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Costs & IRMAA

Medicare Finalizes 2027 Outpatient Rule, Cutting Drug Costs for Patients at Hospital Clinics

CMS issued a final rule November 4 that sets a 2.3 percent hospital outpatient payment increase for 2027 and lowers what Medicare pays hospitals for 340B-acquired drugs, projecting average savings of about 900 dollars for beneficiaries who receive a qualifying drug at a hospital outpatient department.

By the Goodsurance editorial teamNovember 5, 2026

On November 4, 2026, the Centers for Medicare and Medicaid Services finalized the Calendar Year 2027 Hospital Outpatient Prospective Payment System rule, known as CMS-1850-F. The rule sets payment rates for about 3,500 hospitals and 6,400 ambulatory surgical centers.

Overall outpatient payment rates will rise 2.3 percent in 2027, the net result of a 3.2 percent market basket update minus a 0.9 percentage point productivity adjustment.

A new Medicare rule finalized November 4 may cut your drug costs by an average of about 900 dollars if you receive qualifying 340B medicines at a hospital outpatient clinic in 2027.

The most consumer-facing change involves drugs purchased through the 340B Drug Pricing Program. Hospitals in the 340B program buy certain drugs at steep discounts, but Medicare has historically reimbursed them at rates well above their acquisition costs. The final rule sets payment at the drug's average sales price minus 28 percent, a figure CMS says better reflects what participating hospitals actually pay. CMS estimates the change will reduce total Medicare drug spending by 4.35 billion dollars and trim beneficiary out-of-pocket drug costs by 1.1 billion dollars in 2027. For an individual patient receiving a qualifying drug in a hospital outpatient department, CMS projects average savings of about 900 dollars.

The rule also extends site-neutral payment to imaging services without contrast performed at off-campus hospital outpatient departments. Those services will now be reimbursed at the lower physician fee schedule rate rather than the higher outpatient rate. CMS estimates that change will save about 260 million dollars in 2027 and more than 9 billion dollars over the following decade.

In plain words

CMS set new payment rules for hospital outpatient care starting in 2027. Hospitals will receive 2.3 percent more overall. But for some drugs, Medicare will pay hospitals less. Those drugs are bought through a program called 340B that lets certain hospitals purchase medicines at a discount. CMS found hospitals were being paid far more than those discounted prices. The new rate is set much closer to what hospitals actually pay. If you get one of those drugs at a hospital outpatient clinic, you could save an average of about 900 dollars on your share of the bill. The rule also sets lower payment for certain scans done at hospital offices that are not on the main hospital campus.

Understand the basics first

Source: CMS
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