Ep. 120: Alex Taira – The CMS 2026 Proposed Payment Rule for ASCs
Here’s what to expect on this week’s episode. 🎙️
CMS just dropped their 913-page proposed rule for 2026, and it’s an exciting one for ASCs.
On this week’s episode, we’re joined by Alex Taira, Associate Director of Public and Regulatory Affairs at ASCA, to break it all down. The highlights:
- 2.4% Medicare payment update
- 547 new codes proposed for the ASC Covered Procedures List
- Proposed removal of 4 quality reporting measures, including the COVID-19 vax measure
- Comments due by Sept 15
Plus, we chat about:
- The shift away from CMS gatekeeping toward more clinician decision-making
- The potential impact on cardiovascular and spine cases
- National Advocacy Day coming Sept 15–17
- Why ASCs should take 60 seconds to fill out ASCA’s EHR survey
Check out the full episode to hear even more from Alex & ASCA.
Episode Transcript
[00:00:00] Welcome to this week in Surgery Centers. If you are in the ASC industry, then you are in the right place. Every week, we’ll start the episode off by sharing an interesting conversation we had with our featured guest, 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.
Erica Palmer: Hi everyone. Here’s what you can expect on today’s episode. Alex Taira 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. 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.
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 news segment with a positive story about a game changing device that preserves donor organs.
I hope everyone enjoys the episode and here’s what’s going on this week in surgery centers.
Erica Palmer: Alex, welcome to the podcast.
Alex Taira: Thanks for having me, Erica.
Erica Palmer: 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?
Alex Taira: 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 policy, so mostly Medicare related stuff, but anything that the federal government does that could affect surgery centers. More recently, uh, dipping my toes in some communications and public affairs related work. So really great to be here on the podcast.
Erica Palmer: Perfect. So this is obviously a very busy week for you because CMS —
Alex Taira: Yes.
Erica Palmer: — just released on July 15th, their 2026 proposed payment rule for ASCs. 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?
Alex Taira: 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. 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. 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 1st.
Erica Palmer: Yeah, and I was trying to go back through my notes, last year the final rule was 2.9%. Is that, do you remember?
Alex Taira: That sounds right. Yeah.
Erica Palmer: Okay.
Alex Taira: It’s roughly around here every year. Yeah.
Erica Palmer: Yeah. Okay. Cool. And how about the ASC Covered Procedures List? Because I know this is one everyone’s watching for every year.
Alex Taira: 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. 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, some procedures are for the hospital outpatient department, but not for the ASC. And then there are procedures that have been explicitly approved for performance in surgery centers, which we call the ASC Covered Procedures List. 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 in 2026. Again, this is all proposed of those 285, 271 would go straight onto the ASC Covered Procedures List. So in total 547 codes, new codes that could be reimbursable in ASCs in 2026 compared to 2025. I mean, just a huge update. As a comparison, last year there were 21 codes added to the ASC covered procedures list. And [00:05:00] 19 of those were dental codes. 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.
Erica Palmer: When I first saw that email come through, I was like, that must be a typo. There’s no way, because I was reading that 547 number and I was like, there’s just no way that, that’s right. But it is. So that’s amazing.
Alex Taira: 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 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.
Erica Palmer: Yeah, absolutely. And I think especially like on the Cardio front, 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. So the potential there is really exciting.
Alex Taira: 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. 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. 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.
Erica Palmer: Yeah. Very cool. So I know everyone is also always waiting for updates on the Quality Reporting Program. So what’s going on there?
Alex Taira: 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. 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. 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.
Erica Palmer: 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’s going on?
Alex Taira: 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, and we know that it’s definitely less prioritized under the new administration, so 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. We had already opposed many of these measures for addition last year. So definitely happy that they’re not being included in the future ASC Quality Reporting Program.
Erica Palmer: 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 a measure.
Alex Taira: Yeah, I know.
Erica Palmer: Basically, outcomes? Is that the gist?
Alex Taira: Yeah, you know, I haven’t actually taken a very good look at it, so I think we’ll have to look more at that. But yeah, let me see if I can get this name here. 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.
Erica Palmer: It’s hilarious.
Alex Taira: I think, yeah, outcomes generally, like I said, voluntary reporting in 2027 and 2028.
Erica Palmer: Okay.
Alex Taira: 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, um, ASC Quality Collaboration and Kara and Gina will have comments for that for sure.
Erica Palmer: Sure. All right. Anything else in the document? I know it just came out that, but that we should be made aware of at this time?
Alex Taira: 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 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? And we’ll have template letters so that people can comment on the rule themselves alongside our comments. So a lot more to come in the next couple months.
Comments are due for anyone interested on September 15th, so that’s a Monday. If you wanna submit your own comments and support or in opposition to any of the proposals, you can certainly do that.
Erica Palmer: Perfect. And I think I saw you guys are doing a webinar next week.
Alex Taira: We do this every year, but for ASCA members just kind of like a 30 minute, high level run through. Kara will break down the rule as much as she can, a little closer look at some of the codes being affected, like the top a hundred codes, top 10 codes, that kind of thing. So definitely if you’re an ASCA member, tune into that.
Erica Palmer: Yeah. Perfect. I’ll put a link in the episode notes to that as well so people can find it. Okay. What else is going on with ASCA? What are you guys up to?
Alex Taira: 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. We comment every year because even though the policies in that rule don’t directly affect our members, so the surgery centers themselves, they do strongly affect the clinicians that work in ASCs. 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.
I also wanted to mention that we submitted comments to a health technology 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. 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 ASC industry is and why some of the things that they’re considering might not be good to apply to surgery centers.
Erica Palmer: Got it. And what about, uh, the 60-second survey that’s currently open?
Alex Taira: Yeah, so we have a 60-second survey currently open. I’ll probably close that next Friday, so the 25th. 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’ve run a similar survey in 2021 and also 2023 and usually get about 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, 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. And once that survey closes, I’ll write a piece for Digital Debut, which is ASC Focus’ online weekly publication, that will break down all of the results and we’ll also be including those results in our comments and advocacy, I’m sure.
Erica Palmer: 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.
Alex Taira: Definitely.
Erica Palmer: And you have an exciting advocacy day coming up. Tell us more about that.
Yes, I really appreciate the opportunity to talk about National Advocacy Day. So this is the day where we bring members from the ASC community to Washington, DC to meet with your state representatives, state senators, and talk about the issues that affect your work.
So for example, we have a bill currently introduced, ASCA supported, that would fix a copay issue in Medicare, basically. In other sites of service, Medicare’s co-insurance 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. 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. 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. Really just can’t overstate what an impactful day this is. And I think if you’ve talked to anyone who’s been to a National Advocacy Day before, they would say the same thing. 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, 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. 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 state so that you can meet with the legislators that make an impact most directly and talk about the communities that you’re in. And you’ll also have a group leader, someone from ASCA or maybe a board member going around with you. There’ll 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.
Erica Palmer: 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 HOPD 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.
Alex Taira: 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 it benefits the facilities and the people you work with, it’s just such a great day.
Erica Palmer: Yeah. Alright, Alex, we do this every week with our guests. What is one thing our listeners can do this week to improve their surgery centers?
Alex Taira: Kind of continuing on this thread, and I may have said this in a previous appearance, but, I think get involved in local advocacy. 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 ASCs, 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. And I think one of the best things you can do to make sure that these things aren’t burdensome, and that your state governments are understanding about your place in their healthcare delivery system is to, uh, get involved. 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, 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.
Erica Palmer: Agreed. Thank you so much for all of your work and for coming on today. We really appreciate it.
Alex Taira: Thanks, Erica. Thanks for having me.
Erica Palmer: As always, it has been a busy week in healthcare, so let’s jump right in. 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 its AI-powered search platform for doctors.
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. 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.
The company says it’s handled more than 7 million clinical consultations a month, and now claims a third of us 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. These partnerships bring decades of trusted evidence-based research into a format that is fast, digestible, and tailored to realtime clinical decisions.
And Open Evidence is currently valued at $1 billion. So what does this mean for ASCs? 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. 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. 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. So Dr. Udaya Padakandla, MD, my apologies if I’m saying that wrong, is an anesthesiologist at Baylor Scott and White Health, and they recently spoke with Becker’s about the top insurance related concerns affecting anesthesiologists today. So here are his three concerns.
Private payers are benchmarking their rates against already low Medicare reimbursements, which is pushing anesthesia payments even lower. 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. 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 United Healthcare, noting that while they weren’t the first to cut modifier payments, they’re following a troubling trend among large payers. 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.
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. 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 ASCs best interest. So make sure to check out those episodes.
All right. For our third story, this is my regular reminder that your ASC needs to be proactively prepared for a cyber attack. 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. 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 2:00 AM on a Saturday, all while their firewall looked fine. The breach took 15 days and cost two and a half million dollars to resolve. So in this article by Outpatient Surgery Magazine, they quickly summarized five action items that as ASCs can focus on.
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. 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 24/7 monitoring, and then fifth, consider autonomous remediation. This new tech automatically patches vulnerabilities in your software covering about 70% of threats.
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 a $2 million ransomware recovery. And nevermind the bad press your ASC will receive, which will impact physician reputation and case volume.
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 MacRobert Award. The device mimics a life inside the body verses 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.
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. 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. Make sure to subscribe or leave a review on whichever platform you’re listening from. I hope you have a great day, and we’ll see you again next week.