Millions of Medicare beneficiaries who get X-rays, CT scans, or MRIs at hospital-owned outpatient facilities could see their out-of-pocket costs drop starting January 1, 2027. The Centers for Medicare & Medicaid Services (CMS) has proposed aligning payment rates for certain imaging services at off-campus hospital departments with the lower rates paid to freestanding physician offices, a shift that would directly shrink the 20 percent coinsurance seniors owe on each scan.
How lower hospital imaging rates would cut beneficiary costs
The proposed change sits inside CMS-1850-P, the Calendar Year 2027 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center proposed rule. According to a CMS fact sheet on the 2027 outpatient rule, the agency is targeting payment differences that arise purely from site of service rather than clinical complexity.
Under current policy, Medicare pays hospitals more than independent physician offices for the same imaging service, even when the scan is performed at an off-campus location that operates like a standalone clinic. Because Traditional Medicare Part B requires beneficiaries to pay 20 percent of the Medicare-approved amount after the deductible, a higher approved amount means a bigger bill for the patient.
The proposed rule would apply Physician Fee Schedule-equivalent payment rates to “imaging without contrast” services performed in excepted off-campus provider-based departments. That category covers common diagnostic scans, including X-rays, CTs, and MRIs ordered without contrast dye. Reducing the base payment Medicare approves for these scans at off-campus hospital departments would automatically reduce the coinsurance each beneficiary owes, with no change to the 20 percent formula itself.
If the rule is finalized, the practical effect is straightforward: a senior who gets a CT scan at a hospital-affiliated imaging center across town from the main campus would owe a coinsurance amount closer to what a patient at an independent radiology office pays. The gap between those two bills has persisted for years because hospital outpatient rates are set under a separate, generally higher payment schedule that reflects hospital overhead and regulatory requirements.
CMS-1850-P and the Physician Fee Schedule alignment
CMS tied this imaging payment change to a companion proposed rule, CMS-1848-P, which governs CY 2027 payment policies under the Physician Fee Schedule and other Part B coverage changes. Both rules share a January 1, 2027 effective date for their proposed policies, and both are part of a broader strategy to harmonize payment across settings when the underlying service is the same.
The agency describes the Physician Fee Schedule proposal in a separate summary that outlines updates to relative value units, quality reporting programs, and coverage for certain preventive and chronic care services. By referencing those policies in the outpatient rule, CMS signals that the imaging change is not a one-off tweak but part of a coordinated push toward “site-neutral” payment.
Off-campus provider-based departments have drawn scrutiny because hospitals can bill at outpatient rates for services that, from the patient’s perspective, look identical to what happens in a doctor’s office suite. By setting imaging-without-contrast payments at PFS-equivalent levels, CMS would remove part of the financial incentive for hospitals to route scans through higher-cost billing channels when the same test could be delivered safely in a lower-cost setting.
Open questions about hospital response and beneficiary savings
Several gaps remain before the real-world impact becomes clear. CMS has not yet detailed average per-scan savings for beneficiaries or the total projected reduction in Part B spending specifically tied to imaging without contrast in off-campus departments. Those figures typically appear in the regulatory impact analysis that accompanies the final rule, which will also reflect any changes CMS makes in response to public comments.
The agency is also soliciting feedback on operational details, such as how to define and identify affected off-campus sites and how to prevent inappropriate shifting of services to other billing codes. Hospitals may argue that even off-campus departments bear higher compliance and staffing costs than independent physician offices, and that lower payments could make it harder to sustain imaging access in rural or underserved communities.
Some hospital systems could respond by consolidating imaging back onto main campuses, where the proposed alignment would not apply, or by reducing the hours and services offered at off-campus centers. Others might renegotiate contracts with radiology groups or invest in workflow changes to lower their own costs so they can operate profitably at the new rates.
For beneficiaries, the headline effect is positive: lower allowed amounts mean smaller coinsurance bills for many routine scans. But the magnitude of savings will vary widely based on local market prices, how aggressively hospitals reconfigure their service lines, and whether Medicare Advantage plans, which pay under separate negotiated arrangements, mirror the new structure.
Stakeholders have a limited window to influence the final policy. The public comment deadline for CMS-1848-P is September 14, 2026, and CMS typically aligns comment timelines for closely related rules like CMS-1850-P. Patient advocates, hospitals, physician groups, and imaging suppliers are expected to use that period to press for clarifications, exemptions, or phase-in periods that could shape how quickly and broadly beneficiaries see relief on their imaging bills.
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