CMS’ final 2027 outpatient rule gives ASCs a 2.3% raise. Not every spine and orthopedic center will feel it. Procedures that use implants, like joint replacements and spinal cord stimulators, will be reimbursed at higher rates. Pain procedures, like injections and ablations, will be reimbursed at lower rates.
CMS issued the final rule Nov. 4, and the changes take effect Jan. 1. Here is what spine and orthopedic leaders need to know.
1. Implant cases win, pain procedures lose
CMS expects Medicare ASC payments for musculoskeletal procedures to rise 6% in 2027, well above the 2.3% update. Results vary widely by procedure. Among the 30 procedures with the highest Medicare ASC spending:
- Biggest gain: Arthroscopic rotator cuff repair (CPT 29827), up 35%
- Biggest loss: Transforaminal lumbar/sacral epidural injections (CPT 64483), down 3% — tied with facet radiofrequency ablation, facet joint injections and carpal tunnel release
Joint replacement, shoulder and stimulator programs come out ahead. Centers that do a lot of epidural injections, facet injections and radiofrequency ablations take a cut — the second year in a row CMS has lowered ASC rates for those procedures.
Spine surgeons pushed back when CMS proposed the cuts in July. Jeffrey Carlson, MD, an orthopedic spine surgeon at Orthopaedic & Spine Center in Newport News, Va., told Becker’s the cuts penalize physicians for getting more efficient at common pain procedures.
“The reason these are high-volume procedures is because they actually work,” Dr. Carlson said.
Some spine practices are already rethinking where those cases go. In August, Issada Thongtrangan, MD, a spine surgeon at MicroSpine in Scottsdale, Ariz., told Becker’s his practice could move lower-acuity pain procedures into office-based suites and save ASC time for complex surgery.
2. Why: a hospital drug policy
The split comes from a change that has nothing to do with surgery. CMS is cutting what it pays hospitals for drugs bought through the 340B program, to average sales price minus 28%. By law, those savings go back into hospital outpatient rates, which pushes them up.
ASCs get part of that boost, but only on implant costs. Medicare pays ASCs the same as hospitals for the device portion of implant-heavy procedures. When hospital rates rise, ASC implant payments rise with them.
To keep total ASC spending in check, CMS then lowers rates on everything else. Procedures without implants, like injections, take the hit. And the effect keeps growing: Implants made up about 32.4% of ASC spending in 2026, up from about 5.4% in 2016, according to the final rule.
Adam Bruggeman, MD, CEO and surgeon at Texas Spine Care Center in San Antonio, told Becker’s before the rule was finalized that the policy undercuts CMS’ own goal of moving care to lower-cost settings, even as the agency adds hundreds of procedures to the ASC list.
“We need to get rid of the scalar once and for all,” Dr. Bruggeman said, referring to the budget neutrality adjustment CMS uses to lower ASC rates.
CMS acknowledged that this hurts non-implant procedures and said it may consider fixes in future rules. Nothing changes for 2027.
3. Hospitals get a bigger raise than ASCs
Hospital outpatient departments come out ahead of ASCs in 2027. Their base payment rate rises about 9.4%, largely because of the 340B money. The ASC base rate rises about 2.5% — the 2.3% update plus a small wage index adjustment.
That widens the gap between what Medicare pays hospitals and ASCs. In 2026, the ASC base rate was about 62% of the hospital rate. In 2027, it is about 58%. In July, orthopedic leaders told Becker’s they expected the gap to close by cutting hospital pay. For surgery, this rule does the opposite.
Why it matters:
- Independent ASCs get a stronger argument with commercial and Medicare Advantage payers: Sending cases to an ASC saves even more money.
- Hospital-based programs get higher Medicare outpatient rates, which makes keeping cases in the hospital more attractive than moving them to a jointly owned ASC.
One cut does hit hospitals: imaging. In 2027, Medicare will pay off-campus hospital departments the lower physician office rate for X-rays, CT, MRI and ultrasound without contrast. For health system spine and orthopedic programs that run imaging through these sites, that means less revenue from a service that feeds surgical volume.
4. Spine and orthopedic cases already moved last year
CMS is removing 637 more procedures from the inpatient-only list and adding 618 to the list of procedures Medicare covers in ASCs. None are spine or orthopedic procedures. Those moved in 2026, when CMS removed 285 mostly musculoskeletal procedures from the inpatient-only list and added 573 codes to the ASC list.
What to watch:
- 2028: CMS expects to remove the last procedures from the inpatient-only list, including neurological procedures.
- Prior authorization: Medicare already requires it for cervical fusion and facet joint procedures in hospital outpatient departments. The WISeR model is testing it for cervical fusion and epidural injections in six states. More freedom on site of service is coming with more review.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
