Payment Accuracy CMS Medicare & Medicaid Futureproof Claims Program Integrity

CMS Pauses Elimination of the Inpatient Only List

Steven A Greenspan JD LLM

The Centers for Medicare and Medicaid Services (CMS), on November 2, 2021, issued the CY2022 Outpatient Prospective Payment System (OPPS) Final Rule (OPPS Final Rule) which, in part, paused the elimination of the Inpatient Only (IPO) list. In the CY2021 OPPS Final Rule, CMS finalized a plan to eliminate the IPO list; a list of services that CMS deemed so complex that Medicare would only pay for when they were performed in an inpatient setting because of the nature of the procedure, the underlying physical condition of the patient, or the need for at least 24 hours of postoperative recovery time or monitoring before the patient can be safely discharged (70 FR 68695). The plan was to fully eliminate the full list over a three (3) year period. The initial elimination for CY2021 had CMS dropping 298 services from the IPO list. There were many comments throughout the rulemaking process as well as post final rule by interested stakeholders concerned that CMS was creating a patient safety concern by eliminating a program which safeguarded many complex services.

Prior to the change created by the CY2021 OPPS, services removed from the IPO list annually through the OPPS went through a rigorous review that included five (5) criteria for assessing the removal of a service:

  • Most outpatient departments are equipped to provide the services to the Medicare population.
  • The simplest procedure described by the code may be furnished in most outpatient departments.
  • The procedure is related to codes that we have already removed from the IPO list.
  • A determination is made that the procedure is being furnished in numerous hospitals on an outpatient basis.
  • A determination is made that the procedure can be appropriately and safely furnished in an ASC and is on the list of approved ASC services or has been proposed by us for addition to the ASC list. (76 FR 74352 through 74353)

In the newly released CY2022 OPPS, CMS “saw the light” and has paused the elimination of the IPO list, adding back to the IPO list all the services removed in 2021, except for CPT codes 22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), 27702 (Reconstruct ankle joint) and their corresponding anesthesia codes. For these codes, CMS has ostensibly run them through the above criteria and determined they were appropriate for removal from the list.

As an important reminder to providers, the IPO list requires those services on the list to be medically necessary in the first place. The IPO list is not a surrogate for a medically necessary inpatient admission. The claim for services must still support that the services were medically necessary to be entitled to the use of IPO status and this must be documented in the medical record. For example, if a particular service, to be medically necessary, must include a tried and failed conservative therapy, that information must be documented in the medical record to support the claim.

We have seen many denied IPO services because they lacked medical necessity – do not let that happen to you. Documentation remains king!