Department of Health and Human Services, Centers for Medicare & Medicaid Services: Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Overall Hospital Quality Star Rating; Hospital Price Transparency; and Notice of Closure of a Teaching Hospital and Opportunity To Apply for Available Slots
Highlights
GAO reviewed the Department of Health and Human Services, Centers for Medicare & Medicaid Services' (CMS) new rule entitled "Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Overall Hospital Quality Star Rating; Hospital Price Transparency; and Notice of Closure of a Teaching Hospital and Opportunity To Apply for Available Slots." GAO found that the final rule (1) revises the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the Medicare Ambulatory Surgical Center (ASC) payment system for calendar year 2026; (2) describes changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment systems; and (3) announces the closure of a teaching hospital and the opportunity to apply for available slots, updates and refines the requirements for the Hospital Outpatient Quality Reporting Program, Rural Emergency Hospital Quality Reporting Program, ASC Quality Reporting Program, Overall Hospital Quality Star Rating, as well as updates and refines the requirements for hospitals to make public their standard charge information and enforcement of hospital price transparency.
Enclosed is our assessment of CMS's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. If you have any questions about this report or wish to contact GAO officials responsible for the evaluation work relating to the subject matter of the rule, please contact Will Shakely, Acting Assistant General Counsel, at (202) 512-6398.
B-337920
December 10, 2025
The Honorable Mike Crapo
Chairman
The Honorable Ron Wyden
Ranking Member
Committee on Finance
United States Senate
The Honorable Brett Guthrie
Chairman
The Honorable Frank Pallone, Jr.
Ranking Member
Committee on Energy and Commerce
House of Representatives
The Honorable Jason Smith
Chairman
The Honorable Richard Neal
Ranking Member
Committee on Ways and Means
House of Representatives
Subject: Department of Health and Human Services, Centers for Medicare & Medicaid Services: Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Overall Hospital Quality Star Rating; Hospital Price Transparency; and Notice of Closure of a Teaching Hospital and Opportunity To Apply for Available Slots
Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS) entitled “Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Overall Hospital Quality Star Rating; Hospital Price Transparency; and Notice of Closure of a Teaching Hospital and Opportunity To Apply for Available Slots” (RIN: 0938-AV51). We received the rule on November 24, 2025. It was published in the Federal Register on November 25, 2025. 90 Fed. Reg. 53448. The stated effective date of the rule is January 1, 2026.
This rule revises the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the Medicare Ambulatory Surgical Center (ASC) payment system for calendar year 2026. The rule also describes changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment systems. In addition, the rule announces the closure of a teaching hospital and the opportunity to apply for available slots, updates and refines the requirements for the Hospital Outpatient Quality Reporting Program, Rural Emergency Hospital Quality Reporting Program, ASC Quality Reporting Program, Overall Hospital Quality Star Rating, as well as updates and refines the requirements for hospitals to make public their standard charge information and enforcement of hospital price transparency.
The Congressional Review Act (CRA) requires a 60-day delay in the effective date of a major rule from the date of publication in the Federal Register or receipt of the rule by Congress, whichever is later. 5 U.S.C. § 801(a)(3)(A). The rule was published in the Federal Register on November 25, 2025. 90 Fed. Reg. 53448. The House of Representatives received the rule on November 21, 2025. 171 Cong. Rec. H4900 (daily ed. Nov. 25, 2025). The Senate received the rule on December 2, 2025. 171 Cong. Rec. S8506 (daily ed. Dec. 4, 2025). The stated effective date of the rule is January 1, 2026. Therefore, the stated effective date is less than 60 days from the date of receipt by Congress.[1]
Enclosed is our assessment of CMS's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. If you have any questions about this report or wish to contact GAO officials responsible for the evaluation work relating to the subject matter of the rule, please contact Will Shakely, Acting Assistant General Counsel, at (202) 512-6398.
Shirley A. Jones
Managing Associate General Counsel
Enclosure
cc: Calvin E. Dukes II
Regulations Coordinator
Department of Health and Human Services
ENCLOSURE
REPORT UNDER 5 U.S.C. § 801(a)(2)(A) ON A MAJOR RULE
ISSUED BY THE
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
CENTERS FOR MEDICARE & MEDICAID SERVICES
ENTITLED
“MEDICARE PROGRAM: HOSPITAL OUTPATIENT PROSPECTIVE PAYMENT
AND AMBULATORY SURGICAL CENTER PAYMENT SYSTEMS; QUALITY REPORTING
PROGRAMS; OVERALL HOSPITAL QUALITY STAR RATING; HOSPITAL PRICE
TRANSPARENCY; AND NOTICE OF CLOSURE OF A TEACHING HOSPITAL
AND OPPORTUNITY TO APPLY FOR AVAILABLE SLOTS”
(RIN: 0938-AV51)
(i) Cost-benefit analysis
The Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS), prepared an analysis of the costs and benefits for this rule. See 90 Fed. Reg. 53448, 54059 (Nov. 25, 2025). CMS estimated that the total increase in federal government expenditures under the Outpatient Prospective Payment System (OPPS) for calendar year (CY) 2026, compared to CY 2025, due to changes to the OPPS in the rule will be approximately $1.77 billion. Id. CMS estimated that the OPPS expenditures, including beneficiary cost-sharing, for CY 2026 will be approximately $101 billion, which is approximately $8 billion higher than estimated OPPS expenditures in CY 2025. Id. CMS also estimated that the total increases in Medicare expenditures, not including beneficiary cost-sharing, under the Medicare Ambulatory Surgical Center (ASC) payment system for CY 2026 compared to CY 2025, to be approximately $450 million. Id.
(ii) Agency actions relevant to the Regulatory Flexibility Act (RFA), 5 U.S.C. §§ 603–605, 607, and 609
CMS stated that the Secretary of HHS has certified that the rule will not have a significant impact on a substantial number of small entities. See 90 Fed. Reg. 53448, 54080. CMS stated that the rule will affect payments to a substantial number of small rural hospitals and a small number of rural ASCs, as well as other classes of hospitals, community mental health centers, and ASCs, and some effects may be significant. Id. at 54080–81. However, CMS stated that the rule should not have a significant effect on small rural hospitals. Id. at 54081.
(iii) Agency actions relevant to sections 202–205 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. §§ 1532–1535
CMS determined that this rule will not have an effect on state, local, or tribal governments, in the aggregate, or on the private sector, of $100 million in 1995 dollars, updated annually for inflation, in any one year. See 90 Fed. Reg. 53448, 54080.
(iv) Other relevant information or requirements under acts and executive orders
Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.
On July 17, 2025, CMS published a CY 2026 OPPS/ASC proposed rule. 90 Fed. Reg. 33476. CMS stated that they received comments from various parties. See 90 Fed. Reg. 53448, 53455. CMS responded to comments in the rule. Id.
Paperwork Reduction Act (PRA), 44 U.S.C. §§ 3501–3520
CMS determined that this rule contains information collection requirements under the Act. See 90 Fed. Reg. at 54029.
Statutory authorization for the rule
CMS promulgated this rule pursuant to section 1395 of title 42 and section 804(2) of title 5, United States Code, as well as section 1833 of the Social Security Act.
Executive Order No. 12866 (Regulatory Planning and Review)
CMS stated that the rule is significant under the Order. See 90 Fed. Reg. 53448, 54059. CMS stated that the rule was submitted to the Office of Management and Budget for review. Id.
Executive Order No. 13132 (Federalism)
CMS determined that this rule does not have federalism implications. See 90 Fed. Reg. 53448, 54080.
[1] CMS stated in the rule that there was good cause to waive the 60-day delay in the effective date in accordance with 5 U.S.C. § 808(2), as it would be contrary to the public interest to delay the effective date beyond January 1, the first day of the payment year in which the OPPS and ASC payment system updated policies are intended to apply. 90 Fed. Reg. at 54081. In particular, CMS noted that work on the rule was delayed due to a lapse in appropriations at the beginning of fiscal year 2026. Id. The exception in section 808(2) only applies when the agency has found good cause to waive notice and public procedure requirements when promulgating the rule and incorporates the finding and a brief statement therefor in the rule. 5 U.S.C. § 808(2). Here, CMS's good cause finding relates to waiving the delay in effective date, not to waiving the notice and public procedure requirements, and CMS published a notice of proposed rulemaking on July 17, 2025, 90 Fed. Reg. 33476, on which it solicited comments. Therefore, this exception does not apply.