Will ASC Growth Keep Up With Demand?

Outpatient surgical volume keeps climbing — and Medicare's 2026 rules just opened the door wider than ever. The question is whether the supply of surgery centers can keep pace.

Outpatient surgical volume in the United States is still on a steep upward curve, led by the same engines as before — orthopedics and cardiovascular care — but now reinforced by the most aggressive Medicare site-of-service policy changes in a generation. Joint replacements, spinal procedures, and a growing list of cardiac and electrophysiology cases continue to migrate out of the hospital and into lower-cost outpatient settings.

The healthcare intelligence firm Sg2 had projected that outpatient surgical volumes would rise 18% over a decade, toward roughly 110 million cases a year. More recent market forecasts have pushed that figure higher, with ASC procedure volume now expected to grow about 21% between 2024 and 2034. The ASC market itself, valued near $45.6 billion, is projected to reach $55.3 billion by 2029.

The 2026 rules changed the equation

The demand story is no longer just about more cases — it's about more complex cases. In its CY 2026 Outpatient Prospective Payment System and ASC Payment System final rule (released November 21, 2025), CMS finalized two changes that dramatically expand what surgery centers are allowed to do:

The Inpatient-Only (IPO) list is being eliminated. CMS is phasing out the IPO list entirely over three years, ending January 1, 2028 — a year faster than originally proposed. For 2026 alone, 285 mostly musculoskeletal procedures (including complex spine and orthopedic codes) come off the list, meaning Medicare will now pay for them in outpatient settings when the physician judges it appropriate.

The ASC Covered Procedures List saw its largest expansion yet. CMS added roughly 560 procedures to the list for 2026, combining new codes approved under revised criteria with procedures pulled from the IPO list. The agency also dropped five long-standing exclusion criteria — such as procedures involving significant blood loss or major blood vessels — recasting them as nonbinding considerations left to physician judgment.

Together, these moves don't just add volume; they raise the acuity of the average ASC case. The historical mix of cataract and GI procedures is shifting toward higher-resource joint, spine, and cardiac work that consumes more operating-room time per case.

On payment, CMS finalized a 2.6% ASC rate update for 2026 (a 3.3% hospital market basket increase, less a 0.7% productivity adjustment), following a 2.9% update in 2025. Total Medicare payments to ASCs are projected to reach about $9.2 billion in 2026, up roughly $450 million from the prior year. Many ASC leaders continue to argue these updates lag true inflation, but the policy direction is unmistakable: CMS is steering appropriate surgical volume toward the lowest-cost clinically suitable setting.

Can supply keep up?

Here is the supply side. There are now roughly 6,500 Medicare-certified ASCs in the U.S. — up from about 6,200 two years ago — and more than 12,000 ASCs in total when non-Medicare-certified facilities are counted. Those Medicare-certified centers operate over 18,000 ORs, averaging just 2.89 operating rooms each. But facility growth is running at only about 1.6% per year.

Hold that growth rate steady for a decade and the country adds only about 1,100 net new Medicare-certified centers — reaching roughly 7,600 facilities. Set that against outpatient surgical demand approaching 110 million cases, and the math points to something in the neighborhood of 14,000 to 14,500 cases per facility annually — and that figure understates the real strain, because each case is trending toward higher acuity and longer OR time than the cases ASCs handled a decade ago.

In other words, demand — measured in both volume and complexity — is growing faster than the physical supply of surgery centers and operating rooms. Cardiovascular and orthopedic specialties, already the fastest-growing, are precisely the ones the 2026 rule changes unlock. The constraint going forward is unlikely to be whether Medicare permits these cases in an ASC; it will be whether enough well-located, appropriately built facilities exist to perform them.

That gap is the opportunity.

NHRD provides outpatient ASC advisory and development services including national site selection, lease negotiation, design management, financing, and ground-up development of surgery centers. Our team partners with leading ASC management companies and physician groups to deliver turn-key ASC real estate expansion. Contact us to discuss your next surgery center development.