Image by Florian Pircher from PixabayThe U.S. Centers for Medicare & Medicaid Services (CMS) is calling for big changes to how – and where – surgical procedures are performed.
Specifically, federal regulators are pushing to eliminate the Medicare Inpatient Only List (IPO) while significantly expanding the ASC Covered Procedures List (ASC-CPL).
The agency floated those plans on July 15 when it released its 2026 ASC payment system proposed rule. While there’s much to unpack in the more than 900-page proposed rule, such changes would be monumental for ambulatory surgery centers (ASCs).
“In order to give beneficiaries more choices on where to obtain care with the potential for lower out-of-pocket expenses, CMS is proposing to phase out the IPO list over a 3-year period, beginning with removing 285 mostly musculoskeletal procedures for CY 2026,” A CMS fact sheet detailed. “CMS believes that the evolving nature of the practice of medicine allows more procedures to be performed on an outpatient basis with a shorter recovery time.”
In addition to phasing out the IPO list, the July 15 proposed rule included changes to the Ambulatory Surgical Center Quality Reporting (ASCQR) Program and a positive payment rate update for ASCs.
“For CY 2026, using the hospital market basket update, CMS proposes an update factor to the ASC rates of 2.4%,” the fact sheet continued. “The update applies to ASCs meeting relevant quality reporting requirements. This update is based on the proposed IPPS market basket percentage increase of 3.2%, reduced by 0.8 percentage point for the productivity adjustment.”
What’s more, CMS sided with ASC industry advocates by proposing to continue aligning the ASC update factor with the one used to update hospital outpatient department (HOPD) payments for another year.
Accelerating the shift
By ending the IPO list and adding more codes to the ASC-CPL, CMS would further accelerate the shift of surgical procedures out of the traditional hospital setting and into ASCs.
According to an analysis of the proposed rule by the Ambulatory Surgery Center Association, the July 15 proposed rule – if finalized – would add 276 procedures to the ASC-CPL. Many of those procedures are for codes that ASCA has requested for inclusion, including multiple cardiovascular, spine and vascular codes.
Meanwhile, as part of its elimination of the IPO list, CMS is likewise seeking to push 271 of those codes to the ASC-CPL. As a result, 547 codes would be added to the ASC-CPL for 2026.
“The proposed expansion in surgical procedures that may be performed in ambulatory surgery centers reflects our longstanding belief that the clinical judgment of the medical community is the proper determinant for where patients can receive their care,” ASCA CEO Bill Prentice said in a statement. “This approach, if finalized, will allow many more Medicare beneficiaries to receive safe and effective care in surgery centers and lower costs for both patients and the Medicare program.”
For context, in its final ASC payment rule for calendar year 2025, CMS added just 21 procedures to the ASC-CPL.
The collection of changes included in the proposed rule “significantly strengthens the ASC industry,” Todd Currier, CEO and administrator of Bend Surgery Center, told Ambulatory Surgery Center News in an email.
“This expansion increases clinical capability, supports site-of-service migration and empowers physicians to perform surgeries in cost-effective ASC settings,” Currier said. “These proposed changes enhance access for Medicare beneficiaries, reduce patient out-of-pocket costs and position ASCs to absorb greater surgical volume without compromising safety.”
Changes to ASCQR
The ASCQR Program requires ASCs to report certain quality and safety data. If an ASC doesn’t report the required information, it gets paid 2% less by Medicare. The public can also see how ASCs perform on these quality measures through Care Compare.
As far as new additions to ASCQR, CMS is proposing to add one new measure related to patient understanding of key information related to recovery after a facility-based outpatient procedure.
At the same time, the agency is looking to remove a few measures that many ASC stakeholders opposed.
Those measures CMS is proposing to remove include the COVID-19 vaccination measure, the facility commitment to health equity measure and the social determinants of health measure.
“CMS is removing several burdensome ASCQR measures, such as COVID-19 vaccination and health equity screening, while introducing a patient-centered recovery measure aligned with improved care coordination,” Currier continued. “These updates streamline reporting, reduce administrative burden and reinforce CMS’s confidence in the ASC model.”
ASCA had previously called for the removal of the ASCQR measures CMS is proposing to eliminate.
“ASCA supports meaningful quality reporting that improves transparency, safety and patient care,” Prentice said. “CMS correctly understood that the quality measures proposed for removal did not support this goal and instead added unnecessary burden with little benefit. We look forward to continuing work with CMS on measures that have been tested in surgery centers and will improve quality of care and patient safety.”
