The Service Line

Optum wants to go deeper into surgery centers, and its parent’s third-quarter numbers show why the strategy is back on the table: Optum Health, the UnitedHealth Group unit that owns the 370-plus-center SCA Health platform, lifted its operating margin to 3.2 percent from 0.2 percent a year ago even as revenue fell 10 percent. Optum Health Chief Executive Officer Krista Nelson named ambulatory surgery centers (ASCs) among the unit’s high-performing service lines on UnitedHealth’s October 13 earnings call, saying there is “lots of opportunity for growth in those services to go deeper in our existing markets,” according to ASC News’ account of the call. UnitedHealth’s third quarter 2026 earnings release reports Optum Health revenue of $22.9 billion, earnings from operations of $735 million versus $41 million a year earlier, and credits “operational discipline and medical cost management” in its value-based care markets. The release does not break out ASC results. For operators, the so-what is payer leverage: ASC News counts SCA Health at more than 370 centers in 35 states, second only to Tenet’s USPI at 533, so an insurer-owned platform that deepens in its existing markets is a contracting counterparty and a competitor in the same metro. Confidence: High on the financials, Medium on what “go deeper” means in practice, since no ASC revenue or margin was disclosed.

Reimbursement

The Centers for Medicare & Medicaid Services (CMS) built its proposed 2.4 percent ASC rate increase for 2027 on the hospital market basket, not the smaller consumer-price formula, but the code-level math is uneven and pain procedures take the hit. CMS’s CY2027 OPPS/ASC proposed rule fact sheet states the update is the projected 3.2 percent market basket less a 0.8 percentage point productivity adjustment, and proposes removing 638 services from the Inpatient Only list in the second year of a three-year phase-out. The Hospital Outpatient Prospective Payment System (OPPS) proposal was published July 7, and the final rule is expected in November. The American Society of Interventional Pain Physicians, reading the rule’s ASC addenda, reports a conversion factor moving from $56.322 to $57.766, spinal cord stimulator generator insertion (63685) up 14.8 percent, and lumbar epidural injections (62323, 64483) down 3.8 percent. ASCs that miss quality reporting get a 0.4 percent update instead of 2.4 percent. Confidence: High on the 2.4 percent and its basis (CMS); Medium on code-level rates, which are a specialty-society read of proposed addenda and can change in the final rule.

Enforcement

The Department of Health and Human Services Office of Inspector General (OIG) estimated Medicare improperly paid $15.2 million for sacroiliac joint injections in a single year, and the agency’s top fix, a national coverage policy, was rejected by CMS. In report OAS-25-09-021, issued August 3, auditors found 72 of 100 sampled sessions did not comply with Medicare requirements, and estimated 134,526 of 186,842 sessions from October 2023 through September 2024 were improperly paid, including about 46,711 billed as therapeutic injections when they should have been diagnostic. OIG recommended education, steps such as modifier KX education to stop diagnostic injections being billed as therapeutic, and a national coverage determination or local policies for the two Medicare contractors without one. CMS agreed to the first two and declined the third. The audit examined physician claims, not ASC facility claims, but the procedure is a staple of ASC pain practices, and the findings are a documentation-audit roadmap. We found no new Department of Justice settlement involving an ASC in this window. Confidence: High on the findings (OIG); Medium on ASC relevance.

Who’s Buying

A nonprofit hospital system and an Ascension-owned platform both added to their surgery center footprints this month, a reminder that the buyers in the ASC market now include health systems, insurers, and their subsidiaries rather than financial sponsors. CommonSpirit Health created a division, CommonSpirit Ambulatory Ventures, to grow its ASC business, reporting in its financial disclosures that it owns all or part of 80 ASCs and 239 ambulatory joint ventures across about 2,600 care sites in 24 states, per ASC News. Separately, AMSURG, which Ascension bought, announced October 13 that it acquired the two-site Euclid Endoscopy Center in San Diego and El Cajon, five gastroenterologists and three procedure rooms, lifting its California total to 25 centers, according to ASC News’ dealbook. Terms were not disclosed. The same dealbook reports the consulting firm Avanza + MedHQ bought the payer-contracting firm Fulcrum Strategies, which says it has secured more than $100 million in negotiated rate increases for providers. Confidence: Medium, trade-press sourced, no primary filings located for the AMSURG deal.

Clinical Policy

The supply of surgeons, the scarcest input for ASC growth, is projected to fall 4.2 percent by 2038 while demand rises 12.8 percent, leaving the country 27,940 surgeons short. Two studies presented ahead of the American College of Surgeons Clinical Congress, summarized by ASC News on September 29, used the federal Health Workforce Simulation Model to project only 84.3 percent of need met across 10 specialties. The worst gaps are vascular surgery at 65.8 percent, ophthalmology at 71.8 percent, and plastic surgery at 74.1 percent, with orthopedics at 87.9 percent. A companion distribution study found 951 of 3,144 counties had no surgeon in any of 12 specialties. For ASC operators, ophthalmology and orthopedics are the two highest-volume lines, so recruitment and retention economics, including equity offers that must clear the Anti-Kickback Statute safe harbors, matter more than rate updates at the margin. Confidence: Medium, the studies are summarized by trade press and the journals were not named.

The Operator Metric

Medicare’s improper payment rate for ASCs is 14.7 percent, about $656.3 million, and 92.8 percent of those errors are missing or insufficient documentation rather than coding mistakes. CMS’s ASC compliance page, citing 2024 fee-for-service supplemental improper payment data, attributes 58.8 percent of ASC errors to insufficient documentation, 34 percent to no documentation, and 7.2 percent to incorrect coding. Track your own denial reasons against that split this week: if your audit exposure looks like the national mix, the fix is in the chart (consent, pre-operative history and physical, operative findings, anesthesia entries, discharge notes), not the coding desk. Pair it with the quality-reporting deadline, since missing it costs 2 points of the 2027 update. Confidence: High on the figures (CMS), noting they reflect 2024 data.