Just wanted to thank you guys for taking the time to help.
My goal was to avoid the often used "If Exists" logic in order to
reduce the scan count and the subsequent logical/physical reads that
are made when using this approach
1 read for the existence check
1 read for the update or insert (depending on existence)

the "Upsert" method only results in the Optimizer conducting 1 total
scan and handling the update/insert in one pass.

Below is the updated code, again thanks for lending a hand:

ALTER PROCEDURE [dbo].[WDSHE_CATEGORIES_INSERTUPDATE]
@cat_name varchar(50),
@status char(1),
@na_only char(1)
AS

declare @msgcnt int,
       @msg_ok varchar(100),
       @msg_invalid varchar(100)
        set @msg_ok = 'Value Added Successfully'
        set @msg_invalid = 'Value Already Exists'
BEGIN
UPDATE dbo.WDSHE_CATEGORIES
SET cat_name = @cat_name, status = @status, na_only = @na_only
WHERE cat_name = @cat_name
IF @@rowcount = 0
    BEGIN
        INSERT INTO WDSHE_CATEGORIES (CAT_NAME, STATUS, NA_ONLY)
        VALUES (@cat_name, @status, @na_only)
        SET @msgcnt = 0
        SELECT results = @msgcnt , reason = @msg_ok
        return @msgcnt
    END
    ELSE
    SET @msgcnt = -1
    SELECT results = @msgcnt , reason = @msg_invalid
END