Image by Alina Kuptsova from PixabayA proposal from the Centers for Medicare & Medicaid Services (CMS) to phase out Medicare’s Inpatient-Only List (IPO) while adding more procedures for ambulatory surgery centers (ASCs) is stirring debate over how patients move through the continuum of care.
As surgical capabilities advance, more complex procedures can safely take place outside of hospitals, including in ASCs. In turn, CMS in its 2026 proposed payment rule for ASCs has suggested phasing out the IPO list over three years, beginning in 2026 with the removal of hundreds of procedures, most of them musculoskeletal.
While ASC operators see expanded opportunity, post-acute leaders are sounding alarms.
LeadingAge, which represents more than 5,400 nonprofit providers and other organizations, recently warned CMS that removing the IPO list without other reforms could disrupt access to skilled nursing facility (SNF) care for Medicare beneficiaries.
The concern centers on Medicare’s three-day inpatient hospital stay requirement, which ASC News sister publication Skilled Nursing News recently highlighted. Under current rules, patients in traditional Medicare must spend three days admitted to a hospital before qualifying for SNF coverage.
If more procedures shift directly to the outpatient or ASC setting, patients could miss that eligibility window, LeadingAge points out.
“We believe it is unlikely that the need for SNF services would be completely unnecessary just because a procedure was shifted to an outpatient setting,” LeadingAge wrote in a comment letter. “While some of these procedures may be less invasive, it does not mean that these patients do not continue to need skilled care and the more intensive rehabilitation therapies that a SNF setting offers.”
LeadingAge urged CMS to “pursue the elimination of the outdated 3-day inpatient stay requirement” as the IPO list is phased out.
Short of legislative action, the group recommended CMS waive the rule for procedures removed from the IPO list, provided a physician determines that SNF care is appropriate.
“Absent CMS’s ability to take these steps, we ask CMS to delay the phase-out of the IPO list, as we are concerned about the consequences for patient access to SNF care,” the association wrote.
Beyond procedural eligibility, LeadingAge and other leaders argue that the IPO phase-out should prompt CMS to rethink how different sites of care interact, including ASCs and SNFs.
“We envision CMS giving treating physicians the option to directly admit a patient to a SNF when the person needs help to stabilize aspects of their chronic condition, allowing them to avoid an unnecessary emergency department visit and the associated cost,” the LeadingAge letter stated.
Such a policy could change discharge patterns for ASC patients who lack support at home or require intensive monitoring after surgery.
As outpatient surgical migration accelerates, ASCs could end up relying more on post-acute partners for step-down care.
“The health systems, hospitals – our acute care partners – are really looking to fine-tune what they’re doing in their four walls. … They’re looking to the post-acute and skilled nursing industry to really pick up the pieces of where the hospitals left off,” Joseph Kiernan, chief strategy officer and senior vice president of network development at Ocean Healthcare, said at the Skilled Nursing News RETHINK Conference in Chicago.
For ASCs, the policy debate underscores how intertwined their growth is with Medicare’s broader coverage rules.
More orthopedic and musculoskeletal surgeries are likely to migrate into the ASC setting as CMS eliminates the IPO list. But unless the three-day rule is addressed, some patients may face challenges accessing downstream rehabilitation, potentially straining discharge planning and limiting ASC throughput.
“The 3-day hospital stay is vestigial; it’s something that isn’t necessary anymore,” Joel VanEaton, EVP of compliance and regulatory affairs at Broad River Rehabilitation, said at RETHINK.
About 20% to 50% of current SNF admissions are for Medicare beneficiaries following musculoskeletal procedures, LeadingAge noted.
This story pulled from a report by Tim Mullaney for Skilled Nursing News. To read the original story, click here.
