This bill amends section 1833(t)(1)(B) of the Social Security Act to carve out a narrow exception allowing certain items and services furnished at off‑campus outpatient departments to be paid under the hospital outpatient prospective payment system (OPPS). The exception applies beginning in 2027 and is tied to a specialty‑level volume test based on the prior year’s payments under the physician fee schedule (PFS).
The change is targeted: only items or services provided at off‑campus outpatient departments that fall within physician specialties whose total PFS payments for those items in the previous year were below $2,000,000 become eligible for OPPS payment. The provision rewrites the statutory off‑campus exclusion to create this new, limited route back to OPPS, creating a selective reversal of site‑neutral payment rules for low‑volume specialty activity furnished off campus.
At a Glance
What It Does
The bill inserts a new clause into 1833(t)(1)(B) that treats certain off‑campus outpatient department items as OPPS‑paid when two conditions are met: the service is furnished at an off‑campus outpatient department as defined in the statute, and the physician specialty associated with those services had less than $2,000,000 in total PFS payments for those items in the prior year. The change takes effect for items furnished in 2027 and thereafter.
Who It Affects
Hospitals that operate off‑campus outpatient departments, physician specialties with low Medicare PFS volume for particular services, CMS and Medicare contractors who process OPPS claims, and beneficiaries who receive outpatient care at off‑campus hospital sites. It also affects physician groups that currently bill under the PFS for the same services.
Why It Matters
This creates a narrowly tailored pathway to reverse site‑neutral treatment for a subset of off‑campus services, preserving hospital OPPS rates for low‑volume specialty services while leaving higher‑volume specialties under the existing exclusion. That mix of access preservation and targeted scope makes the policy financially significant for affected hospitals and administratively complex for CMS.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
Under current law, many items and services furnished at off‑campus hospital outpatient departments are excluded from OPPS and are instead paid under the physician fee schedule or other non‑OPPS mechanisms. This bill adds a new exception so that, beginning in 2027, particular items and services provided at off‑campus outpatient departments can be paid under OPPS.
The exception is not universal: it applies only when the physician specialty most associated with those items had relatively low PFS payments for those services in the previous year.
The statute accomplishes this by adding a new clause to 1833(t)(1)(B). That clause does two things: it requires that the service be furnished at an off‑campus outpatient department as the statute defines that term, and it requires a specialty‑level test — specifically, that the greatest total amount paid under the PFS for that specialty for those services during the prior year was under $2,000,000.
In short, the bill restores OPPS payment for some off‑campus activity, but only where physician fee schedule dollar volume in the relevant specialty is small.Operationally, CMS will need to identify which services meet the specialty‑volume threshold using prior‑year PFS payment data and then treat claims for those services from qualifying off‑campus departments as OPPS billable. That requires cross‑linking PFS payment amounts by specialty to billed services and determining which specialty is the controlling specialty for a given set of services.
The change also alters the statutory exclusion language, making the exclusion “subject to” the new exception so it integrates with the existing off‑campus framework.The practical effect is a site‑of‑service payment shift for a narrowly defined set of services: payments that otherwise would travel through the PFS (and typically to physicians or freestanding entities) could instead be made to the hospital under OPPS when delivered at an off‑campus hospital department and when the specialty‑volume test is met. That can affect revenue flows between hospitals and physician practices, influence where services are offered, and require claims‑processing changes at CMS and among Medicare administrative contractors.
The Five Things You Need to Know
The bill adds clause (vi) to 42 U.S.C. 1395l(t)(1)(B), creating an exception to the statutory off‑campus OPPS exclusion.
The exception is effective for items and services furnished beginning in 2027.
Eligibility hinges on a specialty‑level test: the greatest total amount paid to a physician specialty under the PFS for the prior year for those services must be less than $2,000,000.
The off‑campus facility reference points to the existing statutory definition found in paragraph (21)(B) of section 1833(t), meaning current law’s site definitions control eligibility.
The change shifts payment sources: services meeting the test will be paid under OPPS (hospital outpatient prospective payment rates) rather than under the physician fee schedule.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
Designates the Act as the “SOS: Sustaining Outpatient Services Act.” This is purely a heading provision and has no effect on substance or implementation deadlines.
Adds an exception to the off‑campus exclusion
The bill amends the list of what the statute "does not include" by inserting an explicit caveat: the statutory exclusion for off‑campus outpatient department services is now “subject to” a new clause (vi). In practice, that means the existing exclusion remains the baseline rule but the new clause creates a narrow carve‑in for certain services. The drafting approach alters the interplay between the old exclusion and the new exception rather than replacing the exclusion outright, which matters for how CMS reads the statute and applies other off‑campus rules.
Geographic/site requirement — off‑campus outpatient department
Subclause (I) requires that the service be furnished at an off‑campus outpatient department of a provider, pointing to the statutory definition in 1833(t)(21)(B). That means whether a service qualifies depends on the established tests for off‑campus status (distance, provider affiliation, and any prior statutory carve‑outs), so existing site‑of‑service determinations stay relevant. Providers and CMS will need to apply the existing off‑campus definition when deciding whether claims can be considered for OPPS payment under the new exception.
Specialty‑volume threshold
Subclause (II) creates the numeric trigger: the exception applies only when the greatest total amount paid under the physician fee schedule to a physician specialty for the prior year, for all such items or services furnished by physicians in that specialty, was less than $2,000,000. The statute ties eligibility to prior‑year PFS payment aggregates by specialty, not to prior‑year hospital OPPS volumes, and does not specify how CMS should allocate multi‑specialty services or define the controlling specialty — issues CMS must resolve in guidance or regulation.
This bill is one of many.
Codify tracks hundreds of bills on Healthcare across all five countries.
Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Hospitals that operate off‑campus outpatient departments: They can receive OPPS rates for qualifying low‑volume specialty services furnished off campus, supporting the financial viability of those sites.
- Patients in communities served by off‑campus hospital sites: Restoring OPPS payments for certain services increases the likelihood hospitals will continue offering outpatient care at those locations.
- Hospital finance and revenue cycle teams: OPPS payments typically carry different groupers, packaging, and facility payments than PFS billing, potentially increasing hospital facility revenue where the exception applies.
Who Bears the Cost
- Medicare trust funds and taxpayers: Shifting payment from PFS to OPPS is likely to raise Medicare outlays for the services affected, increasing program spending relative to the current exclusion.
- Physician practices and groups that currently bill under the PFS: When services shift to hospital OPPS billing, physicians may lose professional fee revenue or see referrals consolidate under hospital billing arrangements.
- CMS and Medicare administrative contractors: Implementing the specialty‑volume test and cross‑referencing PFS payment data to OPPS eligibility will require system changes, new edits, and ongoing monitoring, creating administrative burden and potential operational costs.
Key Issues
The Core Tension
The central trade‑off is between preserving access and hospital revenue at off‑campus sites for low‑volume specialty services, and maintaining site‑neutral payments and control over Medicare spending; the bill tilts toward access by restoring OPPS payment selectively, but that relief comes with budgetary cost and creates incentives for billing and organizational changes that could erode the intended scope of the exception.
The bill threads a narrow needle: it seeks to preserve hospital OPPS payment for certain off‑campus services while limiting scope via a $2 million prior‑year PFS threshold. That approach raises immediate implementation questions.
CMS must decide how to identify the ‘‘physician specialty’’ tied to a service when multiple specialties furnish similar services, how to handle multi‑specialty procedures, and whether to use calendar‑year or other accounting windows for prior‑year calculations. The statute is silent on how to allocate PFS payments for bundled services or shared billing arrangements, leaving room for disputes and the potential need for CMS subregulatory guidance.
There is also a gaming risk: hospitals, physicians, or suppliers could reclassify services, shift billing patterns, or restructure provider affiliations to push services into categories that meet the $2 million test. The lag built into a prior‑year test reduces immediate manipulation but does not eliminate incentives to restructure between the measurement year and the year of service.
Finally, the bill’s effect on program spending depends on how many specialty/service combinations meet the low‑volume threshold; if many do, the cost could be meaningful, but if the threshold captures only a sliver of activity, the practical effect will be limited. Policymakers and CMS will need to balance access objectives against the risk of undermining the broader site‑neutral payment architecture.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.