ASC leaders have been increasingly vocal about the miscalculation of treating the center as one enterprisewide profit-and-loss statement instead of a collection of distinct businesses, each with its own economics.
As reimbursement tightens and cost structures shift, some of the industry’s most financially disciplined operators say the fix isn’t a new service line or a fuller schedule but rather a different unit of analysis altogether.
That reimbursement squeeze isn’t anecdotal. CMS’ calendar year 2026 ASC payment final rule, released Nov. 21, 2025, set overall ASC payments to rise just 2.6% — down from the 2.9% increase for calendar year 2025 and the 3.1% increase for calendar year 2024, according to VMG Health’s 2026 Healthcare M&A Report. Three straight years of moderating reimbursement growth, against labor, implant and anesthesia costs that keep climbing, is the gap a case-level view is designed to catch before it shows up as a surprise at year-end.
“Many centers prioritize surgeon preference, historical case mix and full OR schedules, instead of focusing on which cases, payers and physicians contribute most effectively to financial performance,” Judith Gary, executive director of Algonquin Road Surgery Center in Lake in the Hills, Ill., told Becker’s. “Success is no longer determined by efficiency alone, but by ensuring the right procedures are performed at the right reimbursement levels. Top-performing centers demonstrate selectivity in case mix, discipline in payer relationships and a consistent emphasis on margin optimization.”
That selectivity is easy to state as a principle and hard to operationalize, which is why Scott Kulstad, CEO of St. Paul (Minn.) Eye Clinic, said the center itself needs restructuring around it. He recommends running an ASC “like a portfolio of micro-businesses across service lines, not a single enterprisewide profit-and-loss,” with a case-level contribution margin model built and updated monthly.
Mr. Kulstad also urges leaders to treat payer contracting as a core competency “not an annual event,” and to hire talent that protects it — a recognition that the micro-business model only works if someone is actively managing the revenue side of each line, not just the cost side.
The largest ASC operator in the country is already running its business this way in practice, if not by name. Saum Sutaria, MD, chairman and CEO of Tenet Healthcare — parent company of United Surgical Partners International, the country’s largest outpatient surgery center operator — told investors on Tenet’s third-quarter 2025 earnings call: “The ASC opportunity has many dimensions, given the growth platform we have built at USPI. We’re focused on higher-end specialties and partnerships with our more productive health system partners.”
Per VMG Health’s report, USPI added 211 new service lines in 2025, up from 162 over the same period in 2024, expansion aimed specifically at higher-acuity, higher-margin specialties rather than simply adding volume.
Peter Bravos, MD, chief medical officer of Sacramento, Calif.-based Sutter Health Surgery Center Division, points to why the old enterprisewide view can mask the problem this model is designed to catch.
“When an ASC hits 80% utilization, leadership tends to celebrate, yet margins may be flat or compressing,” he said. “The mistake is optimizing for volume instead of value capture. Case mix drift toward lower-margin work crowds out spine, total joint and complex ophthalmology, leaving real margin on the table.”
A single utilization number can look healthy at the enterprise level while individual service lines are quietly eroding, which is precisely the blind spot a case-level model is built to expose.
“Volume fills rooms,” Dr. Bravos said, “but margin builds value.”
Michael Sheerin, CEO of Leawood, Kan.-based NueHealth, has seen what happens when growth outpaces that discipline.
“ASCs sometimes add new service lines without fully understanding reimbursement, cost structure, denial risk or payer requirements — resulting in increased volume but declining profitability,” he said. “Successful expansion requires clear visibility into true margins, payer alignment before launch, controlled pilots and operational readiness. Without this rigor, growth can quickly become a financial liability rather than an asset.”
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.
