CMS Didn’t Cut Hospitals Last Week. It Repriced Every Operating Room in America.
I started in healthcare in 1997. This is the largest opportunity independent physicians have ever been handed.
On July 2, CMS proposed adding 618 procedures to the ASC list.
It proposed removing 638 more from the inpatient-only list.
It cut hospital drug payments by $5.7 billion and, by law, redistributed the money to everyone else.Then it published the year cardiovascular surgery leaves the hospital. 2028.
If you own an operating room, the federal government just repriced your asset.
IN TODAY’S ARTICLE:
CMS proposed cutting 340B drug payments from ASP plus 6% to ASP minus 33.4%. The $5.7 billion doesn’t leave Medicare. Budget-neutrality laws force it back into non-drug services, and ASCs are the purest non-340B class in American healthcare.
618 procedures proposed for the ASC covered list in 2027, on top of 560 surgical procedures added in 2026. The inpatient-only list loses 638 more procedures next year and dies entirely in 2028.
Cardiovascular, the highest-margin service line left within hospital walls, has a published migration date of 2028. ASC capital decisions made today are underwritten as of that date.
Section 6001 still bans physician-owned hospitals from expanding. That makes the ASC the only unrestricted vehicle for physician ownership of surgical infrastructure, at the exact moment Washington is flooding it with cases.
Glossary at the bottom of today’s article.
I started in healthcare in 1997.
That August, Congress passed the Balanced Budget Act. Washington decided which settings of care got fed and which got starved, and it made those decisions the way it always does: in response to whoever showed up with the best lobbyists. Hospitals showed up. They have never stopped showing up.
The numbers tell you who won. In 1997, Medicare paid hospital outpatient departments $17.2 billion. It paid ambulatory surgical centers $1.1 billion. By 1998, barely 2,300 ASCs participated in Medicare at all. The ASC was a rounding error. A place hospitals sent the cases they didn’t want.
Twenty-nine years later, there are roughly 6,400 Medicare-certified ASCs in the United States.
And on July 2, 2026, the federal government made every physician-owned one of them worth more.
THE RULE NO ONE READ CORRECTLY
CMS released the CY2027 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center proposed rule on July 2. The headlines wrote themselves: Medicare slashes 340B payments. Hospitals slam the rule. The American Hospital Association had its objection out within hours, calling the package a continued assault on the 340B program.
The hospital lobby read the rule as an attack. That tells you who wrote the headlines.
Read the same rule from an operating room you own, and it says something different. It says the federal government just executed the largest deliberate volume transfer in Medicare history, and it pointed the volume at you.
Four provisions. Follow each one to where the money lands.
The hospital lobby filed its objection within hours of the rule being dropped.
100,000 physicians, healthcare executives, and lawmakers read The Rojas Report, so the cartel isn’t the only side that knows by lunch.
