Medicare backs off plan for quicker clawback of $7.8 billion from hospitals

Bob Herman covers health insurance, government programs, hospitals, physicians, and other providers — reporting on how money influences those businesses and shapes what we all pay for care. He is also the author of the Health Care Inc. newsletter. You can reach Bob on Signal at bobjherman.09.

Hospitals scored a win in Medicare’s final outpatient payment rule for 2026, as they persuaded federal Medicare officials to back off a plan that would have clawed back $7.8 billion a decade sooner than originally planned.

However, hospitals didn’t get everything they wanted. Medicare will move forward with surveys that will pinpoint how much drugs cost for hospitals — surveys that hospitals have fended off for 20 years.

If the results of the survey reveal excessive profit margins on drugs, hospitals may face cuts from Medicare in the future. And Medicare officials finalized their proposal to eliminate the list of surgeries that can only be done in inpatient settings, opening the way for thousands of surgeries to be done for less money in surgery centers and outpatient clinics.