Medicare shifts outpatient payments from doctors to hospitals

What it does

This bill amends Medicare law to allow certain items and services furnished by off-campus outpatient departments of hospitals to be paid under the hospital outpatient prospective payment system (OPPS) rather than the physician fee schedule, but only if the total physician fee-schedule payments for that specialty in the prior year were below $2 million. The effect is to shift payment methodology for lower-volume specialty services from physician-based rates to hospital-based rates, potentially affecting how hospitals and physicians are reimbursed for these services starting in 2027.

Why we flagged it

The bill's operative mechanism is a technical amendment to Medicare payment rules, shifting certain off-campus outpatient services from physician fee-schedule reimbursement to hospital outpatient prospective payment. This is a reimbursement-methodology change, not a new benefit or restriction on access.

What the text implies

• The $2 million threshold creates a cliff effect: specialties just above or below the threshold face sudden payment-methodology changes year-to-year, potentially creating billing instability and administrative burden.
• Off-campus outpatient departments may gain competitive advantage over independent physician practices offering the same services, as they can now access hospital-based payment rates; this may accelerate consolidation of outpatient services into hospital systems.
• The provision applies beginning in 2027, giving hospitals and physicians limited time to adjust billing systems and contracts; implementation delays or disputes over specialty classification could disrupt reimbursement.
• Patients may experience different cost-sharing or billing practices depending on whether services are billed under OPPS (hospital rates) vs. physician fee schedule, creating potential confusion and inconsistent out-of-pocket costs for similar services.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill may reduce patient out-of-pocket costs if OPPS rates are lower than physician fee-schedule rates, and could improve access by allowing hospitals to consolidate billing. However, it may also reduce physician reimbursement for lower-volume specialties, potentially affecting physician supply or service availability in those areas, and the shift to hospital billing may increase administrative complexity for patients and providers.

Who stands to gain

• hospital systems with off-campus outpatient departments
• specialty practices affiliated with hospitals

Named in the bill

Centers for Medicare & Medicaid Services (CMS), Medicare, Social Security Act § 1833(t), physician fee schedule, hospital outpatient prospective payment system (OPPS), off-campus outpatient departments

Where it stands

1 cosponsor: 1 Democrats.

• Feb 24, 2026 — Introduced · Congress.gov: “Introduced in House”
• Feb 24, 2026 — Referred to House Committee on Ways and Means and House Committee on Energy and Commerce · Congress.gov: “Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a…”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 1 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $10,000 in lobbying spend. A filing names 9 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

Adrian Smith, the sponsor, reported $1,398,750 in PAC receipts in the 2026 cycle.

• Mental Health America — $10,000 on 1 filing

Lobbying Disclosure Act filings through Jul 18, 2026. A filing shows who paid to lobby on a bill it names, not what changed.