Orthopedic surgery is moving steadily from hospitals to ambulatory surgery centers, and the shift is changing more than the site of care. It is changing the economics of orthopedic practices and raising the stakes for orthopedic revenue cycle management.
Better surgical techniques, anesthesia, pain management and patient selection have made outpatient surgery possible for a broader range of musculoskeletal procedures. Payers also continue to scrutinize site of service and cost. For orthopedic groups, that creates a meaningful growth opportunity, but it also creates a more complex revenue cycle.
An ASC is not simply another place where a surgeon operates. For many groups, it is a major part of enterprise value. Once an organization manages professional revenue, facility revenue, implants and ancillary services, the RCM model must connect all of those pieces. A claim can look correct and still miss the economics of the case. An authorization may cover the procedure but not the facility. Implant reimbursement may go unbilled. A recurring denial may continue because no one recognizes the pattern.
Orthopedic ASC growth is accelerating
Medicare policy is adding momentum to outpatient migration. For 2026, the Centers for Medicare & Medicaid Services added 289 procedures to the ASC Covered Procedures List after revising its coverage criteria. CMS also added 271 codes that came off the Inpatient Only List and began a three-year phaseout of that list with 285 mostly musculoskeletal procedures.
The utilization data point in the same direction. MedPAC reported that ASC volume for total knee arthroplasty increased 27.6% in 2024 and total hip arthroplasty increased 28.7%. Medicare also began reimbursing total shoulder arthroplasty in ASCs in 2024. The number of single-specialty orthopedic ASCs grew 18.9% from 2023 to 2024, while multispecialty centers focused on pain management and orthopedics grew 20.9%. [2]
The cost differential helps explain the attraction. MedPAC reports that Medicare ASC payment rates are about 46% lower than hospital outpatient department rates for most services covered in both settings. AAOS also reported research showing roughly 35% lower total costs for common hand and upper-extremity procedures performed in ASCs versus hospital outpatient departments.
For physicians, the ASC model can create another economic layer. A surgeon performing a hospital case typically generates professional revenue for the practice while the hospital receives the facility payment. When physicians have a compliant ownership interest in an ASC, they may also participate in facility economics. Many orthopedic groups then add imaging, physical therapy, durable medical equipment and other ancillary services. Professional collections alone no longer show the full financial picture.
Where orthopedic ASC billing gets complicated
Moving a case from a hospital to an ASC may lower the cost of care, but it does not automatically make the case profitable. The revenue cycle has to support the clinical and business model before, during and after surgery.
Take a total joint replacement. Before surgery, the team must confirm that the patient’s plan allows the procedure at the ASC and that the authorization names the correct facility. Contract terms must support the case. The professional and facility claims have different billing requirements. Implant reimbursement, medical necessity rules and patient responsibility all require close attention.
Bundled and episode-based reimbursement add another layer. Fee-for-service RCM can focus heavily on individual claims. A bundled arrangement forces leadership to evaluate the financial performance of the full episode, which may include surgery, physician services, rehabilitation and other preoperative or postoperative care.
That changes the central question from “Did the claim get paid?” to “How did the full course of care perform financially?” It also changes denial management. Reviewing denials one at a time can hide root causes. Looking across payer, procedure, surgeon and location can reveal authorization failures, medical-necessity issues, modifier problems or workflow gaps tied to a contract.
Orthopedic RCM requires specialty expertise
Orthopedic revenue cycle management is not generic physician billing with a different specialty code. The workflow is different because the business is different. Effective orthopedic RCM has to connect office-based care, surgical scheduling, ASC billing, coding, authorizations, denials, implants, payer rules and post-acute services.
At Assembly Health, our teams work across professional and ASC revenue cycles with that broader view. The goal is not simply to submit claims faster. It is to understand where revenue is created, where it leaks and how each component of care affects overall performance.
One orthopedic client described the value this way: “Their understanding of orthopedic billing, surgical reimbursement, payer nuances, and ancillary services allowed them to identify opportunities that had previously gone unnoticed.”
What orthopedic leaders should measure now
Traditional RCM metrics still matter, including collections, days in A/R and denial rates. But orthopedic groups with ASCs and ancillary services need a wider operating view. Leaders should be able to answer questions such as:
- Which procedures produce strong financial results in the ASC?
- Which payer contracts support the ASC model, and which do not?
- Where are site-of-service authorizations failing?
- Are implants being captured and reimbursed correctly?
- Which denial patterns repeat by payer, procedure or location?
- How do professional and facility revenue perform together?
- For bundled arrangements, what is the financial result across the full episode of care?
These are strategic questions, not just billing questions. They matter when a group evaluates ASC expansion, a hospital joint venture, a private equity transaction, a health-system partnership or an independent growth strategy. Leaders cannot make those decisions confidently without reliable revenue data across the orthopedic enterprise.
The revenue cycle has to follow the site-of-care shift
Outpatient migration in orthopedics is already here. Some groups will build or expand ASCs. Others will partner with hospitals or larger platforms. Many will remain independent. At the same time, reimbursement will continue to mix fee-for-service with bundled and value-based models.
Whatever path an orthopedic organization chooses, its revenue cycle must keep pace. Strong orthopedic ASC RCM connects the professional claim, the facility claim and the broader episode of care. Getting each claim right remains essential. The larger opportunity is understanding how the entire orthopedic business performs and using that visibility to protect margin, improve decisions and support growth.
References
1. Centers for Medicare & Medicaid Services. CY 2026 OPPS and ASC Final Rule Fact Sheet. CMS source
2. Medicare Payment Advisory Commission. March 2026 Report to the Congress, Chapter 11: Ambulatory surgical center services. MedPAC source
3. American Academy of Orthopaedic Surgeons. “Ambulatory Surgery Centers Are More Cost-Effective than Hospitals for Hand and Upper-Extremity Surgeries,” March 8, 2024. AAOS source
