Paul Sanchez
The Centers for Medicare & Medicaid Services (CMS) has established an Inpatient Only (IPO) list, which includes procedures and services that Medicare will only pay for if the beneficiary is admitted as a hospital inpatient. The IPO list is made up of surgeries that are more complex, labor- and risk-intensive, and require specialized acute care. Medicare Part A covers inpatient hospital care, while Medicare Part B covers outpatient procedures. The IPO list has been undergoing a phase-out since 2020, with the CMS announcing in 2021 that it would be eliminated by 2024, allowing physicians to determine the appropriate setting for a procedure and giving patients more options. This change has raised concerns about cost-cutting and the impact on patients' financial responsibility, particularly for drugs self-administered under the Inpatient Prospective Payment System (IPPS). While the IPO list specifically applies to Medicare, it is worth examining if commercial insurances follow a similar approach and how their reimbursement policies might be influenced by the shifting landscape of surgical settings.
| Characteristics | Values |
|---|---|
| What is the Inpatient Only list? | An inventory of procedures and services that Medicare will pay for only when a beneficiary is admitted as a hospital inpatient. |
| Who does it apply to? | Traditional Medicare (Part A and Part B) and Medicare Advantage (Part C) plans. |
| What types of procedures are on the list? | Procedures that are labor- and risk-intensive and require the specialized care found in the acute care setting. |
| Where are procedures on the list performed? | In a hospital. |
| Who decides what procedures are on the list? | The Centers for Medicare & Medicaid Services (CMS). |
| How often is the list updated? | Every year. |
| Are commercial insurances mentioned in relation to the Inpatient Only list? | No, but there is mention of commercial payer contracts and their push for most surgeries to be performed in Ambulatory Surgery Centers (ASCs) or in the hospital outpatient setting. |
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What You'll Learn
The impact of the inpatient only list's elimination
The Inpatient Only (IPO) list is an inventory of procedures and services that Medicare will pay for only when a beneficiary is admitted as a hospital inpatient. The IPO list includes surgeries that are labour- and risk-intensive and require specialized acute care. The list is updated annually by the Centers for Medicare & Medicaid Services (CMS), which also publishes a list of outpatient surgeries that can be performed at an ambulatory surgery centre (ASC).
In 2020, CMS announced plans to phase out the IPO list over three years, with the first group of surgeries removed from the list in 2021. However, due to concerns raised by surgeons and medical facilities, CMS reinstated most of these surgeries on the IPO list in 2022. The final rule, which eliminates the IPO list, is set to take effect in 2024.
The impact of the IPO list elimination is a cause for concern among healthcare providers and industry organizations such as the American Hospital Association (AHA). Here are some of the potential implications:
- Patient Safety: The IPO list was created, in part, to ensure patient safety for complex and invasive procedures. With the list elimination, there are worries about potential impacts on patient care, especially for those requiring post-acute care in nursing or rehabilitation facilities. CMS guidelines typically limit outpatient stays to 48 hours, with 72 hours as the maximum in extreme cases.
- Clinical Decision-Making: Physicians may face increased challenges in justifying clinical decisions with appropriate documentation to support inpatient stays.
- Hospital Admissions and Capacity: As more surgeries are moved to the outpatient side, there may be an increase in long-stay outpatient admissions. Hospitals will need to carefully manage patient transfers to acute care settings or support extended outpatient stays.
- Financial Impact on Hospitals: The AHA has expressed concerns about the financial implications for hospitals, especially considering the financial strain caused by the COVID-19 pandemic.
- Payment and Coverage: The IPO list elimination gives physicians more flexibility in choosing the appropriate setting for surgical procedures. However, it's important to note that if an IPO service is performed in an outpatient setting, CMS has stated that they will deny payment, and the hospital cannot appeal.
- Coding and Billing: While the elimination of the IPO list does not directly impact outpatient coders, there may be implications for billing and coding practices, particularly regarding the documentation of medical necessity for inpatient stays.
It is worth noting that the elimination of the IPO list does not affect the determination of Medicare coverage under Parts A and B. Medicare Advantage plans, however, will now need to consider the IPO list, in addition to their internal processes and other guidelines, when making coverage decisions.
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Medicare Advantage plans and the inpatient only list
Medicare Advantage (Part C) plans and traditional Medicare (Part A and Part B) follow different rules. While traditional Medicare follows all the payment guidelines, Medicare Advantage plans did not have to adhere to the Inpatient Only (IPO) list until January 1, 2024. The IPO list is a list of complex procedures that Medicare plans will only cover if performed in hospital inpatient settings. These procedures are generally covered under Medicare Part A as established by the Centers for Medicare & Medicaid Services (CMS).
The IPO list is released annually by CMS, detailing the procedures that Medicare will cover in an inpatient setting. The list includes Healthcare Common Procedure Coding System (HCPCS) codes for surgeries that are more complex and have a higher risk of complications. These procedures typically require post-operative monitoring and have long recovery times. The IPO list ensures that Medicare does not pay for inpatient procedures presented as outpatient services, maintaining patient safety and appropriate care.
Medicare Advantage plans often refer to national guidelines, such as MCG Health's Care Guidelines or Change Healthcare's InterQual Solution, to determine whether a surgery requires inpatient care. Insurance companies may also have internal processes to determine their coverage policies for different surgeries. With the recent rule change, Medicare Advantage plans must now also consider the IPO list in their decision-making process.
It is important to note that regardless of the Medicare plan, surgeries on the IPO list must be performed in a hospital setting. Medicare Advantage plans offer some benefits, such as the potential waiver of the three-day inpatient rule for rehabilitation care after surgery, which can result in significant cost savings for patients with shorter hospital stays. However, the specific coverage details can vary depending on the plan and the insurance company's internal processes.
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Surgeries that can be performed at an ASC
Commercial insurance companies offering Medicare Advantage plans did not have to adhere to the Inpatient Only (IPO) list until 1 January 2024. The IPO list is a set of surgeries that will be covered by Medicare Part A, which helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care. Surgeries on the IPO list must be performed in a hospital.
The Centers for Medicare & Medicaid Services (CMS) publishes a list of outpatient surgeries that can be performed at an Ambulatory Surgical Center (ASC). ASCs are outpatient medical facilities where surgeries are performed. They may or may not be affiliated with a hospital and are also referred to as same-day surgery centers.
The surgeries on the ASC list are considered safe for Medicare beneficiaries and do not require overnight observation or other hospitalization. The type of surgery determines how long a patient stays at the ASC.
Some of the most common types of surgery performed at ASCs include general surgery, orthopedic surgery, ophthalmology, and pain management. In 2022, the most common procedures performed at ASCs were dexamethasone injections, bupivacaine liposome injections, and extracapsular cataract removal.
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The inpatient only list and hospital admissions
The Inpatient Only List (IPO) is a list of procedures that Medicare will pay for as inpatient procedures in an acute hospital setting. The list is published by the Centers for Medicare and Medicaid Services (CMS), which falls under the umbrella of the federal health insurance program Medicare, for anyone aged 65 and older and some people under 65 with certain disabilities or conditions. The IPO list outlines procedures that are more complex and have a higher risk of complications, requiring at least 24 hours of post-operative recovery time.
The IPO list is significant because it determines how Medicare will pay for surgeries. Procedures on the IPO list must be performed on an inpatient basis due to their invasive nature, the need for post-operative recovery time, and the patient's underlying physical condition. For surgeries not on the IPO list, patients are considered outpatients, even if they stay in the hospital overnight. This affects the amount the patient will pay and where the surgery can be performed.
Medicare Part A covers inpatient care in hospitals, while Medicare Part B covers outpatient services. For surgeries on the IPO list, Medicare Part A will cover most of the surgical costs, while surgeries not on the list will be covered by Medicare Part B. It is important to note that the type of Medicare plan a patient has may also impact how their surgery is covered. Traditional Medicare (Part A and Part B) follows the IPO list, while Medicare Advantage plans did not have to adhere to the list until January 1, 2024, when a new rule was finalized by CMS.
The IPO list is updated annually, and there have been discussions about phasing it out. In 2020, CMS initially announced that the IPO list would be phased out over three years, starting with the removal of 298 musculoskeletal and spinal procedures in 2021. However, due to concerns raised, most of these procedures were added back to the IPO list in 2022. The future of the IPO list remains uncertain, and it is possible that it may be eliminated again in the future.
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The inpatient only list and insurance billing
The Inpatient Only (IPO) list is a list of procedures and services that Medicare will only pay for if the beneficiary is admitted as a hospital inpatient. The IPO list is maintained by the Centers for Medicare & Medicaid Services (CMS). The procedures on the IPO list are typically complex surgeries that are labor- and risk-intensive and require specialized care in an acute care setting. The IPO list also ensures that the patient's underlying physical condition is taken into account.
Medicare Part A covers inpatient hospital care, skilled nursing facility care, hospice care, and home health care. Medicare Part B covers doctors' services, tests, and preventive services. For surgeries on the IPO list, Medicare Part A covers the majority of the surgical costs, and the patient pays a deductible. The patient may also need to pay 20% for any Part B-covered services.
It is important to note that the IPO list is not static and CMS releases an updated list of surgeries every year. In 2020, CMS announced that it would phase out the IPO list over three years, starting with the removal of 298 musculoskeletal and spinal procedures in 2021. However, due to concerns raised by surgeons and medical facilities, most of these surgeries were added back to the IPO list in 2022.
The impact of the IPO list on insurance billing is significant. If a surgery on the IPO list is inadvertently performed in an outpatient setting, CMS will deny payment, and the hospital cannot appeal. This highlights the importance of clear status orders and coordination between schedulers, coordinators, and case managers to ensure that the patient's status is correctly documented before discharge.
While the IPO list specifically applies to Medicare, it is worth noting that Medicare Advantage plans, offered by private insurance companies, now also have to adhere to the IPO list. Commercial insurance companies may have their own internal processes for determining how they will cover different surgeries, but with the elimination of the IPO list, there may be a push towards very specific language regarding inpatient versus outpatient reimbursement in payer contracts. This could result in a shift towards more surgeries being performed in ambulatory surgery centers (ASCs) or hospital outpatient settings.
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Frequently asked questions
The Inpatient Only (IPO) list is an inventory of procedures and services that Medicare will pay for only when a beneficiary is admitted as a hospital inpatient.
The IPO list is used to determine how Medicare will pay for surgeries under the Medicare Fee for Service (FFS) plan. Surgeries on the IPO list are typically more complex and have a higher risk of complications.
Yes, as of January 1, 2024, Medicare Advantage plans are required to follow the Inpatient Only list.
Commercial insurance companies may have their own internal processes for determining how they will cover different surgeries. While they may be influenced by the Inpatient Only list, there is no requirement for them to follow it.
The elimination of the IPO list gives physicians more flexibility in determining the appropriate setting for a surgical procedure and gives patients more choices. However, it may also result in higher out-of-pocket costs for patients, as some surgeries previously covered by Medicare Part A may now fall under Medicare Part B.
