What Is the GI Site-of-Service Reimbursement Shift?
As of January 1, 2026, CMS finalized a practice expense methodology change in the CY 2026 Physician Fee Schedule that increased Medicare physician payments for office-based GI endoscopy by an average of 16% while cutting physician payments for the same procedures performed in ambulatory surgery centers and hospital outpatient departments by an average of 8%. The American Gastroenterological Association estimates this shifts $37 million toward office-based endoscopy and cuts $58 million from ASC and HOPD-based GI revenue, creating a directional financial incentive for GI practices to move procedure volume from ASCs to office-based endoscopy suites.
Office-based endoscopy: Physician payments for colonoscopy and upper endoscopy performed in the office increased an average of 16% under the 2026 PFS, adding an estimated $37 million to office-based GI revenue nationally.
ASC and HOPD endoscopy: Physician payments for the same procedures in ASCs and HOPDs were cut an average of 8%, removing an estimated $58 million from facility-based GI revenue nationally.
The 2027 outlook: The CY 2027 PFS proposed rule would cut facility-based GI endoscopy physician payments by an additional 3% and office-based payments by 5%, partially reversing the 2026 office gains while continuing to erode ASC margins.
What CMS Changed on January 1, 2026
CMS finalized two policy changes in the CY 2026 Physician Fee Schedule final rule, released October 31, 2025, that together reshaped the site-of-service economics for GI endoscopy.
The first was a 2.5% efficiency adjustment to work relative value units (RVUs) for non-time-based services, including endoscopy. CMS argued that clinicians become more efficient over time and that the current physician survey process overestimates the time required to perform these procedures. The AGA, ACG, and ASGE all opposed the adjustment, calling it arbitrary and unsupported by evidence.
The second was a revision to the practice expense methodology that differentiates more clearly between office-based and facility-based services. CMS increased the practice expense RVUs for office-based procedures, reasoning that physicians who perform procedures in their own office bear higher overhead costs than physicians who use an ASC or hospital facility. The combined effect raised office-based endoscopy payments and cut facility-based payments in the same update.
The result at the procedure level is measurable. For colonoscopy with biopsy (CPT 45380), the 2026 physician payment dropped approximately $14.65 per procedure when performed in an ASC compared to 2025 rates. For colonoscopy with snare polypectomy (CPT 45385), the cut was approximately $18.00 per procedure in the ASC setting.
What Does the Site-of-Service Shift Cost a GI Practice?
The financial impact depends entirely on where your practice performs its endoscopy volume.
| Setting | 2026 Endoscopy Payment Change | 2026 E/M Payment Change | Net Revenue Impact |
| Office-based | +16% avg endoscopy | +8% avg E/M | +$37M nationally |
| ASC-based | -8% avg endoscopy | -9% avg E/M | -$58M nationally |
| HOPD-based | -8% avg endoscopy | -9% avg E/M | Included in -$58M |
For a single GI practice performing 3,000 colonoscopies per year in an ASC, the 8% endoscopy physician payment cut translates to roughly $44,000 to $54,000 in annual revenue loss on the physician fee alone, before accounting for the ASC facility fee impact. The same practice performing that volume in an office-based suite would see a revenue increase of roughly $70,000 to $85,000 from the 16% endoscopy payment boost.
The gap between those two numbers, roughly $114,000 to $139,000 in annual revenue difference on the same procedure volume, is the financial incentive CMS built into the 2026 fee schedule. It is not subtle, and it is not an accident. CMS stated explicitly that the practice expense methodology revision was intended to incentivize physicians to perform procedures in the lowest-cost setting.
In our experience matching GI providers with billing partners, the practices that have already modeled this math are the ones making informed decisions about whether to invest in office-based endoscopy infrastructure. The practices that have not modeled it are absorbing the ASC cuts without realizing the alternative exists.
The 2026 site-of-service shift moved real money between GI practice settings, and the 2027 proposed rule would move more. If your billing team has not modeled what the payment differential means for your procedure volume, payer mix, and facility arrangement, a billing partner with GI-specific fee schedule expertise can run that analysis. Gastroenterology Billing matches your practice with vetted billing companies, free.
Which GI Practices Should Consider Office-Based Endoscopy?
Not every GI practice can or should move endoscopy volume to an office-based suite. The AGA has published guidance noting that office-based endoscopy works best for low-acuity ASA I and II patients undergoing short diagnostic or surveillance procedures. Higher-acuity patients, complex therapeutic procedures, and cases requiring anesthesia support are better suited to the ASC or HOPD setting.
The practices that benefit most from the shift are independent GI groups that currently lease ASC time or share an ASC with other specialties, and whose procedure mix is heavily weighted toward screening and surveillance colonoscopies in healthy patients. For these practices, the 16% payment increase on office-based procedures can fund the capital investment in an endoscopy suite within two to three years, depending on volume.
Practices that own their ASC face a different calculation. The ASC facility fee, which is paid separately from the physician fee, partially offsets the physician payment cut. But the physician payment is what the gastroenterologist takes home, and the 8% reduction on that line affects compensation directly. For practices navigating these economics alongside the 2027 Medicare GI payment changes, the compounding effect of consecutive years of facility-based cuts makes the trend line clear.
How to Respond to the Site-of-Service Shift
These six steps help GI practices evaluate and act on the 2026 reimbursement restructuring.
1. Pull your procedure volume by site of service. Break your colonoscopy, upper endoscopy, and polypectomy volume into office-based, ASC-based, and HOPD-based categories. This is your baseline for modeling the revenue impact.
2. Calculate the per-procedure payment difference. Compare the 2026 Medicare physician payment for each CPT code in each setting. The AGA has published procedure-level payment comparisons that show the exact dollar difference for CPT 45380, 45385, 43239, and other high-volume GI codes.
3. Model the annual revenue impact at your volume. Multiply the per-procedure difference by your annual volume in each setting. This number tells you how much the site-of-service shift costs or gains your practice under the 2026 fee schedule.
4. Evaluate office-based endoscopy feasibility. If the revenue math favors office-based, assess the capital cost of an endoscopy suite, the regulatory requirements in your state, and whether your patient acuity mix supports moving volume out of the ASC.
5. Review your ASC arrangement. If you lease ASC time, the 2026 physician payment cut makes renegotiating the lease terms worth pursuing. If you own the ASC, model the combined physician and facility fee impact to see the full picture.
6. Audit your billing for site-of-service accuracy. Every claim must report the correct place of service code: 11 for office, 24 for ASC, 22 for HOPD. A mismatched POS code creates either an overpayment (recoupment risk) or an underpayment (revenue loss). For practices billing preventive colonoscopies that convert to therapeutic, confirm your modifier 33 usage is correct across all settings.
What Does the 2027 Proposed Rule Add?
The CY 2027 PFS proposed rule, published by CMS in September 2026, would add further cuts to GI endoscopy payments across all settings. According to the AGA’s analysis, the proposed rule would reduce physician payments for facility-based endoscopy by an additional 3% and for office-based endoscopy by approximately 5%. ASC facility payments for most GI endoscopy procedures are also expected to decline by approximately 8%.
The 2027 office-based reduction would partially reverse the 16% gains practices received in 2026, bringing the net two-year office increase down to roughly 11%. Meanwhile, facility-based practices would absorb a second consecutive year of cuts, with the cumulative two-year reduction approaching 11% in the ASC setting.
One question we hear constantly from GI practice managers is whether the site-of-service trend is a one-year adjustment or a permanent direction. Based on the CMS policy rationale, which explicitly aims to incentivize lower-cost settings, and the two consecutive years of facility cuts, the trend appears structural rather than temporary. Practices that plan for the long term should model their site-of-service economics over a three to five year horizon, not just the current fee schedule year.
Billing Accuracy Across Settings
Across the billing companies we vet for GI practices, the site-of-service shift has created three billing accuracy problems that did not exist at this scale before 2026.
Place of service code errors. Practices that perform procedures in both office and ASC settings sometimes submit claims with the wrong POS code, usually because the default in the EHR was set for one location and never updated when the procedure moved. A colonoscopy billed as POS 11 (office) when it was performed in POS 24 (ASC) triggers a payment at the office rate, which is now higher. That overpayment is a recoupment risk on audit.
Split billing confusion. When a practice performs the procedure in an ASC it does not own, the physician bills the professional component and the ASC bills the facility component. When the practice moves that procedure to the office, the practice bills the global code. Billing teams that do not update the component configuration when procedures move between settings create denials that repeat on every claim.
Payer-specific site-of-service rules. Medicare’s site-of-service payment differential is now significant enough that some commercial payers are adopting similar structures. Practices that assume all payers pay the same rate regardless of setting are underpricing their office-based procedures or overpaying their ASC lease based on outdated assumptions.
Frequently Asked Questions
How much did CMS cut ASC endoscopy payments in 2026?
CMS reduced physician payments for GI endoscopy performed in ASCs by an average of 8% under the CY 2026 Physician Fee Schedule. For colonoscopy with biopsy (45380), the cut was approximately $14.65 per procedure. For colonoscopy with snare polypectomy (45385), the cut was approximately $18.00 per procedure.
How much did office-based endoscopy payments increase?
Office-based GI endoscopy physician payments increased an average of 16% under the 2026 PFS. The AGA estimated this adds approximately $37 million to office-based GI revenue nationally. The increase was driven by a practice expense methodology revision that raised RVUs for office-based procedures.
Why is CMS making this change?
CMS stated that the practice expense methodology revision reflects the higher overhead costs physicians bear when performing procedures in their own office versus a facility. The policy intent is to incentivize procedures in the lowest-cost setting. The GI societies have opposed the facility cuts, arguing they threaten ASC infrastructure needed for complex and high-acuity cases.
Should my GI practice invest in office-based endoscopy?
It depends on your volume, patient acuity mix, and state regulatory requirements. Office-based endoscopy works best for low-acuity ASA I and II patients undergoing screening or surveillance colonoscopies. Higher-acuity patients and complex therapeutic procedures are better suited to ASC or HOPD settings. Model the revenue impact at your specific volume before making the investment.
Does the 2027 proposed rule continue the trend?
Yes. The CY 2027 PFS proposed rule would reduce facility-based GI endoscopy physician payments by an additional 3% and office-based payments by approximately 5%. ASC facility payments would also decline by approximately 8%. The two-year cumulative effect continues to widen the gap between office and ASC economics.
Do commercial payers follow CMS site-of-service differentials?
Increasingly, yes. Several state health plans have introduced programs to promote endoscopy in office settings rather than ASCs or HOPDs due to lower costs. Practices should review each commercial contract’s site-of-service payment terms to confirm whether the Medicare differential is mirrored in their commercial rates.
Next Steps
Review the 2027 Medicare GI payment changes to see how the proposed rule compounds the 2026 cuts.
For colonoscopy billing when a screening converts to therapeutic, see our modifier 33 billing guide.
Model your site-of-service economics at your procedure volume and payer mix before the 2027 final rule is published.
Ready to stop losing revenue to the site-of-service shift? Get matched with a GI billing partner who models these economics.
The CMS site-of-service shift is structural, not temporary. Two consecutive years of facility-based cuts and office-based increases are reshaping GI practice economics. Gastroenterology Billing matches your practice with vetted billing companies that specialize in GI endoscopy billing, site-of-service modeling, and payer contract optimization. Free quotes, all 50 states, rates starting at 2.95%.
