Medicare Updates for Ambulatory Surgery Centers in 2026

Ambulatory Surgery Centers (ASCs) continue to play a critical role in delivering efficient, high-quality care as healthcare shifts toward outpatient settings. The CY 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Payment System Final Rule (CMS-1834-FC) introduces several important updates that directly affect ASC reimbursement, quality reporting, procedure coverage, and compliance requirements.

Our executive overview highlights the most impactful changes ASCs should understand as they prepare for calendar year 2026.

Who Is Affected by the CY 2026 Updates?

The CY 2026 Medicare updates impact a broad range of providers and stakeholders, including:

• Ambulatory Surgery Centers
• Physicians and specialty providers
• Hospital outpatient departments
• Suppliers serving Medicare beneficiaries

Understanding how these changes affect coding, billing, and operational workflows is essential to maintaining compliance and protecting revenue.

Key Payment Updates and Policy Changes

ASC Payment Rate Increase

For CY 2026, Centers for Medicare and Medicaid Services finalized a 2.6 percent increase to ASC payment rates. This update reflects a projected 3.3 percent hospital market basket increase, offset by a 0.7 percent productivity adjustment.

ASCs that successfully meet quality reporting requirements will receive the full increase. Facilities that fail to meet these requirements will see a 2 percent reduction to the payment update.

ASC Conversion Factor

• $56.322 for ASCs meeting quality reporting requirements
• $55.224 for ASCs that do not meet reporting requirements

The conversion factor is used to calculate payment rates for covered surgical procedures performed in ASCs.

Hospital Price Transparency Requirements

Beginning April 1, 2026, hospitals must disclose additional payer-specific pricing data, including the 10th percentile, median, and 90th percentile allowed amounts when negotiated charges are based on percentages or algorithms. The rule also introduces a mandatory executive attestation of accuracy and requires hospitals to encode organizational NPIs.

Two-Midnight Rule Policy Continuation

CMS is continuing its policy exempting procedures removed from the Inpatient-Only list from certain medical review activities related to the two-midnight rule. These procedures remain protected from site-of-service claim denials and related RAC reviews until claims data shows they are more commonly billed in the outpatient setting.

ASC Quality Reporting Program Changes

Participation Requirements

ASCs must continue to participate in the ASC Quality Reporting (ASCQR) Program to receive the full payment update. Failure to comply results in a 2 percent payment reduction.

Measure Removals

CMS finalized the removal of four measures from the ASCQR Program. These include:

• COVID–19 Vaccination Coverage Among Healthcare Professionals measure beginning with the CY 2024 reporting period/CY 2026 payment determination.
• Facility Commitment to Health Equity (FCHE) measure beginning with the CY 2025 reporting period/CY 2027 payment determination
• Screening for SDOH measure beginning with the CY 2025 reporting period Screen Positive Rate for SDOH measure beginning with the CY 2025 reporting period

Extraordinary Circumstances Exception (ECE)

CMS is formally codifying the Extraordinary Circumstances Exception policy for ASCs. This allows facilities to request relief from reporting requirements when data collection is impacted by qualifying events such as natural disasters or system failures.

Notably, the timeframe to submit an ECE request has been increased from 90 days to 60 days following a precipitating event.

Device and Technology Payment Updates

Transitional Pass-Through Payment for Devices

CMS approved VasQ™ and SCOUT MD™ under the FDA Breakthrough Device Program, making them eligible for transitional pass-through payment under OPPS.

Non-Opioid Pain Management Payments

CMS is continuing separate payments for qualifying non-opioid pain relief treatments through December 21, 2027. For CY 2026, five drugs and thirteen devices qualify for separate payment.

CMS will now evaluate new products quarterly rather than annually, with payments applied retroactively to the date eligibility criteria are met. ASCs should monitor approvals closely to avoid missed reimbursement opportunities.

Drugs, Biologicals, and Radiopharmaceutical Updates

Tc-99m Add-On Payment

For CY 2026, CMS finalized a $10 per-dose add-on payment for radiopharmaceuticals using technetium-99m derived from domestically produced molybdenum-99, with a new HCPCS code C9176 and a requirement that at least fifty percent of the source material be domestically produced.

Skin Substitute Payment Changes

CMS finalized significant changes to skin substitute payment policy, including:

• Separate payment for certain skin substitute products when used during covered procedures
• Deletion of low-cost application C-codes
• Conversion of product codes to add-on codes
• A finalized $127.14 per-square-centimeter payment rate with a new status indicator

These changes are intended to improve billing accuracy and payment transparency.

ASC Procedure Coverage Expansion

Elimination of the Inpatient-Only List

CMS has initiated a phased elimination of the Inpatient-Only List, with all codes scheduled for removal by January 1, 2029. For CY 2026, 285 procedures, largely musculoskeletal, are being removed from the list and assigned to appropriate APCs.

Covered Procedures List Expansion

CMS is adding 547 procedures to the ASC Covered Procedures List for 2026. This expansion reflects revised regulatory criteria and aligns with the broader transition away from inpatient-only designations.

Preparing for CY 2026

The CY 2026 Medicare updates present both opportunities and compliance considerations for Ambulatory Surgery Centers. Staying informed, validating coding and billing workflows, and proactively adjusting operational processes will be key to navigating these changes successfully.

For a deeper dive into the CY 2026 updates and what they mean for your ASC, download our Executive Summary – An Overview of Medicare Updates for Ambulatory Surgery Centers in CY 2026.