The Medicare Payment Advisory Commission’s June 2026 report to Congress focuses on broader Medicare payment incentives, enrollment complexity, improper payments and Medicare Advantage’s effects on provider finances.
In the report, MedPac continues to build its argument that fee-for-service Medicare creates financially driven distortions when it pays more for the same procedure depending on site-of-service, advocating instead for site-neutral payments.
Here are five takeaways from the report for ASC leaders to know:
1. MedPAC’s site-neutral recommendation, which it reiterated in the June 2026 report’s payment incentives chapter, calls on Congress to more closely align payment rates across ambulatory settings for services that are safe and appropriate to provide in all of them.
2. Under one approach MedPAC has outlined, hospital outpatient department rates and ASC payment rates would align with freestanding physician office rates for 57 service categories most commonly delivered in that setting — including clinic visits, drug administration and certain imaging services. For nine additional service categories most commonly provided in ASCs, such as certain colonoscopies, the recommendation would bring HOPD rates down to ASC rates.
3. The financial stakes are significant. The same hip replacement performed at an ASC costs Medicare roughly $3,500 less than in an HOPD, and estimates of potential savings from broader site-neutral reforms run into the tens of billions annually.
4. CMS has already moved incrementally. In the calendar year 2026 outpatient prospective payment system final rule, CMS extended site-neutral payment to physician-administered drugs at certain off-campus hospital outpatient departments, a change it estimated would save $290 million in its first year. But MedPAC’s recommendation would go substantially further, and it requires congressional action that has not materialized.
5. The June 2026 report also flags the broader payment distortion problem in terms that apply directly to the ASC context: FFS Medicare’s use of multiple payment systems with different data sources and formulas allows rates for the same service to diverge based on site of care. MedPAC frames this as a design flaw, not an inherent feature of the program, and one that could be corrected.
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