On November 1, 2024, the Centers for Medicare & Medicaid Services (CMS) issued the 2025 hospital outpatient prospective payment system and ambulatory surgical centers (ASC) rule. 

The rule updates Medicare payment rates for hospital outpatient and ASC services and is anticipated to affect roughly 3,500 hospitals and 6,100 ASCs during the 2025 calendar year.

The final rule has a number of key provisions that will specifically impact ASCs. We outline takeaways for ASCs below. The final rule is intended to align with several goals from the previous presidential administration, including responding to the maternal health crisis, addressing health disparities, expanding access to behavioral health care, and improving transparency in the health system. 

Not all of these goals resulted in changes to the regulations and payment system that directly impact ASCs, but they provide operators and investors an idea of what the rules are looking to accomplish.

Direct Impacts of Final Rule on ASCs

The final rule implements a net 2.9% increase to payment rates for hospitals and ASCs for calendar year 2025. That is based on a projected 3.4% market basket increase, which is the measure CMS uses for changes in the price of goods and services used by hospitals and ASCs to provide patient care. 

Other impacts to ASCs from the final rule include:

• CMS implemented temporary additional payments for certain non-opioid treatments for pain relief from January 1, 2025, through December 31, 2027. This includes a statutory payment limitation of 18% of the Medicare payment for the corresponding procedure or services. CMS has already started approving certain drugs and at least one device eligible for this additional payment to ASCs.
   
• CMS employed the ASC quality reporting program to collect and report facility-level quality metrics. ASCs must meet certain reporting requirements, including public reporting, or the facility may face a 2% reduction in their annual payment under the current ASC fee schedule. The program includes 14 mandatory measures, 10 of which require action in 2025 as well as additional voluntary measures. The metrics include health equity measures and screening for social drivers of health measures. Finally, ASCs must designate a security official with the Hospital Quality Reporting (HQR) system in order to file the required reports. 

Key Takeaways for ASCs

Under the 2025 payment system final rule, ASC operators should familiarize themselves with any adjustments or new billing requirements and procedures related to the additional payment for non-opioid drugs and devices, and ensure there are adequate systems in place to monitor the temporary billing practice. 

Operators also should familiarize themselves with the ASC quality reporting program requirements. ASCs should develop a plan for meeting all mandatory reporting requirements in 2025 and carefully consider whether the facility should participate in the voluntary measures now in preparation for those measures becoming mandatory in 2026. 

Finally, ASCs will need to designate and register one or more security officers to report on the HQR site. The officer should familiarize themselves with the process, deadlines, and other requirements and develop a plan to comply. ASCs should consider whether to assign more than one official to ensure someone is always available. 

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