Site-Neutral Payment Comes for Imaging

By Elina Sabilova, CPC, CFPC, CPMA — Billing Department, WCH

Buried on page after page of the CY 2027 OPPS proposed rule that CMS dropped on July 2, 2026, past all the coverage of the 340B cuts, is a change that matters a lot more to the imaging world than the headlines suggest. CMS wants to start paying physician-office rates for non-contrast imaging — plain X-rays, MRIs and ultrasounds without contrast — when it’s done in an off-campus hospital outpatient department. Nobody in radiology should be surprised. This is the same playbook CMS used on clinic visits back in 2019 and on drug administration just last year. Now it’s imaging’s turn, and imaging is where a lot of hospital outpatient money actually lives.

The Mechanics

Right now, a hospital-owned off-campus imaging site can bill Medicare’s standard OPPS rate for a scan, while an independent center down the street bills the lower Physician Fee Schedule rate for the exact same study. CMS’s fix: for the affected imaging codes, off-campus hospital departments would get paid at roughly 40% of what they get today — call it a 60% cut on those specific services in those specific locations.

Rural Sole Community Hospitals are carved out, same as with the earlier rounds of site-neutral policy. That covers something like 79% of rural hospitals, though it’s worth being precise here — Critical Access Hospitals aren’t paid under OPPS at all, so this exemption question doesn’t really apply to them in the first place.

CMS pegs the first-year savings at about $260 million: $190 million straight off Medicare’s books, another $70 million from lower Part B premiums, and $70 million in reduced cost-sharing for patients. The agency likes to point to echocardiograms as the poster child for why this needs to happen — same test, but Medicare currently pays close to 294% more when it’s done inside a hospital than in a doctor’s office. Physician professional fees aren’t touched by any of this; it’s strictly a facility-payment change.

One thing worth flagging clearly: none of this is finalized yet. Comments are due August 31, 2026, CMS is expected to finalize sometime later in the year, and the effective date on the table is January 1, 2027.

It’s Not a One-Time Move

What makes this worth paying attention to isn’t the dollar figure — $260 million is small change against total Part B spending — it’s the pattern. CMS has been doing this incrementally for almost a decade:

• 2017: services at newly-opened off-campus HOPDs, via statute
• 2019: clinic visits at off-campus HOPDs
• 2026: drug administration
• 2027 (proposed): non-contrast imaging

CBO has run the numbers on where this could go if CMS keeps pulling this lever. Extending site-neutral payment to imaging generally (including contrast studies) across off-campus HOPDs was estimated at around $7.6 billion in ten-year savings. Push it out to all the services typically done in physician offices, and the number climbs to $156.9 billion. That’s the ceiling CMS is working toward, not the floor — and KFF’s read on it, which lines up with what I’d expect, is that on-campus clinic visits and eventually surgical services are the logical next targets.

Winners and Losers, and They’re Not Symmetric

Hospital systems that built out (or bought up) off-campus imaging capacity partly because the HOPD rate made it profitable are the ones absorbing this. Some systems spent the last several years specifically acquiring independent imaging centers to capture that rate differential — that trade is going away.

On the other side, independent imaging centers and physician offices get more competitive almost overnight, since the artificial payment gap that made hospital ownership attractive starts closing. Ambulatory Surgery Centers benefit too, and not just from this rule — the ASC Covered Procedures List is growing by another 618 procedures for 2027, which is part of the same broader push to move care out of hospital settings.

There’s also a second-order effect worth noting for surgical specialties. The Inpatient Only List phase-out is running in parallel — another 637-638 procedures come off it in 2027, the second of three planned years — giving orthopedics, ophthalmology, gastroenterology, urology, ENT, pain management and general surgery more room to move cases to lower-cost settings without CMS penalizing them for it.

What to Do About It Now, Not Later

If you’re running an off-campus PBD with real non-contrast imaging volume, the smart move is to run the numbers on a 60% rate cut for those codes today, before the rule is even final. Waiting until January 2027 to find out how bad it is isn’t a strategy.

Separately, and this one sneaks up on people, CMS is also moving toward requiring every off-campus HOPD to bill under its own distinct NPI starting in 2028, backed by a formal provider-based attestation under 42 CFR §413.65. That requirement comes out of Section 6225 of the 2026 CAA, and it’s exactly the kind of administrative groundwork that makes future site-neutral expansions easier to enforce. Get that paperwork clean now rather than scrambling later.

The comment period closes August 31, 2026. Industry groups — RBMA, ACR, AHA, America’s Essential Hospitals — are all preparing formal comments, but individual provider input genuinely does get read and can shift where CMS draws the final lines or exemptions.

If you’re on the independent-center or physician-office side, this is a real opening, but it’s also a signal to move on capacity and equipment sooner rather than later, because the competitive edge hospitals currently hold on these codes starts eroding in 2027 regardless of what you do.

And if you’re running a health system, this is probably a good moment to reconsider where you’re planning to put capital for the next imaging build-out, because the math that used to justify hospital ownership of these services is changing under your feet.

The honest way to think about this rule is that it’s a preview, not an outlier. CMS has been closing the gap between “where a service happens” and “what it costs” one category at a time since 2019, and there’s no real sign of it stopping at imaging. The providers who come out ahead won’t be the ones reacting once the final rule lands — they’ll be the ones who already modeled it, commented on it, and adjusted before January 2027 forces the issue.

Sources:

CMS (CMS-1850-P fact sheet, July 2, 2026), KFF Quick Takes, Healthcare Dive, HFMA, Radiology Business, Holland & Knight, Advis, National Law Review, America’s Essential Hospitals.