CMS is advancing a major step toward site-neutral payment reform in its proposed 2026 Hospital Outpatient Prospective Payment System rule, a move that could redefine how hospitals and ASCs collaborate.
The proposal, which closed for public comment Sept. 15, aims to reduce long-standing disparities in Medicare reimbursement between hospitals and physician offices. CMS estimates that hospitals currently receive about 60% higher payments than physician offices for similar services due to differences in how professional and facility fees are calculated.
Site-neutral payment policies, which would require Medicare to pay the same rate for a service regardless of where it’s delivered, have been a policy focus for years. Lawmakers argue that the current system encourages hospitals to acquire physician practices to capture higher reimbursement, driving up both Medicare costs and patients’ out-of-pocket spending.
“Site-neutral payments are a focus for President Donald Trump’s administration and the current Congress,” said Adam Bruggeman, MD, CEO of Texas Spine Center and chair of the AAOS Advocacy Council, during a keynote at Becker’s 22nd Annual Spine, Orthopedic, and Pain Management-Driven ASC + The Future of Spine Conference in June. “I’ve met with senators who are shaping these policies, and the goal is not to bring up surgery center payments — it’s to bring hospital payments down to surgery center levels,” Dr. Bruggeman said. “That’s going to reshape purchasing, supply chain leverage and how vendors respond when everyone gets paid the same.”
For ASCs and hospitals, site-neutral reform represents both disruption and opportunity. Jenny Bono, administrator of the Joint Replacement Center of Lake Charles (La.) and a former hospital CFO, said hospitals will need to rethink growth strategies and rebuild trust with independent physicians.
“Hospitals need to think strategically about how to team up with ASCs, but the physicians also left hospitals for a reason,” she told Becker’s. “Now, they’ll need to rebuild those relationships so both can collaborate and expand the continuum of surgical care.”
Ms. Bono noted that while many health systems in larger markets have already developed ASC strategies, rural hospitals are only beginning that shift, often as a means of survival.
“Rural hospitals have been focused purely on staying open,” she said. “But I always remind my hospital colleagues — we’re about to be partners again. We need to rebuild those relationships, maybe through co-branded strategies or joint ventures. Site neutrality is going to push that collaboration.”
If finalized, site-neutral payment reform could compress hospital margins while strengthening the competitive position of ASCs as efficient, lower-cost providers. While hospitals may lose a pricing advantage, many could gain partners, and shared incentives, in the ambulatory space.
