LUGPA Brief: The Medicare Inpatient-Only List

Nov. 29, 2023

The healthcare landscape has seen significant advancements due to rapid medical technology progress and the emergence of innovative outpatient care centers, greatly enhancing patient access to care. Despite these strides, regulatory frameworks for outpatient care have lagged, hindering physicians in delivering optimal care. A notable constraint is the inpatient-only (IPO) list.

Established by the Centers for Medicare & Medicaid Services (CMS) in 2000, the IPO list designates specific surgeries or procedures as inpatient-only due to invasiveness, necessitating at least 24 hours of postoperative recovery or the patient's underlying physical condition. Procedures on this list must occur in an inpatient setting to be covered by Medicare under the Outpatient Prospective Payment System (OPPS).

LUGPA has consistently opposed the IPO list, contending that it imposes unnecessary barriers to access, impeding physicians' ability to leverage innovation for safe, cost-effective, and convenient patient care. We argue that eliminating the IPO list would empower physicians to exercise clinical judgment freely, eliminating regulatory hurdles to applying unique patient considerations.

Moreover, the IPO list hampers the adoption of new healthcare technologies and services. LUGPA contends that the determination process is too slow to keep pace with technological evolution, impeding progress.

Debate on the IPO list's necessity led to CMS phasing it out in the 2021 Hospital Outpatient Prospective Payment System (OPPS) and ASC Payment System Final Rule. However, a subsequent 2021 CMS rule reinstated 298 procedures to the IPO list, making future list modifications more challenging. LUGPA opposes these changes and advocates for ending both the IPO and ASC lists.

LUGPA envisions a healthcare future where outpatient procedures become the norm, maintaining high standards while reducing costs. According to projections by healthcare intelligence firm Sg2, by 2028, 85% of all healthcare procedures will be outpatient.

Expanding healthcare services to outpatient settings enhances patient access and yields significant Medicare savings. A 2020 study by the Ambulatory Surgery Center Association (ASCA) and the University of California-Berkeley estimated a potential $73.4 billion in Medicare savings by 2028 through ASCs.

Studies, including one in Urology, have demonstrated the benefits of ASC expansion for urology providers. The introduction of ASCs into healthcare markets lowered rates of outpatient urologic surgery in costlier hospital settings without compromising quality.

Congressional efforts to eliminate the IPO list are underway, with the introduction of H.R.960, the Eliminate the IPO List Act, in February. This bill aims to prevent CMS from refusing to designate a service as a covered hospital outpatient service under Medicare based solely on its determination that the service can only be safely furnished in an inpatient setting.

For further details on LUGPA's advocacy on the inpatient-only list, refer to our commentary to CMS here.