Image by fernando zhiminaicela from PixabayIn what can be seen as a victory for ambulatory surgery centers (ASCs), the U.S. Centers for Medicare & Medicaid Services (CMS) on Nov. 21 finalized its proposal to phase out Medicare’s inpatient-only list and open the door for which procedures can be covered in the ASC.
In addition to those moves, ASCs will see an average update of 2.6%, which includes a 3.3% inflation adjustment and a 0.7 percentage-point productivity adjustment.
The ASC community has been advocating for years to move surgical procedures from hospitals to ASCs, Ron Grace, principal at Polsinelli Law Firm, told Ambulatory Surgery Center News. He believes the rule will continue to drive significant growth in ASCs, a trend he has observed over time.
“The final rule signals CMS’s formal commitment to phase out the inpatient-only list, which represents a shift in its approach from past years,” Grace said. “This will lead to more complex procedures that were historically only performed in hospitals now being available in the ASC setting – a significant benefit for patients. From a deal perspective, since the final rule removes uncertainties around borderline cases, it will ease some of the regulatory due diligence work and increase deal certainty, which is positive for M&A.”
ASC operator executives also conveyed optimism regarding the final rule.
“The 2026 final ASC Medicare Coverage Rule demonstrates CMS’s commitment to reimbursing a wider range of procedures that ASCs already perform safely and effectively,” Stacy LaLonde, vice president of payer strategy at Compass Surgical Partners, told ASC News. “The additions are notable: cardiovascular ablations – such as catheter-based treatments for atrial fibrillation – certain spinal fusions, and several previously inpatient-only spine codes, including more complex decompression and stabilization procedures.”
Compass Surgical Partners, based in Raleigh, North Carolina, is an independent provider of comprehensive ASC development and management services, managing a nationwide portfolio of joint ventures with health systems and physicians.
Compass has recently invested in ASCs capable of handling higher-acuity procedures through joint ventures with health systems and physicians.
Some of its recent JVs include Horizon Surgery Center in Northeast Florida and Jersey Shore Ambulatory Surgery Center in Somers Point, New Jersey.
In September, Compass announced a joint venture with Bon Secours Mercy Health in Newport News, Virginia, focused on orthopedic care, including total joint replacements, extremity surgeries, and spine and pain management procedures.
The two organizations also joined with AlignedCardio to open a cardiovascular ASC in Henrico, Virginia. This facility offers a range of procedures, including diagnostic heart catheterization, coronary and peripheral interventions, and pacemaker implantations.
“The approval of cardiovascular ablations stands out the most,” LaLonde said. “We’ve been waiting for CMS to greenlight these since the COVID era, especially given how consistently hospitals have been able to discharge patients the same day. Bringing AFib and other arrhythmia ablations into the ASC setting is a win for patient access and scheduling efficiency.”
In addition to phasing out the IPO list, CMS also followed up on industry feedback regarding removing specific measures from the ASC Quality Reporting (ASCQR) Program.
Specifically, CMS removed measures related to staff COVID-19 vaccination coverage, screening for social determinants of health and facility commitment to health equity beginning with the calendar year 2025 reporting period.
CMS also acknowledged industry comments supporting measure concepts related to well-being and nutrition for future consideration in ASCQR programs. In response, it finalized a proposal to update and codify the Extraordinary Circumstance Exception policy, clarifying that it has the discretion to grant an extension in response to an ECE request for the ASCQR program.
Lingering concerns
While there is much to celebrate in the passage of the final rule, some concerns echo through the ASC community.
Grace highlighted potential changes to the bottom line that new procedures may bring, emphasizing the importance of clear documentation in existing partnerships.
“ASCs will face extra costs to perform the newly eligible procedures,” he said. “This will likely lead to increased capital funding needs from partners, which could put pressure on ASC partnerships, especially when upgrades only benefit a subset of the physician owners. If the governing documents of the ASC partnership are unclear on this issue, it could result in disputes and litigation.”
Reimbursement changes continually challenge the ASC landscape, and payment reductions for specific procedures further intensify that stress.
“One surprise was the payment reductions for CPT 64570, 64580 and 64590 – the codes for peripheral nerve stimulation and implantable neurostimulator procedures,” Lalonde noted. “These are often used for chronic pain management, and the cuts aren’t aligned with the growing clinical need. We’ll need to dig into the rationale behind the decrease to understand whether it’s methodology, data or something else driving the change.”
But some experts believe that ASCs will withstand ongoing changes by embracing adaptability and learning to do more with less.
“The main takeaway for me is that ASCs need to become comfortable with the idea of being adaptable to an ever-changing reimbursement and operational environment,” Michael McClain, managing partner at LeftCoast Healthcare Advisors, said. “With all the regulatory and reimbursement uncertainty we have faced over the past several years, I think it will be difficult to lay out the standard three-to-five-year strategic plan with the same confidence as before.”
LeftCoast Healthcare is an advisory firm based in Renton, Washington, that works with health systems to create and execute short-term and long-term strategies for ASCs.
McClain explained that ASCs and their operators need to get comfortable with the idea of being infinitely adaptable and handling more unpredictable reimbursement expectations in the future.
“While the future looks promising, history has shown us that there is potential for significant uncertainty ahead,” he warned. “So, those ASCs that can quickly adapt, take advantage of reimbursement and operational opportunities, and shift processes to maximize value for their patients and surgeons will ultimately be the winners.”
In addition to these concerns, there’s also the ongoing push from CMS around site-neutral payments.
Industry experts who commented on the final rule noted a significant gap between the proposed physician application payment and the combined facility and physician facility setting payment rates in a hospital outpatient department (HOPD).
The fear is that this disparity will create a strong financial incentive to shift patient care to the more expensive HOPD setting, cascading challenges down to ASCs.
One commenter stated that while it generally supported site-neutral payments, it did not “believe that it is possible to sustain a high-quality health care system if site neutrality is defined as shrinking all payments to the lowest amount paid in any setting.”
The commenter went on to state that CMS should not implement site neutrality in a way that reduces payments to the lowest common denominator and should reinvest savings from lower facility payments into other Part B services, including payments under the physician fee schedule.
