Medicare Cost Savings

Since 1982, when Medicare began reimbursing ASCs, the industry has saved the program billions of dollars. Today, with approximately 6,100 Medicare-certified facilities across all 50 states, ASCs perform an estimated 22.5 million procedures each year. On average, Medicare saves more than $4.2 billion annually when surgical procedures are performed at ASCs instead of hospital outpatient departments (HOPDs). Likewise, Medicaid and other insurers benefit from lower prices for services performed in the ASC setting.

Patients typically pay less coinsurance for procedures performed in ASCs than for the same procedures in the hospital setting. For example, a Medicare beneficiary could pay $539 in coinsurance for a cataract extraction procedure performed in a hospital outpatient department, while that same beneficiary's copayment in the ASC would be only $328 (HCPCS 66984).

Without the emergence of ASCs as an option for care, US health care expenditures would have been tens of billions of dollars higher over the past four decades.

What the Experts Are Saying

An analysis of actual Medicare claims data released in 2020 by internationally recognized health economics and policy consulting company KNG Health Consulting, LLC, shows that ASCs reduced Medicare costs by $28.7 billion from 2011 through 2018 and projects that ASCs can be expected to reduce Medicare costs by an additional $73.4 billion from 2019 to 2028. In 2018 alone, that analysis shows, Medicare savings tied to ASCs totaled $4.2 billion. In 2028, they are projected to be more than $12 billion each year. Read the full KNG report to learn more about the cost reductions ASCs offer Medicare and some of the specialties driving future trends.

The 2020 KNG analysis provides an update to a study published in 2013 by researchers at the prominent University of California-Berkeley Nicholas C. Petris Center on Health Care Markets and Consumer Welfare. That study also found that ASCs provide billions of dollars in savings to the Medicare program and its beneficiaries. Specifically, the Berkeley researchers found that ASCs saved Medicare $7.5 billion over the four-year period from 2008 to 2011 and, going forward, predicted that ASCs had the potential to save the Medicare system an additional $57.6 billion over the next decade. For more information, read the full UC-Berkeley analysis.

A report issued by the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) found that outpatient surgical procedures performed in ASCs had saved Medicare more than $1 billion annually for several years—and had the potential for even greater savings in the future. As a result of the cost-savings that ASCs offer, the report concluded, “…Medicare saved almost $7 billion and beneficiaries saved an additional $2 billion during CYs 2007 through 2011. Also, Medicare and beneficiaries could save an additional $12 billion and $3 billion, respectively, during CYs 2012 through 2017.” For more information, read the full OIG report.