This month's Union Strategy Bootcamp, “How to Speak Ambulatory" is set to cover all the essentials: Key concepts, players, controversies, data points, and market-shaping trends. The world of ambulatory is a dynamic one and there's always tons to talk about; In today's post, I want to carve out just a subset of the provider landscape—ambulatory surgery centers (ASCs), infusion centers, and physician groups that are heavy on in-office specialty procedures—and share five key trends we are watching for this group this year.
Point of order: Why am I classifying these sites together as 'specialty ambulatory'?
Today I'm categorizing ASCs, infusion centers, and in-office procedure-heavy physician groups into one bunch because they share common financial, operational, and regulatory dynamics. Such as:
Definitionally non-inpatient, high-margin, medium-acuity care.
Heavily impacted by site-neutral payment reforms.
Attract investments from private equity (PE) and others including hospital systems, insurers, and the emerging category of "new strategics" (drug distribution and supply chain conglomerates like Cencora, McKesson, and Cardinal Health).
You could certainly argue for the inclusion of Imaging centers, but they tend to be lower-margin and more commoditized than the rest of the cohort, so, I'm leaving them out for today.
Trend # 1. Site-neutral payment reform keeps unfolding (so don't take your eye off this ball)
Site-neutral payment reform is one of those 'hiding in plain sight' healthcare trends (like consumerism, or risk-based payment) that is easy to accidentally discount because it seems like old news; but that's always a mistake because, it's an ongoing, phased process that triggers new market effects every year. Every year, CMS takes at least two major kinds of actions on this front. It adds more procedures to the 'safe to be done in an ASC setting' list, which opens up those procedure to potential HOPD competitors. It also adds new procedures to the site neutral payment set, i.e., procedures to be reimbursed at same rate across different outpatient settings. This reduces the long-standing financial advantage of off-campus hospital outpatient departments (HOPDs) over ASCs, infusion centers, and physician office settings for those specific procedures. (More on the fragile exception around currently grandfathered on-campus HOPD rates in a moment.)
2025 saw many additions to the site neutrality procedural universe, of which the following three are especially interesting:
Rotator cuff repairs can now be done in ASCs. Interesting because the impact is likely to be swift. Orthopedic ASCs are plentiful, highly competitive, and insurers have strong mechanisms in place to steer patients for this type of procedure.
Off-campus HOPDs lost their payment advantage for drug infusions, now reimbursed at the same rate as physician offices and independent infusion centers. Interesting because it's a broad change, covering many chemotherapy infusions, biological infusions for autoimmune diseases, and Intravenous immunoglobulin (IVIG) therapy for patients with immune deficiencies
19 new dental surgical procedures were added to the ASC-covered list. Interesting because, while not a huge revenue pillar for hospitals today, it's an area of high demand among Medicare patients, and low capacity among many health systems--potentially opening the door to a new line of business for ASCs.
What to watch in ambulatory world:
In a nutshell: Whether/when the final domino might fall, that is, on-campus HOPDs losing their higher rates.
So far, hospital systems have managed to protect their higher rates for on-campus outpatient settings. But the payment gap between Medicare on-campus HOPD rates and ASC/physician office rates keeps widening (due to differences in rate-setting methodologies), which adds urgency to the question of whether/when payers can bring those rates down.
The 2023 proposed Cassidy-Hassan SITE Act aimed to eliminate this final payment gap. That proposed legislation is still in the Senate Finance Committee, but re-appeared at the end of 2024 as a proposed legislative framework that seems to enjoy bipartisan support.
Extrapolating from the previous to the current Trump administration seems increasingly dicey these days but, for what it's worth, the previous Trump administration did propose budgets that would have included on-campus HOPD site-neutrality as a cost-cutting move.
Trend #2. MA utilization spikes + scrutiny on denials = potential rate cuts?
Insurer economics are tough right now. All major Medicare Advantage insurers are under pressure due to higher-than-expected utilization. Medical loss ratios (MLR) are up; net profit margins and stock performance have been affected. At the same time, insurers are under public and regulatory pressure not to over-rely on go-to controls for this situation, specifically, prior authorization and denials—especially if automating them.
All this places insurer-provider contracting under a certain amount of pressure, as insurers look for ways to stabilize their finances. This industry-wide macro issue affects all providers and many other healthcare ecosystem participants, but as today we are keeping the lens on ambulatory world, here are a few things we are keeping our eye on there.
What to watch in ambulatory world:
• Smaller specialty providers (with less market relevance) could see rate cuts—in MA and, to a lesser extent, commercial insurance. Especially in high-margin areas such as orthopedics, GI, and cardiology.
• Insurers will continue to push on all available ambulatory utilization control levers—including related investments in AI, accelerating adoption of two-sided risk contracts with providers, and narrowing networks further.
Trend #3. PE in ambulatory care: Is the window reopening?
PE has been a massive shaping force in ambulatory specialty sector for the last decade or more. Its participation has been controversial all along and, in 2024, the financial collapse of Steward Healthcare seemed as it might act as the tipping point for regulatory action. However, with a Trump administration now in seat, conventional wisdom among PE leaders is that regulation is less likely, and there may now be an opportunity to re-engage in this space.
What to watch in ambulatory world:
• Specialty groups in cardiology, orthopedics, and GI attracting renewed interest from PE-backed consolidators.
• Continued trend of PE firms altering the form of their investment in these groups--not owning the groups outright, but instead acquiring companies acting as management services organizations (MSOs) to the relevant groups. The point here being to mitigate corporate practice of medicine concerns.
• Capital to continuing to flow into ancillary services (revenue cycle, infusion, imaging) where business fundamentals are strong and oversight is lighter.
Trend #4. "New strategics" are expanding their presence in the infusion market
Over the past few years, pharmacy and drug distribution giants Cencora (formerly AmerisourceBergen), McKesson, and Cardinal Health have been expanding their influence in the specialty ambulatory world, particularly in infusion services. These companies, historically focused on drug distribution, specialty pharmacy, and supply chain logistics, are increasingly moving downstream by acquiring or partnering with specialty physician groups whose revenue model revolves around pharmaceutical interventions, as well as independent infusion centers. This strategy is linked to buy-and-bill economics, in which the new owner can capture both the drug distribution margin and the provider-side infusion revenue.
Examples include Cencora expanding its oncology group and specialty pharmacy footprint, investing in patient access programs and provider partnerships. McKesson, through its US Oncology Network, has long played a dual role as both a distributor and practice management organization for oncology providers. Now, it’s extending this model into broader specialty infusion. Cardinal Health has been investing heavily in provider-facing services, including specialty drug financing and infusion site-of-care optimization, and has recently also acquired oncology groups.
What to watch in ambulatory world
More infusion centers may align with these players rather than traditional providers.
Health systems will start ramping up competitive strategies to protect their market share of specialty drug administration.
Expect continued debates over drug pricing, site-of-care incentives, and business tensions/conflict of interests relating to this comparatively new type of vertically consolidated corporate player.
Trend #5. Home infusion: A future threat to infusion centers?
Freestanding infusion centers and independent physician offices have been gaining market share on the basis of being the go-to low-cost alternative to hospital-based infusions. The question is, can an even lower-cost option—home infusion—gain traction as the next disruptive force in this part of healthcare?
Advances in drug formulation, remote patient monitoring, and infusion pump technology are making it increasingly feasible for patients to receive biologic therapies at home rather than in an infusion center or hospital outpatient department. And at the same time, payers are looking to cut costs— home infusion can be significantly cheaper than facility-based care, particularly for high-cost biologics used in rheumatology, oncology, and neurology.
So, no surprise that in the commercial world, insurers are experimenting with reimbursement models that steer patients toward home infusion, either by reducing facility-based reimbursement rates (where they can) or implementing site-of-care optimization programs that push biologic drug infusions away from hospitals and into the realm of specialized home infusion providers where possible. But the shift isn’t without resistance: hospitals and infusion center providers argue that home infusion isn’t suitable for all patients, especially those at higher risk of infusion reactions.
What to watch in ambulatory world:
Tech advances (remote monitoring, drug stability) aiming to make home infusion safer and more scalable.
Insurers testing more policies, benefit designs, etc. that push high-cost biologic infusions into home settings.
Regulatory fights over home infusion safety and reimbursement structures.
Final thought: Ambulatory specialty trends are just one piece of the ambulatory world puzzle
Ambulatory specialty is its own unique world within healthcare, with domain-specific players and trends that are important to keep up with. We will be taking a look at all the issues mentioned here, along with controversies, data points, major players, and key concepts that all senior executives should be conversant in during our upcoming Strategy Bootcamp, “How to Speak Ambulatory”. It's slated for 1 p.m. ET on Thursday, March 20.
Union members register from the Strategy Bootcamp page here.
Non-union members, email info@unionhealthcareinsight.com for more information!
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