12/2/2025 – CMS To Survey Hospitals on Acquisition Costs for Outpatient Drugs; Postpones Acceleration of Non-Drug Reimbursement Cuts

On November 25, CMS published its annual 2026 Outpatient Prospective Payment System Final Rule (OPPS) including two provisions impacting 340B hospitals. Both items relate to the Supreme Court’s decision that the agency’s previous reduction in Medicare reimbursement to hospitals for 340B Part B drugs violated a provision in the Medicare statute requiring CMS to survey hospital costs before imposing such limitations. Am. Hosp. Ass’n v. Becerra, 142 S. Ct. 1896, 1906 (2022). Notably, CMS’ policy requires all hospitals paid under OPPS to respond to the survey.

CMS stated that it is finalizing its proposal to conduct a hospital acquisition cost survey of outpatient drugs to allow it to adjust payment formulas for Part B drugs for calendar year 2027. CMS will open the survey for submissions from January 1, 2026, through March 31, 2026, with the potential to open the survey earlier. The survey will collect drug net acquisition costs for each of the covered outpatient drugs that the hospital acquired from July 1, 2024 – June 30, 2025. CMS will use an online portal and Excel-based reporting option via its Fee for Service Data Collection System (FFSDCS) to capture the survey data.

The survey is likely to result in lower reimbursement rates for 340B drugs as well as a reduction in reimbursement for non-340B drugs. CMS stated that future payment rates will be informed by the survey but declined to acknowledge that the survey will lead to reduced reimbursement for OPPS drugs. The 340B hospital community anticipates that the survey will result in lower reimbursement to 340B hospitals because they have lower acquisition costs. Grantee covered entities are concerned that the potential cuts are a “slippery slope” that will lead to reduced reimbursement for the 340B drugs that they purchase. CMS disagreed with one commenter’s “allegation that we are proposing to base future drugs payments on 340B status alone.” Notably, given that CMS is required to set OPPS rates in a budget neutral manner, any reductions to reimbursement rates for Part B drugs must be offset by increases in payments for other OPPS services or items.

CMS contends that the Medicare statute requires it to design the survey and for hospitals to respond to the survey. For hospitals that do not respond, CMS stated that it may assume that the hospitals have lower acquisition costs than responding hospitals. As an alternative CMS may impute values using the lowest reported acquisition costs among similar hospitals, Federal Supply Schedule prices, 340B ceiling prices, average sales price-based benchmarks, or “other recognized drug pricing for payment of hospitals.” CMS noted that it will adopt policies for addressing the lack of survey data for non-responding hospitals after it assesses the number of those hospitals.

CMS acknowledged the burden associated with the new survey but emphasized that it has taken steps to minimize complexity, provide technical support and allow flexible submission options. CMS estimated that each hospital submission would take over 80 hours. Once OMB approves the survey, CMS will offer user testing, and an onboarding process, which will involve webinars, user guides, fact sheets, additional communications as well as a dedicated email inbox, phone number, and website for assistance. CMS directs hospitals to visit its survey website for survey resources and to register for webinars on December 9th and 11th.

CMS expects all hospitals paid under the OPPS to respond to the survey and that it will survey OPPS hospitals every four years. Powers obtained the draft survey implementation template and CMS confirmed that the template is nearly identical to the final survey. Powers will provide the draft template to clients and allies upon request.

CMS did not adopt its proposal to accelerate reductions in OPPS payments for non-drug items and services to offset the settlement payments made to 340B hospitals as the result of the Supreme Court decision. For 2026, CMS will continue with reductions of 0.5% that have been in place since the 2023 OPPS final rule but said that it anticipates a greater reduction in the 2027 OPPS final rule.

CMS issued the OPPS rule as a final rule with comments accepted until January 20, 2026.  CMS typically adheres to a 60-day window between publishing the rule and its effective date but failed to do so this year.  The late issuance of the publication of the rule is likely due to the 43-day government shutdown (October 1 to November 12, 2025).

Powers will continue to monitor developments on the hospital acquisition cost survey and the acceleration of non-drug payments cuts. Please contact Powers’ drug pricing team, or your lead Powers attorney, if you have any questions.