The Service Line

Surgery Partners, the nation’s largest publicly traded pure-play operator of ambulatory surgery centers (ASCs), posted a net loss that widened sixfold in the second quarter just as it walked back its acquisition target for the year, underscoring how expensive it has become to grow through deals even for the sector’s biggest consolidator. Surgery Partners (NASDAQ: SGRY) reported August 10, 2026 that its net loss attributable to the company grew to $15.0 million in the second quarter, up from $2.5 million a year earlier, even as revenue rose 2.7 percent to $848.9 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $125.2 million. Management told investors it will “clearly not reach” its long-standing target of $200 million in average annual acquisition spending this year after closing only an immaterial amount of mergers and acquisitions (M&A) year to date, though it still expects to close additional deals before year-end and reaffirmed full-year revenue guidance of $3.35 billion to $3.45 billion. The results land three weeks after Surgery Partners signed escrow documents to sell its last two hospital stakes, in Idaho, to Intermountain Health for roughly $795 million, a move the company calls the clearest step yet in its pivot to a standalone, ASC-only surgical platform. Confidence: High on the reported financial figures, Medium on whether the M&A pace recovers before year-end as management projects. Sources: Surgery Partners, Inc. Announces Second Quarter 2026 Results Reaffirms Full Year 2026 Guidance, GlobeNewswire, Surgery Partners’ net loss widens 500% in Q2, Becker’s ASC Review.

Reimbursement

The public comment period on the Centers for Medicare & Medicaid Services’ (CMS) proposed 2027 payment rule for hospital outpatient departments and ambulatory surgery centers closed August 31, 2026, and the Healthcare Financial Management Association told CMS the rule’s proposals could hit providers with disruption the agency has not adequately justified. The Calendar Year (CY) 2027 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) proposed rule, published in the Federal Register July 7, 2026, would raise ASC payment rates 2.4 percent, add roughly 618 procedures to the ASC Covered Procedures List, remove 637 more services from the Inpatient-Only list, and eliminate the alternative device pass-through payment pathway effective October 1, 2026, requiring all new device applicants to meet the tougher “substantial clinical improvement” standard. In its August 31 comment letter, the Healthcare Financial Management Association (HFMA) flagged nine separate provisions, including the device pass-through change, the Inpatient-Only list phase-out, and new site-neutral payment proposals, warning that “several proposals in this rule, particularly when considered together, could create significant financial and operational disruption without sufficient evidence” the changes improve value for Medicare beneficiaries. For ASC operators building device-intensive total-joint, spine, and cardiac programs, the pass-through change matters most: a “substantial clinical improvement” standard is a materially harder bar to clear than the temporary alternative pathway CMS has used in recent cycles. Separately, the temporary hospital market-basket formula ASCs have used for their annual payment update since 2019 still expires at the end of this calendar year, and the Senate and House bills that would make it permanent, S.4963 and H.R.8091, remain stuck in committee. CMS is expected to finalize the CY2027 rule around November. Confidence: High on the rule’s provisions and comment period closing, Medium on how CMS responds to HFMA’s concerns in the final rule. Sources: Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems, Federal Register, HFMA Comments on CY 2027 Hospital OPPS and ASC Proposed Rule, Healthcare Financial Management Association.

Enforcement

The Federal Trade Commission (FTC) still has not resolved its landmark antitrust case against the private-equity-backed anesthesia consolidator blamed for driving up prices across Texas, four months after the agency announced a deal to settle it, leaving ambulatory surgery centers that contract with roll-up anesthesia groups in limbo. The FTC sued U.S. Anesthesia Partners (USAP) in September 2023, alleging the Welsh Carson-backed company spent a decade buying up nearly every large anesthesia practice in Texas to build market power that let it “demand higher prices for anesthesia services, costing Texans tens of millions of dollars in extra healthcare costs each year.” The FTC announced an agreement in principle to settle on April 23, 2026, and a federal judge stayed the litigation the next day to give the parties time to finalize terms, but as of this week no consent order has been entered and the settlement’s substance remains confidential. USAP has already shrunk its footprint from 12 states to 9 since the case was filed, and the eventual terms will be closely watched by any ASC operator whose anesthesia coverage runs through a private-equity-backed group, since this is the first time the FTC has pursued a completed practice roll-up on a retroactive basis rather than blocking a deal before it closes. Confidence: Medium, the case’s outcome and its precedential reach beyond Texas anesthesia remain unsettled. Source: U.S. Anesthesia Partners, Inc., FTC v., Federal Trade Commission.

Who’s Buying

Private equity’s retreat from healthcare services is hitting physician practices far harder than it is hitting ambulatory surgery centers, a divergence that is reshaping who gets acquired and at what price. PitchBook’s Q2 2026 Healthcare Services Report, published in August, found overall healthcare services deal count down 18.5 percent year over year amid higher interest rates, softer utilization, and heavier regulatory scrutiny, but the pain concentrated in physician practice management, the sector’s largest deal category: physician practice management deal volume fell to 71 in the second quarter, down from 89 in the first quarter, and is on pace to decline 46 percent for all of 2026 compared with 2025. Ancillary and outsourced services, the PitchBook category that includes ASCs alongside clinical staffing and diagnostic labs, proved comparatively resilient. The split helps explain why Surgery Partners can still describe the “fragmented ASC industry” as a continuing consolidation opportunity even while pulling back its own deal pace, and why strategics such as Tenet’s United Surgical Partners International, Optum’s SCA Health, and Ascension, who between them now own the three largest ASC platforms, face less competition from financial sponsors chasing the same assets. Confidence: Medium, PitchBook’s category definitions can shift between reports, and the ASC-specific deal count within “ancillary services” was not separately broken out. Source: Q2 2026 Healthcare Services Report, PitchBook.

Clinical Policy

A Medicare prior-authorization pilot that survived a Senate repeal vote this summer now covers several of the highest-volume pain and orthopedic procedures ambulatory surgery centers perform, in six states including Ohio. The Wasteful and Inappropriate Service Reduction (WISeR) Model, a Center for Medicare and Medicaid Innovation (CMMI) demonstration that uses artificial intelligence to screen prior-authorization requests, launched January 1, 2026 in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington, and requires prior authorization for services including epidural steroid injections, knee arthroscopy for osteoarthritis, and several nerve-stimulation procedures, codes that sit squarely in the ASC pain-management and orthopedic sports-medicine caseload. The U.S. Senate voted 46 to 50 on July 16, 2026 against an effort to block the model, clearing the way for it to run through its planned end date of December 31, 2031, covering roughly 6.4 million traditional Medicare beneficiaries across the six states. Providers and trade groups have reported Medicare prior-authorization denials up 31 percent year over year in 2026 broadly, though that figure spans more than just WISeR-covered services. For an Ohio pain-management or orthopedic ASC, the model means building prior-authorization turnaround into scheduling for codes that previously required none, a workflow cost CMS has not built into ASC payment rates. Confidence: Medium, the 31 percent denial-rate figure is not WISeR-specific and CMS has not published model-specific approval or denial rates for the six pilot states. Sources: WISeR Model, Center for Medicare and Medicaid Innovation, Medicare WISeR Model Requires Prior Authorizations in Six States, Moss Adams.

The Operator Metric

$5,057. That is the net revenue Surgery Partners collected per surgical case in the second quarter of 2026, up 5.8 percent from a year earlier even as total case volume grew just 0.3 percent quarter over quarter, and it is the clearest public benchmark ASC operators have for how much of this year’s growth has to come from pricing and case mix rather than simply doing more procedures. The figure comes from Surgery Partners’ same-facility metrics disclosed alongside its August 10 earnings release, where the publicly traded ASC operator reported same-facility revenue growth of 5 percent driven almost entirely by higher revenue per case rather than more cases walking through the door. For independent and joint-venture ASCs without Surgery Partners’ payer-contracting scale, the number is a reminder that flat or low-single-digit case growth, which several operators have also reported this year, means the payer mix and acuity of the cases an ASC recruits, not just its case count, now determines whether its budget holds up against rising anesthesia, staffing, and supply costs. Confidence: Medium, the figure is one public company’s disclosure rather than an industry-wide claims benchmark. Source: Surgery Partners, Inc. Announces Second Quarter 2026 Results Reaffirms Full Year 2026 Guidance, GlobeNewswire.