The Centers for Medicare & Medicaid Servies (CMS) released the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System proposed rule for CY 2027. The proposal makes payment and policy changes to services provided under the OPPS and ASC payment system including updating payment rates, continuing policy to phase out the inpatient only list, expanding prior authorization in traditional Medicare, and reducing payment for drugs acquired under the 340B program. The proposed rule is accompanied by a fact sheet and the addenda used by CMS in rate setting. Comments are due August 31.

Page numbers in this summary reflect the PDF page number of the display copy of the proposed rule linked above.

Background and General Information

In recognition of the fact that most urologists are not employed in private practice and are impacted by how hospital, outpatient, and ambulatory surgical procedures are paid, the AUA’s Payment Policy and Reimbursement team has expanded its scope of work to include analysis of the 2027 Proposed Hospital Outpatient Prospective Payment System (HOPPS) and Ambulatory Surgical Center Payment System (ASC) Rules that were announced late last week. AUA members may have varied levels of knowledge regarding CMS payment systems, nomenclature and methodologies. The following information may be helpful when reviewing this Summary.

1. The Medicare Payment Advisory Commission (MedPAC), an independent congressional agency that advises the U.S. Congress on issues affecting the Medicare program, has developed educational issue briefs on all CMS payment issues.
2. Specific educational issue briefs covering HOPPS and ASC payment are linked below and will provide additional information/context should you be interested about anything within our summary.

1.       HOPPS MedPac Payment Issue Brief

2.       ASC MedPac Payment Issue Brief

Payment Rate Updates for OPPS and ASC Payment System – p. 73

Payment rates for services performed in the hospital outpatient department will increase by 2.4% in 2027. The increase is derived from the inpatient hospital market basket increase of 3.2% for inpatient services paid under the inpatient prospective payment system, and then reduced by a productivity adjustment of 0.8%. The agency estimates that total Medicare payments to OPPS providers, including Medicare beneficiary cost sharing, will be $110.9 billion in 2027, an increase of $9.5 billion. Payment rates in the ASC setting will also increase by 2.4% and total payments will equal approximately $9.9 billion.

Hospitals that do not meet quality reporting requirements will be subject to a 2% reduction in overall Medicare payments, while hospitals that that are captured under the 340B remedy offset will see a reduction of 3%.

Permanent Prostatic Urethral Stent, CPT^® Code 52282 (APC 5375) – p. 186

CMS proposes to reassign CPT code 52282 (cystourethroscopy with insertion of a permanent urethral stent) from APC 5374 (Level 4 Urology and Related Services) with a CY 2027 payment rate of $4,064 to APC 5375 (Level 5 Urology and Related Services), with a payment rate of $6,292.This change increases Medicare outpatient hospital department payment for the procedure by 55%.

To evaluate OPPS payment for this service, CMS analyzed Medicare outpatient department claims for services associated with CPT code 52282 furnished between January 1, 2025, and December 31, 2025. Based on 109 claims, CMS determined that the geometric mean cost of the procedure was approximately $4,005. Even though CMS has claims data from 2025, the agency determined that prior years claims data did not accurately reflect the current costs of the procedure because there was no Food and Drug Administration (FDA)-approved permanent prostatic urethral stent available in the United States for approximately nine years. A new permanent prostatic urethral stent, the ProVee^® System, received FDA premarket approval in late 2025.

CMS concludes that the procedure, reported by CPT code 52282 shares greater resource use and clinical similarity with procedures assigned to APC 5375, particularly HCPCS code C9739 - cystourethroscopy with insertion of one to three transprostatic implants.

Background:

CPT code 52282, which has been effective since 1998, describes cystourethroscopy with insertion of a permanent urethral stent using an endoscope. As noted in the rule, this procedure is intended to provide an additional treatment option for select patients with obstructive lower urinary tract symptoms (LUTS) secondary to benign prostatic hyperplasia (BPH). The new ProVee^® System is indicated for men with prostatic urethral lengths of at least 3.75 cm and prostate volumes between 30 cc and 80 cc who have LUTS resulting from BPH.

Integrated Sacral Neurostimulator, CPT Code 0786T (APC 5464) – p. 187

Effective January 1, 2024,Category III CPT code 0786T (Insertion or replacement of percutaneous electrode array, sacral, with integrated neurostimulator, including imaging guidance, when performed) was created to distinguish implantation of integrated sacral neurostimulator systems from traditional sacral neurostimulator procedures reported with CPT code 64590 (Insertion or replacement of peripheral, sacral, or gastric neurostimulator pulse generator or receiver, requiring pocket creation and connection between electrode array and pulse generator or receiver). Since the integrated neurostimulator device was not FDA approved at the time, CMS assigned CPT code 0786T a status indicator E1 (not covered under an outpatient benefit category). Following FDA approval of the Neuspera integrated sacral neurostimulator for urge urinary incontinence in June 2025, CMS finalized coverage for the procedure in the CY 2026 OPPS rule, assigning CPT code 0786T to APC 5463 (Level 3 Neurostimulator and Related Procedures) with status indicator J1 (Hospital Part B services paid through a comprehensive APC).[1]

For CY 2027, CMS proposes to reassign CPT code 0786T from APC 5463 to APC 5464 (Level 4 Neurostimulator and Related Procedures). Because the code was not assigned to a clinical APC until January 1, 2026, no CY 2025 Medicare claims data were available to inform the APC assignment. Without claims data to inform CMS on appropriate APC placement for 0786T, the agency instead compared the procedure to existing sacral and tibial neuromodulation procedures for bladder dysfunction and concluded that the resources and clinical effort are like those associated with APC 5464. Therefore in 2027, the base payment rate for APC 5464 is $22,150 instead of the payment rate associated with APC 5463 which is $12,673.

APC Payment Rates for Cystourethroscopy Procedures – Addendum B

HCPCS code C9761 (Cystourethroscopy, with ureteroscopy and/or pyeloscopy, with lithotripsy, and ureteral catheterization for steerable vacuum aspiration of the kidney, collecting system, ureter, bladder, and urethra, if necessary, with use of steerable ureteral catheter or suction-integrated ureteroscope) maps to APC 5376 (Level 6 Urology and Related Services).The 2027 payment rate for APC 5376 is $10,796, and the service has a payment status indicator of J1.

HCPCS code C8014 (Cystourethroscopy, with ureteroscopy and/or pyeloscopy, with lithotripsy, including use of a suction enabled ureteral access sheath, with irrigation (if performed)) became effective July 1, 2026. This service maps to APC 5375 (Level 5 Urology and Related Services) with a payment rate of CY 2027 $6,292.00, and payment status indicator J1.

Alternative Pathway for New Technology Add-on Payment – p. 200

CMS proposes to eliminate the alternative pathway that allows FDA Breakthrough Devices to qualify for OPPS transitional device pass-through payment. According to CMS, while FDA Breakthrough Device designation reflects eligibility for the FDA's expedited review program, it does not necessarily demonstrate that a device satisfies Medicare's separate requirement to show substantial clinical improvement for a new technology payment designation.

As outlined in the rule, beginning with applications submitted on or after October 1, 2026, manufacturers will be required to satisfy all existing pass-through eligibility criteria, including demonstrating substantial clinical improvement, rather than relying on FDA Breakthrough Device designation. Applications submitted by September 30, 2026, would continue to be evaluated under the current alternative pathway, and existing pass-through categories established under that pathway would continue through their normal eligibility period.

Payment Adjustment for 340B-Acquired Drugs – p. 325

Before proposing policy changes to the 340B drug pricing program, CMS conducted a nationwide survey of hospital acquisition costs for each separately payable drug paid by Medicare through the OPPS. After analyzing the results of the survey, the agency proposes to reduce Medicare reimbursement for 340B-acquired drugs to ASP minus 33.4%. Typically, 340B-acquired drugs are paid at ASP minus 6%. To learn more about the data analysis of the survey and the methodology CMS used to arrive at the 33.4% reduction, the agency provides a lengthy, highly detailed explanation starting on page 327 of the proposed rule.

The 340B Drug Pricing Program was established by Congress in 1992 to enable eligible safety-net health care providers to purchase certain outpatient drugs from manufacturers at discounted prices. Participating drug manufacturers are required to provide discounts on covered outpatient drugs as a condition of participation in the Medicaid Drug Rebate Program, while the hospitals captured under the program are expected to use the savings to enhance patient care and maintain access to health care services.

OPPS Payments for Software as a Medical Service (SaMS) – p. 448

During last year’s OPPS rulemaking cycle, CMS sought comment from stakeholders on possible payment methodologies for software as a service (SaaS) technology. The agency hoped to gather information that would allow it to develop an appropriate and fair payment structure for these evolving technologies. In this year’s proposed rule, CMS outlines a temporary solution that will allow the agency to collect data so that a permanent, standardized payment process may be developed. Of note, the agency changed the nomenclature for these services from SaaS to software as a medical service (SaMS).

For 2027, CMS proposes to assign current SaMS CPT codes to new technology APCs. CMS proposes to designate 36 CPT codes as SaMS and reassign them from their current APCs into the more specific New Technology APCs. The agency believes the existing clinical APC structure does not adequately account for SaMS due to a lack of sufficient claims data, clinical use data, and cost data. To ensure payment continuity and prevent financial disruption, the SaMS technologies will be placed into existing New Technology APC groupings that more closely align with the current CY 2026 payment rates until CMS can collect enough information to identify appropriate, permanent clinical APC assignments. Table 61, page 453 of the proposed rule lists the SaMS services by CPT code, 2026 APC assignment, and the 2027 proposed APC assignment and payment rate.

There is one SaMS service of interest to urology, CPT code 0898T - Noninvasive prostate cancer estimation map, derived from augmentative analysis of image-guided fusion biopsy and pathology, including visualization of margin volume and location, with margin determination and physician interpretation and report currently maps to APC 5724 - Level 4 Diagnostic Tests and Related Services. The current national payment rate for APC 5724 is $877. For 2027, CMS proposes to map CPT code 0898T to new technology APC 1510 – New Technology Level 10, with a payment rate that ranges from $801 to $900.

Proposed CY 2027 Changes to the Inpatient Only List – p. 413

With this proposed rule, CMS continues towards complete elimination of the inpatient only (IPO) list with implementation of the second phase of the process by removing 637 procedures from the IPO in the following clinical families: auditory, digestive, endocrine, female genital, hemic and lymphatic systems, integumentary, male genital, maternity care and delivery, mediastinum and diaphragm, respiratory, and urinary. CMS finalized policy in the 2026 OPPS rule to discontinue the IPO list beginning in 2026 by using a phased-in approach, with the list being eliminated by January 1, 2029.

The IPO list was established in 2000 as part of the implementation of the OPPS. The IPO list identified procedures that Medicare only reimbursed when performed in a hospital inpatient setting due to certain factors of the procedure including the invasiveness of the procedure, the health status of the beneficiary, and postoperative recovery time. However, as stated in last year’s rule, CMS notes that changes in medical technology, the development of advanced surgical techniques, and quality and safety advances have made the use of the IPO list unnecessary. Additionally, CMS recognizes that physicians are best positioned to determine the most appropriate and safest site of service for a procedure based on their clinical expertise, professional judgment, and the individual needs of the Medicare beneficiary.

Payment for Imaging without Contrast Services for CY 2027 and Subsequent Years – p. 439

With this proposed rule, CMS continues its efforts to control unnecessary increases in the volume of outpatient services furnished in excepted off-campus provider-based department (PBDs) and will cap payment for certain imaging services to the amount paid under the Medicare Physician Fee Schedule (MPFS). To support this policy, CMS explains that the agency continues to see growth in the volume of certain outpatient department services driven by site of service payment differentials. CMS asserts that  the volume increases are based on financial incentives tied to payment policy and not to clinical necessity. Therefore, the agency proposes to remove the site-of-service payment differential for imaging without contrast for x-rays, CTs, MRIs and DXA scans and will apply the MPFS equivalent payment rate to those services when performed in the outpatient department. The list of affected APCs can be found on page 440, Table 60 Proposed New APCs Paid the PFS-Equivalent Rate for Services Provided at Excepted Off-Campus PBDs for CY 2027.

Expansion of Botulinum Toxin Injection Codes for Hospital Outpatient Department (OPD) Prior Authorization Process – p. 582

Using its authority to develop “methods for controlling unnecessary increases in the volume of covered outpatient department services”, the agency has expanded the list of botulinum toxin injection services subject to prior authorization under the OPPS. Table 76 on page 588 lists the procedures that require prior authorization to be paid by Medicare. Adding these procedures signals CMS intent to continue expanding the use of prior authorization in traditional Medicare.

As background, starting with the CY 2020 payment year, CMS established prior authorization processes for select procedures performed in the hospital outpatient department. The procedures captured under the prior authorization process includes a broad range of service categories including blepharoplasty (eye lid repairs), rhinoplasty (nasal surgeries), ablation of veins, cervical fusion, implantation of neurostimulators, and injections of botulinum toxin. Table 77, starting on page 588, lists all the procedures, with corresponding CPT codes that are subject to prior authorization policy.

[1] Paid under OPPS; all covered part B services on the claim are packaged with the primary "J1" service for the claim, except services with OPPS status indictor of "F', "G", "H", "L", and "U"; ambulance services, diagnostic and screen mammography, rehabilitation therapy services, services assigned to a new technology services, services assigned to a new technology APC, self-administered drugs, all preventive services, and certain part B inpatient services.