Image by oljamu from PixabayAlthough Medicare payment rates have not faced major cuts under the new administration so far, ambulatory surgery centers (ASCs) continue to be underpaid compared to hospitals.
That’s according to Bill Prentice, CEO of the Ambulatory Surgery Center Association (ASCA), who recently shared his regulatory outlook at the Arizona Ambulatory Surgery Center Association’s 2025 Annual Conference in Scottsdale, Arizona.
“Medicare seems to be OK right now,” Prentice said at the conference. “But we still are standing on the fact that we are paid so much less than hospital outpatient departments, [which] are doing the same things.”
Demonstrating value
ASC leaders have done a “tremendous job” in recent years showing their work and demonstrating quality, something that wasn’t always the case, Prentice said.
“When I came to ASCA 15 years ago, there was still a lot of talk and intimations by the hospital community – and even health reporters – about the quality of care being provided in the surgery center space,” he said. “Not because we weren’t providing great care, but because we weren’t showing our work.”
He pointed to the Medicare Quality Reporting Program as a key tool in changing perceptions. The data, he said, has helped open eyes across Washington.
“The quality of care we provide in surgery centers, including for patients with more comorbidities and health complexities than ever before, is outstanding,” Prentice said. “Nobody serious is questioning it anymore.”
But proving value doesn’t stop with quality metrics, Prentice added. As ASCs expand into higher-acuity cases such as total joints and cardiovascular procedures, operators must continue to educate payers, policymakers and patients about what the ASC model is capable of – and what it’s not.
“We’re not trying to say that every patient belongs in a surgery center,” he said. “But for most procedures, for most people, the ASC is the best setting for outcomes, experience and cost. That’s the story we have to keep telling.”
The complex reality of site neutrality
One of the most pressing policy issues facing the industry is the push for site-neutral payments, which would essentially reimburse the same amount for a procedure regardless of the setting in which it’s performed.
At first glance, the idea may sound fair.
“It’s simple, catchy and easy for people to understand,” Prentice said. “The procedure is the procedure. … Why should the building it happens in affect the reimbursement?”
But applying site-neutrality broadly, he warned, would ignore important differences in patient complexity and regulatory oversight.
“Even something as simple as a screening for colonoscopy. … Probably 95% to 97% of Medicare beneficiaries could safely have that done in a surgery center,” he said. “But there’s still a slim percentage where age or comorbidities mean a hospital is the better choice.”
If hospitals lose reimbursement on those procedures, they may stop offering them altogether. ASCs, in turn, wouldn’t be able to absorb the full volume shift.
ASCs also face threats from site-neutrality policies that shift reimbursement toward the physician office setting, Prentice added, since CMS already removes ASC facility fees for procedures where the majority of volume moves to office-based settings.
“You’d have an access to care problem,” Prentice said. “Site neutrality focuses only on the cost of care. Health policy always goes wrong when it focuses on cost and not the patient or outcomes.”
State-level bills
At the state level, ASC leaders must remain alert to legislation that mischaracterizes facility fees as unnecessary surcharges, Prentice said.
Recent proposals in Texas and Indiana have aimed to eliminate these fees, often in response to hospitals applying them after acquiring physician practices.
“That’s a valid concern,” he said. “But lawmakers don’t always understand the difference between that and the facility fee for a surgery center, which pays for clinical staff, equipment, sterilization and everything else required to safely deliver surgical care.”
ASCA works closely with state associations to provide advocacy support and policy materials, but Prentice said that the most effective approach is direct education.
“The best thing you can do is invite your state legislator to your ASC,” he said. “Once they see what you do, they become an ally. We have a great story to tell, but we have to tell it.”
Still, Prentice acknowledged that staffing shortages represent one of the biggest barriers to continued growth across the country. Federal disinvestment in training programs decades ago has created a lasting impact.
“We eliminated anesthesia training programs 30 years ago, and now we’re dealing with anesthesia shortages,” he said.
ASCA is partnering with anesthesiology societies to explore solutions, but ASC operators can’t wait for Washington alone to fix the issue, Prentice said.
“You’re never going to win on salary alone,” he said. “But you can create a culture where people want to work, and that’s a place where ASCs have a real advantage over hospitals.”
To ensure that lawmakers and regulators understand the role ASCs play, Prentice urged operators to step up their advocacy, especially at the state level, where legislation often moves quickly and with little warning.
“We work with our different state associations to coach them up on these issues and help articulate the arguments,” he said. “But at the end of the day, no one can tell your story better than you can.”
He encouraged ASC leaders to invite local lawmakers into their facilities for a firsthand look at how care is delivered, what the facility fee supports, and how surgery centers benefit their communities.
“Bring them to your ASC,” he said. “Have them come in and see what you do every day. They’re going to be amazed. Every time we’ve done that, the lawmaker walks out a fan.”
