Ambulatory surgery centers (ASCs) continue to expand their footprint in Medicare while delivering care at significantly lower cost than hospital outpatient departments (HOPDs).
That’s according to a recent status report from the Medicare Payment Advisory Commission (MedPAC). The report offers a high-level overview of ASC utilization, spending, quality and geographic distribution under fee-for-service Medicare.
MedPAC is an independent congressional advisory body that analyzes Medicare payment systems and makes recommendations to Congress on how to balance beneficiary access, quality of care and fiscal sustainability. While MedPAC does not set policy directly, its analyses and recommendations influence U.S. Centers for Medicare & Medicaid Services (CMS) rulemaking and legislative proposals.
The ASC status report is part of MedPAC’s regular monitoring of Medicare provider sectors. Unlike the commission’s formal recommendations, this presentation-style update is descriptive rather than prescriptive.
Even so, it lays the groundwork for future policy debates, particularly around payment rates and cost reporting.
ASC use and spending continue to climb
Among its highlights, MedPAC found that Medicare use of ASCs increased again in 2024, with 6,436 centers nationwide serving 3.4 million fee-for-service beneficiaries and performing roughly 6.4 million procedures. Total Medicare spending on ASC services reached $7.5 billion, including beneficiary cost-sharing.
Payments per beneficiary receiving ASC services rose sharply, climbing to $2,211 in 2024, up from $1,954 in 2023 and $1,458 in 2019 – a roughly 13% year-over-year increase. MedPAC attributed the growth to a combination of higher service volume and rising payment rates, even as ASC payments remain substantially lower than hospital outpatient rates.
The commission noted that ASC payment rates are, on average, about 44% lower than HOPDs for similar services.
Moving forward, the sector is likely to see further Medicare-spend increases tied to outpatient migration, particularly as higher-acuity procedures move into ASCs.
Growth remains concentrated
Despite diversification efforts, ASC volume remains heavily concentrated in a small number of procedures. MedPAC found that seven procedures accounted for roughly half of all ASC volume in 2024, with cataract surgery alone representing about 18%.
At the same time, the report highlighted rapid growth in total hip, knee and shoulder replacements performed in ASCs. The trend reflects both clinical advances and CMS’ gradual expansion of the ASC covered-procedures list.
MedPAC also found that the share of fee-for-service Part B beneficiaries treated in ASCs rose to 12.1% in 2024, with procedure volume per 1,000 beneficiaries increasing by more than 3% year over year.
Musculoskeletal, cardiovascular and other higher-acuity service lines are positioned for growth in 2026 and beyond, with operators looking to capitalize on emerging opportunities tied to CMS rulemaking and state-level regulatory changes.
“The biggest force shaping ambulatory surgical care in 2026 will be the continued shift of many higher-acuity case types into ASCs,” DJ Hill, former CEO of Compass Surgical Partners and the company’s current board chair, said in ASC News’ executive outlook. “With the recent publication of the final OPPS rule, CMS reimbursement policies are catching up to what surgeons have shown for years – that a broad range of spine, cardiovascular, musculoskeletal procedures can be delivered safely, with high quality, and at a lower cost for insurers and for patients.
MedPAC: Cost data gaps remain a looming policy issue
Another takeaway from the report is MedPAC’s continued concern over the lack of ASC-specific cost data. Unlike hospitals and other Medicare providers, ASCs are not required to submit cost reports, according to MedPAC.
MedPAC reiterated that without cost data, CMS cannot accurately assess ASC payment adequacy or develop an ASC-specific market basket to update payment rates. The commission has previously recommended that ASCs be required to submit cost information, a proposal that has drawn opposition from industry groups.
The report also showed mixed quality performance results under the ASC Quality Reporting Program in 2024, with slight increases in hospital visits following certain orthopedic and urology procedures.
