CMS Unveils Sweeping 2026 Medicare Overhaul: Transparency, Cost Cuts, And New Rules For Hospitals

The proposal seeks to align payments across care settings, eliminate outdated inpatient-only rules, and introduce stricter price disclosure standards and hospital rating reforms.

The Centers for Medicare & Medicaid Services unveiled a proposal on Tuesday that would alter how Medicare reimburses hospitals and surgery centers beginning in 2026. 

The objective is to reduce financial burden on patients, expand choices on where they can be treated and bring transparency to the price tag for that care.

In a statement, CMS said that the draft rule is part of its upcoming payment updates for hospital outpatient departments and ambulatory surgical centers.

It is focused on updating the system to reflect today’s healthcare landscape, while making hospitals more accountable.

One of the key changes would level the playing field when it comes to billing. Currently, patients may pay more simply because a procedure is performed in a particular location. 

CMS aims to address this by aligning payments for services, regardless of whether they're delivered at a hospital or an off-site facility. 

The proposal also aims to phase out the so-called “inpatient-only” list, allowing doctors more flexibility to recommend outpatient options when appropriate.

The proposal includes new price transparency requirements that would obligate hospitals to publish clear, consumer-friendly pricing data in standardized formats. 

Hospitals that fail to comply could face civil monetary penalties.

Additional proposals include removing some health equity and COVID-19 vaccine reporting requirements and introducing a new metric to track emergency department wait times.

The agency predicts that the suggested changes will prevent excessive payments and save Medicare alongside its beneficiaries approximately $11 billion during the next decade.

Hospital operators that could be potentially impacted include Community Health Systems (CYH), HCA Healthcare (HCA), Tenet Healthcare (THC) and Universal Health Services (UHS).

On Stocktwits, CYH and HCA both saw ‘neutral’ sentiment, with message volume ‘high’ for CYH and ‘low’ for HCA. 

THC drew ‘bullish’ sentiment on ‘normal’ volume, while UHS faced ‘bearish’ sentiment amid ‘low’ message activity.

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