Starting January 1, 2026, you’ll see major changes in how hospitals bill Medicare and display their prices. The Centers for Medicare & Medicaid Services (CMS) finalized new rules that require hospitals to post real prices, expand their surgical options, and align payments across different care settings. These changes affect where you receive care, how much you’ll pay, and the information you’ll have when making healthcare decisions. Keep reading to learn more.
Hospitals Must Reveal Actual Costs
Have you ever tried to find out what a hospital procedure costs and gotten vague estimates or been told to wait for a bill? That’s about to change. Starting next month, hospitals must post actual consumer prices, not estimates or chargemaster rates that nobody actually pays. The information needs to be in standardized formats, so you can understand exactly what your care will cost before you receive treatment.
This isn’t a suggestion or guideline. Hospitals that fail to comply will face civil monetary penalties. CMS is closing the loopholes that hospitals have used to avoid meaningful price transparency. You’ll be able to compare costs between hospitals and make decisions based on real numbers rather than guessing what you might owe. The standardized format requirement means you won’t need to be a billing expert to understand the information.
The transparency rules apply to all hospitals that participate in Medicare, which covers nearly every hospital in the country. You’ll see prices for common procedures, tests, and services displayed in ways that let you shop around. If you’re facing a planned surgery or procedure, you can check multiple hospitals to see where you’ll get the best value. This puts power back in your hands as a healthcare consumer.
More Outpatient Surgery Options
CMS is phasing out the inpatient-only list and expanding the procedures that ambulatory surgical centers can perform. This gives your physician greater flexibility to determine the most appropriate setting for your care. Many surgeries that previously required an overnight hospital stay can now be performed safely in outpatient settings, and you’ll have more choices about where to receive treatment.
Ambulatory surgical centers typically cost less than hospital-based care, and you’ll often experience shorter wait times and more convenient scheduling. The expansion of covered procedures means you can choose an outpatient facility for surgeries that would have required hospital admission in the past. Your doctor can recommend the setting that makes the most clinical sense for your specific situation rather than being restricted by outdated rules.
This change doesn’t mean you’ll be forced into outpatient settings if you need inpatient care. Patient safety remains the priority, and the expanded options simply give you and your physician more flexibility. If your condition requires hospital-level monitoring or intensive care, you’ll still receive treatment in the appropriate setting. The goal is removing arbitrary restrictions that prevented safe outpatient procedures from being performed outside hospitals.
Same Service Same Cost
You shouldn’t pay dramatically different amounts for the same service just because of where you receive it. CMS is using its authority to align payments for certain services whether they’re delivered in hospital outpatient departments or off-campus facilities. This policy helps ensure you aren’t penalized with higher copays simply based on location rather than the actual service you’re receiving.
Hospital-based care often comes with facility fees that significantly increase your out-of-pocket costs compared to the same service at a freestanding clinic or physician’s office. The payment alignment addresses this disparity and encourages care delivery in the most appropriate and cost-effective settings. You’ll benefit from more predictable costs and won’t face surprise bills because your doctor’s practice happens to be affiliated with a hospital system.
This change is part of CMS’s broader effort to control unnecessary increases in the volume of outpatient department services. When hospitals can charge substantially more for the same service just because it’s performed on their campus, they have financial incentives to shift care to higher-cost settings. The new payment policies remove those incentives and focus on delivering care where it makes the most sense for patients and the Medicare program.
Hospital Safety Ratings Changes
The Overall Hospital Star Rating system is getting tougher standards for patient safety. Starting in 2026, hospitals performing in the lowest quartile of the Safety of Care measure group can no longer receive a five-star rating, regardless of how well they perform in other areas. In future years, these low-performing safety hospitals will face an automatic one-star downgrade.
This change recognizes that patient safety is fundamental to quality care. A hospital might excel at customer service or have modern facilities, but if patients are experiencing preventable complications, infections, or safety events at high rates, that hospital shouldn’t be rated as excellent overall. The updated rating system will give you more accurate information about which hospitals maintain the highest safety standards.
You can find hospital Star Ratings on Medicare’s Hospital Compare website when you’re researching where to receive care. The safety-focused changes mean you’ll have better information about which hospitals protect patients from preventable harm. If you’re choosing between hospitals for a planned procedure, the Star Ratings will more clearly reflect safety performance, helping you make decisions that protect your health.
What This Means for You
These changes take effect in just over a month, and they’re expected to save Medicare beneficiaries and the program $11 billion over the next ten years. You’ll see immediate benefits in terms of price transparency and expanded care options. The savings come from aligning payments more closely with the actual cost of care and reducing unnecessary spending on hospital-based services that can be safely provided elsewhere.
Your copays might decrease when you receive care in lower-cost settings that are now covered under the expanded ambulatory surgical center list. You’ll have actual price information to help you budget for procedures and avoid surprise bills. The payment alignment means you won’t be steered toward higher-cost hospital settings when equivalent care is available at freestanding facilities.
The hospital Star Rating changes will help you identify facilities with the strongest safety records. When you’re comparing hospitals, you’ll know that a five-star rating means the hospital excels across all measures, including patient safety. The transparency requirements give you the tools to be an informed healthcare consumer, comparing prices and quality before you commit to a provider.
Conclusion
The 2026 hospital payment rule represents the most significant update to hospital payment policies in years. You’ll see these changes take effect on January 1, giving you greater control over your healthcare decisions through real pricing information and expanded options for where you receive care. The focus on patient safety in hospital ratings ensures you can identify facilities that maintain the highest standards of care. The projected $11 billion in savings over ten years benefits both you and the Medicare program.
These reforms address long-standing problems in healthcare pricing and payment. Whether you’re planning a procedure or comparing hospitals, you’ll have access to information that was previously hidden. The combination of transparency requirements, expanded outpatient options, and safety-focused ratings creates a better healthcare system for Medicare beneficiaries. For more information about Medicare hospital benefits, please call 866-633-4427 to speak with a Senior Healthcare Solutions Medicare expert.
