Outpatient settings and ASCs are taking over inpatient-only procedures

Medicare began phasing out its Inpatient-Only list in January 2026, removing 285 primarily musculoskeletal procedures from mandatory hospital settings. This marks the start of a three-year transition to outpatient care. The shift prioritizes ambulatory surgical centers (ASCs) and outpatient clinics for procedures previously restricted to hospitals. Trilliant’s research chief Allison Oakes highlights this as a major cost-saving and efficiency move. Reimbursement policies are adapting to support the transition, aligning payments with lower-cost outpatient settings. This reflects broader Medicare and Medicaid efforts to reduce healthcare spending. The change impacts revenue cycles, requiring providers to adjust billing and operational workflows. Hospitals may face financial pressure as high-reimbursement procedures migrate. The trend accelerates industry consolidation, favoring providers with strong outpatient networks. Analysts expect further procedure removals, reshaping care delivery and reimbursement models.