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CMS just dropped a bombshell on outpatient surgery centers.
Starting in 2026, they’re dismantling the Inpatient Only list over 3 years, beginning with 285 musculoskeletal procedures.
But here’s what nobody’s talking about:
📊 ASCs get a 2.9% payment increase (barely covering inflation at 3.4%)
🏥 Over 500 procedures suddenly approved for ASC settings
💰 The 340B remedy offset continues slashing payments by 0.5% annually through 2041
This creates a fascinating paradox.
CMS is pushing complex surgeries into outpatient settings while simultaneously squeezing reimbursements. They’re expanding ASC procedure lists dramatically but offering payment updates that don’t even match inflation.
The real winners? High-volume ASCs that can capitalize on the 500 new approved procedures.
The losers? Rural hospitals already struggling with the 340B offset, now facing more competition from ASCs for surgical cases they depend on for revenue.
Here’s my take:
This isn’t just about site of service. It’s about fundamentally restructuring how we deliver surgical care in America. CMS is betting that ASCs can handle increasingly complex procedures at lower costs.
But when you combine inadequate payment updates with expanding scope, you’re asking facilities to do more with less, year after year.
The 16-year 340B payback timeline through 2041 is particularly brutal. That’s $7.8 billion being clawed back from hospitals, many serving vulnerable populations.
Smart ASCs will invest now in capability expansion. Smart hospitals will double down on procedures that truly require inpatient resources.
Everyone else? They’ll be caught in the middle of this massive healthcare delivery transformation.
♻️ Repost if healthcare payment reform needs more than inflation adjustments
👉 Follow me, Jonathan Govette, for real-time updates on healthcare technology and business news. LinkedIn Profile: https://www.linkedin.com/in/jonathangovette/
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Author:
CEO/Co-Founder @ Oatmeal Health | AI Lung Cancer Screening | Almost Became a Doctor | Engineer | Follow to Share What I’ve Learned Along the Way
I help patients get the care they need earlier, preventing late-stage cancer.
That’s been the throughline across three companies and almost 20 years in healthcare. At ReferralMD, we fixed broken referral networks so patients didn’t fall through the cracks. At Oatmeal Health, it’s lung cancer: building the diagnostic and screening infrastructure so the 85% of cases caught too late get caught early instead.
Today as CEO of Oatmeal Health, I lead a team embedding AI into radiology workflows to turn routine lung CT scans into reimbursable cancer risk assessments. We partner with FQHCs to reach underserved communities, and with health systems and payers to make early detection economically sustainable. Think HeartFlow or Cleerly, but for lungs.
Between companies, I advised at Techstars and Plug and Play, mentoring founders building in digital health. That experience shaped how I think about what separates companies that ship from companies that stall: distribution, reimbursement, and clinical trust, not just technology.
I’m a CancerX alumnus, a 3x healthcare founder, and someone who believes the biggest problems in cancer aren’t scientific. They’re operational.
We’re hiring mission-driven builders at Oatmeal Health. If you want to work on something that matters, reach out.
When I’m not working, I’m traveling, mentoring, and keeping up with one very energetic husky. 🐾
Substack – The Oatmeal Bite:
Millions of patients get less care because of who they are, where they live, or how they look. I’m fighting to change that. CEO @OatmealHealth, a startup built for the underserved. The Oatmeal Bite: intel for clinicians, investors, and advocates.
Jonathan Govette
CEO of Oatmeal Health
Substack:
https://oatmealhealthjonathangovette.substack.com/
