CMS Updates Pay, Price Rules and Adds New Quality Steps for 2026
The Centers for Medicare & Medicaid Services (CMS) are required to update and publish payment policies and rates for hospital outpatient departments and ambulatory surgery centers (ASCs) annually. In November 2025, CMS released their “final rule” which details changes to payment policies and rates for hospital and ambulatory surgery center services for the calendar year 2026.
According to CMS, these payment policies affect approximately 4,000 hospitals and approximately 6,000 ASCs. The “final rule” release not only outlines payment rates, it also includes changes and updates to programs and reporting requirements for these facility types.
CMS made changes to the ASC-covered procedures list, how skin substitutes are categorized and packaged for payment, payment policies for non-opioid treatments for pain relief, overall hospital quality star rating program, and hospital pricing transparency, to name a few.
Most of these changes went into effect January 1.
Transparent Hospital Pricing
In 2019, CMS published their final rule implementing Section 2718(e) of the Public Health Service Act, which aimed to make hospital pricing for common services more transparent and accessible to the public. The rule did not “officially” go into effect until January 2021.
Since 2021, the hospital pricing transparency rule required hospitals to publish their “standard charges” for common and identifiable categories of treatments and services. The online data for each hospital was to include a description of each charged “item” or “service” and the “gross charge” (this would be the regular rate for each item charged by the hospital as reflected in the hospital “chargemaster”—the hospital’s list of all charges with charge amounts).
In addition to the “gross” charge amount for each item in the chargemaster, the online data also was to include payer or insurance specific negotiated charge amounts for each line item, discounted cash price (what they charge to patients who pay cash if they agreed to discount the gross charge amount), minimum negotiated charge (the lowest charge amount for an item or service), and the maximum negotiated charge (the highest amount with all payors for an item or service).
Update to Pricing Transparency Rules
Recently, CMS has updated the transparency rules in the 2026 OPPS and ASC final rule. The new pricing transparency rules went into effect January 1, but the agency will delay enforcement of the pricing transparency requirements until April 1.
Under the new rule, CMS now requires hospitals to update their online chargemaster and pricing data to show the “median allowed amount” for each charge or service. The “allowed amount” is a negotiated rate between insurers and in-network providers showing the maximum amount an insurer will pay for a covered health care service.
If a provider charges more than the insurer’s allowed amount the patient may have to pay the difference. Previously, hospitals could publish estimated amounts for each charge, but changes to the rule in 2026 requires facilities to update their online charge data, “hospitals will be required to calculate and encode the median, 10th and 90th percentile allowed amounts as well as the count of allowed amounts in their machine-readable file (MRF) when payer-specific negotiated charges are based on percentages or algorithms”.
The new rule aims to supply the public with more accurate pricing information. Hospitals that fail to comply can face civil monetary penalties from CMS.
In addition to penalties, hospitals should focus sufficient attention to the online chargemaster because many payors use these online chargemaster and pricing tools to perform claim reviews, and outdated and inaccurate online pricing tools can lead to denial of claims. Room, drug and other services charges might be checked against an online chargemaster—that if not updated appropriately—reflects outdated or inaccurate pricing data. In certain types of claim reviews, payors may use a facility’s own online tools to identify coding errors, billing inaccuracies, or to compare charges against contracted rates, leading to claim denials.
When payors deny payments based on a hospital facility’s own online pricing data—even if the data is outdated—it makes appeal of an improper denial more difficult as the facility is then fighting against its own data. These types of issues also require added work for appeals department nurses and coders who have to work with their IT departments to update online tools.
Hospitals and health systems should ensure that their facilities’ policies and procedures require regular maintenance updates to webpage pricing tools and that the data used in those tools aligns with CMS requirements. For the 2026 rule change, CMS is requiring hospitals use a lookback period of “no less than 12 months and no longer than 15 months prior to posting the machine-readable file (MRF) for the median allowed amount, 10th and 90th percentile allowed amounts, and count of allowed amounts.”
Hospital facilities should ensure appropriate resources are allocated to their chargemaster maintenance and web site maintenance. Equally important is to make sure the hospital’s revenue cycle department and IT department are working together to guarantee its online pricing tools are appropriately updated and accurate.
Other Changes Worth Noting
Star Rating
CMS changed the Overall Hospital Star Rating system to require an automatic 1-star downgrade for hospitals performing in the lowest quartile of the Safety of Care measure group. This means hospital facilities with lower safety of care measurements can no longer receive a 5-star rating.
To increase the importance of safety-of-care, CMS finalized an update to its star rating methodology. The changes are two step. In 2026, the change would require a 4-star cap for hospitals in the lowest quartile of the safety of care measure groups performance; they would only receive four stars. Using 2024 data, CMS determined that this cap would have resulted in 14 of the 2,847 hospitals it monitored receiving a lower star rating.
According to CMS, in 2027 or thereafter, any hospital that is in the lowest quartile of safety of care measure group performance (based on at least 3 measure scores) would have its overall start rating reduced by 1 star. This step will replace the 2026 cap. Per 2024 data, CMS determined that this reduction would have affected 459 hospitals out of 2,847 hospitals’ overall star rating.
Emergency Department Quality Reporting
Another rule change in the outpatient final rule relates to quality reporting for hospital facilities that have emergency departments. This change will take effect with voluntary reporting of the new metrics in the 2027 period, followed by mandatory reporting of the new data beginning in 2028.
This change removes two chart abstracted measures already included in the Hospital Outpatient Quality Reporting program (the median time for discharged emergency department (ED) patient measure & left without being seen measure) and adoption of the Emergency Care Access & Timeliness electronic clinical quality measure. This measure will now evaluate:
- Patient wait time longer than one hour after arrival to the ED until placement in a treatment room or dedicated treatment area that allows for audiovisual privacy during history-taking and physical exam.
- Patient left the ED without being evaluated.
- Patient boarding time in the ED (measured from a decision to admit (order) to ED to ED departure for admitted patients) longer than four hours.
- Patient ED length of stay (time from ED arrival to ED physical departure, measured by the ED departure time-stamp) longer than eight hours.
CMS expects this change to reduce the burden in reporting as the two measures being removed are manually abstracted from chart data, while the electronic clinical quality measure set can be automatically extracted from EHR.
Please contact Lara Bishop Walker or any member of the Phelps health care team if you have questions or need advice or guidance.
