CMS has released the proposed Outpatient Rule for CY2026. Comments are open for 60 days.
See the press release here. The press release is titled, "CMS Proposes Bold Reforms to Modernize Hospital Payments, Strengthen Transparency, and Put Patients Back in Control."
See the Federal Register document here. See the FACT SHEET here.
Familiar Topics
New activities on familiar topics, such as equalizing payment in different settings (principally, hospital outpatient vs physician office), and phasing out the "inpatient only" list (though it's hard to imagine heart transplants in the outpatient setting, with or without a list). CMS is also adding more procedures to those allowable in the ASC setting (a non hospital surgicenter). Big reductions are proposed in payments for some skin substitute products.
Software
CMS has included software (software as a service) as a request-for-comment and discussion topic. This topic has often been surfacing in the hospital outpatient rule, since AMA has created numerous Category III codes that include advanced software, all of which show up for pricing decisions in the OPPS (APC) setting.
This SaaS section is at 213-216 of the typescript or "inspection copy" early rule version.
CMS incentives "domestic production" of molybdenum-99 (for technnetium-99) with a $10 per dose add-on payment.
CMS made big changes in radiopharmaceutical pricing last year; that section is inspection copy 313ff. At a glance I don't see major changes compared to last year's major changes. Cost line rises to $655 (I think it was $630; pp. 331).
Pricing of Heartflow seems to be a perpetual topic; here, 75580 is placed in Dx APC 5724 for about $1000.
CMS also revisits the priority issue of hospital price transparency, which has seen executive orders and other prioritizations.
Quality Measures
CMS is dropping quality measures such as COVID vaccination rate among health personnel. Other quality measures such as "Facility Commitment to Health Equity" and "Screening for Social Drivers of Health" are being shown the door.
"Laboratory" and "Molecular"
No news on these topics.
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AI CORNER
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I asked Chat GPT to read pp. 213-216 re SAAS.
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CMS is actively soliciting public comment on how to establish payment policy for Software as a Service (SaaS) technologies under the Outpatient Prospective Payment System (OPPS). This request arises because of the growing use of SaaS tools, including AI-based software, in clinical decision-making and the lack of a clear, consistent payment methodology across settings.
Key Areas Where CMS Seeks Input:
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Factors for Payment Rates
What should Medicare consider when setting SaaS payment rates? Should costs include acquisition, maintenance, development, or other factors? -
Appropriate APC Assignment
Should SaaS be paid through existing clinical APCs, new technology APCs, or new dedicated APCs for software? -
Cost Assessment Methods
How should CMS evaluate hospital acquisition costs for SaaS? What benchmarks or methodologies are appropriate? -
Data Sources for Rate-Setting
Given limited claims data, what alternative sources could CMS use to establish realistic payment levels? Examples might include hospital invoices, market research, or cost modeling. -
Discrepancy in Costs
Why are Medicare claims data often showing lower geometric mean costs for SaaS than manufacturers’ stated prices? Is this due to reporting practices, acquisition models, or other factors? -
Value and Efficiency
How should CMS factor in SaaS efficiencies (e.g., operational savings, faster diagnostics) in hospital outpatient and ASC settings? -
Quality and Efficacy
How can Medicare payment policies reflect the clinical value, quality, and efficacy of SaaS technologies?
Context:
Historically, CMS packaged SaaS into payments for the primary clinical service (e.g., MRI image processing). More recently, separate payments have been made under New Technology APCs or clinical APCs. However, CMS lacks a dedicated policy framework, and stakeholders argue this inconsistency can impede patient access and market adoption.
CMS highlights challenges like non-transparent R&D costs, lack of comparator services, and limited claims data as barriers to creating fair and predictable payment rates.
Parallel Rulemaking:
CMS is also soliciting similar comments on SaaS under the Physician Fee Schedule (PFS).
