2.4% average rate update

If the proposed rule is finalized as drafted, ASCs would see, on average over all covered procedures, an effective update of 2.4%, which is a combination of a 3.2% inflation update based on the hospital market basket and a productivity reduction mandated by the Affordable Care Act of 0.8 percentage points. This is an average and the updates might vary significantly by code and specialty.

The table below provides a comparison between the 2027 ASC and HOPD reimbursement proposals.

While the conversion factor is an increase from that in the 2026 final rule — $56.32 — the ratio of these conversion factors is 56.63%, which is much lower than the ratio in 2026 — 61.61% — leading to a growing disparity in reimbursement between ASCs and HOPDs.

Impact of 2027 proposed weight scalar

CMS proposed an ASC weight scalar of 0.809, which is a substantial decrease from the 2026 final weight scalar of 0.872. This decrease is due in large part to the fact that historically, the device portions of device-intensive procedures were not scaled so that payment for device portions would remain constant between the Hospital Outpatient Prospective Payment System and ASC payment system. However, due to increased use of device-intensive procedures in ASCs, specifically orthopedic procedures, ASC expenditures on device portions of device-intensive procedures represent a substantially larger share of total ASC expenditures than in prior years.

CMS estimates that spending attributable to device portions increased from approximately 5.4% of total ASC expenditures in CY 2016 to roughly 32.4% of total ASC expenditures in 2026. CMS asserts the weight scalar reduction is largely attributable to the substantial increase in expenditures for device portions of device-intensive procedures under the ASC payment system.

CMS is soliciting comments on whether the device portions of device-intensive procedures calculated using the OPPS conversion factor should continue to be excluded from the ASC weight scalar or, alternatively, whether these device portions should be included in the expenditures subject to scaling through the ASC weight scalar. CMS estimates that treating device expenditures for device-intensive procedures as scalable prospective expenditures would increase the proposed ASC weight scalar from 0.809 to 0.865 in CY 2027 and would reduce the device portions of device-intensive procedures by approximately 14%.

The proposed weight scalar’s impact on the highest volume codes in the ASC setting is substantial. All the top 10 codes by volume are projected to see a decrease in reimbursement from 2026 rates. The table below shows the current reimbursement rates, the 2027 proposed rates found in the ASC addenda and the delta between those rates, for the top 10 ASC codes by volume.

However, CMS proposes to increase the reimbursement for most device-intensive codes, including total joint replacements. Total knee arthroplasty (CPT 27447), total hip arthroplasty (CPT 27130) and total shoulder arthroplasty (CPT 23472) would see increases of 4%, 5% and 7%, respectively.

Significant changes to the ASC-CPL

CMS plans to widely expand the ASC-CPL in 2027, proposing 618 codes for addition.

Many of these codes, including all four of the hernia codes ASCA requested for inclusion, are procedures also proposed for removal from the inpatient-only list for 2027. CMS proposes removing a total of 637 procedures from the IPO list in 2027, continuing its transition to phase out the IPO list entirely. The lists of codes proposed for addition to the ASC-CPL in 2027 can be found on ASCA’s Medicare Payment Resources page.

Proposed elimination of the IPO list

CMS proposes to eliminate 637 of the remaining 1,438 codes on the IPO list. This is the continuation of a policy CMS finalized for 2026 to eliminate the IPO list through a three-year transition. In 2026, the codes removed from the IPO list were musculoskeletal.

For CY 2027, the codes proposed for removal from the IPO list fall within the following clinical families: auditory, digestive, endocrine, female genital, hemic and lymphatic systems, integumentary, male genital, maternity care and delivery, mediastinum and diaphragm, respiratory, and urinary.

If CMS finalizes its proposal to remove these services for CY 2027, the majority of remaining services are more complicated in nature and might require a lengthier review process and potential changes to current ambulatory payment classifications to determine an appropriate APC assignment. For example, some of the remaining procedures for removal in CY 2028 are from the neurological family, cardiovascular family, solid organ, intestinal, and islet cell transplants and related services.

As a reminder, codes proposed for removal from the IPO list are not automatically placed on the ASC-CPL. There is an additional review by CMS to determine whether those codes should be eligible for the ASC setting.

Changes to the ASC Quality Reporting Program

CMS proposed to remove the Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients (the Colonoscopy Follow-Up Interval) measure from both the HOPD and ASC Quality Reporting Programs. This measure, ASC-9 in the ASC Quality Reporting Program, would be removed beginning with the CY 2027 reporting period/CY 2029 payment determination if finalized as proposed.

CMS did not propose to add any new measures to the ASCQR Program. The agency is requesting information, however, on stratification of ASC-4: All-Cause Hospital Transfer/Admission. Currently, the measure does not distinguish the phase of care in which a transfer occurs. CMS is considering whether adding a phase of care stratification relative to the surgical encounter — for example, preprocedure, intraprocedure and postprocedure — could improve the interpretability and usefulness of ASC-4 in the ASCQR Program. According to CMS, stratification by phase of care “would improve attribution and interpretability across the diverse range of ASC services, including non-operative procedures such as those associated with pain management, for hospital transfers/admissions associated with ASC care.”

Comments are due August 31, 2026.

2027 proposed payment rule resources

ASCA produces proposed rule resources that are available for members only, including a rate calculator that allows users to determine what ASCs will be paid locally if the proposal is adopted.

In addition, ASCA members can learn more during next month’s Regulatory Series session, “Understanding Medicare’s Proposed Rule for 2027.” This session — led by ASCA Chief Advocacy Officer Kara Newbury and ASCA Associate Director of Public & Regulatory Affairs Alex Taira — will offer important insights into new procedures added to the ASC-CPL and any other policy changes that might impact ASC payments, including changes to the ASCQR program.

The session is scheduled for August 4 at 1:00 pm EDT and will be available on demand afterward. It is available exclusively to ASCA members and registration is required.

Please write Kara Newbury with any questions.