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The CMS 2026 Proposed Payment Rule for ASCs
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Alex Taira from ASCA breaks down the key takeaways from CMS's 2026 Proposed Payment Rule for ASCs. From reimbursement rates to the ASC Covered Procedures List and quality reporting changes, Alex shares what ASC leaders need to know from the 913-page proposal.
In our news recap, we highlight an AI-JAMA partnership, payer challenges facing anesthesiologists, tips to prevent cyberattacks, and a breakthrough device preserving donor organs.
ASCA Resources:
- Proposed Rule Highlights
- Propsed Rule Webinar on 7/22/25
- ASCA’s 60-Second Survey
- National Advocacy Day
News Stories:
- JAMA signs multi-year deal with OpenEvidence
- The payer issues pressing anesthesiologists
- Offensive Mindset: Preventing Cyberattacks
- ‘Life-saving’ organ-preserving device wins major award
Brought to you by HST Pathways.
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Transcript
Introduction and Episode Preview
00:00:01
Speaker
Welcome to This Week in Surgery Centers. If you're in the ASC industry, then you're in the right place. Every week, we'll start the episode off by sharing an interesting conversation we had with our featured guest.
00:00:12
Speaker
And then we'll close the episode by recapping the latest news impacting surgery centers. We're excited to share with you what we have. So let's get started and see what the industry's been up to.
CMS 2026 Proposed Payment Rule Discussion
00:00:28
Speaker
Hi everyone, here's what you can expect on today's episode. Alex Tyra is the Associate Director of Public and Regulatory Affairs at ASCA, and he joins us today to walk us through the CMS 2026 proposed payment rule for ASCs.
00:00:43
Speaker
CMS just released their 913-page document on July 15th, and there are some really exciting proposed updates for reimbursement rates, the ASC-covered procedures list, and the quality reporting program.
00:00:56
Speaker
Alex is a wealth of knowledge, as always, and shares exactly what ASC leaders need to know. In our news recap, we'll cover a new AI startup that just signed a multi-year deal with the Journal of American Medical Association, payer issues pressuring anesthesiologists, the latest tips to protect yourself from a cyber attack, and of course, end the new segment with a positive story about a game-changing device that preserves donor organs.
00:01:23
Speaker
I hope everyone enjoys the episode, and here's what's going on this week in Surgery Centers.
00:01:32
Speaker
Alex, welcome to the podcast. Thanks for having me, Erica. I know we've had you on before, but just in case some of our listeners missed that episode, can you please share a little bit about the work you do at ASCA?
00:01:45
Speaker
Sure. So I'm ASCA's Associate Director of Public and Regulatory Affairs. I've been part of the government affairs team here for over eight years now. primarily working on federal regulatory policies, so mostly Medicare related stuff, but anything that the federal government does that could affect surgery centers.
00:02:03
Speaker
And more recently, dipping my toes in some communications and public affairs related work. So really great to be here on the podcast. Perfect. So this is obviously a very busy week for you because CMS just released on July 15th their 2026 proposed payment rule for ASCs.
00:02:22
Speaker
So I want to spend the bulk of the conversation covering that, and then we can wrap up with a few other things that ASCA has going on. So let's start with the reimbursement rate. What are they proposing for 2026? Okay.
00:02:36
Speaker
Sure. The basic here is that Medicare is proposing a 2.4% payment update for 2026. So that's a national average. Some codes will see different from that, but on average 2.4%. And that's the same update that hospitals will see.
00:02:52
Speaker
CMS, the agency that runs Medicare, will continue to update surgery centers with the same update as hospitals for at least one more year. And we're hoping you know one of our big advocacy pushes is to continue that update alignment for the indefinite future.
00:03:06
Speaker
Just as a refresher as well, Medicare updates these payments every year in the summer. So this is just the proposed rule. We'll have an opportunity to comment on it. And then the final rule where the final payment update, which could differ a little bit from 2.4%, as well as any you know changes that they see based on comments that'll happen right around November first Yeah. And I was trying to go back through my notes. Last year, the final rule was 2.9. Is that, do you remember? That sounds right. Yeah. Okay. It's roughly around here every year. Yeah.
00:03:37
Speaker
Yeah. Okay.
Significant Updates to ASC Procedures List
00:03:39
Speaker
Cool. And how about the ASC covered procedures list? Because I know this is one everyone's watching for every year. Yeah, I think this is the major headline. I'm sure, i mean, anyone who got our payment rule alert or has read any of the kind of coverage of the rule, this is the major headline.
00:03:56
Speaker
So just as some kind of background, Medicare has historically separated procedures out into things that can be performed in a specific site of service. Some procedures are inpatient only.
00:04:06
Speaker
Some procedures are for the hospital outpatient department, but not for the ASC. And then there are procedures that have been explicitly performed approved for performance in surgery centers, which we call the ASC-covered procedures list.
00:04:19
Speaker
So this year, major additions, we're seeing 276 codes proposed to the ASC-covered procedures list. And then on top of that, CMS is proposing to phase out the inpatient-only list completely over the next three years, and that's going to begin with 285 procedures Again, this is all proposed.
00:04:38
Speaker
Of those 285, 271 would go straight onto the asc cover procedures list So in total, codes, new codes that could be reimbursable in as season and twenty twenty six compared to twenty twenty five i mean just a huge update as a comparison last year there were twenty one codes added to the ASC cover procedures list. 19 of those were dental codes.
00:05:02
Speaker
So obviously, this is just a massive update for surgery centers. This will allow a ton of new procedures to be performed. The codes being added include a bunch of codes that ASCA has advocated for in the past, including codes and specialties like cardiovascular and spine surgery. So yeah, big news here.
00:05:20
Speaker
when I first saw that email come through, was like, ah that must be typo. There is no way. Cause I was reading that 547 number and I was like, there's just no way that that's right, but it is.
00:05:33
Speaker
So that's amazing. Yeah. And I think, We're obviously happy and supportive of this proposal and the codes. That's a huge number of codes. We'll be breaking that down further in the coming month. I think it also importantly reflects the overall philosophical advocacy that ASCA has done in recent years, which is a shift away from CMS kind of making medical determinations on specific codes, what can be performed where, and moving that decision-making towards the clinicians. And I think we see that rhetoric reflected in the rule.
00:06:03
Speaker
Yeah, absolutely. And I think especially like on the cardio front, and same as you guys, like we're talking about that all the time. And when we pulled data on just like net revenue per case broken out by specialty, like cardio is just, I think it was the second highest just behind ortho.
00:06:20
Speaker
So the potential there is really exciting. Totally. And we did a Medicare cost savings analysis back in 2020 that we're looking at refreshing now, somewhat based on these shifts in Medicare.
00:06:33
Speaker
And we saw huge potential savings in future years. And it was mostly driven by these kind of more complex surgical specialties, cardiovascular, spine, ortho. which we know are moving more to the outpatient space.
00:06:45
Speaker
And I think one of the big barriers was Medicare gatekeeping some of these procedures and not allowing them to migrate according to clinician decision-making. And so hopefully this is one step away from moving more of those procedures over.
00:06:59
Speaker
Yeah, very cool.
Changes in Measures and ASCA's Response
00:07:01
Speaker
So I know everyone is also always waiting for updates on the quality reporting program. So what's going on there? Yes, so I think the main takeaway is that there are four measures proposed for removal, most notably maybe the COVID-19 vaccination measure, which I know has caused a lot of hassle for facilities in the most recent years.
00:07:23
Speaker
The other three measures are measures that were proposed for addition finalized for addition, let me say, last year. So that's one, facility commitment to health equity measure, and two, social drivers of health measures.
00:07:34
Speaker
um There is also a measure proposed for addition, but that's down the road. So I think we'll be commenting on it, but I don't think it's mandatory until 2028 or something like that. I was surprised to see the ones from last year already being proposed for removal. Was that just because of all the pushback or new administration? what What's going on? I mean, if I can talk candidly, it's definitely a change in the administration. and this is kind of representative of the overall tone of the administration switching over. Health equity was a huge advocacy point for the Biden administration.
00:08:08
Speaker
and we know that it's definitely less prioritized under the new administration. yeah. We were kind of expecting it. We'd seen some of these measures go away already in previous rules, like the hospital inpatient rule previously. So we were expecting this to happen.
00:08:20
Speaker
We had already opposed any of these measures addition last year. So definitely happy that they're not being included and in the future ASC quality reporting program. Yeah. And just at a very high level, the one they're proposing, first of all, it's the longest name I think I've seen yet for measure. Yeah, I know. Basically outcomes?
00:08:39
Speaker
Is that the gist? Yeah. Yeah, you know, i haven't actually taken a very good look at it, so I think we'll have to
ASCA's Resources for Understanding Proposed Rules
00:08:46
Speaker
look more at that. But, you know, let me see if I can get this name here.
00:08:50
Speaker
The patient understanding of key information related to recovery after a facility-based outpatient procedure or surgery, patient-reported outcome-based performance measure. I mean, it's quite a mouthful. It's hilarious. i think Yeah, outcomes generally, I said, voluntary reporting in 2027 and 2028. Okay.
00:09:08
Speaker
okay um So there's a bit of runway here. I'm not sure exactly what our comments will be related to this, but I'm sure the ASC Quality Collaboration and Kara and Gina will have comments for that for sure.
00:09:18
Speaker
Sure. All Anything else in the document? I know it just came out that but that we should be made aware of at this time. No, I think that's it for now. But I will say, you know, there's obviously a lot to consider. We've only had, what, 48 hours here, a little less to read through it, but we'll have a lot more resources, including a more in-depth breakdown and of the rule for ASCA members, a proposed rule rate calculator. I'm sure that'll have a lot of interest because people want to see what are the rates for these 547 new codes.
00:09:49
Speaker
And we'll have template letters so that people can comment on the ah rule themselves alongside our comments. So a lot more to come in the next couple months. Comments are due for anyone interested and September 15th. So that's a Monday.
00:10:02
Speaker
if you want to submit your own comments and support or opposition to any of the proposals, you can certainly do that. Perfect. And I think I saw you guys are doing a webinar next week. We do this every year, but for ASCA members, just kind of like a 30 minute high level run through.
00:10:16
Speaker
Carol will break down the rule as much as she can, a little closer look at some of the codes being affected, like the top 100 codes, top 10 codes, that kind of thing. So definitely if you're an ASCA member, tune into that. Yeah, perfect. I'll put a link in the episode notes to that as well so people can find it.
Medicare Physician Fee Schedule and Health Tech Advocacy
00:10:32
Speaker
Okay. What else is going on with ASCA? What are you guys up to? Yeah, so there's a lot going on. I will just mention that the Medicare physician fee schedule proposed rule also released last week. So this is the clinician side.
00:10:47
Speaker
We comment every year because even though the policies in that rule don't directly affect our members of the surgery centers themselves, um they do strongly affect the clinicians that work in ASCs.
00:10:58
Speaker
So we tend to follow the lead of the specialty societies in terms of their comments on the policies. So we'll be talking to all of our specialty organization partners, and I write comments to that every year. One thing that I did want to note is there is a new proposal for a mandatory ambulatory specialty model included in that. So I expect that'll be kind of the main portion of our comments to that rule.
00:11:20
Speaker
Also wanted to mention that we submitted comments to a health technology ah RFI about a month ago now. And that was kind of a broad request for information, I would say, broken out with specific questions for different stakeholders.
00:11:34
Speaker
We only responded to a couple, but I think it was also important to just continue our touch points with the federal government, keeping them informed about what the state of health technology in the AAC industry is and why some of the things that they're considering might not be good to apply the surgery center.
00:11:54
Speaker
Got it. And what about ah the 60-second survey that's currently open? Yeah, so we have a 60-second survey currently open. I'll probably close that next Friday, it'll be 25th.
00:12:07
Speaker
And this is an EHR-related survey. We do a bunch of different surveys, but this one in particular I think is pretty important. We run a similar survey 2021 and also and usually get about...
00:12:19
Speaker
350 responses. It's not scientific, but maybe 5% sample of the industry or something like that. This survey is pretty important because I think it'll inform our EHR-related advocacy with the federal government, as well as just general information about what is the status of health information technology in the ASC industry. you know We've seen a lot of growth in that space just in the past five, seven years.
00:12:43
Speaker
but still kind of fragmented, definitely behind the penetration that we're seeing in physician offices and hospitals. So again, 60-second survey, it's called that because we don't want people to have to pull any reports or anything to respond. It should be just simple. I think this one's five questions, plus a couple demographic questions, just like what's your state and ownership structure, that kind of thing.
00:13:05
Speaker
And once that survey closes, I'll write a piece for Digital Debut, which is AFC Focus's online weekly publication. that will break down all the results and we'll also be including those results in our comments and advocacy, I'm sure.
00:13:18
Speaker
Yeah, I actually love this series that you do. I find that even though it is a small segment of the industry, just the insights are always so interesting. And obviously, we're excited to see the results of this one in particular. Definitely.
00:13:32
Speaker
And you have an exciting advocacy day coming up. Tell us more about that.
National Advocacy Day and Local Engagement
00:13:38
Speaker
Yes, I really appreciate the opportunity to talk about National Advocacy Day. So this is the day where we bring members from the AAC community to Washington, D.C. to meet with your state representatives, state senators, and talk about the issues that affect your work.
00:13:52
Speaker
So, for example, we have a bill currently introduced, MASCA supported, that would fix a copay issue in Medicare, basically in other sites of service.
00:14:04
Speaker
Medicare's coinsurance is for beneficiaries is capped at the inpatient deductible, but this doesn't happen for patients that receive services in ASCs, which means that certain expensive procedures could be really expensive for patients. So this bill would end that.
00:14:20
Speaker
That's just an example of something that you could talk about in your congressional office. We'll also have other things to talk about. And just honestly introducing your legislators to surgery centers. that you know We work in this industry, so we think that everyone knows about ASCs, but you'd be surprised going into these offices how little congressmen and their staff really understand about surgery centers and the place that we have in the health ecosystem.
00:14:44
Speaker
Really just can't overstate what an impactful day this is And I think if you've talked anyone who's been to a National Advocacy Day before, they would say the same thing. So this year, this day is in the fall, which is the first time I can remember this happening for a while, September 15th to 17th.
00:14:59
Speaker
And registration will close on August 15th. So I can send you a link to that as well. This year, we do have a room block at a hotel as well as a Delta discount code. So travel should be a little bit less expensive.
00:15:10
Speaker
And I was just checking with Maya this morning. i think we have about 60 registrants from 24 different states so far, obviously still a month to go. And you'll be grouped by states so that you can meet with the legislators that make an impact most directly and talk about the communities that you're in.
00:15:27
Speaker
And you'll also have a group of leader, someone from ASCA or maybe a board member going around with you. There will be a briefing the night before. So plenty of support. Again, just such a cool opportunity to be on the Hill and advocate for not just your facility, but really the entire industry.
00:15:42
Speaker
Yeah, I love that you guys do this. And it it really makes such a difference because before I got involved in the industry, I did not know the difference between even like a physician's office and a surgery center and a HOPTI and inpatient. It's nuanced, but obviously like the advocacy work that you guys are doing is having an impact. Look at the covered procedures list now. Look at just the influx of interest in the industry, all the above. So it all pays off.
00:16:12
Speaker
Yeah. And even separate from the impact, it's really just such a cool experience. And I think you feel the importance when you're you know walking around the hill and you walk into your senator's office and you meet with their staff. It really is just a great experience all around. And the fact that it's for our industry, that benefits of the facilities and the people you work with, it's just such a great day.
00:16:33
Speaker
Yeah. All right, Alex, we do this every week with our guests. What is one thing our listeners can do this week to improve their surgery centers? Kind of continuing on this thread, and I may have said this in a previous since appearance, but I think get involved in local advocacy.
00:16:50
Speaker
ASCA is really nationally focused, but I think we've seen a big increase in stuff happening at the state level, at the local level that affects ASEs. You know, that's reimbursement issues, prior authorization, EHRs, you name it. We're seeing a lot more issues pop up at the state level.
00:17:06
Speaker
And I think one of the best things you can do to make sure that these things aren't burdensome, that your state governments are understanding about your place and their healthcare delivery system is to get involved.
00:17:17
Speaker
Whether that's your state association, maybe hosting a facility tour from one of your state, your local officials coming to the fly-in. These things really make a big difference. And I think we're trying to keep track of the federal stuff.
00:17:30
Speaker
But a lot of the times we need help from the grassroots level to combat some of these issues that are happening at the state level. So it really can't be overstated. if you have a state association, you have a local organization, please get involved because these things make a huge difference.
00:17:45
Speaker
Agreed. Thank you so much for all of your work and for coming on today. We really appreciate it. Thanks, Erica. Thanks for having me.
00:17:57
Speaker
As always, it has been a busy week in healthcare, so let's jump right in.
AI in Clinical Insights and Anesthesia Models
00:18:01
Speaker
AI startup Open Evidence just signed a multi-year deal with the Journal of the American Medical Association to use their full text and multimedia content, so that would be 13 medical journals in total, and it's AI-powered search platform for doctors.
00:18:18
Speaker
Now, if you haven't heard of Open Evidence yet, their tool is designed to simplify and summarize peer-reviewed medical info for clinicians with the intent of offering fast answers and insights at the point of care.
00:18:31
Speaker
So it's already gaining traction. More than 50,000 verified clinicians sign up each month and over 10,000 hospitals and medical centers actively use the platform.
00:18:42
Speaker
The company says it's handled more than 7 million clinical consultations a month and now claims a third of U.S. doctors are on board. So Open Evidence also secured a similar agreement with the New England Journal of Medicine to help power its clinical key AI tool.
00:19:00
Speaker
These partnerships bring decades of trusted evidence-based research into a format that is fast, digestible, and tailored to real-time clinical decisions. And Open Evidence is currently valued at $1 billion. dollars So what does this mean for ASCs?
00:19:17
Speaker
The pressure is certainly on for surgery centers to stay current. With AI tools like Open Evidence gaining traction, ASC leaders should really explore how decision support tools can streamline care, reduce risks, and empower physicians with on-demand answers.
00:19:33
Speaker
So you could probably expect more clinicians to rely on platforms like this and be looking to use tech and their workflows as much as possible.
00:19:43
Speaker
All right, second story, anesthesia providers, as we know, are facing a tough mix of payer issues and staffing challenges, all while demand for their services continue to rise.
00:19:55
Speaker
So Dr. Udaya Patakhandla, my apologies if I'm saying that wrong, is an anesthesiologist at Baylor Scott and White Health. And they recently spoke with Beckers about the top insurance-related concerns affecting anesthesiologists today.
00:20:12
Speaker
So here are his three concerns. Private payers are benchmarking their rates against already low Medicare reimbursements, which is pushing anesthesia payments even lower.
00:20:25
Speaker
Payers are not complying with the No Surprises Act, especially around independent dispute resolutions where payers are supposed to honor arbitration outcomes, but they often don't. And third, in some cases, payers have recently decided to stop reimbursing for ASA physical status modifiers and certain technique-related modifiers, including things like controlled hypotension and field avoidance techniques.
00:20:50
Speaker
At least one payer even tried to cap reimbursement based on CMS-determined time values, although that policy was rolled back for now. One example of this would be UnitedHealthcare, noting that while they weren't the first to cut modifier payments, they're following a troubling trend among large payers.
00:21:08
Speaker
He linked these cuts to shareholder appeasement and broader financial pressures, noting that physicians are being squeezed on all sides. So now, as you know all too well, anesthesia reimbursement is under fire. It's not even just reimbursement. It's staffing. It's these stipends. It's all these different models now. you know The pendulum in the ASC industry has really swung after COVID in terms of how we are kind of managing and maintaining our relationships with anesthesia groups.
00:21:38
Speaker
So Now's a great time to really assess your current anesthesia models if you have not already and see where you can adjust. Maybe it's just better understanding your payer policies, negotiating contracts, or changing staffing models.
00:21:52
Speaker
And for the month of August on this podcast, we'll actually be focusing on different anesthesia solutions and how to evaluate which model will be in your ASC's best interest.
00:22:03
Speaker
So make sure to check out those episodes.
Cybersecurity and Technological Innovations
00:22:07
Speaker
All right, for our third story, this is my regular reminder that your ASC needs to be proactively prepared for a cyber attack.
00:22:16
Speaker
Cyber attacks aren't a matter of if, they're more of a matter of when now. And for ASCs, it likely won't be a targeted attack. Most hackers use AI-driven tools to scan the internet and exploit weak points, hitting small and large facilities alike.
00:22:33
Speaker
So if your surgery center thinks it's too small to be a target, you are certainly wrong. One ASC recently had 15,000 patient records exported at 2 a.m. on a Saturday, all while their firewall looked fine.
00:22:46
Speaker
The breach took 15 days and cost $2.5 million dollars to resolve. So in this article by Outpatient Surgery magazine, they quickly summarized five action items that ASCs can focus on.
00:23:00
Speaker
First, train everyone. Most breaches start with a staff member clicking a bad link. The second, follow up. Use simulated phishing emails to test what your team has actually learned.
00:23:12
Speaker
The third is to scan daily. Real-time vulnerability scanning can spot issues before hackers do. Number four, use MDR. Manage detection and response tools. Ensure twenty four seven monitoring.
00:23:26
Speaker
And then fifth, consider autonomous remediation. This new tech automatically patches vulnerabilities in your software covering about 70% threats.
00:23:36
Speaker
So again, just your reminder that cybersecurity is no longer optional. Surgery centers need to shift from reactive to proactive strategies. Leaders should invest in both smart tech and strong training because prevention is way cheaper and less chaotic than $2 million dollars ransomware recovery.
00:23:54
Speaker
And never mind the bad press your ASC will receive, which will impact physician reputation and case volume.
00:24:02
Speaker
But to end on a positive note, a game-changing device that preserves donor organs by replicating conditions inside the human body has won the Royal Academy of Engineering's Mac Robert Award.
00:24:16
Speaker
The device mimics a life inside the body versus keeping the organs on ice, allowing donor organs to be preserved for longer, which can be a matter of life and death in certain emergencies.
00:24:28
Speaker
Doctors have already been praising the invention as life-changing. The device was invented at the Oxford Institute of Biomedical Engineering, and it has been used in some 6,000 liver transplants already.
00:24:43
Speaker
So a huge congrats to everyone involved. This seems like a really great invention that can help save lives. And that officially wraps up this week's podcast to thank you as always for spending a few minutes of your week with us.
00:24:57
Speaker
Make sure to subscribe or leave a review on whichever platform you're listening from. i hope you have a great day and we will see you again next week.