Image by Rita Kazinczi from PixabayThe Centers for Medicare & Medicaid Services’ (CMS) proposal to phase out the Medicare Inpatient Only (IPO) list over three years has stirred conversation among surgery center operators, with many seeing the potential to expand case volumes.
And while such a move could be a boon for the ambulatory surgery center (ASC) industry overall, some types of facilities may see a magnified benefit.
“[The removal of the IPO list] has opened up the doors, so to speak, for those higher-margin and higher-acuity procedures,” Ardent Health CEO Marty Bonick said during the company’s second quarter 2025 earnings call last week.
For rural operators in particular, the change could mean an opportunity to keep more patients local and expand their surgical offerings. Linda Bedwell, CEO of ASCend Specialists, a management services organization focused on rural ASCs, told ASC News she believes the industry is prepared for the shift.
“I think surgery centers are ready,” Bedwell said. “ … We’re already doing some higher-acuity type procedures here anyway, and the procedures that will be coming to the surgery center will be cases that are healthy enough to be able to qualify for the criteria for an outpatient procedure and discharge to home.”
Still, operators should carefully assess the financial viability of newly eligible cases, she said.
“If a procedure is going to cost us $20,000 to perform from the supplies that are needed, but we’re only going to be reimbursed $15,000, we’re going to have to think strongly about whether we’ll continue to do that,” Bedwell said.
These types of cases will require operators to return to insurers to ensure they receive appropriate reimbursement, including negotiating carve-outs when necessary. And commercial negotiations can be just as challenging as Medicare rates, Bedwell said.
“Back in the day, you used to be able to find a CEO of insurance companies – contact [number] or email,” she said. “[Today], the people that are sitting at the top don’t really hear what’s going on on the ground level.”
But the IPO list proposal is not just about new procedures; it’s about ASC operators stepping into a stronger advocacy role, Bedwell said.
“We can complain to Medicare as much as we want, but conglomerately, those decisions come from Washington,” she said. “So we need to encourage all the surgery centers to really step up on their advocacy side so that those legislators can hear what’s going on. I have learned that those legislators actually do listen.”
Working with hospital systems is another key factor in rural outpatient facilities taking on more procedures, Bedwell said.
“[The regulation is] not going to take these procedures from the hospital, but it is going to impact hospitals,” she said. “I think the biggest challenge for this is rural health care hospitals can be really slow to embrace what surgery centers bring to the table.”
Still, there is room for improvement in building bridges between the two settings, Bedwell said.
“I think we could have a little bit more cohesiveness between the rural health care hospitals and surgery centers,” she said. “I think we would both be a lot more successful in tearing down those walls.”
For rural states like Wyoming, where there are only about 20 surgery centers, 11 hospitals and 16 critical access hospitals serving roughly 500,000 residents, expanding the list of eligible outpatient procedures could make a meaningful difference, Bedwell said.
“We, of course, need all of those hospitals,” Bedwell said. “We don’t want any of them to go anywhere because they’re strategically placed in areas that have the highest need for it.”
At the same time, with procedures staying in the hospital, the patient doesn’t get the value-based dollar-for-dollar savings that they get from having a procedure in a surgery center, Bedwell said.
“Surgery centers get reimbursed 50% less, rule of thumb, than a hospital does across the board,” she said.
This has taught the outpatient industry, through the years, to watch expenses closely, Bedwell said.
“Hospitals, in general, through the last decades have not had to be so cautious,” she added. “Now, with the way that health care is changing, all of the hospitals are struggling.”
While she does not expect the IPO list removal to spark a sudden need for more ASCs in rural areas, Bedwell said it could help keep existing centers at full capacity.
“If this isn’t going to [create] the ability to add more cases, it certainly is going to help keep us more efficient,” she said.
