The U.S. Centers for Medicare & Medicaid Services (CMS) finalized plans to phase out the Medicare Inpatient-Only (IPO) List in November while also covering more procedures in the ambulatory surgery center (ASC) setting.
But some voices in the post-acute care space continue to express concern with the changes.
As CMS accelerates the shift of more procedures into outpatient settings, skilled nursing leaders are warning that downstream Medicare policy has not kept pace, renewing calls to eliminate the long-standing three-day inpatient stay rule.
Under traditional Medicare rules, beneficiaries generally qualify for covered post-acute skilled nursing facility (SNF) care only after a hospital inpatient stay of at least three days. Industry advocates worry that as more procedures migrate to outpatient hospitals and ASCs, patients could lose access to Medicare-covered SNF care, even when post-acute services are clinically necessary.
CMS plans to phase out the IPO list over three years, beginning in 2026 with the removal of 285 procedures, most of them musculoskeletal. Those cases represent a significant share of SNF volume: Between 20% and 50% of SNF admissions involve Medicare beneficiaries following musculoskeletal procedures, according to nonprofit senior care advocacy organization LeadingAge.
In its final rule, issued Nov. 21, CMS sought to ease those concerns, emphasizing that removing a procedure from the IPO list does not require it to be performed in an outpatient setting.
“ … We would expect that those Medicare beneficiaries identified as appropriate candidates to receive a surgical procedure in the outpatient setting would not be expected to require SNF care following surgery,” CMS wrote in the final rule. “Instead, we expect that these beneficiaries would be appropriate for discharge to home (with outpatient therapy) or home health care.”
LeadingAge welcomed the clarification but said gaps remain. The rule, for instance, does not require surgeons or hospitals to consider a patient’s post-acute care needs – or Medicare eligibility rules – when determining site of care.
“Surgeons, for instance, may not be familiar with Medicare’s eligibility requirements for SNF care, which could lead to unintended consequences,” Nicole Fallon, VP of integrated services and managed care at LeadingAge, told ASC News sister publication Skilled Nursing News shortly after the final rule came out. “For example, a surgeon might determine that an outpatient procedure is clinically safe – without realizing that this decision could make the patient ineligible for SNF services.”
That could leave older adults responsible for significant out-of-pocket costs if SNF care is needed but not covered.
Other senior care leaders have expressed similar concerns.
“Regardless of their inpatient or observation designation, seniors must be able to access post-acute care in a skilled nursing facility when they need it without fear of considerable out-of-pocket costs,” John Kane, SVP of reimbursement for the American Health Care Association/National Center for Assisted Living (AHCA/NCAL), told SNN. “We will continue to advocate for policies that eliminate the antiquated policy of the three-day stay, and prevent any Medicare beneficiaries from falling through the cracks.”
While CMS cites advances in technology, pain management and care delivery – trends that have fueled ASC growth – Fallon argued that post-acute policy must evolve alongside outpatient expansion.
“If acute care is changing, then post-acute care policy must evolve as well,” she said.
CMS has encouraged stakeholders to share evidence on how the IPO list phase-out affects beneficiaries. LeadingAge says its members are already monitoring whether outpatient migration ultimately limits access to covered post-acute care, or shifts costs to patients.
There are multiple reasons why the three-day stay rule has been difficult to change, Skilled Nursing News reported.
“For instance, Medicare Advantage payers can leverage waivers to the rule as a way to reward preferred partners that meet benchmarks for cost control and quality outcomes; these organizations do not have strong incentives to cede this power by supporting the elimination of the three-day stay rule,” Skilled Nursing News wrote.
The original version of this story by Tim Mullaney first appeared in Skilled Nursing News.
