Narrator
Welcome to the Advancing Surgical Care Podcast, brought to you by ASCA, the Ambulatory Surgery Center Association. ASCA represents the interests of outpatient surgery centers of every specialty and provides advocacy and resources to assist them in providing safe, high-quality, cost-effective patient care. As with all of ASCA's communications, please check to make sure you are listening to or viewing our most up-to-date podcasts and announcements.
Bill Prentice
Hello and welcome to the Advancing Surgical Care Podcast. I'm ASCA'S CEO Bill Prentice, and in just a moment, I'll be joined by Kara Newberry, ASCA's Chief Advocacy Officer. I've asked Kara back to the podcast to do our usual annual review of the 2026 Medicare payment rule that was issued by the Centers for Medicare and Medicaid Services, or CMS, on November 21st. The regulation runs 1,657 pages this year, and as in prior years, it establishes an inflation adjustment for Medicare payments for 2026, the searchable codes that can be performed on Medicare beneficiaries and ASCs, and our quality reporting programs, among other things. So with that brief introduction, Kara, welcome back to the podcast.
Kara Newbury
Thanks for having me, Bill.
Bill Prentice
So, Kara, let's start with the inflationary update and the final rule. Can you give us the top line, but also break down how and why the inflationary adjustment is not an across the board increase, but includes additional factors that ultimately determine what Medicare pays for procedures performed in ASCs?
Kara Newbury
Sure, Bill. So the across the board update is 2.6%. That factors in the 3.3% update minus a 0.7% productivity adjustment. It is the same exact update factor that the hospital outpatient departments will receive because CMS has extended for at least one more year use of the hospital market basket for ASCs. Those who've been around a while know that historically ASCs have been updated based on the consumer price index for all urban consumers, which is typically a lower update. The 2.6% is slightly better than the 2.4% that we saw in the proposed rule. Now, as you mentioned, this is an average across all codes. So for instance, we're seeing for our highest volume code, Cataract 66984, we're seeing a 3.3% update to the positive. Some of the GI codes, 3.62%, which is great, but it's better than that 2.6. Unfortunately, our second highest code by volume, which is an EGD 43239, is seeing a 1.1% decline from 2025.
Bill Prentice
So Kara, you mentioned this, but the cataract code was something that from the proposed rule to the final rule, we saw a really substantial change. Can you go into that?
Kara Newbury
Absolutely. So CMS, as with all of us, I suppose, can make mistakes. And there were a lot of people who were raising concerns about that decrease from ASCA and the ASC community as well as the ophthalmic society in terms of how that could be the case. And so there were some independent analyses done, and CMS agreed. Stakeholders agreed with all of us that there was an error made in calculations. And so they rectified that mistake. And like I said, kind of a 7% shift, which is great because in the proposed role, we thought we were going to get more than a 4% cut to the reimbursement for our highest code by volume by far.
Bill Prentice
Very interesting. And so last thing before we take a quick break, Kara, talk to us about the Medicare rate calculator that Ask has and how members can use that to make sure that they're being reimbursed properly.
Kara Newbury
Absolutely, Bill. And of course, we're scrambling a little bit right before the Thanksgiving holiday here with our rule coming out three weeks later than usual. But we will have, hopefully by the time this podcast runs, we will have an updated 2026 final rate calculator that allows members only to find their local rate because, of course, reimbursement rates are adjusted by a local wage index. So you can search for your own county and find your local rates.
Bill Prentice
Really amazing tool and something, as you mentioned, only available to ASCA members. So thank you for you and your team's work and getting that updated.
Narrator
This recording of the Ambulatory Surgery Center Association is being brought to you by Surgery Partners, a leading operator of surgical facilities and ancillary services with more than 200 locations in 33 states. Surgery Partners offers multiple types of healthcare services that deliver high-quality healthcare in a convenient and cost-effective manner. To learn more, visit SurgeryPartners.com.
Bill Prentice
Kara, let's move on and talk about the ASC covered procedures list. As ASCA members know, the ASC CPL is an exact listing of the procedures the Medicare will pay for in the ASC setting. And a big part of our advocacy efforts at ASC each year is convincing CMS that there are more procedures that can be safely performed in surgery centers. In many instances, these are procedures that are already been performed on the non-Medicare population in our facilities. So allowing the migration of more procedures would give patients more choice and also save Medicare substantial amounts of money since ASCs are generally reimbursed at rates 50% or less than those paid to hospitals. So this final rule responds to many of the arguments that ASCA has been making and also proposes some sweeping changes in the years ahead. Can you break it down for us?
Kara Newbury
Sure. And a lot of this really, we could go back to what was finalized in the 2021 payment rule, which was the last payment rule from the first Trump administration, because a lot of the policies in this rule are extremely similar to that. So one thing that CMS did in the proposed rule and then finalized here is to look at the Code of Federal Regulations language that applies to ASCs and really the thought process that goes behind adding codes. And they removed some exclusionary criteria and moved those to more of a clinical discretion category in the Code of Federal Regulations. So taking out kind of a hard and fast rule that if there is it, if the procedure involves major blood vessels, for instance, that it would be, you know, you know, universally just not excluded, not considered for addition. This gives the discretion to the clinicians on an individual case-by-case basis. And kind of loosening some of those restrictions, CMS added 276 codes to the ASC cover procedure list that were already reimbursed in hospital outpatient departments. Many of those are codes that ASCA had requested in the pre-proposed rulemaking period as well. So we were happy to see that CMS listened to us as well as the cardiology groups and some spine folks to add some of the cardiac ablation codes that we had requested, as well as two lumbar fusion codes that we've been seeking for, gosh, probably about a decade now.
Bill Prentice
That's great. As you said, while we're getting many more codes available to ASCs for reimbursement, the likelihood is that it's going to be a very slow, gradual process for the great majority of those in terms of them moving now or anytime in the near future into our setting, correct?
Kara Newbury
Absolutely. And the codes I was just talking about were the 276 that are currently paid in hospital outpatient apartments. CMS also added 271 codes that are coming off of the inpatient only list as part of a bigger sweeping three-year removal process of the inpatient only list. And especially for the codes coming off the inpatient only list, we're not anticipating a significant shift in volume. Most of those codes were not ones that have been requested for addition to the ASC cover procedure list by our members, maybe just a handful or two. So we don't really see a lot of volume going to shift, especially for those. I think it's more symbolic almost. It's more just a recognition by CMS that they should have put more of the decision making in the hands of the clinicians who are performing these services.
Bill Prentice
That makes a lot of sense. So, Kara, let's move on to quality reporting. I think it bears mentioning that every time we talk about this topic, that ASCA supports quality reporting biases, but only so long as the reporting results in meaningful information for the surgery centers and patients. We've also expressed our concerns to CMS about the amount of reporting requirements that has been kind of lardied into our program over the years and has really made it so burdensome that we were concerned about it impairing the integrity of the entire quality reporting program itself. So, in that regard, I'm pleased to ask you about the details in the changes to the ASC quality reporting program for 2026.
Kara Newbury
Absolutely, Bill. And as we've discussed on prior podcasts and with regard to previous rulemaking, the ASC quality reporting program, which was requested by the ASC community, really have kind of gone off course. It should have benefits that are twofold, obviously benefiting patients and the general public to know about the safety taking place in a surgery center, but also to help the surgery center improve performance. And a lot of the measures that have been considered lately meet neither of those objectives. And so we were happy to see that CMS had addressed some of this in the 2026 final rule. CMS has finally removed the ASC20, which is the COVID-19 vaccination coverage among the healthcare personnel measure. So that is removed effective immediately. And then there had been three new measures that had been finalized in the 2025 rulemaking that have been removed for 2026. And those are the ASC22 through 24, which were health equity measures. That, you know, I'm not going to speak to the value of those measures on their face, but more just the fact that those three measures were never tested in the ASC setting. And ASCA and a lot of other stakeholders questioned the lack of testing, as we're ASCs who don't really have an ongoing relationship with most patients. Were we the appropriate site of service to collect some of this meaningful data for public health? So in addition to the removal of the four measures, which we did anticipate because similar measures were removed from all of the other payment systems that had their rules finalized earlier in the year than ASCs and hospital application departments did. So we weren't necessarily surprised by that. We were pleasantly surprised to see that CMS really took into consideration our feedback about the proposed new measure. The I'm gonna say the whole thing so I don't get it all botched, but the patient understanding of key information related to recovery after a facility-based outpatient procedure or surgery, patient-reported outcome-based performance measure. And if the name of the measure is that burdensome and difficult to say, imagine how implementing the measure itself would have been. But seriously, it is an information transfer, patient-reported outcome performance measure that was supposed to be looking at were ASCs giving the appropriate information to patients post-operatively that they were supposed to be giving. This measure was created and added to the ASC payment system. Once again, not being tested in ASC setting. And there was no research or data that showed that this was a problem in the ASC setting. So we viewed it as a solution in search of a problem. And as such, opposed this measure. And we're happy to see that CMS did not finalize its addition.
Bill Prentice
That's great. And I think I have one last question for you about some additional resources for our members. But I think the other important thing to just mention is that this is, as you noted, the first payment rule in the second Trump term. But how long it took to get the political leadership installed in CMS this spring really means that we didn't really have an opportunity to really talk with them and give them some advice and counsel what we would like to see in this payment rule. So we were more reactive than proactive in that regard because there just wasn't anybody to talk to yet. One way of saying it is that our work on the 2027 payment rule will probably be our best opportunity to really suss out where this administration views ASEs and see how receptive they are to some of the really critical changes that we still need in our Medicare program in order for it to grow and for ASEs to want to embrace seeing more Medicare beneficiaries. Would you agree with that?
Kara Newbury
Absolutely, Bill. And there were big and sweeping changes in this rule, but a lot of them were carry over from the first Trump administration. And so really getting the ASCA top priorities in terms of really stabilizing the payment rates, getting rid of the ASC weight scalar, which we were having some momentum prior to COVID-19. I think that there will be much more of an opportunity in 2027 rulemaking. It's always, I think, a little confusing for folks because once this rule came out, my mind already started going to 2027. And we're still in the year 2025 right now, but that's how we have to approach things because CMS will be writing the 2027 rule in the first quarter of 2026. And in order to keep us on the hospital market basket, which we want to do moving forward in order to fix the weight scaler, get some more codes that we want to see added. We know that there were a lot added, but we didn't get like some hernia codes that we needed off the inpatient only list, some other cardiac codes that we want that are already payable on HOPD. So there's a lot more work to be done. And we do think that we have the ear of some folks within the administration. But as you said, they were still getting up and running when the rules were really being written and debated and edited this year. So we should have much more opportunity in 2027 to make even more headway.
Bill Prentice
The work never ends, and we barely get a chance to catch our breath and we're already on to the next rule. But before we get there, some of the work your team is already working on, are these resources that are available now or soon will be for our members in terms of their understanding of this 2026 final payment rule? Can you give us a sense of what those resources are and where to find them?
Kara Newbury
So absolutely, Bill. I will be updating an analysis that will compare the proposed rule, what ASCA commented in response to the proposed rule, as well as what happened in the final rule. So we'll have that analysis up for our members shortly. In addition, the rate calculator we've already discussed. And then Alex Taira on our team puts together a great resource that has all sorts of different worksheets in the Excel file, everything from codes that are currently reimbursed in HOPDs and not ASCs. And even though there are fewer of those now, based on some of the policies that were finalized in the 2026 rule, there still are some, as well as a worksheet that shows the device intensive codes and just different analyses and information that our members have requested over the years can be found in that worksheet. And of course, I hope that everybody's already looked at the initial rule release that we came out with. We will be putting something in an upcoming focus magazine, another digital debut piece in our online magazine and our webinar. How could I forget? I will be doing a webinar on the rule. So we want to make sure that the information is available in every different format that our members might want to receive it.
Bill Prentice
Well, that's awesome. And again, it just shows you how valuable it is to be an ASCA member because we really put all this effort into trying to make this stuff explainable and easy to find for the ASCA members so that they can work with the Medicare program in the most efficient way possible. So with that, Kara, I want to thank you and the rest of your government affairs team for all the work that you've done on this rule. And a special thanks this year for some really great wins in this final rule. So thank you for that.
Kara Newbury
And thank you, Bill, and thanks to all on the team who worked diligently on a Friday afternoon /evening to get out uh the analysis and some information up on our website and social media right away. It really is always a team effort at ASCA, and we appreciate the support of our members submitting comments as well, the echoed, the ASCA comments. So it's a team effort. And at this time of Thanksgiving, happy to have you, Bill, and all of our members as part of our team.
Bill Prentice
That's very nice to hear. And also, we also have to give special thanks to our ASCA board and our government affairs committee, all the volunteers who also play an important role in guiding us and giving us advice in counsel about what to look out for and what those priorities are in terms of trying to make changes to the Medicare program. So thank you to them as well. And happy Thanksgiving to you, Kara.
Kara Newbury
Thanks, Bill.
Bill Prentice
Now, before concluding, I'd like to also acknowledge the support of our update sponsor, Surgery Partners, a leading operator of surgical facilities and ancillary services with more than 200 locations in 32 states. Surgery Partners offers multiple types of healthcare services that deliver high-quality health care in a convenient and cost-effective manner. To learn more, please visit surgerypartners.com.