UHS · 10-Q · 2026Q3 · Full report

Medicare OPPS and IPO Changes

UNIVERSAL HEALTH SERVICES INC · 2026-11-06 · Importance 43 · Surprise 32

CMS’s November 2026 OPPS final rule sets a 3.2% hospital market-basket increase and a 0.9% productivity reduction for a 2.3% net update; after other adjustments and patient mix, UHS estimates an 8.9% overall Medicare OPPS increase for 2027. The estimate includes a favorable 7.5% 340B Drug Cost Survey budget-neutrality adjustment and a 2.0% 340B remedy recoupment reduction. CMS estimates the 340B-acquired-drug payment change will reduce Original Medicare drug payments by $4.65 billion in its first year, with equivalent budget-neutral increases for non-drug OPPS services. The rule continues the three-year phase-out of the Inpatient Only list, removing 637 services in the second year; UHS says this may shift some inpatient volume to hospital outpatient or freestanding settings, and that impact is not reflected in its update estimate.

Key facts

• CMS is phasing out the inpatient-only list over three years; in the second year it is removing 637 services from specified clinical families, a policy that may shift inpatient volume to outpatient settings. source
• UNIVERSAL HEALTH SERVICES INC estimates its overall Medicare OPPS update for 2027 will be a net increase of 8.9%, considering other required adjustments and hospital patient service mix. source
• CMS's 2027 OPPS final rule has a 3.2% hospital market basket increase and a 0.9% productivity adjustment reduction, producing a net market basket increase of 2.3%. source
• For CY 2026, CMS began a 3-year phaseout of the inpatient-only list by removing 285 mostly musculoskeletal procedures; UHS does not expect a material impact on results of operations in CY 2026. source
• UNIVERSAL HEALTH SERVICES INC estimates its overall Medicare OPPS update for 2026 was a net increase of 2.0%. source
• UHS cannot determine the potential impact on results of operations of IPO-list changes for calendar years 2027 and later until future CMS rulemaking occurs. source
• UHS believes its hospitals are in full compliance with applicable federal hospital price transparency regulations. source