CMS Finalizes Physician Fee Schedule and Outpatient Prospective Payment System Rules

On November 4, 2026, the Centers for Medicare & Medicaid Services (CMS) issued final rules for the calendar year (CY) 2027 Physician Fee Schedule (PFS) and the CY 2027 Medicare Outpatient Prospective Payment System (OPPS).  

The Final Rules include the following provisions:

PFS Final Rule

Medicare Part D 340B Claims Data Reporting

CMS finalized requirements for Medicare Part D 340B covered entities to report specified claims data for drugs purchased through the 340B Drug Pricing Program to the Medicare Part D Claims Data 340B Repository.

• Beginning January 1, 2027, covered entities must report specified data elements for applicable Medicare Part D claims involving 340B drugs.
• Covered entities remain responsible for reporting accuracy even when contractors, such as third-party administrators (TPAs), submit the required information on their behalf.
• The initial submission is due September 30, 2027, and covers claims with dates of service from January 1 through March 31, 2027. Beginning with the second reporting period, data must be submitted within 1 calendar quarter following the close of each applicable quarter.

Medicare Prescription Drug Inflation Rebate Program

• CMS finalized clarifications concerning the use of Consumer Price Index for All Urban Consumers (CPI-U) data in calculating inflation rebates under the Medicare Part B and Part D Drug Inflation Rebate Programs.
• CMS updated the definition of “first marketed date” to mean the earliest date of first sale of any 11-digit National Drug Code (NDC-11) within a billing and payment code among all products and package sizes under the same Food and Drug Administration (FDA) application. If an average sales price (ASP) first marketed date is not available, the first marketed date will be identified using an alternative public source, such as the National Drug Code (NDC) Directory.

Medicare Shared Savings Program: Beneficiary Cost-Sharing Flexibility

• The PFS Final Rule allows certain accountable care organizations (ACOs) participating in the Medicare Shared Savings Program to reduce or eliminate beneficiary cost-sharing for eligible Medicare Part B items and services beginning April 1, 2027.

Medicare eligibility

• Implementing Public Law 119-21, CMS restricted Medicare eligibility to specified categories of individuals. The changes may affect Medicare Advantage and Part D enrollment, coverage transitions, and continuity of medication access.

OPPS Final Rule

Medicare Part B Payment for 340B-Acquired Drugs

CMS finalized a revised payment methodology for 340B-acquired drugs furnished in hospital outpatient departments, effective January 1, 2027.

• CMS will replace the current general payment rate of ASP plus 6% for 340B-acquired drugs with ASP minus 28%. Payment for drugs not acquired through the 340B Program will remain at ASP plus 6%.
• Rural Sole Community Hospitals (SCHs), prospective payment system (PPS)-exempt cancer hospitals, and children's hospitals will be exempt from the revised 340B payment policy.

Medicare Part B Inflation Rebate Program: 340B Claims Identification

• CMS finalized changes to its regulations governing billing modifiers to aid in the identification of 340B units for purposes of Medicare Part B inflation rebate calculations.

Separate Payment for Qualifying Non-Opioid Pain Management Treatments

CMS is continuing its policy providing temporary separate payments for qualifying non-opioid treatments for pain relief furnished in hospital outpatient departments and ambulatory surgical centers (ASCs) under Section 4135 of the Consolidated Appropriations Act, 2023.

• Separate payments will continue through December 31, 2027, consistent with the statutory payment period.
• The policy applies to qualifying non-opioid drugs, biological products, and medical devices that meet certain criteria for post-surgical pain relief.

More on This Topic:

• PFS Final Rule
• PFS Fact Sheet
• PFS Press Release
• OPPS Final Rule
• OPPS Fact Sheet
• OPPS Press Release

For questions, please reach out to Geni Tunstall.