What ASCs should watch in the 2027 final rule

More procedures, tighter economics? What ASCs should watch in the 2027 final rule

On paper, the proposed 2027 Medicare payment rule could create new service-line opportunities for ambulatory surgery centers (ASCs). The Centers for Medicare and Medicaid Services (CMS) proposes adding 618 codes to the ASC Covered Procedures List (ASC-CPL), continuing the phaseout of the inpatient-only list, and applying a 2.4% payment update for ASCs that meet quality-reporting requirements.¹

But those broad proposals don’t show how payment rates could change for individual ASC procedures. The Ambulatory Surgery Center Association (ASCA) supports expanding the range of procedures eligible for ASC care, while cautioning that the proposed payment methodology could reduce reimbursement for many high-volume services.

With the final rule expected later this fall, ASC owners and operators may want to look beyond the number of newly eligible procedures and the overall update factor. Changes to individual payment rates, procedure mix, and the treatment of device-intensive services could determine whether expanded eligibility supports sustainable service-line growth or adds pressure to existing procedure economics. 

How ASC payment affects patients and Medicare spending

Those economics have implications beyond an individual center. When clinically appropriate procedures can be performed in  ASCs  rather than HOPDs, Medicare and patients may realize substantial savings. An ASCA-commissioned analysis by KNG Health estimates that procedures performed in ASCs instead of HOPDs generated $5.1 billion in Medicare fee-for-service savings in 2024.² Patients may benefit, too: when Medicare pays less for a procedure in an ASC, the portion the patient is responsible for may also be lower.

For smaller ASCs, changes in Medicare reimbursement may be harder to absorb. According to ASCA’s comment letter, 6,640 Medicare-certified ASCs were operating as of June 2026, and more than half had two or fewer operating rooms.³ These facilities may need the same equipment, devices, implants, and supplies as hospitals but may have less leverage to negotiate prices or secure bulk discounts.

Payment policy therefore affects more than an individual center’s financial performance. If reimbursement does not adequately cover the cost of providing care, an ASC may be unable to accept additional Medicare cases. That could limit the number of patients who can receive appropriate care in a lower-cost setting, as well as the potential savings for Medicare.

More procedures could become eligible for ASC care

CMS’s proposal would give physicians more flexibility to determine where surgery can be performed safely and appropriately. For 2027, CMS proposes removing 637 services from the inpatient-only list and adding 618 codes to the ASC-CPL.⁴

The two changes are related but not interchangeable. Removing a service from the inpatient-only list would allow Medicare to pay for it in a hospital outpatient department when outpatient care is clinically appropriate. Adding a code to the ASC-CPL would allow Medicare to pay for the procedure when it is performed in an ASC. Neither change would require a procedure to move out of the hospital. The appropriate setting would still depend on the procedure, the patient’s needs, and the physician’s clinical judgment.

ASCA supports the proposed expansion and the greater use of ASCs for clinically appropriate care. The organization’s concern is whether payment rates will make that care financially feasible. Eligibility determines whether Medicare can pay an ASC for a procedure, but the payment amount may not cover all the resources required to perform it.

For owners and operators, that means assessing each newly eligible procedure against physician demand, expected patient volume, available capacity, staffing, equipment, credentialing, and required investment.

Why a 2.4% update does not mean every payment rate increases

The proposed 2.4% update is not a promise that Medicare payment for every ASC procedure would rise by 2.4%. It is one part of a larger calculation. CMS arrived at the figure by taking a projected 3.2% increase in hospital operating costs and subtracting a 0.8 percentage-point productivity adjustment.⁵

Three elements help determine what an ASC would ultimately receive for a procedure:

• The annual update adjusts the base amount CMS uses to calculate ASC payments.
• The procedure’s relative weight reflects how resource-intensive the service is compared with other procedures.
• Budget-neutrality adjustments redistribute payment across the ASC system so that changes in procedure weights do not increase Medicare’s total projected spending.

The ASC weight scalar is part of that third step. CMS uses this multiplier to keep projected ASC spending from rising or falling solely because procedure weights change. As a result, an individual procedure’s rate could decrease even though the overall annual update is positive.

For financial forecasting, owners should not apply the 2.4% update uniformly across their Medicare business. The effect of the final rule will need to be modeled code by code using the ASC’s actual Medicare volume and procedure mix.

ASCA argues that this adjustment suppresses ASC rates and increases the payment difference between ASCs and HOPDs. According to the organization, the 100 highest-volume ASC codes represent 87% of Medicare fee-for-service ASC volume. ASCA projects that 85 of those codes would receive lower reimbursement under the proposal. It also projects that average ASC reimbursement for those 100 codes would fall from 53% of the corresponding HOPD rate in 2026 to 44% in 2027.⁶

ASCA has asked CMS to eliminate the ASC weight scalar. Alternatively, the organization proposes calculating budget neutrality across the ASC and HOPD systems together rather than adjusting ASC payments separately. ASCA argues that either approach would make it more financially feasible for appropriate procedures to move to lower-cost ASC settings.

Why payment changes to high-volume procedures matter

For many specialty ASCs, high-volume procedures anchor case mix, operating-room utilization, and fixed-cost recovery. Cataract surgery, gastrointestinal procedures, and  pain-management services  may also provide the financial stability needed to invest in additional service lines.

In ASCA’s analysis of the proposed rates, all 10 of the highest-volume ASC codes would receive lower reimbursement under the proposal. The codes include cataract removal, colonoscopy, upper gastrointestinal endoscopy, and spinal injections. Even a relatively small change can become significant across many cases. For example, a hypothetical $20 decrease applied to 1,000 procedures would mean $20,000 less in annual Medicare reimbursement, even if the center’s costs remained unchanged.

For owners evaluating a newly eligible service, the relevant question is not whether its payment is higher than that of a routine procedure. It is whether the payment covers the full cost of the case, including devices, implants, specialized equipment, supplies, staffing, and other required resources.

Together, lower payment for frequently performed services and the higher costs associated with some newly eligible procedures create a potential tension. ASCs may gain permission to perform a wider range of procedures while receiving less reimbursement for services that make up much of their existing Medicare volume. The effect will vary by center and specialty, making procedure-level analysis essential.

Six questions to ask when the final rule arrives

The final rule will include hundreds of codes and payment rates, but not every change will have the same effect on every ASC. Leaders can focus their review by asking six questions:

1. Which procedures were added to the ASC-CPL? 

   Assess physician demand, expected patient volume, available capacity, staffing, equipment, credentialing, and required investment.

    

2. How did payment change for the center’s highest-volume procedures?

   Compare the final 2027 rates with current reimbursement and model the changes across the ASC’s highest-volume Medicare procedures.

    

3. What happened to the ASC weight scalar?

   Determine whether CMS retained, modified, or eliminated the adjustment—and how that decision affected procedure-level payments.

    

4. How are device-intensive and multiple procedures treated?

   Compare the final payment with the full cost of devices, implants, supplies, anesthesia, staff time, and other resources required to perform each service.

    

5. Did ASC quality-reporting requirements change?

   Review any measures CMS added, removed, delayed, or revised. Determine what information the center must collect and which teams or systems will be responsible.

    

6. What must change before January 1, 2027?

   Identify affected codes, update financial forecasts, review clinical and billing workflows, and communicate relevant changes to physicians, staff, and revenue-cycle teams.

To answer these questions, ASC leaders will need visibility into procedure volume, reimbursement, costs, claims performance, and their ability to staff and deliver services.

Prepare to evaluate the full picture

CMS’s proposal could give physicians and patients more options for clinically appropriate outpatient care. Whether those options translate into more care delivered in ASCs, however, will depend on more than the number of procedures added to the ASC-CPL. The final payment rates — and how they compare with the cost of providing each service — will matter just as much.

ASC owners and operators do not need to wait for the final rule to begin preparing. They can establish a baseline by identifying their highest-volume Medicare procedures, modeling proposed rates against actual case mix, calculating the full cost of newly eligible services, and identifying any investments or operational changes those services would require. Access to clinical and financial information cannot change Medicare payment policy, but it can help leaders understand how that policy affects their organizations and make more informed operational decisions.

Learn how connected clinical and financial workflows can help ASC leaders better understand performance across the patient and revenue cycle.