
Health care costs remain a major concern for older Americans, with many Medicare beneficiaries facing rising premiums, deductibles and prescription drug prices. While Oz said the proposal focuses on “patient affordability,” hospitals are concerned the proposed cuts could weaken safety-net providers that care for underserved populations.<\/p>\n
“The proposed OPPS rule from CMS takes an axe to critical funding that supports essential hospitals without concern for how it will affect the patients they serve,” Jennifer DeCubellis, the president and CEO of the advocacy group America’s Essential Hospitals, said in a statement. <\/p>\n
![\"Administrator](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/07\/GettyImages-2279468107.jpg\"\/)
What the New Rule Says<\/p>\n
If finalized, the rule would take effect in 2027 and could affect how much Medicare beneficiaries pay out of pocket for some drugs and outpatient procedures. Specifically, the rule proposes to increase pay for outpatient care by 2.4 percent, a bit lower than the 2.6 percent rate update for the past year. <\/p>\n “In the short run, many Medicare beneficiaries could actually pay less out of pocket because reimbursement would be closer to what hospitals paid for the drug. The concern is longer term. If hospitals lose that revenue, they will likely look to make it up somewhere else,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.<\/p>\n “To be fair, whether nonprofit or for-profit, hospitals should not be profiting off the spread between steep government discounts and higher Medicare reimbursement,” he added.<\/p>\n 340B Drug Payment Cuts<\/p>\n CMS is proposing a reduction in Medicare reimbursement for drugs purchased through the 340B program, which allows eligible hospitals to buy outpatient drugs at discounted prices. The program was created to help hospitals serving large numbers of low-income and uninsured patients. <\/a><\/p>\n According to CMS, Medicare would pay substantially less for 340B-acquired drugs beginning in 2027, which could reduce both Medicare spending and beneficiary cost-sharing on those medications. <\/a><\/p>\n “The goal is to lower Medicare drug costs, not eliminate the 340B program,” Thompson said. “The long-term question is who ultimately absorbs the reduced reimbursement. If hospitals don’t absorb it, those costs could eventually show up elsewhere in the health care system through higher prices or fewer services.”<\/p>\n Expansion of Site-Neutral Payments<\/p>\n CMS is also proposing to expand site-neutral payment policies to certain imaging services performed in hospital outpatient departments.<\/p>\n Medicare often pays hospitals more than doctors’ offices for performing the same service. Under the proposal, some imaging procedures performed in certain hospital-owned outpatient locations would be reimbursed at physician-office rates instead. <\/a><\/p>\n Under current policy, patients often pay higher cost-sharing when services are billed through hospital outpatient departments, even when the care provided is identical. So site-neutral payments are intended to reduce those discrepancies, experts say.<\/p>\n “The 20 percent coinsurance would be calculated from a payment closer to what 340B hospitals actually paid, rather than a much larger reimbursement amount,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek, adding that the savings would apply only to certain physician-administered Part B drugs at participating hospitals. <\/p>\n How the Change May Affect Medicare Beneficiaries<\/p>\n For patients, the biggest potential benefit is lower out-of-pocket costs<\/a>.<\/p>\n CMS said reducing payments for 340B drugs would lower beneficiary cost-sharing tied to those medications, and that site-neutral payment reforms could help reduce costs when patients receive care in hospital-owned outpatient settings. <\/a><\/p>\n Ultimately, if the rule is approved, Medicare beneficiaries could see the following:<\/p>\n Lower cost-sharing for certain outpatient prescription drugs.Reduced costs for some imaging services performed in outpatient settings.More consistent pricing between hospital outpatient departments and physician offices.<\/p>\n However, much of the impact would depend on which services a patient uses<\/a> and whether the proposed rule is finalized without major changes.<\/p>\n What Happens Next<\/p>\n The proposal is part of CMS’s draft 2027 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center payment rule. It must go through a public comment process before a final version is issued. <\/a><\/p>\n If finalized, the changes would take effect next year. <\/p>\n Beene said, “The long-term question is whether Medicare can eliminate expensive markups without weakening the safety-net hospitals that use 340B revenue to support care for beneficiaries.”<\/p>\n Contact Newsweek editors on this story: Steve Mollman<\/a> and Shakeema Edwards<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"The Trump administration has unveiled a plan to reshape how Medicare pays for outpatient care, with officials arguing…\n","protected":false},"author":2,"featured_media":744230,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[104116,97,252,9041,253,9447,1342,1052,1120],"class_list":["post-744229","post","type-post","status-publish","format-standard","has-post-thumbnail","category-health-care","tag-centers-for-medicare-medicaid-services","tag-health","tag-health-care","tag-health-insurance","tag-healthcare","tag-hospitals","tag-medicare","tag-prices","tag-seniors"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/744229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=744229"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/744229\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/744230"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=744229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=744229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=744229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}