One of the most immediate developments affecting hospitals is a new compliance requirement for off-campus hospital outpatient departments (OPDs) enacted through the FY2026 federal appropriations bill.
Beginning January 1, 2028, hospitals must obtain a unique National Provider Identifier (NPI) for each of its off-campus outpatient departments. Hospitals will also be required to attest that each off-campus facility meets Medicare’s provider-based requirements. Failure to comply with these requirements may render the department ineligible for Medicare reimbursement.
Increased Scrutiny of Provider-Based Departments
The new statutory requirement builds on earlier site-neutral payment reforms and expands the Centers for Medicare & Medicaid Services’ (CMS) oversight of provider-based departments (PBDs). Historically, hospitals could bill certain off-campus facilities under the Outpatient Prospective Payment System (OPPS) if they met CMS provider-based criteria. This often resulted in higher reimbursement than services billed by freestanding physician offices.
Under the new provisions, CMS is expected to increase scrutiny of whether off-campus departments truly satisfy provider-based requirements under 42 C.F.R. § 413.65, including standards related to clinical integration, financial control, and public awareness of hospital affiliation.
Hospitals may face both prospective payment denials and potential recoupment of past payments if CMS determines that a department is improperly billing under OPPS.
Broader Site-Neutral Payment Trends
The new requirements are widely viewed as part of a broader federal push toward site-neutral payment policies. For example, CMS has already taken steps to expand site-neutral payments to certain drug administration services, and to begin phasing out the Medicare inpatient-only list. Increased transparency into off-campus billing patterns may further accelerate site-neutral payment reforms in future rulemaking.
Extension of Key Provider Programs
At the same time, the FY2026 appropriations package extends several provider-favorable programs, including:
- Medicare telehealth waivers through 2027
- The hospital-at-home program through fiscal year 2030
- Supplemental payments for low-volume and Medicare-dependent hospitals
- Add-on payments for ambulance services
Implications for Hospitals and Healthcare Stakeholders
Viewed collectively, these developments signal a continued federal shift toward greater transparency, tighter compliance oversight, and expanded site-neutral payment policies across care settings. Hospitals and health systems should begin evaluating their off-campus outpatient department structures well in advance of the January 1, 2028, compliance deadline, including confirming whether each location satisfies Medicare’s provider-based requirements under the federal regulations, and preparing for the operational implications of obtaining separate NPIs.
At the same time, stakeholders should closely monitor future regulatory and legislative activity and related appropriations measures that may further accelerate payment reform, increase scrutiny of hospital-affiliated outpatient operations, and reshape reimbursement dynamics across the healthcare system.
Proactive compliance planning and strategic review of outpatient facility structures may help providers mitigate financial exposure and adapt to the evolving federal policy landscape.