CMS’ 2027 payment rule for ASCs, proposed July 2, projects a 2.4% effective update overall — the same headline figure hospital outpatient departments are set to receive.
But that number masks sharply different outcomes depending on procedure type, according to Kara Newbury, chief advocacy officer of the Ambulatory Surgery Center Association, who recently joined Becker’s to break down the proposal and how it will impact ASC leaders and physicians.
Here are nine things to know about CMS’ proposed rule:
1. The 2.4% headline update hides a wider range. CMS’ effective update for ASC-covered procedures ranges from a 4% decrease to a 35% increase, depending on the code and specialty group range.
“Although CMS says it’s an increase overall of 2.4%, it’s obviously going to vary greatly, depending on what procedures you’re looking at,” Ms. Newbury said.
2. Orthopedic, device-intensive codes are among the rule’s biggest winners. Total knee replacement is set to see nearly $400 more, total hip replacement nearly $500 more, and total shoulder replacement almost $1,000 more between 2026 and 2027 rates, Ms. Newbury said. Newer cardiovascular codes the ASCA had pushed CMS to add are also proposed for a substantial increase.
3. Cataract, GI and pain management codes are facing cuts. Some of the highest-volume procedures performed in ASCs are set to see a negative update under the proposal.
“It’s going to be very difficult for our facilities who are performing cataract surgeries, who are doing GI procedures, because they are all set to see a negative update,” Ms. Newbury said. “Costs are not going down. Their cost of equipment is not going down, the cost of personnel, nursing, other staff just running the facility is not going down.”
4. The gains and cuts are connected. CMS maintains budget neutrality within the ASC payment system, so when new, higher-cost codes such as knee, hip and shoulder replacements see a substantial bump, the money has to come from somewhere else in the system.
“If we see a huge influx in some of these newer codes, like we saw with knee, hip, shoulder, it can unfortunately cut into the reimbursement rate for other codes,” Ms. Newbury said.
5. The ASCA sees a partial win in the market basket update. CMS proposed continuing to apply the hospital market basket update to ASC rates for an additional year, keeping the ASC payment methodology aligned with hospital outpatient departments rather than switching to a different index.
“We would like to see that extended longer,” Ms. Newbury said. “We would like to see that made permanent for as long as hospital outpatient departments are updated based on the inpatient hospital market basket. We think ASCs should be as well, since our payment system is closely tied to HOPD.”
6. CMS proposed adding 618 codes to the ASC-covered procedure list, including four hernia codes the ASCA had specifically requested. A prior change to how hernia codes are sized based on the hernia’s dimensions had inadvertently pushed some procedures onto the inpatient-only list, even though ASCs had previously been performing them.
“That was a good pickup for us,” Ms. Newbury said.
7. A colonoscopy quality measure is being removed. CMS proposed removing a colonoscopy follow-up measure from the ASC Quality Reporting Program after both that program and its hospital-outpatient counterpart topped out on the metric, meaning there was little room left to show improvement.
8. In the long term, the ASCA warns facilities could shift away from Medicare volume. If reimbursement does not keep pace with rising costs, ASCA sees some facilities eventually reconsidering how much Medicare volume they take on for procedures where they have flexibility in their payer mix.
“”There’s not going to be as much of an incentive to do Medicare volume if that doesn’t work for certain procedures,” Ms. Newbury said. She noted limits to that shift, though: Cataract surgery, one of the procedures facing a proposed cut, is performed overwhelmingly on Medicare beneficiaries who have no other payer to shift toward.
9. A fraud provision buried in the home health rule could still affect ASCs. A provision tied to the geographic concentration of providers appeared in the proposed home health rule, not the ASC rule, and does not mention ambulatory surgery centers in its text.
It’s the kind of provision, Ms. Newbury said, that ASC leaders and physicians should be tracking regardless of which rule it technically lives in, since a policy aimed at one provider type can still extend to others.
The ASCA is preparing formal comments urging CMS to reconsider the codes facing cuts. The group is also watching for the release of the 2027 physician fee schedule rule, which will affect ASC physician owners directly.
“We will obviously be arguing for higher reimbursement rates,” Ms. Newbury said. “We will be arguing for better stability in the payment system. Something needs to be done overall to how Medicare pays.”
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.