CMS Proposes Rules of the Road for Provider-Based Billing – And the Clock is Ticking

Key Takeaways

• CMS’s recently released Outpatient Prospective Payment System (OPPS) Proposed Rule sheds light on two new billing requirements for Medicare-enrolled hospitals:
  • Registering each off-campus hospital outpatient department (HOPD) under its own unique National Provider Identifier (NPI), separate from the main hospital; and
  • Submitting a—previously voluntary—attestation confirming each HOPD’s compliance with the provider-based requirements at 42 C.F.R. § 413.65.
• Hospitals must submit an attestation for each existing off-campus HOPD by December 31, 2027 to continue billing those locations as hospital-based beginning January 1, 2028.

Why Provider-Based Status Matters: Non-Compliance is a Serious Economic Threat

HOPDshave long been required to comply with the “provider-based rules” at 42 C.F.R. § 413.65 in order to bill under OPPS rather than the Medicare Physician Fee Schedule (MPFS). An “off-campus” HOPD is generally an outpatient location that is not within 250 yards of the main provider or a remote-location inpatient facility. To qualify as provider‑based, the outpatient facility must demonstrate that it operates as an integrated component of the hospital, including by being under common ownership and control with the hospital, sharing the hospital’s state licensure, and achieving sufficient clinical, administrative, and financial integration.

HOPDs that fail to comply with the provider-based rules risk:

• Loss of hospital-based billing and significantly reduced Medicare reimbursement for grandfathered off-campus HOPDs in existence prior to November 2, 2015 (referred to as “excepted” HOPDs). If an excepted HOPD loses its status, it will be reimbursed as a physician’s office.
• Loss of 340B eligibility, since an off-campus location generally must be a registered provider-based department to purchase drugs at 340B discounted prices.

For additional background, see Manatt Insight: .

What Is Changing: The Voluntary Attestation Becomes Mandatory

Historically, hospitals could submit a voluntary attestation to obtain an affirmative CMS determination of compliance with 42 C.F.R. § 413.65, mitigating future overpayment risk. Section 6225 of the Consolidated Appropriations Act, 2026 (CAA of 2026) converted that historically voluntary attestation into a mandatory condition of payment. Hospitals must now identify each off-campus HOPD through a unique NPI and prove compliance with these longstanding requirements through a mandatory attestation.

The Proposed Process

Step #1: NPI Enrollment

Before an attestation can be filed, the main provider must obtain a separate NPI for each off-campus HOPD and update its enrollment records in the Provider Enrollment, Chain, and Ownership System (PECOS). First movers will be at an advantage, as the enrollment process can take months to complete.

Step #2: Attestation Submission

CMS proposes to allow prior determinations to satisfy the new submission requirement. Specifically, CMS is considering allowing providers that received a provider-based determination prior to January 1, 2026 to satisfy the new requirement by re-attesting via letter to CMS rather than restarting the process. Hospitals with prior determinations should strongly endorse this proposal.

For all new attestations, CMS proposes a number of measures aimed at streamlining the process:

• A single, standardized attestation form. CMS proposes retiring the current MAC-specific templates in favor of a standardized form filed through a centralized electronic system. CMS solicits feedback on the in OPPS comment letters. (Prior to the finalization of the form, attestations may be submitted through existing MAC-specific channels).
• Allowing multiple sites to rely on the same documents. CMS acknowledges the burden on hospitals with multiple HOPDs and anticipates permitting a single submission of documentation applicable to multiple locations, rather than separate documentation for each site. CMS solicits feedback on this approach.

Proposed Documentation Framework: CMS proposes a standardized documentation framework operationalizing the existing provider-based criteria under § 413.65. While the compliance categories have not changed, hospitals must be prepared to demonstrate compliance with each category, for each HOPD, and to produce supporting documentation to CMS upon request.

Step #3: Review and Audit

CMS proposes a structural change to how provider-based status determinations are made by shifting responsibility for initial determinations to contractors. Under the proposed framework, contractors would conduct standardized review and validation activities to evaluate compliance with provider-based requirements in 42 C.F.R. § 413.65. These initial determinations would carry the same administrative appeal rights afforded to CMS-issued determinations.

Review would proceed in three proposed tiers:

Looking Ahead

For hospitals, the stakes are high but the details remain unsettled. Shifting initial determinations to contractors, paired with automated validation, is intended to speed review of a far larger attestation volume, but CMS has not published standardized criteria for how attestations will be flagged for targeted documentation review or extended review (e.g., site visits, audits). In the absence of standardized criteria, outcomes may vary across contractors, and flagged attestations could face lengthy review.

The practical takeaway for hospitals: invest in getting each attestation right the first time, rather than relying on appeals or extended review to correct course.

Because so much remains open, hospitals can play a clear role in shaping the operational footprint by providing public comments. Comments are due August 31, 2026, with a final rule expected in late October or early November 2026. Hospitals should prioritize commenting on:

• CMS’s proposal to allow prior voluntary attestation determinations to satisfy the new attestation requirement through a simple re-attestation letter 
• Permitting a single documentation submission that covers multiple sites for hospitals with multiple HOPDs
• The draft standardized attestation , and the scope of documentation categories
• Broader feedback on the feasibility, operational impact, burden, and unintended consequences of the proposal, with supporting data, examples, and alternatives