Hospital outpatient provider-based departments which are treated as part of the main hospital provider for Medicare purposes are eligible for higher Medicare payments than freestanding facilities. Medicare rules specify the criteria for treating a facility as provider-based, as well as the requirements for a CMS determination of provider-based status, which include the provider’s attestation of compliance with the provider-based criteria. While compliance with provider-based rules is required, submitting such attestation has been an optional process providers could undertake if a CMS determination of provider-based status was desired.
Under the Consolidated Appropriations Act of 2026, however, as of January 1, 2028, Medicare will no longer make payments for services furnished at off-campus outpatient provider-based departments (“HOD”) unless (a) The hospital submits an attestation confirming the HOD’s compliance with the Medicare provider-based requirements, and (b) the HOD has an NPI that is separate and distinct from the hospital’s NPI. To implement these provisions CMS was directed to issue new regulations to establish a process for: (a) hospitals operating HODs to submit attestations confirming compliance with the Medicare provider-based requirements, and (b) CMS to review each attestation and evaluate whether the HOD is in compliance with the Medicare provider-based requirements.
The proposed Hospital Outpatient Prospective Payment System Rule for calendar year 2027 published by CMS on July 7, 2026 outlined new provider-based attestation requirements to implement the Act’s mandate. Key CMS proposal areas include the following:
- Hospitals must obtain separate national provider identifiers (“NPI”) and formal provider-based attestations for every HOD.
- To ensure consistency, multiple provider-based attestation forms implemented by Medicare administrative contractors (“MAC”) will be replaced with one standardized electronic attestation form.
- Hospitals must file an initial provider-based attestation for each HOD within the two years before services begin, with follow-up attestations to occur no more than every five years.
- For HODs already furnishing services on or before January 1, 2028, initial attestations must be submitted between January 1, 2026 and December 31, 2027.
- To evaluate attestations, CMS and MACs will employ standardized review processes, which may include automated validation activities, data analysis, risk-based screening methodologies, targeted documented review, and other program integrity activities.
- MACs will review attestations through a two-stage process – an initial automated screening for completeness and PECOS alignment, followed by an extended review (audits, site visits, and data analysis) for a subset of the higher-risk attestations.
- As part of demonstrating compliance with the provider-based requirements, hospitals must be able to demonstrate compliance with licensure, clinical and financial integration, public awareness, Emergency Medical Treatment and Labor Act, billing, and ownership requirements, as well as the 35-mile location requirement, and to be prepared to provide supporting documentation to CMS or the MAC upon request.
Given that non-compliance with the provider-based requirements risks loss of Medicare payments, it is prudent for hospitals operating the HODs to prepare for the upcoming changes and timely attestation submission by inventorying all HODs now, confirming each site’s compliance and PECOS enrollment records, obtaining the required unique NPIs, and assembling supporting documentation.
In addition, stakeholders currently have the opportunity to submit comments on the CMS proposal, including the new provider-based attestation form, attestation timing, and operational impact, by August 31, 2026. CMS requested that comments include specific detailed rationale, supporting data, illustrative examples, and real-world alternatives.
