Policy & oversight
Medicare Proposes Lower Payments for Imaging Services at Off-Campus Hospital Sites, With Savings Projected for Patients
The 2027 hospital outpatient proposed rule would pay physician-office rates, rather than higher hospital rates, for X-rays and MRIs at off-campus hospital departments, with CMS estimating 260 million dollars in Medicare savings and 70 million dollars in lower patient cost-sharing in the first year. Comments are due August 31.
By the Goodsurance editorial teamAugust 17, 2026
CMS issued the Calendar Year 2027 Hospital Outpatient Prospective Payment System proposed rule, known as CMS-1850-P, in early July 2026 with a public comment deadline of August 31, 2026. Among its provisions, the rule would apply physician fee schedule payment rates, rather than the higher hospital outpatient rates, for imaging services without contrast when provided at off-campus provider-based departments of hospitals.
Off-campus provider-based departments are hospital-affiliated facilities located away from a hospital's main campus. Medicare currently pays more for the same imaging services at these locations than at freestanding physician offices. CMS cited this disparity as a driver of higher beneficiary premiums and cost-sharing.
CMS estimates the imaging-specific proposal would reduce Medicare Part B spending by approximately 260 million dollars in the first year, comprising 190 million dollars in program savings and 70 million dollars in lower beneficiary premiums. Patient cost-sharing at affected sites would fall by an estimated additional 70 million dollars. Rural sole community hospitals would be exempt from the change.
The proposed rule also implements a new requirement from the Consolidated Appropriations Act of 2026: off-campus provider-based departments must submit attestations demonstrating they have complied with provider-based regulations within the prior two years. Starting January 1, 2028, failure to meet the attestation standard would mean the facility no longer qualifies for the higher hospital outpatient rates.
Overall, CMS proposes a 2.4 percent update to hospital outpatient payment rates for 2027, based on the projected market basket increase minus a productivity adjustment. The 340B drug payment provisions in the same proposed rule, which would reduce Medicare drug payments at eligible facilities, were covered when the rule was first released.
In plain words
Some hospitals have clinics or offices located away from their main building. Medicare pays more for services at those off-campus locations than at regular doctor offices, even when the service is identical. CMS now wants to change that rule for imaging tests like X-rays and MRIs. Under the proposal, Medicare would pay the lower doctor-office rate for imaging at off-campus hospital sites. This could mean smaller copays for patients who get imaging there. CMS estimates patient cost-sharing would fall by about 70 million dollars per year if the change is finalized. Off-campus hospital sites would also need to prove they meet certain standards by 2028 to keep getting higher payments. The public has until August 31 to comment.
Understand the basics first
Source: CMS
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