CMS has released the Calendar Year (CY) 2027 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Proposed Rule, with a comment window open through August 31, 2026. On the surface, it is a fairly routine annual payment notice, with a proposed 2.4% update to both OPPS and ASC rates. That said, this proposed rule is a highly consequential one, and it further shifts the underlying operating reality for many orthopedic service lines.
The key thread in this proposed rule is site of service. CMS is entering the second year of a three-year plan to eliminate the Inpatient Only (IPO) list, proposing to add roughly 618 procedures to the ASC Covered Procedures List (CPL), and extending site-neutral payment to more outpatient settings. For orthopedics, which is already the leading edge of the shift to outpatient and ASC care, the message is clear: we will see more surgical volume, and more complex surgical volume, take place outside the hospital's four walls. Here is what is in the rule, why it matters now, and what it means for the teams responsible for those episodes.
What CMS Actually Proposed
A 2.4% payment update: CMS proposes raising both OPPS and ASC rates by 2.4% for facilities that meet their respective quality-reporting requirements. Importantly, CMS itself notes that other provisions in the rule, such as expanded site-neutral policies and a substantial restructuring of 340B drug payment, will offset the update for many.
The IPO list keeps shrinking: CMS is continuing its three-year phase-out of the IPO list, the roster of procedures Medicare will pay for only when performed inpatient. After removing 285 procedures for CY 2026, CMS proposes removing 637 more for CY 2027 across eleven clinical families. The most complex remaining categories, including neurologic and cardiovascular procedures, are slated for the final phase in CY 2028. The direction from CMS is unambiguous: the default site of service is shifting from “inpatient unless proven equally safe and effective elsewhere” to “outpatient when clinically appropriate as determined by clinicians.”
The ASC door opens wider: In parallel, CMS proposes adding approximately 618 procedures to the ASC CPL, many of them the same procedures coming off the IPO list. Total joint arthroplasty made this journey years ago, but the continued expansion signals that the ASC is now a mainstream setting for surgical care, not an exception for certain surgical fields.
Site-neutral payment expands again: CMS proposes applying Physician Fee Schedule-equivalent rates to imaging without contrast furnished in certain off-campus provider-based departments. This is the latest step in a multiyear effort to pay the same amount for the same service regardless of where it is delivered, which CMS estimates would produce roughly $260 million in combined savings. The specific service in this proposal is imaging, but the principle of reimbursement based on the lowest-cost appropriate setting is likely a trend that will stick going forward.
Why Orthopedics Sits At the Center
Orthopedics has been the proving ground for the outpatient shift for years. Total joint replacement has firmly moved from routine multi-day inpatient stays to same-day discharge and ASC procedures over the past several years, driven by better perioperative protocols, digital care capabilities, remote monitoring, evolving payment policy, and patient preference. This proposed rule deepens this trend and broadens the set of procedures that follow.
That carries a real operational consequence to these shifting procedures. When a hip or knee replacement happens in an ASC or as a hospital outpatient case, the patient is home within hours, and the most fragile part of the episode–the first days and weeks of recovery–unfolds entirely beyond the visibility of the clinical team. The clinical risk does not move to a lower-cost setting; only the site of the procedure does. Wound concerns, pain and medication management, mobility milestones, and early signs of complication all still need attention. The question every service line has to answer is how the care team stays connected to a patient it no longer sees frequently just down the hall.
Quality and Accountability Follow the Patient
The other thread running through the rule is quality reporting. Both the Hospital Outpatient Quality Reporting (OQR) and ASC Quality Reporting (ASCQR) programs carry a two-percentage-point payment reduction for facilities that fail to meet requirements, and CMS continues to refine both. As surgical volume migrates, the quality obligations migrate with it; ASCs and hospital outpatient departments are increasingly accountable for the kinds of outcome and patient experience measures that once lived primarily on the inpatient side.
This matters because the federal push toward patient reported outcomes is not setting-specific. The CMS THA/TKA PRO-PM–which some groups thought may be delayed for HOPDs and ASCs in this proposed rule, but wasn’t–requires matched pre-operative and one-year patient reported outcome data, and episode-based models such as the Transforming Episode Accountability Model (TEAM) and the proposed Comprehensive Care for Joint Replacement Expanded (CJR-X) extend PROs and PRO-PMs across outpatient episodes. Soon, a total joint that happens in an ASC will owe CMS the same PROMs, collected at the same intervals, from a patient who may never set foot in the hospital. Value-based readiness now has to work wherever the surgery happens.
What It Means For You
For orthopedic service line leaders, hospital and health system executives, and ASC administrators, the CY 2027 proposed rule is a planning document as much as a payment notice. A few implications stand out:
- The volume shift is real: If a meaningful share of your total joint and other musculoskeletal (MSK) cases will be outpatient- or ASC-based, a recovery model built for inpatients will not stretch to cover them. Plan for how patients will be guided and monitored at home: deploy procedure-specific digital care plans, automate education and outreach to account for the lack of in-person interactions, and utilize remote monitoring and risk stratification to escalate patients who need more attention.
- Make PROMs setting agnostic: Collection cannot depend on a discharge visit or an inpatient nurse. It has to reach the patient directly, at the pre-op and one-year intervals CMS requires, regardless of where the procedure occurred.
- Treat patient engagement as a necessity: Extending the care team into the home, through condition- and procedure-specific care plans, video-based education, and remote monitoring, is how hospitals and ASCs can hold quality and outcomes steady while volume grows, without adding staff or brick-and-mortar resources.
How Force Closes Care Gaps
This is the gap our partner hospitals and surgical centers ask us to close. Force Therapeutics extends the care team across the full episode of care, pre-op through recovery, so that a procedure moving to an ASC does not mean a patient moving out of view. Our platform guides patients through their surgical journey, automates the collection and reporting of the PROMs CMS requires, and gives care teams remote visibility into recovery, whether in inpatient, outpatient, or ASC settings.
The CY 2027 rule is still a proposal, and the comment window runs through August 31, 2026. But the trajectory it confirms has been clear for years: surgery is moving to lower-cost settings, and accountability for outcomes is moving with it. The organizations that thrive will be the ones that decide early how to stay connected to patients wherever their care takes place.
To learn more about how leading institutions are preparing their orthopedic and ASC programs for the continued site-of-service shift, reach out to the Force team:
