The gradual migration of procedures to the outpatient setting has hit a new pace in recent years, as CMS approves new codes for the ASC setting and the need to lower costs while expanding care access aligns more closely with outpatient flows.
Yet numerous disruptors — from workforce shortages to payer complications — continue to hold back the outpatient migration in 2026.
Coinsurance payments
For many procedures, Medicare beneficiaries are responsible for paying 20% of the procedure costs — but this responsibility is capped in the hospital setting. The cap for 2026 is $1,736 — but unlike ASCs, hospitals are “made whole” by the Medicare program after the patient cap is met, Kara Newbury, chief advocacy officer for the Ambulatory Surgery Center Association, told Becker’s.
“I call it a double whammy,” Ms. Newbury said. “Because not only is the policy incentivizing procedures to go to the higher cost setting, but then they’re also being made whole, so the portion they would have gotten from the beneficiary, they get from the Medicare program.”
ASCs are likely to see this policy affect higher-cost procedures, particularly in cardiology, orthopedics and those involving devices or implants, she added. For example, according to CMS’ procedure price lookup tool, a total knee replacement costs $10,552 in the ASC, compared with $14,275 in the HOPD.
Despite the lower overall cost, patients pay $142 more in ASCs due to the lack of a coinsurance cap. The issue disproportionately impacts those without supplemental insurance coverage, which, according to ASCA, is “an area where a racial disparity in access has been observed, with only 40% of Black beneficiaries being covered by supplemental insurance in contrast to 72% of white beneficiaries.”
Misconceptions about outpatient care
Marcelo Hochman, MD, a Charleston-based independent physician and former president of the Independent Doctors of South Carolina, told Becker’s that the common mistake physician leaders make when considering moving their work to an outpatient setting is “thinking [they] have to replicate a big system,” Dr. Hochman told Becker’s.
Instead, physician owners are better off starting single-specialty practices as they learn more about ASCs, allowing them to match infrastructure to their patient volume and specialty, without shouldering the overhead or complexity of a full-scale hospital department. But all-or-nothing thinking prevents some physicians from ever getting started, Dr. Hochman said.
“The perception that it’s either too risky or too operationally overwhelming — that you’d have to duplicate something massive — just isn’t accurate,” he said.
Site-neutrality
Site neutrality, or rather, a lack thereof, has kept ASCs in a negative loop of payment disparities as they operate at a lower cost than hospital outpatient departments but have historically been paid at a lower rate.
CMS’ 2026 Hospital Outpatient Prospective Payment System rule took a major step toward site-neutral payment reform, aiming to reduce the long-standing Medicare payment gap between hospitals and physician offices.
Hospitals currently receive about 60% higher Medicare payments for similar services due to facility-fee differences — a structure lawmakers say incentivizes hospital acquisition of physician practice. New site-neutrality reforms are expected to lower hospital payments, rather than boost ASC payments to HOPD levels.
“I’ve sat down and met with the senators that are putting [site-neutral payment policies] together, and I will tell you that the goal is not to bring up surgery center payments. The goal is to bring down hospital payments to surgery center levels, and what does that mean at a large scale for purchasing,” Adam Bruggeman, MD, CEO of Texas Spine Center and chair of the AAOS Advocacy Council, told Becker’s. “We talked about the [group purchasing organizations] and having different segments, but what happens when everyone gets paid the same? How is that going to impact vendors and are they going to dig in?”
Acuity mismatches
Bruce Feldman, former administrator of Eastern Orange Ambulatory Surgery Center in Cornwall, N.Y., and founder of an ASC consulting firm, said hospitals are increasingly offloading higher-acuity cases to ASCs to free up OR capacity, without fully accounting for whether those settings can safely handle them.
“Hospitals today are pushing more and more cases that were traditionally done in a hospital setting into the ASC because they want to free up their ORs,” he told Becker’s. “But an ASC isn’t necessarily in the best interests of every patient.”
The migration of higher-acuity procedures from hospital outpatient departments to ASCs accelerated throughout 2024, according to a VMG Health report. Orthopedics, cardiology and advanced spine were identified as the primary growth drivers, fueled by technological advances and demand for patients with significant comorbidities, advanced age or complex procedural needs are better served in a hospital environment, Mr. Feldman said, a distinction he argues is getting lost as financial pressures drive the push toward outpatient migration.
“That envelope is being pushed right now,” he said. “We’re seeing higher-acuity cases moved into ASCs, and most ASCs are not equipped to handle that level of complexity.”
The consequences, he warned, are already beginning to show. Mr. Feldman recounted a recent personal experience: His cousin went into an ASC for a cardiac ablation, developed atrial fibrillation on the table and had to be transferred to a hospital after the anesthesiologists on site were not prepared to perform a cardioversion.
“That’s the kind of scenario we’re going to see more of,” he said.
Some ASC operators say they are already taking steps to ensure patient selection keeps pace with the influx of complex cases. Stephanie Perna, MSN, RN, Deerfield, Ill.-based SCA Health’s regional vice president of operations for Kentucky, told Becker’s the company is tightening how it evaluates patients who may be on the edge of ASC eligibility, incorporating in-person assessments for patients with borderline ASA risk to ensure appropriate placement.
Anesthesia workforce shortages
Shortages of anesthesia professionals — including both physician anesthesiologists and certified registered nurse anesthetists — continue to present a consistent obstacle for ASC leaders looking to expand service lines.
The average anesthesia reimbursement rate in 2023 was $21.88 per unit, a 5.5% decline from 2019, according to medical billing servicer Coronis Health. Similarly, Medicare reimbursement fell from $22.27 per unit in 2019 to $21.12 in 2023, a trend highlighted in a VMG Health report.
Over the past 23 years, inflation-adjusted Medicare reimbursement for select pain management procedures has decreased an average of 2.81% annually, according to the American Association of Physician Leadership.
“At the same time, Medicare patients are often older, sicker and more resource-intensive, which increases clinical complexity while reimbursement moves in the opposite direction,” Michael Bernard, MD, an anesthesiologist and chief medical officer of Ambulatory Anesthesia Solutions in West Bloomfield Township, Mich., told Becker’s. “This widening mismatch is a major driver behind the surge in anesthesia stipend requests from ASC-based anesthesia groups, especially as more procedures become eligible for the ambulatory setting.”
Commercial payers have also tried to cut certain anesthesia reimbursements, notably those allocated to CRNAs. In October, UnitedHealthcare reduced reimbursement for QZ-billed CRNA services by 15% in selected states and removed payments tied to several add-on and qualifying-circumstance codes.“Continued decrease in reimbursement certainly puts a strain on anesthesia practices at a time when overhead continues to increase,” Jason Habeck, MD, assistant professor of anesthesiology at the Minneapolis-based University of Minnesota, told Becker’s.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.