A surgery center is not considered a hospital. An ambulatory surgery center (ASC) is a distinct type of healthcare facility, separately defined and regulated under federal law. It operates exclusively to provide surgical services to patients who do not require hospitalization, with stays limited to less than 24 hours. That said, the line gets blurry in practice: some surgery centers are owned and operated by hospitals, which creates a different billing and regulatory situation than a fully independent center.
How Federal Law Defines Each Facility
Under Medicare regulations, an ASC is “any distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization and in which the expected duration of services would not exceed 24 hours following an admission.” A hospital, by contrast, provides inpatient care, maintains an emergency department, and offers round-the-clock nursing coverage. These are fundamentally different categories with separate sets of rules, reimbursement rates, and oversight requirements.
The procedures allowed at an ASC are also limited by design. Medicare only approves procedures for ASCs that would not pose a significant safety risk and where the patient would not typically need active medical monitoring at midnight following surgery. In other words, if a procedure is complex enough that you’d likely need overnight care, it belongs in a hospital.
The Hospital-Owned Surgery Center Exception
Here’s where it gets confusing. A surgery center can be owned by a hospital and still be classified as an ASC, or it can be treated as a hospital outpatient department (HOPD). The hospital chooses which designation to use. An independent ASC has no ownership connection to any hospital or larger healthcare system. A hospital-run center operates under the common ownership, licensure, or control of a hospital and can elect to function as either an ASC or a provider-based department of the hospital.
This distinction matters enormously for your bill. When a surgery center operates as a hospital outpatient department, it bills under the hospital’s payment schedule, which is significantly more expensive. A study of Medicare data across 62 sports medicine procedures found that facility fees at independent ASCs were 45% lower than those at hospital outpatient departments. For shoulder procedures specifically, the savings reached 49%. Hip procedures showed a 53% difference in facility fees. The surgery itself may be identical, performed by the same type of surgeon in a similar operating room, but the facility’s classification changes what you pay.
Differences in Staffing and Emergency Readiness
Hospitals must provide 24/7 registered nurse coverage across their inpatient units. Surgery centers have a different requirement: a registered nurse must be available for emergency treatment whenever a patient is present in the facility. Once the last patient leaves for the day, the nursing obligation ends. This reflects the core difference between the two settings. Hospitals are designed to handle anything at any hour. Surgery centers are designed around scheduled, predictable procedures during operating hours.
Federal regulations for ASCs contain specific language about emergency equipment and personnel that goes beyond what’s required of hospital outpatient surgical departments. ASCs must spell out who can operate emergency equipment and how emergencies will be handled. This makes sense given that a freestanding surgery center doesn’t have a hospital’s emergency department down the hall. If something goes wrong during or after a procedure, the center needs a plan to stabilize and transfer the patient to a hospital.
Accreditation Works Differently
Three organizations hold “deemed” status from Medicare to accredit surgery centers: the Joint Commission (which also accredits hospitals), the Accreditation Association for Ambulatory Health Care (AAAHC), and the American Association for Accreditation of Ambulatory Surgery Facilities (AAAASF). Each applies different standards.
- The Joint Commission uses the same standards whether or not a center seeks Medicare certification, and it requires state licensure where applicable. Its standards are written generically to cover all types of patient care settings.
- AAAHC has standards tailored to specific departments and services, making compliance easier to evaluate. It also requires state licensure and applies nearly identical standards regardless of Medicare certification status.
- AAAASF focuses on office-based surgery centers and does not require state licensure. Many of its standards don’t apply if a center isn’t seeking Medicare certification, which can mean less stringent physical plant requirements compared to the other two organizations.
A hospital undergoes a broader, more comprehensive accreditation process that covers emergency services, inpatient units, pharmacy operations, and dozens of other departments. ASC accreditation is narrower, focused on the surgical environment, anesthesia safety, and patient recovery protocols.
Infection Rates and Safety Outcomes
One concern people have about surgery centers is whether they’re as safe as hospitals. Infection rates in the ambulatory setting have consistently been reported as lower than those in hospital environments. A study comparing outpatient surgical facilities found a deep infection rate of 0.38% at a single-specialty ASC across more than 7,300 operations, compared to 0.81% at a multispecialty ASC across roughly 2,900 operations. Both rates were favorable compared to hospital benchmarks.
Several factors contribute to this. Surgery centers handle a narrower range of procedures and typically treat healthier patients who’ve been screened as good candidates for outpatient surgery. Hospitals, by contrast, treat sicker populations and manage complex cases where infection risk is inherently higher. The controlled, high-volume nature of ASC workflows also helps keep complication rates low.
Why the Distinction Matters for You
If you’re scheduling a procedure and comparing facilities, knowing whether your surgery center is an independent ASC, a hospital-owned ASC, or a hospital outpatient department directly affects your out-of-pocket costs. Insurance copays and coinsurance are typically calculated as a percentage of the facility fee, so a 45% difference in that fee translates into real savings. Ask the facility which category it falls under and confirm with your insurance company how it will be billed.
Your recovery expectations also depend on the setting. At a surgery center, you’ll arrive, have your procedure, recover for a few hours, and go home the same day. If complications arise that require overnight monitoring, you’ll be transferred to a hospital. At a hospital outpatient department, you’re already within the hospital system, which can simplify things if your condition unexpectedly requires a longer stay or additional resources.