CMS added 619 procedures to the ASC covered procedures list for 2027. The weight scalar will determine which centers can afford to take them on.
The final 2027 OPPS and ASC rule, released Nov. 4, gives ASCs that meet quality reporting requirements a 2.3% payment update, effective Jan. 1. But, for most centers, the scalar matters more. CMS finalized it at 0.814, down from 0.872 in 2026, a drop that cuts pay on many of the high-volume procedures ASCs perform every day.
“The weight scalar adjustment effectively penalizes us on the very procedures that form the backbone of our center’s volume,” Janet Carlson, MSN, RN, CEO and founder of Vertex Surgical Solutions in Columbia, S.C., told Becker’s.
ASC payment rates start from hospital outpatient weights. CMS then multiplies those weights by the scalar so total ASC spending stays budget neutral. When hospital outpatient weights rise, the scalar falls, and ASC rates for most procedures fall with it.
That chain reaction drove this year’s cut. CMS’ 340B drug payment cut is budget neutral, so the savings flow back into non-drug hospital outpatient rates, and higher hospital weights pushed the ASC scalar down. Under the July proposal, the Ambulatory Surgery Center Association estimated that 85 of the top 100 ASC procedures would take a cut and that ASC pay would slip to 44% of hospital outpatient rates, from 53%.
The final version offered little relief. CMS eased the 340B cut to average sales price minus 28%, yet the scalar landed at 0.814, only slightly above the 0.809 it proposed. The higher hospital rates also lift the device portion of device-intensive ASC procedures, which leaves procedures without implants to absorb the offset.
Not every center loses. Overall, CMS expects Medicare ASC payments to grow 2% next year, led by a 6% gain for musculoskeletal and nervous system procedures and 5% for cardiovascular procedures. Eye and gastrointestinal procedures, which together account for 38% of Medicare ASC spending, each are expected to drop 1%.
Single-specialty centers without device-heavy cases have little to offset the cut. Nate Kalkwarf, executive director of Iowa City (Iowa) Ambulatory Surgical Center, said his center’s case mix is split entirely between ophthalmology and ENT.
“We don’t perform the device-intensive procedures necessary to offset the 340B weight scalar penalty,” Mr. Kalkwarf said. “Ultimately, we are taking a net reimbursement cut on our core volume precisely when our staffing, anesthesia and supply costs are climbing.”
GI leaders have put dollar figures on the cut. Under the proposed rates, colonoscopy with lesion removal and colonoscopy with biopsy would each lose about $20 per case, and EGD with biopsy about $15, Julie Jackson, chief administrative officer of Milwaukee-based GI Associates, previously told Becker’s.
Nirav Shah, MD, president of the DDA division and chief medical officer of clinical research at Wyomissing, Pa.-based US Digestive Health, said the scalar “reduces reimbursement for many of the high-volume procedures that are the foundation of ASC operations.”
“CMS continues to encourage the migration of care to the outpatient setting, which we support, but that strategy is difficult to sustain when reimbursement for the procedures we perform every day continues to decline,” Dr. Shah said.
Larger multispecialty operators have more room to adjust. Neil Tanna, MD, senior vice president of system perioperative services and strategy at New Hyde Park, N.Y.-based Northwell Health, said the expanded covered procedures list supports the system’s goal of moving complex surgeries out of main operating rooms, even as the scalar cuts pay on certain high-volume cases.
“Multispecialty centers with robust orthopedic and device-heavy caseloads are better positioned to weather these compressed margins, forcing us to meticulously balance our clinical case mix to remain sustainable,” Dr. Tanna said.
ASC groups asked for relief in several forms, and CMS said no to all of them. The agency kept the scalar, kept 340B in the ASC rate calculation and rejected a proposal to scale device costs that would have lifted the scalar to roughly 0.865. CMS said that option would have reduced the device portion of payments by about 14%.
Some physician leaders want the scalar gone entirely.
“We need to get rid of the scalar once and for all,” Adam Bruggeman, MD, CEO and surgeon at San Antonio-based Texas Spine Care Center, previously told Becker’s.
The agency’s reasoning hinged on missing data. Because ASCs do not submit cost reports, CMS said, it cannot tell whether current rates cover ASC costs or whether centers need a separate update method. It left the door open to alternatives in future rules.
For 2027, ASC rates stay tethered to hospital payment policy, including 340B decisions aimed at hospitals rather than surgery centers.
“Other than the IPO list changes, the 2027 final rule disappoints in that it maintains the status quo for surgery center policy,” ASCA CEO Bill Prentice said in a news release shared with Becker’s.
Ms. Carlson said the 2.3% update “does not reflect the inflationary environment we are operating in.”
“For ASCs to continue providing a safe, cost-effective alternative to the hospital setting, the payment structure must reflect the true cost of care,” she said.
CMS’ projected 2027 Medicare payment changes for eight high-volume ASC procedures, with estimated 2026 payments in parentheses:
- Cataract removal, CPT 66984 ($1.38 billion): Down 2%
- Total knee arthroplasty, CPT 27447 ($529 million): Up 4%
- Spinal cord stimulator generator, CPT 63685 ($421 million): Up 13%
- Colonoscopy with lesion removal, CPT 45385 ($273 million): Down 1%
- Colonoscopy with biopsy, CPT 45380 ($253 million): Down 1%
- EGD with biopsy, CPT 43239 ($174 million): Down 1%
- Lumbar transforaminal epidural injection, CPT 64483 ($108 million): Down 3%
- Rotator cuff repair, CPT 29827 ($97 million): Up 35%
The effects may not stop at Medicare. Many commercial ASC contracts are pegged to Medicare rates, so cuts on common codes could resurface at the negotiating table.
Litigation is another wild card. Hospital groups including the AHA, 340B Health and America’s Essential Hospitals argued in comments that the proposed 340B cut was unlawful. If a court changes the 340B rate, the scalar would shift with it.
Until then, operators are planning around case mix.
“We are eager to bring these new procedures into our center, but the financial pressure on common, high-volume cases makes it increasingly difficult to maintain the high-quality, efficient environment that makes ASCs the preferred site of service,” Ms. Carlson said. “We will need to be extremely strategic with our case mix to offset these margin pressures.”
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.
