Medicare Proposes 2.4% ASC Payment Increase for 2027, but Major Reimbursement Changes Go Further

CMS has proposed a 2.4% increase in Medicare payment rates for ambulatory surgical centers (ASCs) in 2027, based on a 3.2% hospital market basket update minus a 0.8 percentage-point productivity adjustment. The proposal is part of a broader hospital outpatient payment rule affecting about 3,500 hospitals and 6,400 ASCs.

2027 Medicare ASC Payment Update at a Glance

Payment factor	2027 proposed change
Hospital market basket	+3.2%
Productivity adjustment	−0.8 percentage points
ASC payment update	+2.4%
ASC quality reporting penalty	−2 percentage points

Does the 2.4% Increase Mean Every ASC Procedure Will Pay More?

No. The 2.4% figure is an average payment update across covered ASC services. Actual Medicare reimbursement can vary by procedure, code, and specialty, and some high-volume procedures could see lower payments in 2027 despite the overall increase.

Medicare 340B Drug Payments Could Fall to ASP Minus 33.4%

One of the largest proposed changes involves drugs purchased through the 340B Drug Pricing Program. CMS proposes paying for 340B-acquired drugs at Average Sales Price (ASP) minus 33.4%, based on findings from a 2026 hospital acquisition-cost survey.

CMS estimates the change would reduce Original Medicare drug spending by approximately $4.55 billion and lower beneficiary drug payments by about $1.15 billion. Because the OPPS system is budget neutral, CMS proposes using the resulting savings to increase payments for other non-drug outpatient services.

CMS Proposes a 3% Reduction to Recover Earlier 340B Payments

CMS is also proposing to accelerate the recovery of approximately $7.8 billion in additional payments associated with its previous 340B payment policy.

A 0.5% reduction to the OPPS conversion factor began in 2026. Under the 2027 proposal, that reduction would increase to 3% until the required amount is recovered. CMS estimates the recovery could be completed by 2029.

638 Services Could Leave the Inpatient-Only List

CMS is continuing its planned phase-out of the Medicare Inpatient-Only list. After removing 285 musculoskeletal procedures in 2026, the agency is proposing to remove another 638 services in 2027.

The change would allow more procedures to be considered for outpatient treatment when clinically appropriate and could expand the range of services performed in ASCs and other outpatient settings. CMS has proposed completing the elimination of the inpatient-only list in 2028.

Certain Off-Campus Imaging Could Receive Lower Payments

CMS is also proposing to expand its site-neutral payment policy to certain imaging services without contrast performed in qualifying off-campus hospital outpatient departments.

For affected services, Medicare would use a payment based on the Physician Fee Schedule rather than the OPPS. CMS estimates the proposal could reduce Medicare Part B spending by approximately $190 million in 2027, with additional savings for beneficiaries.

Eight More Botulinum Toxin Codes Could Require Prior Authorization

The proposed rule would also expand prior authorization requirements to eight additional botulinum toxin injection codes. CMS said the proposal follows an increase in utilization of these services and is intended to help ensure that Medicare payments are made for medically necessary care.

Quality Reporting Still Matters for ASCs

The proposed 2.4% update would not apply in the same way to every ASC. Facilities that fail to meet applicable ASC Quality Reporting Program requirements can face a 2-percentage-point reduction to their annual payment update.

This makes quality reporting an important factor in determining the effective payment adjustment an ASC receives in 2027.

CMS Also Seeks Input on Hospital Price Transparency

The proposed rule includes a request for information on strengthening hospital price transparency. CMS is seeking public feedback on ways to make hospital pricing information more standardized, comparable, and useful to consumers and other stakeholders.

What Happens Next

The changes are proposed, not final. CMS is accepting public comments through August 31, 2026, before issuing the final 2027 OPPS and ASC payment rule. The final rule will determine whether the proposed 2.4% ASC update and other reimbursement changes take effect as proposed or are modified.

Bottom Line

CMS’s proposed 2.4% Medicare ASC payment increase for 2027 is only one part of a much broader reimbursement overhaul. The proposal would reduce 340B drug payments to ASP minus 33.4%, increase the 340B recovery adjustment to 3%, remove 637 services from the inpatient-only list and expand site-neutral payment policies.

For ASCs and hospitals, the key issue is that the 2.4% average update does not guarantee higher payment for every procedure. Final reimbursement will depend on the specific service, payment policy and whether CMS adopts the proposals after the public comment period.