Hospital outpatient departments that qualify as provider-based are eligible for higher Medicare reimbursement rates than freestanding facilities. Until now, submitting a formal attestation to confirm compliance with provider-based rules has been optional, something hospitals could pursue if they wanted an official CMS determination. That is about to change.

Under the Consolidated Appropriations Act of 2026, starting January 01, 2028, Medicare will stop making payments for services at off-campus outpatient provider-based departments unless two conditions are met. First, the hospital must submit an attestation confirming that the department meets Medicare's provider-based requirements. Second, the department must have its own NPI (National Provider Identifier) that is separate from the main hospital's NPI.

To carry out these requirements, CMS published the proposed Hospital Outpatient Prospective Payment System (OPPS) Rule for calendar year 2027 on July 07, 2026. Here is a summary of the key proposals:

Every hospital outpatient department (HOD) must have its own separate NPI, and hospitals must submit a formal provider-based attestation for each one. The multiple attestation forms currently used by different Medicare Administrative Contractors (MACs) will be replaced with a single standardized electronic form. Initial attestations must be filed within the two years before a department begins providing services, with follow-up attestations required at least once every five years. For HODs already in operation on or before January 01, 2028, initial attestations must be submitted between January 01, 2026 and December 31, 2027.

To review submitted attestations, CMS and MACs will use a two-stage process. The first stage is an automated screening that checks for completeness and alignment with PECOS records. The second stage involves extended review for higher-risk submissions, which can include audits, site visits, and data analysis.

To demonstrate compliance, hospitals must be able to show they meet requirements related to licensure, clinical and financial integration, public awareness, EMTALA (Emergency Medical Treatment and Labor Act), billing practices, ownership structure, and the 35-mile location requirement. Supporting documentation must be available to provide to CMS or the MAC upon request.

Since non-compliance puts Medicare payments at risk, hospitals should start preparing now by taking inventory of all their HODs, confirming each site's compliance and PECOS enrollment, securing the required unique NPIs, and gathering supporting documentation.

Stakeholders also have the opportunity to submit comments on the proposed rule, including the new attestation form, timing requirements, and operational concerns, by August 31, 2026. CMS has asked that comments include specific reasoning, supporting data, real-world examples, and alternative approaches where applicable.