CMS Proposes Cutting Noncontrast Imaging Payments for Off-Campus Hospital Sites in 2027

What Is the Proposed 2027 OPPS Imaging Payment Cut?

As of July 2, 2026, the CMS 2027 OPPS proposed rule (CMS-1850-P) would reduce Medicare payment for noncontrast imaging services furnished in excepted off-campus hospital outpatient departments to the Physician Fee Schedule equivalent rate, which is approximately 40 percent of the current OPPS rate. CMS estimates this change would save Medicare $190 million, reduce beneficiary premiums by $70 million, and lower beneficiary cost-sharing by another $70 million. The comment period closes August 31, 2026.

• Payment drops to PFS-equivalent rates. Noncontrast imaging codes assigned to imaging-without-contrast ambulatory payment classifications (APCs) in off-campus hospital outpatient departments would be reimbursed at the lower PFS rate instead of the OPPS rate.
• Rural hospitals are exempt. Rural Sole Community Hospitals would remain exempt from this site-neutral payment expansion.
• This is proposed, not final. CMS will accept public comments through August 31, 2026. The final rule is expected in late fall 2026, with payment changes taking effect January 1, 2027.

What CMS Proposed on July 2

CMS released the CY 2027 OPPS/ASC proposed rule (CMS-1850-P) on July 2, 2026. The rule proposes extending the agency’s existing site-neutral payment methodology, previously applied to clinic visits and drug administration services, to noncontrast imaging services furnished in excepted off-campus provider-based departments (PBDs). Under the proposal, hospitals would be paid at the PFS-equivalent rate rather than the higher OPPS rate for any HCPCS codes assigned to imaging-without-contrast APCs when provided at an off-campus PBD.

The financial impact is substantial. HFMA reported that CMS estimates the imaging payment decrease would save $190 million for Medicare, $70 million in beneficiary premiums, and $70 million in beneficiary cost-sharing, for a combined impact of $330 million. For hospital-based radiology groups, this translates directly to lower reimbursement per study on common imaging procedures like chest X-rays, noncontrast CTs, and standard ultrasounds performed in off-campus locations.

CMS frames this as a continuation of its longest-running payment reform initiative: ensuring Medicare does not pay significantly more in the hospital outpatient setting than in the physician office setting for the same service. The agency implemented similar site-neutral policies for clinic visits in 2019 and for drug administration services in 2026.

Does This Affect Freestanding Imaging Centers?

No. The payment reduction applies only to excepted off-campus hospital outpatient departments billing under the OPPS. Freestanding imaging centers that bill under the Physician Fee Schedule are not affected by this proposal. In fact, freestanding centers may benefit competitively if hospital-based imaging becomes less financially attractive for health systems.

The groups most directly affected are hospital-employed radiology practices that furnish noncontrast imaging at off-campus hospital outpatient facilities. These facilities have historically received higher OPPS rates for the same imaging studies that independent radiology groups bill at PFS rates. The proposed rule would narrow that gap substantially.

One question we hear constantly from radiology practice managers is whether their billing setup correctly distinguishes between facility and professional component billing across multiple service locations. Across the billing companies we vet for radiology practices, the ones that handle this well maintain separate billing profiles per service site and track which payment system applies to each location. Practices that use a single billing profile for all locations frequently leave money on the table or face denials when the wrong payment system is applied.

Why CMS Is Expanding Site-Neutral Payments to Imaging

CMS has been moving toward site-neutral payment for over a decade. The rationale is straightforward: when the same service is furnished in two different settings, Medicare should not pay substantially more in one setting than the other unless there is a clinical reason for the difference. For imaging, the payment gap between OPPS and PFS rates for noncontrast studies has been significant, sometimes exceeding 60 percent for the same CPT code.

The proposed expansion follows a pattern. CMS applied site-neutral payment to clinic visit services (HCPCS G0463) in the CY 2019 OPPS final rule, then expanded it to drug administration services in the CY 2026 OPPS final rule. Imaging without contrast is the third service category to be targeted. CMS indicated that the proposal is implemented in a non-budget-neutral manner, meaning the savings flow directly to Medicare and beneficiaries rather than being redistributed to other OPPS-paid services.

For radiology billing teams, this signals that CMS views outpatient imaging as an area where payment has been structurally higher than the underlying cost would justify. The practical consequence is that hospital-based radiology departments will need to evaluate whether their current revenue projections for 2027 account for this reduction, particularly on high-volume noncontrast studies.

How Should Radiology Practices Prepare?

The rule is proposed, not finalized. But the direction is clear, and preparation should start now.

• Identify which of your service locations are excepted off-campus PBDs. The payment reduction applies only to these specific sites. If all your imaging is performed at the main hospital campus or at a freestanding center, the proposal does not change your payment.
• Pull your noncontrast imaging volume by location. For each off-campus PBD, determine how many noncontrast imaging studies you performed in the last 12 months. Multiply the volume by the difference between your current OPPS payment and the PFS-equivalent rate. That is your estimated annual revenue impact.
• Review your payer mix for affected locations. The reduction applies to Medicare OPPS payments. Commercial payers may or may not follow Medicare’s site-neutral direction, but many commercial contracts reference OPPS rates. If your commercial contracts are OPPS-indexed for off-campus imaging, the revenue impact extends beyond Medicare.
• Evaluate whether to shift imaging volume to campus-based or freestanding locations. On-campus hospital outpatient departments and freestanding centers are not affected by this proposal. If your practice has flexibility in where studies are performed, routing noncontrast imaging to unaffected locations preserves current payment levels.
• Submit comments to CMS by August 31, 2026. If the proposed reduction would materially affect your practice, the comment period is the mechanism to provide CMS with data on the operational impact. The American College of Radiology and the Radiology Business Management Association typically coordinate comment efforts for the specialty. Review the ACR’s billing guidance to understand the broader context.
• Engage your billing company on the transition plan. Your billing team needs to know which codes, locations, and payment systems are changing so they can update fee schedules and payment expectations before January 1, 2027.

Common Misreadings of This Proposal

Providers often come to us with inaccurate assumptions about site-neutral payment rules. Here are the most common misunderstandings specific to this proposal.

• Assuming all imaging is affected. The proposal targets noncontrast imaging in off-campus PBDs only. Contrast-enhanced imaging (CT with contrast, MRI with contrast) is not included. On-campus imaging is not included. Freestanding imaging center billing is not included.
• Confusing this with the PFS proposed rule. CMS-1850-P (OPPS) and CMS-1848-P (PFS) are separate proposed rules released in July 2026. The PFS rule covers the conversion factor, practice expense methodology, and specialty-specific RVU changes. The OPPS rule covers hospital outpatient payment rates and site-of-service policies. Radiology practices billing under both systems need to track both rules independently.
• Thinking Rural Sole Community Hospitals are the only exemption. While Rural SCHs are explicitly exempt, the proposal only applies to excepted off-campus PBDs. On-campus departments, regardless of hospital type, are not subject to this reduction. The distinction between excepted and non-excepted off-campus departments also matters, as non-excepted departments are already paid under the PFS.
• Overlooking the commercial payer ripple effect. Many commercial contracts for hospital outpatient imaging reference OPPS rates. If CMS reduces the OPPS benchmark for noncontrast imaging, commercial payers with OPPS-indexed contracts may follow, either immediately or at the next contract renewal.

In-House vs. Outsourced Radiology Billing

Site-neutral payment changes add a layer of complexity to radiology billing that many in-house teams are not staffed to handle. The question for practice managers is whether their billing infrastructure can correctly apply different payment rates to the same CPT code based on the service location.

In our experience matching radiology practices with billing partners, the groups that handle site-neutral transitions smoothly are those whose billing company maintains separate fee schedule configurations per service location and updates them proactively when CMS publishes final rules. Practices relying on a single fee schedule across all locations will underbill at some sites and overbill at others, creating both revenue loss and compliance exposure. For practices evaluating their radiology billing setup, the 2027 OPPS changes make this a good time to assess whether your current partner has the infrastructure to handle location-specific payment rules.

Frequently Asked Questions

Next Steps

Start by identifying which of your service locations qualify as excepted off-campus PBDs and pull your noncontrast imaging volume for those sites. That gives you the revenue exposure number you need to plan around.

If your billing setup does not currently track payment rates by service location, or if you need help modeling the financial impact of the proposed changes, Radiology Bill Co connects you with billing companies that specialize in radiology-specific coding and reimbursement across all practice types and settings.