By Marie Stinebuck, MBA, MSN, ACM

Several years ago, the Centers for Medicare and Medicaid (CMS) announced the decision to end the inpatient only list (IPO), but as we all know, that decision did not last long. In 2021, over 500 procedures were removed from the inpatient only list to move towards the extinction of the list for good. In 2022, CMS put most of those procedures back on the IPO list with the decision to devise a more calculated assessment for how procedures will be removed with the consideration for patient safety and risk. It is unclear, with how political landscapes change, if the IPO list will once again be on the chopping block. Payment of an IPO procedure within the hospital setting is significantly higher than downgrading that procedure to an outpatient payment.

The capture and accurate billing of these IPO procedures is vital to the hospitals that perform the procedures. The front-end capture and verification of accurate codes, involvement, and communication with the utilization review team are crucial. Specifically, there is a vital role for utilization review to incorporate pre and post-review processes to ensure capture of the inpatient only procedures to ensure accurate billing of the procedures.

Points to know related to the IPO list: 

  • The definition of “Inpatient Only” services is generally but not always surgical services that require inpatient care because of the nature of the procedure, underlying physical condition of the individual requiring the service, or the need for at least 24 hours of post-operative recovery time or monitoring before safely discharging.
  • When reviewing procedures for inpatient only procedures, words within the procedure to qualify for an inpatient procedure may include: revision, repair, or open.
  • The IPO list comes out on the OPPS list each year at the end of the year. And goes into effect on January 1st. The IPO list outlines those procedures that Medicare will pay as an inpatient procedure in the acute hospital setting.
  • Procedures are listed by the Hospital Common Procedure Coding System (HCPCS) code and include a short descriptor.
  • Be aware of your top 5-10 contracts. Do they follow the IPO list? Which plans require a pre-authorization?

Changes for Medicare Advantage Plans:

In the final ruling on April 5th, CMS released CMS 4201-F, stating the Medicare Advantage plans will be required to follow the two-midnight roll and that will include also following the Inpatient Only List. CMS also stated that the Medicare Advantage plans can use commercial criteria such as MCG or InterQual as tools to assist in determining medical necessity but must be transparent about their internal coverage criteria.

Utilization Review and IPO Procedures:

Best practice for utilization review (UR) pre-procedure is a review of all surgical cases for inclusion on the IPO list to ensure accurate capture of the procedure. Review of cases 2-3 days in advance is ideal to ensure time to follow up with the physician offices as needed for questions and adjustments to orders. A ‘day of’ surgery review should also be completed to catch any last-minute add-ons to the surgery schedule. It is important to build relationships with the surgical scheduler at the surgeon’s office to discuss cases as needed and ensure smooth communication for cases that require additional review.

Observation services and surgical procedures:

When I work alongside UR nurses in hospitals across the country, and as many of you know from experience, many physicians are placing patients in a bed post-surgery in observation status without a diagnosis that requires observation monitoring. Scheduled surgeries must always begin with an Outpatient or Inpatient order. A patient should only receive additional observation services if an unexpected complication occurs that requires the patient to stay for monitoring. Observation is a service provided to outpatients with a physician order. The patient must meet observation criteria to bill for observation. If the physician’s reason for keeping the patient overnight is that it is late and the patient does not want to drive home, or the physician has always kept all his patients overnight, then the patient status should be captured in outpatient or extended recovery. The extended recovery status will also give your facility the data to reflect how often patients are staying overnight and utilizing a bed while your ED beds may be overflowing. Post-surgery, patients should be reviewed to ensure the procedure did not change affecting the admission status. If the procedure has changed, payers requiring an authorization will likely require a new authorization for the procedure.

Hospital leadership and UR need to be aware that a hospital cannot bill for an inpatient only procedure that is performed as an outpatient procedure. It would be a rare occurrence in which you could bill inpatient without an inpatient order and would have to show the intent for inpatient admission. Ensure that you have a review process pre and post-procedure to ensure these procedures are statured accurately. There is big money at stake here!

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BIO: Marie Stinebuck, MBA, MSN, RN, ACM, is the Chief Operations Officer of Phoenix Medical Management, Inc., the leading case management firm. Marie has practiced as a nurse for the past 26 years with 18 years in the field of case management. Marie has served in executive leadership roles with oversight of case management, utilization review, denials prevention, clinical documentation improvement, and medical record integrity. Marie has authored articles for RACmonitor and other case management resources and is a weekly contributor on Finally Friday. She has served as a board member for the Arizona Chapter of the American Case Management Association (ACMA) and holds an MBA, and an MSN in Leadership.