This sector just scored 2026 reimbursement growth above inflation

In a year where US political headlines have kept healthcare investors on edge, the latest round of Medicare reimbursement updates delivered an under-appreciated boost to medtech. Over the past month, the Centers for Medicare & Medicaid Services released final and proposed payment rules for hospitals, outpatient facilities, surgical centers, and physicians — and the numbers are quietly stronger than many expected.

For 2026, hospital outpatient and ambulatory surgical center (ASC) rates are set to rise by an average of +2.4%, but the story gets better for many medtech-relevant procedures. In our coverage universe, ASC rates are proposed to climb +5.0% and hospital outpatient rates +4.5%, comfortably ahead of the all-code average and well clear of current levels of inflation.

On the inpatient side, the final rule for 2026 locks in a +2.6% increase in hospital payments adding another layer of earnings visibility for device makers tied to acute care volumes.

And finally, as the government looks to lessen the burden on traditional medical care facilities, CMS has increased the office-based physician fee schedule by +16.5% across all codes for next year. Even here, the medtech impact skews positive, with the strongest growth concentrated in office-based procedures that are often higher-margin and more defensible against hospital cost pressures.

The common thread? In the parts of the Medicare system that matter most for medtech, reimbursement growth is outstripping inflation, offering a rare policy tailwind in an otherwise noisy year.

Why This Matters for Investors

For medtech companies, reimbursement is a direct lever on revenue and margins. Above-inflation updates across key sites of service mean:

1. Earnings visibility improves
Predictable, annual increases from Medicare provide a base level of pricing growth that can offset wage, materials, and logistics inflation. In a high-cost environment, that’s a built-in margin defence.

2. Procedure volumes stay supported
Hospitals, ASCs, and physician groups are more likely to maintain or expand capacity for procedures that see strong reimbursement growth. This is particularly relevant in areas where deferrable procedures compete for constrained operating theatre time.

3. Mix shifts to higher-margin settings
The divergence between office-based and facility-based physician payments is likely to accelerate site-of-service shifts. Office-based procedures often carry higher margins for both providers and device companies, and can support faster adoption of new technologies.

4. Political noise becomes less threatening
With US elections approaching, reimbursement stability removes one of the key risk overhangs. Investors can separate campaign rhetoric from the operational reality: Medicare continues to fund critical procedures at rates that outpace cost growth.

5. Sector-wide uplift, but targeted winners
While the policy direction is positive, the magnitude of benefit will vary. Companies exposed to high-growth procedural codes - particularly in ASC and office settings - stand to see the most direct revenue and earnings impact.

Where to Look: Company & Procedure-Level Winners

Hypoglossal Nerve Stimulation – Inspire Medical (NYSE: INSP)

• The reimbursement code for INSP's Gen 5 device is proposed up +5.0% in the ASC and +4.2% in hospital.

• Physician reimbursement for the procedure is proposed up +10.9%.

Cardiac Ablation – Abbott (NYSE: ABT), Boston Scientific (NYSE: BSX), Medtronic (NYSE: MDT)

• Pulmonary vein isolation, ventricular tachycardia, and supraventricular tachycardia ablation rates are all proposed up ~+10% in the outpatient setting, with atrioventricular node isolation up +5%.

Vascular – Penumbra (NYSE: PEN), Stryker

• Arterial thrombectomy rates: +4.9% ASC / +4.6% HOPD; venous mechanical thrombectomy: +7.9% ASC / +4.7% HOPD — both positive for Penumbra and potentially Stryker’s new Artix.

Foot & Ankle – Stryker (NYSE: SYK)

• Proposed increases average out to be +7% ASC / +6% HOPD, with standout gains in ankle arthroplasty (+48% / +51%), ankle fracture (+40% / +5%), and big toe fusion (+35% / +6%).

Urology – Boston Scientific, Teleflex (NYSE: TFX)

• Boston Scientific’s Rezum leads the pack: +29% ASC / +5% HOPD proposed, plus a remarkable +116% in the office setting (albeit down –6% in facility).

• Teleflex’s Urolift also benefited with ~+10% ASC / +9% HOPD for initial implants, smaller gains on subsequent implants. Office payments rise +10%, while facility rates fall –9% for the first implant.

Diabetes – Senseonics (NYSE: SENS)

• Physician payments for implantable glucose sensors in the office setting more than double. This is likely to have little incremental benefit to the large incumbents (DexCom and Abbott) given their share mix in CGMs.

Bottom line: In an environment where investors have been primed to fear reimbursement risk, CMS has delivered a different outcome: targeted, above-inflation increases that should support earnings growth in many of the sector’s most attractive niches. For medtech investors, that’s a policy surprise worth paying attention to.