Hospitals aren’t the only providers losing ground in Medicare Advantage networks. As the nation’s largest insurers pull back coverage, narrow their HMO offerings, and walk away from contracts they deem unprofitable, some ASCs are feeling the downstream effects.
Medicare Advantage now covers about 55% of eligible beneficiaries — roughly 35 million people — and is projected to cost the federal government $76 billion more in 2026 than traditional fee-for-service Medicare, according to a March report by the Medicare Payment Advisory Commission.
Unlike hospitals, which can weather contract disputes across a broader revenue base and mount public pressure campaigns, independent ASCs often operate on thin margins and have limited negotiating leverage. Approximately 68% of freestanding ASCs are independently owned, meaning the vast majority have no parent system behind them to push back when a payer decides a contract isn’t worth renewing.
The shifting payer landscape adds more precarity to that position. PPO plan offerings fell 12% year over year for 2026, compared to an 8% decline in HMO offerings, with more than half of PPO reductions coming from zero-premium plans, according to data from Oliver Wyman. For ASC administrators, the potential consequence is HMO plans requiring beneficiaries to receive care from in-network providers except in emergencies, replacing the flexibility PPOs once offered with products that require explicit in-network status to deliver any coverage at all.
That structural squeeze is already playing out in contract disputes across the country. Most major insurers have pulled back service areas and shifted toward narrower HMO plans. In September, Elevance Health axed MA plans it deemed economically unviable, affecting 150,000 members. UnitedHealthcare also expects to lose between 1.3 million and 1.4 million MA members in 2026.
Affiliated ASCs have gotten caught in several high-profile disputes. For instance, UnitedHealthcare and NewYork-Presbyterian have yet to reach a new agreement, and NYP has warned patients that procedures and admissions at its facilities, including affiliated surgical centers, may no longer be covered at in-network rates starting June 1. In South Carolina, Aetna dropped Lexington Medical Center from its commercial and MA networks in 2025. The health system’s own patient notice flagged that its surgery centers would now carry out-of-network costs. BayCare Health System in Clearwater, Fla., faces a similar situation with UnitedHealthcare MA, effective June 1.
Beyond network disputes, ASC physicians and administrators have flagged reimbursement denials, rising implant costs and mounting administrative hurdles as ongoing pressure points.
“With the inflationary curve on the rise and another looming cut to the physician fee schedule, it is imperative that we re-examine our payer contracts with all other payers in our market,” Andrew Lovewell, CEO of Columbia (Mo.) Orthopaedic Group, told Becker’s in 2024. “Many of the Medicare Advantage plans in our market are trying to pay below the Medicare physician fee schedule, and none of them are accounting for the implant costs associated with doing surgery in our ASC. I am also looking for steerage from the payers for ASC strategies in our market. As the low-cost/high-value provider in the market, we should see significant steerage to our facility but have not experienced that yet. With our clinical outcomes both surgically and non-operatively, we are the best value around.”The disruption, naturally, will extend to patients. A Johns Hopkins research letter published Feb. 18 in JAMA estimated that roughly 10% of MA policyholders in nonemployer HMO or PPO plans will face forced disenrollment in 2026, with more than one in five enrollees losing their plans in 12 states, narrowing the pool of covered patients that ASCs can reliably serve.
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.