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Archive January 2021 XXII, No. 1

Regulatory Affairs: Inpatient-Only List Will Be Phased Out

CMS is putting site-of-surgery decisions into the hands of providers.

David Shapiro, MD


OUTPATIENT OPTION Total hip arthroplasty is one of 267 new procedures CMS has added to the ASC-approved list.

OMS's Outpatient Prospective Payment System and Ambulatory Surgical Center final rule, which took effect on Jan. 1, substantially blurs the lines between inpatient and outpatient surgical care, as well as the artificial delineation separating ASCs from HOPDs. CMS had historically maintained a payment and regulatory distinction between procedures performed on Medicare beneficiaries in various settings. These locations were — and remain — artificially divided into separate sites of service: inpatient, HOPDs and ASCs.

CMS has addressed this longstanding distinction by making two major changes to these artificial barriers: The inpatient-only procedure list will be gradually eliminated, and most procedures formerly on the HOPD-only list are now approved for coverage in ASCs.

In the first of these two positive developments, CMS confirmed its intention to phase out the inpatient-only procedure list over the next three years. CMS initiated the implementation of this process on Jan. 1 by removing 298 procedures, the majority of which are related to musculoskeletal services. By 2024, the full list of approximately 1,700 procedures will be completely removed and approved for payment in hospital-based outpatient settings when clinically appropriate.

In the second pronouncement, CMS essentially eliminated most of the discrepancies separating HOPDs and ASCs by placing 267 formally HOPD-only procedures on the ASC list of covered procedures for 2021. The addition of total hip replacements stands out.

Despite the obvious clinical similarities between HOPDs and ASCs, surgery centers have long been prohibited from offering identical services to Medicare beneficiaries. Each year, the ASC industry would historically declare small victories when CMS added a limited amount of procedures to the list of surgeries payable in ASCs that had previously been reimbursed only in HOPDs. (Last year, the big gains were six cardiac interventional procedures and total knees.)

CMS did not apply the rationale underlying the elimination of the inpatient-only list to completely and finally eliminate the artificial distinction between HOPD and ASC covered procedures. The two separate outpatient sites of service are therefore currently scheduled to persist for the foreseeable future. The 2021 final rule also declares that procedures on the inpatient-only list as of 2020 would be proscribed from future inclusion on the list of ASC-covered procedures. This is puzzling, particularly in light of the positive regulatory developments that facilitate appropriate clinical decision-making by trained medical professionals. The ASC community is gathering forces now to determine the intention of this portion of the final rule.

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