Hospitals nationwide are pulling back from the service lines, and while ASC are theoretically well-positioned to absorb displaced surgical volume, the data suggests otherwise.
Seven hundred twenty rural hospitals, roughly a third of the nation’s rural facilities, are at risk of closing, according to the Center for Healthcare Quality and Payment Reform’s most recent analysis. Of those, 294 face immediate risk of closure within two to three years. More than 40% of rural hospitals lose money delivering patient care, and the federal pandemic assistance many once relied on to cover the gap has ended.
Federal relief isn’t positioned to reverse the trend. The Rural Health Transformation Program is distributing $10 billion a year over five years to shore up rural healthcare access, but a June report from the Commonwealth Fund found that funding will be vastly outpaced by Medicaid, ACA marketplace and SNAP cuts under HR 1, which reach a combined $160 billion in 2029. Nearly half of the 1.65 million jobs the report projects will disappear nationally that year are in healthcare.
Becker’s has tracked 47 hospital department or service-line closures since Jan. 1, most of them concentrated in labor and delivery, behavioral health and primary care rather than surgery. A handful, though, cut directly into ASC territory.
Ogdensburg, N.Y.-based North Star Health Alliance shared plans in June to close its North Country Orthopaedic Ambulatory Surgery Center and North Country Orthopaedic Group, both in rural Watertown, N.Y., within 90 days. The system, which sought bankruptcy protection in February, has already cut more than 100 positions as part of a broader restructuring.
“We recognize that this transition will be difficult for patients, providers, employees and the broader community,” North Star Health Alliance interim CEO Andy Manzer said in a news release announcing the closures. “Our priority is to support those affected, preserve continuity of care wherever possible, and maintain local access to orthopedic services as we continue working to stabilize the health system and build a more sustainable model of care for the North Country.”
Baltimore-based LifeBridge Health is shuttering its Ellicott City, Md., ASC over low procedure volumes, and Fairfield Medical Center in Lancaster, Ohio, is closing its River View Surgery Center ahead of a planned acquisition by Columbus-based OhioHealth.
The regulatory backdrop favors ASCs picking up that caseload. CMS’s three-year phaseout of the Medicare inpatient-only list removes 285 procedures, most of them musculoskeletal, with 266 coming off in 2026 alone, alongside 573 new codes added to the ASC Covered Procedures List.
However, ASCs’ opportunity to pick up cases from shuttered hospital service lines could be complicated by market density. Ninety-four percent of ASCs were located in urban areas in 2024, compared with 6% in rural areas, according to a report from the Medicare Payment Advisory Commission. The states carrying the heaviest hospital closure risk are largely not the states with the densest ASC coverage.
State law compounds the mismatch. Certificate-of-need laws, which require state approval before a new facility can open, remain in effect in some of the most rural states, including Wyoming and Idaho.
When certificate-of-need laws are repealed,capacity tends to follow. Montana repealed its CON law in 2021 and has since seen a 12.5% increase in the number of ASCs, home health agencies and inpatient addiction treatment centers, according to an October report from the Frontier Institute.
Linda Bedwell, CEO of Gillette, Wyo.-based ASCend, told Becker’s that regulatory gap, not a shortage of hospital-shed volume, is the real constraint on rural ASC growth. Her company is a management services organization built to keep rural surgery centers independent and physician-led.
“Unfortunately, many hospital systems are cutting services, leading to healthcare deserts,” Ms. Bedwell said. “ASCs are uniquely positioned to be a solution — providing affordable, sustainable healthcare. That includes everything from Medicare solvency to the financial burden patients feel. ASCs are essential to achieving a value-based care future.”
Even where ASCs can legally open, they face capacity limits of their own. In a third-party survey commissioned by Medely, 83% of orthopedic and spine ASC leaders cited credentialing and verification delays as their top staffing challenge, and 67% said they still track credentialing manually. Federal projections show the orthopedic surgeon workforce shrinking 4.3% from 2025 to 2037 while demand rises 6.4%, and hospitals — which can pay more — are recruiting from the same limited pool of scrub techs, circulating nurses and fluoroscopy technicians ASCs depend on.
The mismatch in shuttered rural hospitals and growing ASCs is increasingly stark. The number of ASCs nationally is growing at roughly 1.6% a year. Rural hospitals are shedding service lines by the dozens in 2026 alone.
Some ASC leaders remain bullish on the regulatory tailwind regardless.
“The expansion of approved procedures is huge — especially cardiac and orthopedic cases,” Tina DiMarino, CEO of Custom Surgical Partners, an ASC company that has developed more than 150 centers, told Becker’s in late 2025. “New CMS codes coming into the ASC space allow both existing and new centers to grow by pulling cases out of inpatient and HOPD settings.”
That growth, though, is concentrated where ASCs already have a foothold: urban and suburban markets with fewer CON barriers and deeper staffing pools. The 720 rural hospitals at risk of closing are disproportionately in states — Texas, Kansas, Oklahoma, Arkansas, Mississippi — where ASC density lags the national average. Whether ASCs can catch the fallout from hospital retreat may depend less on demand or reimbursement policy than on whether rural markets can attract the capital, staff and regulatory clearance to build capacity before the hospitals e are gone.
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.