What to Know about CMS’s 2026 Final Payment Rule for ASCs

Ep. 134: Kara Newbury – What to Know about CMS’s 2026 Final Rule for ASCs

Here’s what to expect on this week’s episode. 🎙️

CMS’s 2026 final rule signals some significant changes for ASCs — what should centers be thinking about as we head into 2026?

In this week’s episode, Kara Newbury, Chief Advocacy Officer at ASCA, walks through what’s in the 1600+ page document: the 2.6% payment update, the cataract code correction, expansion of the procedure list, and where advocacy is headed next. We also look at our most recent data on patient payments — specifically the rise in partial payments and what it means for total collections, financial workflows, and patient access. 

If you’re planning for next year, this one’s worth a listen. 

Be sure to check out the full episode on YouTube or your favorite podcast platform! 

Episode Transcript

Hi everyone, and welcome back to this week in Surgery Centers. This week I’m talking to Kara Newbury, the Chief Advocacy Officer at ASCA about the 2026 final payment rule for ASCs that was passed down from CMS just before Thanksgiving. She does a fantastic job of summarizing the key takeaways from the roughly 1600-page document that ASC leaders need to know. She also highlights areas of ASCA’s ongoing policy work and helps us see the real opportunities and challenges ahead in our industry.

Then in our data segment we are going to take a look at the state of patient payments. Outside of payer considerations, what does patient payment behavior really look like at ASCs and what could it signal? Spoiler alert, the total collections number is actually trending downward, but the number of patients who are making at least a partial payment is increasing.

Our next few episodes on the podcast actually focus on the topic of payments. So, we’re going to use the data from our latest state of the industry report to set the stage for those.

I hope you enjoy today’s episode, and here’s what’s going on this week in surgery centers.

[00:01:37] Alex Larralde: I’m so excited to talk about the CMS final rule for ASCs for 2026, which I know everybody’s really interested in, we just got it a few weeks ago. So, before we get started, Kara, it would be awesome if you could just give us a quick introduction.

[00:01:51] Kara Newbury: Sure. My name is Kara Newbury. I am the Chief Advocacy Officer with ASCA, and I’ve been with the association for about 14 years.

[00:02:00] Alex Larralde: Fantastic. So, the final rule itself was over 1500 pages. There’s a ton of information in there, and the webinar you did was super helpful. So, I encourage anyone who’s an ASCA member to check that out for sure. But today I’d love to just cover some of the highlights and maybe talk about a few of the key points that you think are really important for ASC leaders to keep an eye on as we head into the new year.

Let’s start with the reimbursement rate. What is it what changed and did it align with your expectations?

[00:02:29] Kara Newbury: Great. So, it was across the board an effective update of approximately 2.6%. Now, that is an average across all codes and it’s subject to very, based on specialty. But 2.6% is slightly better than the 2.4% that we saw in the proposed rule. That 2.6% is the same effective update that hospital outpatient departments were set to get.

And that is because we are still going to be updated based on the hospital market basket for 2026, which was something the ASCA advocated for and will continue to advocate for moving forward as well. Historically we had been updated on the consumer price index for all urban consumers prior to 2019, and that is typically a lower update, so we’d like to stay on the hospital market basket.

[00:03:20] Alex Larralde: During your webinar you also mentioned the 0.872 secondary rescaling factor for ASC weights. And I think this is relevant, it might be a little confusing for people who aren’t super in the weeds. So, could you explain in plain English, like what that is and how even when CMS is saying, we’re getting a 2.6% update, how does that scalar kind of change things?

[00:03:41] Kara Newbury: So, even though our payment system is tied to hospital outpatient departments, each individual payment system CMS is looking at it and trying to contain costs and trying to maintain budget neutrality in each siloed payment system. And CMS adjusts the weights. They do it in the hospital outpatient department setting.

And then our weights are based off that. So, then they do what we call a secondary weight scalar or an ASC weight scalar when they bring those over to the ASC setting. So, if you can picture, there’s like a pie of money. And somebody is we’re getting more money, like slightly more money for the inflationary update.

But besides that, CMS would like to keep that pie relatively, the same size. And so, what they do is they scale. Those, weights when they come over to the ASC setting and in the proposed rule, the weight scalar was 0.842. I guess that CMS was making a lot of errors this year because they indicated in the final rule that was also a mistake.

And so, they said that it was supposed to have been 0.872. So, when the weights come over from the HOPD setting we’re cut. Approximately 13% are weights instead of what, 16%, close to 16% that it would’ve been if it was 0.842. That’s already factored. Into, when you look at the reimbursement rates that you’ll see either on the ASCA rate calculator are on the documents that are on CM S’S website.

But that does contribute to, a growing disparity in rates, even though we are updated on the same update factor that hospital market basket. So that’s something else that ASCA is advocating for. We’re asking for them to stop applying this secondary or ASC weight scalar. And to just lump in all of the volume between hospital outpatient departments and ASC at the same time, do one scaling and call it a day.

And so, if that were to happen it would be a huge boon to ASC reimbursement. So that’s something that we’re pushing for. We’re going to be pushing for through legislation, but we also have asked CMS to make that change they have not to date. It’s something that we’ll pursue in 2027, though.

[00:06:00] Alex Larralde: Absolutely, and I imagine we’ll talk about it in just a minute. The expansion to the covered procedures list with more and more procedures coming over, that’s going to make a significant difference. So, we’ll get to that in just a second. But I do want to talk a little bit more about codes and specific adjustments that CMS made because.

Something interesting happened with ophthalmology. They’re obviously representing a huge proportion of procedures that are done in ASCs. Can you tell us a little bit about what happened there?

[00:06:27] Kara Newbury: Sure, in the proposed rule, 66984, a cataract code, which is by far our highest volume code. There were over, about 1.18 million of those procedures done on fee for service beneficiaries in 2023, which is the last full year of data that I have. And in the proposed rule, CMS indicated that the rate was set to drop, be cut by about 4.7%.

And the ophthalmic societies got together. We were in conversations with them beforehand too, and they told us what they found, they had some outside analyses done and determined that there was an error in the calculations in the proposed rule. And so, in the final rule, CMS acknowledged that was correct. There was a mistake that was made in the proposed rule, and now the update between 2025 and 2026 is set to be actually a 3.4% increase instead of that 4.7% decrease. And so that’s extremely good news for all of our ophthalmic practices.

[00:07:32] Alex Larralde: Absolutely. What’s the takeaway here for other specialties?

[00:07:36] Kara Newbury: It’s kind in, in some ways it’s scary, right? So when we were doing our comment letter, I had some folks call me and say, who’s to say that there weren’t mistakes that were made for all of these other codes. And that is certainly a possibility. There were, certain very specific factors that I think played into this, but absolutely, I think the key is when you see something in a proposal.

That doesn’t look right, or when you see something that you don’t like, and we’ll get to this when we talk about quality reporting, especially in a bit. Please comment, provide those public comments because that is really the only way between a proposal and a final rule that we’re going to see some of these changes made.

So, if the ophthalmic groups had not, join together and had that analysis done, who knows what would’ve happened. Maybe, CMS wouldn’t have taken a second look at that. We don’t know. And so, I think it is extremely important always to be on top of these rules and to be participating in that notice and comment period.

To make sure that our voices are heard.

[00:08:41] Alex Larralde: For sure. Don’t assume that everything that comes out in the

[00:08:44] Kara Newbury: Nope, nope.

[00:08:45] Alex Larralde: or

[00:08:46] Kara Newbury: and on that note, actually don’t assume everything in the final rule is correct either. So unfortunately, CMS does sometimes come out with correction notices. And so like our rate calculator where members can go and they can look at their rate in their specific geographic area, it’s up on our website now available.

Unfortunately, CMS typically makes changes and corrections to that at the end of December. So, you’ll get that up as soon as possible. Right now, we have the most updated information that CMS has released up on our website, but there, there could be corrections still to come. And, with the rule coming out so late it came out almost three weeks later than usual this year.

So maybe they were scrambling and there could be error. So, we will see when that correction notice comes out, how much you know of a difference there is.

[00:09:33] Alex Larralde: Yeah, for sure. That’s an important caveat.

So, let’s talk about that covered procedures list. I know that CMS removed several exclusion criteria and there have been hundreds of codes added, which is great news.

Can you talk about what changed and why it’s different this year and what people should be paying attention to?

[00:09:51] Kara Newbury: Sure. And a lot of it really is coming back from the last payment rule that the first Trump administration was responsible for, which was the 2021 payment rule. And so, in that rule, there were some pretty sweeping changes made. There’s certain, you mentioned criteria, there’s certain factors that CMS is looking at when they’re evaluating these codes.

Things like. Does the procedure require excessive blood loss? Would it require medical monitoring and care past midnight? And what CMS finalized in this rule is they took away those as, absolute exclusions, exclusionary criteria, and they put them into a physician consideration category.

So now the, it’s the physician’s, responsibility and, of course the physicians were already doing their due diligence and evaluating every patient. Individually to determine if it was safe to perform those cases, and we will continue to do but this takes off that, absolute restriction.

Due to that CMS said that they were adding the 271 codes that were in the proposed rule just based on those criteria. In addition, we were talking about, it’s important to advocate, it’s important to submit comments, right? There were dozens of codes that were not. Part of that 271 that were submitted during the public comment period, and CMS did also choose to add 13 of those.

So just based on looking at these criteria codes that, were previously allowed in the hospital outpatient department setting CMS is adding 289 procedures like of most kind of importance or interest to us at ASCA were some of the codes that we requested, including some electrophysiology studies and cardiac ablation codes.

A few additional percutaneous coronary intervention, PCI codes. We had already gotten some PCI codes added years ago, but a few that were requested, we got added as well. And then actually one of the 13 that was not in the proposal but was in the final rule is a cardioversion code. 92960, which ASCA had requested.

With many of these procedures the ones specifically that, relate to codes in their wheelhouse, we work closely with the heart rhythm society, who also is engaged with AC, the cardiologist. And we all worked together. They met with CMS to present on these.

We so followed up and supported that in a meeting we had with CMS. So, we were happy to see, a lot of those cardiology codes being added for 2026. In addition, there were two lumbar fusion codes, some spine codes that we’ve been requesting for a long time that were added. So, we’re happy to see that.

And then in addition to the, those codes that were previously allowed in the outpatient department setting of a hospital CMS is now starting a transition, a three-year transition to eliminate the inpatient only list. And different from what the first Trump administration did in 2021 CMS actually took.

Hundreds of those codes that they’re removing from the IPO list, the inpatient only list, and are putting them directly onto the ASC cover procedure list as well. So not quite all of the codes that are being removed for 2026, but 271 of the codes that are being removed are going to also be put straight on the ASC covered procedure list.

So, for those keeping track at home, that is a grand total of. 560 codes set to be added. Now the ones coming off the inpatient only list all fall within the musculoskeletal code range. A lot of procedures though, that will be on the list in 2026 that are not in 2025.

[00:13:35] Alex Larralde: Fantastic. That’s great news for ASCs. I’m really curious about cardiac, and I’d love to just like drill in on the cardiac ablation codes that were added in the proposed rule, CMS was talking about reimbursements for those, like in the 20,000 plus range.

Can you talk a little bit about what that means when CMS turns on a facility fee that’s that substantial within an ASC setting? How do you think that might change behavior and, what are ultimately the implications for Medicare spend and potentially patient cost sharing?

[00:14:07] Kara Newbury: Yeah, and it’s tough too because you have to also look at, a lot of these are device or implant heavy procedures. So, like when we added total shoulder, for instance. The device cost is pretty sub substantial. And so even though the reimbursement seemed decent, it, it was not maybe adequate in a lot of geographic areas because, you get more in.

California in a lot of California communities, then you get in rural communities in the south. And so, you really have to evaluate and look at each procedure and what it’s going to cost, your facility to perform that procedure. But yeah, it’s always positive, I think to get, these new codes added.

Although it is a higher reimbursement rate than maybe some of our other procedures, we are still getting paid less than the hospital outpatient departments. Now for, like I said, if the codes are J eight, which means they are device intensive, the disparity isn’t quite as much.

But we are still getting less. And so, it’s saving the Medicare program money. Now I will say, unfortunately there is a problem with a lot of these higher dollar items in the ASC setting. And that’s the fact that there’s a cap on what a Medicare beneficiary would pay.

If they had a procedure performed in a hospital, outpatient department or an inpatient department, and there’s no such cap in the ASC space. So, you mentioned maybe we’ll say a 20,000, let’s say there was some $20,000 procedure and the cap right now in the HOPD is 1676. So instead of a 20%, co-insurance, they would only be paying that 1676.

Whereas in the ASC 20 per, and I’m doing, my quick off the cuff math, 20% of 20,000 is, $4,000. So, they would pay more. They would pay more than double. To have that procedure done in the ASC. Now, the Medicare program doesn’t save any money when it’s done in the hospital outpatient department because there’s, the hospital is still made whole.

It’s just the beneficiary that suffers. ASCA has legislation that we’re promoting right now to fix this issue. As ASCs would have the same cap that hospital outpatient departments have, but it’s not been enacted yet. So, while it’s great news and if, beneficiaries have supplemental insurance they wouldn’t, they’re not going to feel the pain of that additional, patient responsibility that co-insurance. But for those who don’t, it’s a big issue. And so, I don’t know if we’ll see quite as much, migration to the ASC as we would see if we had that copay cap in place for ASCs as well.

[00:16:39] Alex Larralde: That makes total sense. So, on the surface, it does look like a lot of opportunities opening up. There’s still some issues on the patient cost side that need to be worked out before we really see that migration of volume.

So, one thing that didn’t change this year is CMSs stance on unlisted codes.

And you talked about this on the webinar. And these are CPTs that are still excluded. From any reimbursement if the procedure is done in an ASC. How does this new language in 416.166 treat unlisted codes?

And what does this ultimately mean for ASCs who are advocating for and trying to move more complex procedures into the ASC setting?

[00:17:17] Kara Newbury: Yeah, unfortunately CMS didn’t eliminate all of the exclusions, so there’s one general catchall, basically indicating that we only get reimbursed for surgery or ancillary codes performed in conjunction with surgery. There’s one talking about inpatient, which of course eventually there will be no inpatient lists, so I’m assuming that will come off.

So, then all we’re going to have left is this unlisted code restriction. And CMS in the past has tried to claim that there’s a safety rationale behind this. We’re going to be a lot more forceful this year with our advocacy questioning that because. Both in the hospital outpatient department and even a physician office setting, which a physician office is not regulated by Medicare. There’s no survey and certification process for physician offices performing surgery. They’re allowed to bill for unlisted codes as long as they provide documentation about why they needed to use that unlisted code.

And ASCs don’t have that option. If my cynical side says it’s because, there’s 6,500 Medicare certified ASCs, they don’t want the Medicare, administrative contractors to be bombarded with a bunch of new requests. I don’t see how they can claim though that it’s a safety issue and so we’re going to continue to advocate. For that restriction to be removed. We’ve asked for the removal of that as much or more so than we asked for the removal of the other criteria that were removed.

That was disappointing that it’s still in there and we can’t do those unlisted codes on Medicare beneficiaries, but we’ll continue to advocate for that change.

[00:18:51] Alex Larralde: Got it. So, more work to come, more advocacy to come on that front. For sure.

Let’s shift gears a little bit and talk about quality reporting in 2026. I know there were some pretty significant changes. What are we seeing there?

[00:19:03] Kara Newbury: Sure. A lot of it was as proposed. So, we were happy to see finally that ASC 20, the COVID-19 vaccination coverage among healthcare personnel measure has been removed from the ASC Quality Reporting Program. Basically, effective immediately. So, I know that has been, quite the burden for our facilities.

And so, we’re happy to see that removed. And then the three new health equity measures that were just added in 2025 rulemaking have been stripped away. All of this was expected because these and similar measures to these were removed from. The inpatient prospective payment system rule, which came out earlier in the year.

All of that was expected. There was a measure in the proposed rule that was set to be added. I’m not going to say the whole thing because it’s a tongue twister, really long, but I will just say it’s, we refer to it as the information transfer patient reported outcome performance measure.

And that would be another survey. Really asking patients if they received the information that they needed to receive for follow-up care, postoperatively and I think it was like nine or 12 questions we asked if you could just add one question to the OAS CAHPS survey, which we already have to do.

We raise concerns about survey fatigue with that OAS CAHPS survey. The fact that we’re getting low, turnout low response rates, a lot of facilities are getting low response rates for that OAS CAHPS survey already. And CMS listened to, these concerns and did not. Adopt this new measure.

Who knows what could potentially happen in the future, but at this time, CMS said, we’re not going to adopt this measure. So that was a positive. And like I said really due to ASCA and others, hopefully some of our members used our template letters and really, raising concerns about that new measure and opposing its adoption.

We were all successful. So thanks to everybody who commented on that.

[00:21:05] Alex Larralde: And we talked a little bit about the Medicare Beneficiary Copay Fairness Act. Are there other legislative updates happening aside from the CMS final rule that your team is working on and keeping an eye on as we head into the year?

[00:21:17] Kara Newbury: Sure. And of course we had, a government shut down the longest recorded government shutdown in US history. So not a lot was being done during that time. And unfortunately, that and some other factors delayed our other piece of legislation. So, we still are, trying to stay on the hospital market basket, that’ll be in our new bill. Fixed the weight scalar issue, which we talked about. That’ll be in there. And. There’s a third provision, procedure list. Just really when CMS more transparency in, if they’re not going to add codes, why they wouldn’t add them.

So we’re, obviously we got some of that in the rule, even when they added the codes, they don’t necessarily say why they’re adding them, they just add them. So a little bit more transparency in, in that process. Some other things that we are, have our eye on at the federal level site neutral legislation.

We’re obviously tracking closely. We don’t want any, any legislation that would risk access to care. And I know a lot of ASCs here site neutral and they think this is great. I’m going to get paid What hospital outpatient departments are going to get paid. That’s not what has been proposed. What’s being discussed is, lowering everybody to the lowest common denominator.

We’ll keep our eye on that and update, ASCs if developments arise. And then there’s also this price tag bill which would require facilities to post price transparency information on their website. There was a big push for similar legislation last session. We pushed back against it because we think that there are others, such as the payers who are in a better position to tell individuals what they would owe.

And we think it would be a burden on facilities and actually more confusing maybe to the general public than helpful. So we’ll continue to try to work with members of Congress to either make that legislation better or preferably just, kill the bill. Frankly. But those are some of the main things that are on our radar as we head into 2026.

[00:23:12] Alex Larralde: Fantastic. And we’re very grateful to you and your team for doing that advocacy work and staying on top of those things. Are there any other things in the Final Rule that our listeners should be aware of looking into and preparing for?

[00:23:26] Kara Newbury: I’m sure there are, and if people have specific questions about, their specific procedures that they perform, I’m happy to, answer those. I think that we’ve really done a pretty good job of hitting on the highlights, considering as you said, it’s the rule’s about twice as long.

I think, as it has been in previous years. So 1600 pages is not for the week to read, but

[00:23:48] Alex Larralde: No, not at all. So in addition to that, I wouldn’t recommend that our listeners go out and try to that thing on their own. Are there other resources that you recommend people check out? I mentioned the ASCA webinar. That’s a great one. Are there other things that they should look to?

[00:24:02] Kara Newbury: Sure we’ve got a lot of great resources on our website. Like I said, the rate calculator can show you how much your specific facility would be reimbursed for procedures. We have another document we’re putting up there that’ll show all of the new codes being added in 2026. We’ll have a full rule analysis on there.

So there are different resources that we have on our website. CMS also puts out some, but those are going to be, looking at the role holistically and not maybe as focused in on ASC-specific issues. They’re also looking at the H-O-D-H-O-P-D components to the role. But yeah, I think, starting out just, ascassociation.org is a good place to start.

Great.

[00:24:43] Alex Larralde: Awesome. And I’ll definitely include these links in the show notes for folks so they can easily find all of those resources. So thank you for that. And then before we wrap up, I have one final question for you, but what is one thing that ASC leaders can do this week to improve their surgery centers?

[00:25:00] Kara Newbury: Wow. That is a good one. This week. I know everybody’s just getting back from eating Turkey and pumpkin pie but I think just, making sure that you know who your elected officials are and whether or not you do it next week, this week, or, early in January. Please do reach out to us and schedule a facility tour or, you can do it virtually.

But we prefer in person if possible because, we were talking about all of these different payment issues. Members of Congress have so much on their plate, so many different, policy areas that they’re worried about. And so in order to make sure that we stay on their radar and they know what’s important to us we need to be in front of them.

And they love to come and, get dolled up in the bunny suit. And so really do encourage facilities to have, your elected officials into your facilities so they can see all the great work that you’re doing.

[00:25:53] Alex Larralde: That’s great advice. And I really appreciate it and I appreciate you taking the time to join us and talk through this really important stuff, and I hope to have you on the podcast again in the future.

[00:26:02] Kara Newbury: Sounds good. Thanks so much.

Alex Larralde: This week’s data dive focuses on a pretty significant shift we’re seeing in patient payment behavior at ASCs, and why ASC leaders should keep this trend top of mind as we head into 2026. And we’re not just talking about subtle changes. We’re seeing some pretty big shifts in payment behavior, and it’s already reshaping ASC revenue strategies.

So, let’s start with the numbers. We took a look at the data from our latest state of the industry report, and we saw that partial payments jumped from 41.2% to 56.2% in 2024. That’s more than half of patients paying only part of what they owe. And meanwhile, total payments or patients that have paid in full dropped from 25.8% to just 17% in one year.

So why is this happening?

First, patients aren’t as financially prepared as we think they might be. Even when estimates are sent out ahead of time, expected deposits fell from 55% in 2023 to 51% in 2024. This suggests that many patients are arriving the day-of with outstanding balances and might need more flexibility and time in making those payments. So, in other words, there’s a component that may just be outside of surgery centers’ control.

Second insurance complexity is creating uncertainty. The report shows that only 46% of cases had pre-authorization completed, and in instances where prior auth was required, it dropped to 24%. That leaves many patients unsure of what exactly they owe and what insurance will cover, leading to surprise bills and delayed payments down the line.

Third, financial stress is contributing to cancellations. In 2024, we saw financial issues as one of the top 10 cited reasons contributing to case cancellations. This isn’t just a billing issue; this is a patient access to care problem. So, what can ASCs do to try to get ahead of it?

First of all, start early. Send a detailed estimates out at least one to two weeks before surgery and certainly do not wait until the day of to let people know what they owe. Use technology wherever possible. Text estimates, email payment links, provide mobile payment options. It’s very easy to not pay someone who makes it difficult to do so.

Be flexible. Offer simple automated payment plans to meet patients where they’re at and working within their constraints. And most importantly, follow through, track those partial balances and keep the communication going so that you’re able to close that loop as much as possible.

Relying on day-of or post-op collections is simply not a sustainable strategy. Patients are acting more like consumers, and that means we need to meet them with clarity, flexibility, and ease of access. As we head into the new year, remember that adapting to these trends isn’t just about protecting revenue, it’s really about enhancing the patient experience and ultimately increasing and improving access to care.

And that wraps up today’s episode if you are interested in the topic of patient payments, our next few episodes on the podcast are actually going to be focused on collections, including one that’s anesthesia-focused, that’s coming out before the end of the year, and then we’ll have even more coming to you in January. So definitely be sure to check back for those updates. As always, I’m so grateful that of all the things that you could do, you chose to spend a few minutes of your week with us. I hope you found the information today useful, and I hope to see you again next time.