New Jersey lawmakers in 2025 rewrote the rules for how ASCs are taxed, and the model is drawing attention from other states facing similar Medicaid funding pressures.
Healthcare attorneys say the regulatory wave it represents is far from finished.
What New Jersey changed
Then-Gov. Phil Murphy signed AB 5809, the Healthcare Finance Enhancement Act, on June 30, 2025, significantly expanding the universe of New Jersey ASCs subject to annual assessments and changing the economics of those assessments, according to Holland & Knight’s analysis of the legislation.
The mechanics involve three simultaneous changes that pull in different directions depending on a center’s revenue profile. The law reduces the assessment rate from 2.95% to 2.5% of gross receipts beginning July 1, 2025, but eliminates the $350,000 annual cap that had previously limited exposure for high-volume centers, according to Garfunkel Wild’s analysis of the legislation. The Office of Legislative Services estimates an approximate $63 million increase in state revenue as a result of removing the cap and expanding the assessment to facilities previously exempt.
The third change is the most consequential for smaller operators. Beginning in the state fiscal year 2026, one-room surgical practices that were previously exempt from the assessment are no longer exempt, according to the bill text. The law also extends the assessment to facilities with less than $300,000 in annual gross receipts, which were previously below the threshold, per the New Jersey legislature’s bill summary.
“The most concerning ASC trend on my mind in New Jersey is the change to the ambulatory care facility tax,” Meg Stagliano, MSN, RN, president of the New Jersey Association of Ambulatory Surgery Centers, told Becker’s. “Increasing the ambulatory care assessment on surgery centers places significant strain on their financial stability, reducing resources available to reinvest in patient care. With more dollars diverted to cover the tax, centers face difficulty adopting innovative technology and advancing clinical practices that directly enhance the quality of patient care.”
Certain ASCs may benefit from the reduced assessment rate and pay lower annual assessments than in prior years. However, high-volume ASCs may end up paying more than they have in prior years due to the removal of the cap, according to Holland & Knight. Collectively, the changes under AB 5809 will impact most ASCs operating in New Jersey.
Massachusetts: PE oversight, new licensing requirements
New Jersey’s assessment expansion was not an isolated move. In January 2025, Massachusetts Gov. Maura Healey signed the Act Enhancing the Health Care Market Review Process, which substantially expanded the Department of Public Health’s authority to monitor healthcare transactions and activities involving private equity investment. For the first time, post-transaction monitoring lasting up to five years after closing was implemented. The law also authorized the DPH to regulate office-based surgery centers and require licensure for centers performing liposuction or other surgical procedures using more than minimal sedation, according to Holland & Knight’s analysis.
The multistate pattern
Both states are part of a broader regulatory wave that Holland & Knight flagged in an October 2025 alert covering six states — New Jersey, Massachusetts, North Carolina, Georgia, Iowa and Tennessee — that have enacted or advanced significant ASC legislative and regulatory changes over the prior 18 months. The common thread across the states is not a single policy model but a shared direction toward more oversight, more reporting, more financial exposure for ASC operators who had previously operated in relatively light regulatory environments.
For ASC operators in other states, the New Jersey and Massachusetts moves are worth watching as a leading indicator. Both states used existing healthcare finance and regulatory frameworks as the vehicle, not new ASC-specific legislation, which means similar expansions are available to any state with an existing ambulatory care assessment or healthcare market review authority on the books.
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