As regulatory requirements expand and ED pressures mount, hospital leaders face growing demands to understand performance and act on it.
What hospital and ED leaders need to know about CMS’s latest payment, quality, and emergency care access changes—and how to prepare now
On November 21, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Final Rule.
In addition to the usual payment updates and policy tweaks, there were several important changes that will directly impact hospitals & health systems, including a brand-new Emergency Care Access & Timeliness electronic clinical quality measure (eCQM).
Here we’ll break down not just what the hospital outpatient prospective payment system is but, why it matters, and what hospital & health system leaders should do to prepare in the here and now.
Table of Contents
The Basics: What is the Hospital Outpatient Prospective Payment System?
To set the stage, The Hospital Outpatient Prospective Payment System (OPPS) is how Medicare pays hospitals for outpatient services such as ER visits, X-rays, clinics, ASCs using Ambulatory Payment Classifications (APCs). This groups similar services for fixed payments, replacing older fee-for-service models. CMS sets these rates annually, adjusting for geography and quality reporting, ensuring payments cover costs for many services but excluding some like lab work. It’s part of Medicare’s strategy to control costs by setting predictable payments in advance.
At A Glance: Notable Changes in 2026 OPPS Final Rule
Highlights from the 2026 OPPS final rule include:
- CMS is increasing OPPS and ASC payment rates by 6% for providers that meet quality reporting requirements. This update is based on a 3.3% market basket, reduced by a 0.7 percentage point productivity adjustment.
- Expansion of site-neutral payment policies to include drug administration services provided in off-campus provider-based departments (PBDs).
- In accordance with the President’s Executive Order 14221 (targeted at increasing price transparency), the Final Rule requires that hospitals provide precise dollar amounts instead of estimates. It also requires hospitals to replace the estimated allowed amounts currently on machine-readable files (MRF) with the median allowed amount, while adding the 10th & 90th percentile allowed amounts.
- Changes to the Overall Hospital Quality Star Rating methodology to indirectly weight the Safety of Care measure group more heavily via penalties for hospitals that score in the lowest percentage quartile, including a 4-Star cap in CY 2026 and a blanket 1-Star reduction in CY 2027.
- CMS decided NOT to finalize its proposal to reduce the annual OPPS conversion factor for non-drug items and services from 0.5% to 2%.
- Finalized adoption of the proposed emergency care access and timeliness eCQM, with voluntary reporting in CY 2027 and mandatory reporting in CY 2028. This was accompanied by the removal of the measures related to median time from ED arrival to discharge and left without being seen patients (LWBS).
You can find the complete CMS fact sheet of all changes in the 2026 OPPS Final Rule.
For many ED and hospital leaders, however, the most significant rule passed may be the latter noted above regarding the new emergency care access & timeliness quality measure.
And while 2028 may sound as though it’s in the far off future, the time to prepare is now, and d2i can guide you through the process.
Digging into the Details: Emergency Department Care Access & Timeliness (ECAT) eCQM
Why CMS Finalized the New ECAT eCQM?
As cited in the Final Rule, “a recent report from the Agency for Healthcare Research and Quality (AHRQ) characterized patient ED boarding as a growing public health crisis…”.
CMS also noted that “delays in the timeliness of ED care are associated with patient harm” and that “increased ED length of stay (LOS) is also a strong predictor of poor timeliness of care and is significantly impacted by ED boarding.”
These are just a few of the many instances in the Final Rule where CMS speaks to the concerns related to patient outcomes and timeliness of care in the ED as justification for implementing the new eCQM. This emphasis speaks to the importance of this issue for CMS and they are signaling that other measures could be implemented in the future.
Beyond CMS, industry insiders have also recognized the significance of issues like ED boarding. The American College of Emergency Physicians (ACEP), an advocacy & research organization, applauded the introduction of the new measure by CMS.
ACEP President L. Anthony Cirillo, MD, noted:
“You cannot fix what you refuse to measure. This new Emergency Care Access and Timeliness measure is an essential first step toward real accountability for ED boarding and toward getting patients out of hallways and into beds so that they can get the care they need with the dignity they deserve.”
Additionally, an April 2025 RAND research study highlighted an array of challenges facing emergency departments across the U.S., including ED boarding, ED crowding, capacity and many other concerns. One of the recommendations from the RAND study to specifically address ED boarding was to provide hospitals & health systems with financial incentives and/or penalties to address ED boarding, which aligns with the newly introduced ECAT measure. The Emergency Department Practice Management Association (EDPMA) was a supporter and contributor to the RAND study as well.
When Does the New eCQM Measure Take Effect?
- Reporting on the new eCQM is initially voluntary, then becomes mandatory:
- Voluntary reporting: CY 2027 reporting period
- Mandatory reporting: CY 2028 reporting period, impacting CY 2030 OQR payment
- When it becomes mandatory in 2028, CMS will remove two long-standing ED chart-abstracted measures:
- Median Time from ED Arrival to ED Departure for Discharged ED Patients
- Left Without Being Seen (LWBS)
What Are the Components of the ECAT eCQM?
The new measure is built as a composite, using EHR-extracted data to capture multiple dimensions of ED throughput and access. Here are the key numerator & denominator criteria provided by CMS in the Final Rule materials.
Denominator: Who is included?
- All ED encounters, all ages, and all payers
- Over a 12-month performance period
- A single patient can contribute multiple encounters
This is broader than many existing Medicare-only measures and reflects CMS’s push toward “all-payer” quality metrics.
Numerator: What Metrics Are Tracked/Measured in 2026 OPPS Final Rule ED eCQM?
Based on summarizing CMS materials, an ED encounter is counted in the numerator if any of the following occur:
- Excessive wait time from arrival to treatment space
The patient waits more than one hour from the time of ED arrival to being placed in a treatment room and/or dedicated treatment area that allows for audiovisual privacy during history-taking and physical examination.
- Left without being evaluated
The patient leaves the ED before being evaluated by a qualified clinician (this captures a more precise LWBS-type concept using EHR data elements).
- Extended boarding for admitted patients
The patient is admitted or placed into observation, but remains in the ED more than four hours after the “decision to admit” order.
- Prolonged overall ED length of stay
Total time from ED arrival to ED departure is more than eight hours.
A few important nuances:
- Patients with ED observation stays are included in the denominator, but certain observation pathways are excluded from the boarding and LOS components, consistent with CMS’s detailed specifications.
- Events are not mutually exclusive; an encounter with multiple issues (e.g., >1-hour wait and >8-hour LOS) still counts only once in the composite numerator.
- Results are stratified by:
- Age: ≥18 vs. <18
- Presence or absence of a mental health diagnosis
Regarding the latter, CMS believes that this stratification and volume-standardization provide enough adjustment for case-mix and hospital differences without full risk adjustment.
How does the 2026 OPPS final rule reshape the ED quality landscape?
For ED & hospital leaders, this means a shift in mindset from simply looking at how fast you can disposition discharged patients, to analyzing and optimizing all aspects of patient flow – at arrival, evaluation, boarding, and overall LOS.
Link to Payment and Star Ratings
The new ECAT measure is already set to begin impacting payments alongside mandatory reporting in 2028; however, the changes to Overall Hospital Quality Star Rating system in the final rule raise the stakes even further:
OQR penalty remains in place: Hospitals that fail to meet OQR requirements, including the new ECAT measure once mandatory, will continue to see a 2.0 percentage point reduction in their annual OQR payment update.
Star Ratings put more weight on safety: CMS is modifying the Overall Hospital Quality Star Rating methodology so that hospitals which have low scores for the Safety of Care group can have their star ratings capped or reduced. These new penalties will be phased in using a two stage approach:
- For the first stage, starting in 2026, hospitals that perform in the lowest quartile of the Safety of Care measure group (using at least three measures) will have their star rating capped at a maximum of (4) four stars.
- For the second stage, starting in 2027, which replaces the first stage, hospitals that perform in the lowest quartile of the Safety of Care measure group (using at least three measures) will have their star rating reduced by (1) one star for the 2027 Overall Hospital Quality Star Rating and later years.
While the ECAT measure itself is excluded for now from impacting the Star Rating system, CMS specifically cited ED boarding and longer LOS as patient safety issues, not just throughput problems.
Taken into context with CMS’s commentary on the new measure and the emphasis on patient safety via the star rating changes, CMS is sending a clear signal: Underperformance on measures linked to patient safety, either directly or indirectly, are no longer just operational headaches—they’re financial and reputational risks.
2026 OPPS: Prepare for the New Normal Now, While Maximizing Hospital & ED Performance With Data That Matters
d2i’s integrated healthcare data solutions can help you turn these perceived regulatory headwinds into tailwinds. With connected analytics across emergency medicine, hospital medicine, and ancillary services, hospital and ED leaders can thrive in the ever-changing healthcare regulatory landscape.
Imagine being able to drill down into the “why” across all aspects of your health system’s operations, quality, and patient flow? It’s not enough to know your performance is good or bad – d2i gives you the insights you need to not just understand the “why,” but the “what” to do about it.
Jeremy Floyd is Senior Vice President of Growth at d2i, where he leads go-to-market strategy and growth initiatives across healthcare technology and services. He brings more than 15 years of experience scaling high-growth healthcare organizations. Prior to d2i, Jeremy served as Chief Growth Officer at Signallamp Health, where he helped drive more than 500% revenue growth and supported the company’s successful acquisition by Sunstone Partners (now Tellihealth). At d2i, he focuses on expanding adoption of trusted analytics that help health systems and physician leaders turn data into meaningful, measurable improvement.