The End of the Inpatient Only List

In CY 2021 Medicare Hospital Outpatient Prospective Payment System (OPPS) Final Rule, the Centers for Medicare & Medicaid Services (CMS) furthered its site-neutrality agenda by finalizing the elimination of the Medicare Inpatient Only (IPO) list, a three-year phase-out to occur between CY 2021 and 2023.

We analyzed relevant, short-stay inpatient Medicare cases to help hospitals understand the impact of this rule change. In the first year of the phase-out, impact will be concentrated on joint replacements and spinal fusions. The second phase of removal will have similar aggregate impacts at both the national and hospital level, but will affect a much broader range of services. In the long term, expect secondary effects such as shifts in commercial coverage and expanded ASC eligibility to have an equal or even greater financial impact.