Ambulatory Surgery Center (ASC)

Key facts

Federal standards

Conditions for Coverage, 42 CFR Part 416

Medicare stay limit

Services expected to last no more than 24 hours after admission

Medicare payment

ASC payment system, with rates linked to hospital outpatient weights

Payable procedures

ASC Covered Procedures List, updated in the annual OPPS/ASC rule

Quality program

Ambulatory Surgical Center Quality Reporting (ASCQR) Program

What is an ambulatory surgery center?

ASCs perform procedures such as cataract surgery, colonoscopy, orthopedic and spine procedures, pain management injections and many ear, nose and throat surgeries. Patients arrive, undergo the procedure, recover and go home the same day.

For Medicare purposes an ASC is a distinct entity that operates exclusively to furnish outpatient surgical services. It must have a Medicare agreement, meet the Conditions for Coverage in 42 CFR Part 416 and pass a survey by a state agency or an approved accrediting organization. States license ASCs separately, and some also require Certificate of Need approval to open one.

Ownership is often shared. Physicians frequently own ASCs, sometimes in joint ventures with hospitals or management companies.

How ASC payment works

ASC billing separates the facility from the professionals:

• Medicare pays the ASC a facility fee per procedure, while the surgeon and anesthesia professional bill separately under the Physician Fee Schedule.
• ASC rates use the relative weights of the hospital outpatient system but are generally lower than hospital outpatient department rates for the same procedure.
• Medicare pays only for procedures on the ASC Covered Procedures List. CMS has expanded the list over time, adding total knee arthroplasty in 2020 and total hip arthroplasty in 2021.
• Commercial payers negotiate their own ASC rates and often steer eligible cases to ASCs to lower costs.

Why ASCs matter

Procedure migration to ASCs changes where purchasing and referral decisions happen:

• As procedures move from hospitals to ASCs, devices, implants and anesthesia drugs are bought through different channels, a core question for medtech sales territories.
• Physician-owned ASCs put purchasing decisions with a small group of surgeon owners rather than a hospital value analysis committee.
• Price differences between ASCs and hospital outpatient departments drive payer site-of-care programs and employer benefit design.
• Counting ASCs by specialty, such as ophthalmology, gastroenterology or orthopedics, helps size markets for procedure-specific products.