The Centers for Medicare & Medicaid Services (CMS) released a proposed rule with comment period that would revise the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for calendar year 2016 (CY16). In the proposed rule, CMS describes the proposed changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. The proposal would also update and refine the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. Further, the proposed rule includes certain proposals relating to the hospital inpatient prospective payment system (IPPS), including the two-midnight rule under the short inpatient hospital stay policy, the related -0.2 percent payment adjustment, and a proposed transition for Medicare-dependent, small rural hospitals located in all-urban states. Additionally, the agency proposes to apply a 2 percent reduction to the CY16 conversion factor to redress the inflation in OPPS payment rates resulting from excess packaged payment under the OPPS for laboratory tests from its final CY14 laboratory packaging policy.