Colonoscopy is the most frequently performed procedure in ASCs, and while the demand is rising, the economics of performing it are getting worse.
Colonoscopy accounts for 13.4% of all ASC procedure volume nationally, generates more Medicare savings than almost any other outpatient procedure, and is the only screening tool that both detects and prevents colorectal cancer in a single visit.
Beginning Jan. 1, Medicare reduced payments for GI endoscopy services performed in ASCs by an average of 8%, while simultaneously increasing reimbursement for the same procedures performed in office-based settings. That directional split, lower rates for ASC-based colonoscopy and higher rates for office-based, has significant implications for the GI ASC model.
The long-term erosion
The 2026 cut arrived on top of a decade of cumulative reductions. Between 2018 and 2023, inflation-adjusted Medicare payments to physicians for colonoscopies declined by more than 22%. From 2007 to 2022, unadjusted GI reimbursement declined 7% and adjusted reimbursement dropped 33% over that same period. Reimbursements for colonoscopy with biopsy specifically fell 38% over 15 years.
The cost side has not cooperated. Labor costs, anesthesia stipends and supply expenses have all risen materially over the same period.
“Especially if the procedure is complex and prolonged, we are left with a situation where the reimbursement just about covers the overhead costs,” Curuchi Anand, MD, a gastroenterologist affiliated with UMass Memorial Medical Center, told Becker’s in 2022.
The 2026 split creates a structural problem for ASCs
The policy logic behind the 2026 payment adjustment is that office-based endoscopy is undervalued relative to ASC-based endoscopy. CMS moved to correct that by raising office rates and cutting ASC rates, which will shift volume incentives toward settings that are structurally less capable of handling complex or higher-acuity GI cases.
A practice performing 900 colonoscopies per year under CPT 45378 could see a $45,891 increase in Medicare payment in an office-based setting for that procedure alone, according to the American Gastroenterological Association. The same practice performing those colonoscopies in an ASC absorbed an 8% cut. Over the course of a year, the financial gap between the two settings for identical procedures has widened materially.
Converting to office-based endoscopy works best for low-acuity ASA I and II patients undergoing short diagnostic or surveillance procedures, according to AGA guidance. It is not feasible for every practice or every case type. The 2026 payment structure does not distinguish between those case types in its reimbursement signal.
The demand side makes the economics harder to ignore
GI procedures account for 28.3% of all Medicare and Medicaid ASC volume, making gastroenterology the dominant service line in the ASC space, according to a MedPAC report. Colonoscopy with lesion removal, upper GI endoscopy with biopsy, and colonoscopy with biopsy were among the most frequently billed ASC procedures in 2023.
Colorectal cancer is the top cancer killer of adults under 50. Early-onset CRC rates are rising. The ACS updated its screening guidelines in May to include new blood-based and stool-based alternatives, and the AGA has positioned colonoscopy as the only test that both detects and prevents cancer in a single procedure. Demand for the procedure is not in question. The question is whether the reimbursement structure will sustain the infrastructure needed to meet that demand in an ASC setting.
In the ASC setting, the average colonoscopy costs $1,136, compared to $1,608 in the hospital outpatient department, according to Side Car’s cost of care calculator. According to a Blue Cross Blue Shield Association analysis, colonoscopy screenings cost 32% more in a hospital than in an ASC, and diagnostic colonoscopies cost 58% more in a HOPD than in an ASC.
For GI-focused ASCs, the 2026 cut is one more weight on an already compressed margin. Anesthesia stipends jumped from 28% to 44% of ASCs in a single year. Labor costs are up. Supply costs are up. And the foundational procedure that drives GI ASC volume is now reimbursed at a lower rate in their setting than in a physician’s office.
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.
