The U.S. Centers for Medicare & Medicaid Services’ (CMS) plan to eliminate the Medicare Inpatient-Only (IPO) list could trade a blunt but important safeguard for a series of new challenges for surgeons.
In particular, those challenges could include more payer pressure, more administrative disputes and heightened risks for patients, some surgical experts believe.
Ambulatory surgery centers (ASCs) have largely praised the phasing out of the IPO list, seeing CMS’ plan as a means to eliminate a regulatory barrier that has kept certain procedures confined to hospital inpatient departments regardless of patient acuity or technological advances.
However, the policy shift could also give payers more latitude to challenge otherwise routine clinical decisions, Dr. Julia Song, a surgical resident at Brigham and Women’s Hospital, told ASC News.
“One can argue that this is empowering surgeons to make decisions that the government used to make,” Song said. “On the other hand, it also increases the administrative burden on surgeons to justify nearly every decision they make.”
Payer challenges aside, surgeons would no longer be exempt from justifying the need for inpatient care, Song and her co-authors noted in a recent JAMA Surgery editorial.
Concerns go beyond paperwork. Phasing out the list too quickly could pose risks to patient safety and access to care, Song and her co-authors explained.
“Given that commercial insurers frequently align their reimbursement policies with Medicare, removing the IPO list could reinforce payer expectations that surgeries be defaulted to the outpatient setting,” the authors wrote.
The editorial warns that eliminating the IPO list could increase the likelihood of early discharges, delayed care and coverage denials, particularly in narrow-network markets. Algorithm-based denials could further compound the problem.
“The prior authorization process can be stretched out quite long, with cases denied, appealed and denied again, and then you can have an external appeal,” Song said.
As an example of the risks, Song pointed to amputation procedures. A toe amputation is generally less risky than an operation below the knee or closer to the hip.
“There’s a location on the way where it becomes unsafe to be done outpatient, but we don’t know where that line is drawn,” she said.
So who draws that line?
“Surgeons don’t operate in a vacuum,” Song said. “We operate alongside many other stakeholders, whether insurance companies or the health systems that employ surgeons,” all of which can exert financial pressure on clinical decision-making.
Those pressures may ultimately shape where patients receive care.
Risks to patient health and access to care could be compounded by risks to patients’ pocketbooks. As explained in the JAMA Surgery editorial, outpatient billing can shift costs to beneficiaries even if the system saves money overall.
Inpatient care is bundled under Medicare Part A, while outpatient care under Part B can fragment billing and expose some patients to copays without supplemental coverage.
“CMS should track out-of-pocket spending by site of service to assess potential financial harm from site-of-service shifts,” the JAMA Surgery article reads. “Particular attention should be paid to dual-eligible beneficiaries and those without Medigap, who may be especially vulnerable to cost shifting under Medicare Part B’s billing structure.”
Rather than preserving the IPO list or eliminating it outright, the authors argue that CMS should adopt a transparent, structured review process that blends outcomes data — such as information from surgical registries like the American College of Surgeons’ National Surgical Quality Improvement Program — with clinical judgment.
Other recommended steps might include enhancing oversight to prevent inappropriate limitations on inpatient care access; tracking out-of-pocket spending by site of service to assess potential financial harm to patients; and further developing ASC and hospital outpatient department quality reporting.
“Many people think — and I agree — that ASCs are the future. They offer high-quality care at a lower cost with greater efficiency,” Song said.
The challenge, she added, is determining how to expand outpatient surgery safely.
“ASCs aren’t the problem,” she said. “It’s the financial factors that can push patients inappropriately into ASCs.”
