People with Original Medicare who get certain discounted drugs at a hospital outpatient department should pay about $900 less on average next year, under a final rule the Centers for Medicare & Medicaid Services announced Wednesday. The same rule trims what some patients pay for X-rays, scans and MRIs at off-campus hospital clinics. It also adds prior authorization for more Botox-type injections.
A second final rule, for the physician fee schedule, lets some accountable care organizations waive patients' Part B cost-sharing starting April 1, 2027. Both rules cover 2027. Open enrollment for 2027 coverage runs through Dec. 7, and Edit USA's guide to comparing total costs walks through that choice.
Cheaper 340B drugs in hospital outpatient departments
The 340B program lets many hospitals buy outpatient drugs at a discount. A CMS survey found that in some cases a patient's share of the bill, typically 20% of Medicare's payment, came to more than the hospital paid for the drug. Starting in 2027, Medicare will pay for those drugs at the average sales price minus 28%, according to the agency's fact sheet.
CMS estimates people with Original Medicare will save $1.1 billion on these drugs in 2027, and taxpayers another $4.35 billion. For someone who gets one of these drugs at a hospital outpatient department, CMS puts the average saving at about $900 for the year. The law requires the change to be budget neutral, so Medicare will raise hospital payments for other outpatient services to offset it.
What else changes for patients
| Change | What it means | When |
|---|---|---|
| Imaging at off-campus hospital clinics | Medicare pays the lower physician-office rate for imaging without contrast, such as bone density scans, X-rays, ultrasounds, CT scans and MRIs | 2027 |
| Outpatient surgery | 637 more services come off the "inpatient only" list, and several hundred more procedures can be done at ambulatory surgical centers | 2027 |
| Botox-type injections | Eight more botulinum toxin injection codes need prior authorization at hospital outpatient departments | 2027 |
| Accountable care organizations | Patients assigned to an approved ACO could owe less, or nothing, in Part B cost-sharing for many services | Starting April 1, 2027 |
Copays for the same scan can differ depending on where it is done. Medicare already pays the office rate at off-campus clinics for clinic visits and drug administration. CMS expects patients' cost-sharing to drop about $70 million in the first year, with premiums lower by about the same amount. Over 10 years it puts combined savings for patients and taxpayers above $9 billion. Rural sole community hospitals are exempt.
Taking a service off the inpatient-only list lets Medicare pay for it in a hospital outpatient department when that is clinically appropriate. This is the second year of a three-year phase-out.
The agency said it is adding prior authorization for botulinum toxin injections because hospital claims for those codes rose 42.8% from 2017 to 2024 while overall outpatient volume fell, and it said Medicare will still cover medically necessary injections, such as those for chronic migraines, when a doctor documents the need.
Hospitals that meet quality reporting rules get a 2.3% raise in outpatient payment rates for 2027. Surgical centers get the same.
What the physician rule does
The fee schedule rule cuts payment by 20% for the cheaper service when a patient has an office visit and a minor procedure on the same day. CMS says that ends duplicate billing for work already paid for. The rule also creates payment for health and well-being coaching and shared medical appointments, and it adds two billing codes for advance care planning.
Health and Human Services Secretary Robert F. Kennedy Jr. said in the release that "Medicare should reward clinicians for keeping people healthy."
