How the ASC Covered Procedures List Works

If you are working from anything written before late 2025, its account of the covered procedures criteria is out of date. Here is the change side by side.

The five clinical safety criteria did not vanish. They moved to a new 416.166(d), “Physician considerations”, which states that physicians should consider those safety factors as to a specific beneficiary when deciding whether to perform a covered procedure. CMS described the change as eliminating five general exclusion criteria and moving them into a new section as non-binding physician considerations for patient safety.

First, keep the two lists apart. The Inpatient Only list at 42 CFR 419.22(n) governs whether Medicare pays a hospital for a service furnished in its outpatient department. The ASC Covered Procedures List at 42 CFR 416.166 governs whether Medicare pays an ASC. Different lists, different parts of the regulation, different addenda. They touch at exactly one point: a procedure designated as inpatient only cannot be on the ASC list.

That one point is why the phase-out matters so much to ASCs. Removal from the Inpatient Only list does not by itself put a code on the ASC list — CMS must still add it — but it removes the single largest categorical barrier.

That is regulation text, not preamble language, and it carries a hard end date. This distinguishes the current phase-out from the CY 2021 attempt, which was reversed the following year.

The CY 2026 OPPS and ASC final rule — CMS-1834-FC, 90 FR 53448, published 25 November 2025, effective 1 January 2026 — expanded the ASC list from two directions at once:

• From the criteria change: CMS’s rule text says 276 procedures were added as a result of the revised criteria. CMS’s own fact sheet for the same rule says 289. The figure 276 also appears in the proposed rule, which suggests the final rule’s summary may have carried the proposed count forward while 289 reflects what was actually finalized. We cannot resolve it from the summary documents, so we report both.
• From the Inpatient Only removals: 271 codes that came off the Inpatient Only list for CY 2026 were added to the ASC list.

Note the arithmetic on that second bullet: 285 codes left the Inpatient Only list, and 271 of them landed on the ASC list. CMS does not explain the 14-code gap in either the rule summary or the fact sheet. The likeliest explanations are codes that fail another prong of the current test, but that is inference and we are labelling it as such.

The CY 2026 update factor for centers meeting quality reporting requirements is 2.6 percent — a 3.3 percent hospital market basket increase less a 0.7 percentage point productivity adjustment.

The CY 2027 OPPS and ASC proposed rule is CMS-1850-P, 91 FR 41734, published 7 July 2026, with the comment period closing 31 August 2026. Nothing in it is final, nothing is effective, and nothing in it should be billed against.

• 618 codes proposed for addition to the ASC list — described by CMS as codes “recommended by stakeholders or proposed for removal from the IPO list for CY 2027.” CMS does not break the 618 into those two buckets.
• Proposed ASC update factor of 2.4 percent, based on a proposed 3.2 percent market basket increase less a 0.8 percentage point productivity adjustment.
• Proposed extension of the hospital market basket as the ASC update factor for one more year, through CY 2027. This is easy to miss and it matters: 416.171(a) as codified provides for the consumer price index for urban consumers from CY 2027 onward, and the market basket was authorized only through CY 2026. CMS has to affirmatively extend it each year or the methodology reverts.
• Proposed removal of quality measure ASC-9 from the quality reporting program beginning with the CY 2027 reporting period.
• Proposed changes to the adjustment for no-cost, full-credit and partial-credit devices.

There is one vehicle: the combined annual OPPS and ASC rule. Quarterly updates handle new and revised HCPCS codes, drugs, devices and payment indicator corrections, but surgical procedures are added on the annual cycle.

Proposed rule around July, roughly 60 days to comment, final rule around November, effective 1 January. A center or society that wants a code on the CY 2028 list needs to be working on it in spring and summer 2027.

Effective 1 January 2026, 42 CFR 416.166(e) codifies two routes by which CMS adds a procedure: CMS identifies a qualifying procedure itself, or “CMS is notified of a surgical procedure that could meet the requirements” and confirms that it does.

That second route is the stakeholder path, and having it in the regulation rather than in practice is a real change. The CY 2027 proposal describing 618 additions as partly “recommended by stakeholders” appears to be the first visible output of it.

The check, in order: look for the code in Addendum AA. If it is not there, check Addendum EE to confirm it is affirmatively excluded rather than simply an ancillary service. If it is radiology, a drug, a device or another ancillary, check Addendum BB — and remember those are payable only when integral to a covered surgical procedure on the same claim. Then read the payment indicator in the AA or BB row, which tells you how it pays. For device-heavy cases, check Addendum FF for the device offset.

Re-pull the addenda every quarter. Payment rates are updated quarterly, the January file is not good for the whole year, and indicator assignments sometimes change retroactively.

Verify indicator definitions against the current year’s Addendum DD1 rather than an older transmittal — the indicator set has been added to over time.

Under 42 CFR 416.171(b)(2), a procedure is device-intensive if it meets all three tests: it involves implantable devices assigned a CPT or HCPCS code; it uses devices, including single-use devices, that must be surgically inserted or implanted; and it has a HCPCS code-level device offset greater than 30 percent.

Why it decides whether a case is viable: for a device-intensive procedure the device portion is paid at a rate derived from the OPPS payment rate rather than being scaled down by the ASC conversion factor. That single mechanic is the largest driver of whether a high-cost-implant case works financially in an ASC. Indicators H8 and J8 flag them in Addendum AA; offset percentages and dollar device portions are in Addendum FF.

Two related mechanics. For a device-intensive procedure terminated before anesthesia and billed with modifier 73, contractors use the reduced-price field with the device portion removed. And payment is reduced under 42 CFR 416.179 where a device is furnished at no cost, with full credit or with partial credit — a provision the CY 2027 proposed rule would change.

42 CFR 416.164(a) packages fourteen categories into the facility fee, including nursing and technician services, use of the facility, CLIA-waived lab testing, supplies without pass-through status, equipment, surgical dressings, implanted prosthetic devices and intraocular lenses, splints and casts, integral radiology and diagnostic services, administrative and housekeeping items, anesthesia materials and supplies, and supervision of an anesthetist by the operating surgeon.

416.164(b) lists what is separately payable when integral to a covered procedure: brachytherapy sources, pass-through implantable items, contractor-priced items including corneal tissue acquisition, certain drugs and biologicals separately paid under OPPS, certain radiology and diagnostic services, non-opioid pain management drugs devices and biologicals, and skin substitute supply groups.

416.164(c) lists what is not an ASC service at all and is billed by the practitioner or supplier: physician services including all pre- and post-operative services, anesthetist services, non-integral radiology, unrelated diagnostic procedures, ambulance, braces except where functioning as a cast or splint, artificial limbs, and non-implantable prosthetics and durable medical equipment.