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Medicare Inpatient Only List for 2021


When it comes to health care, the Centers for Medicare and Medicaid Services are trying to put control back into patients’ and doctors’ hands. For 2021, CMS is working toward this by dropping the inpatient-only list. To explain what this means, we go over some key points below. We also provide updates about other CMS initiatives for the year ahead.

What is the Medicare Inpatient Only List?

In summary, the CMS inpatient-only list is a list of procedures that Medicare will pay for when care takes place in a hospital inpatient setting. Important to note is that the same safety and quality standards apply to both inpatient and outpatient services.

Most times, the rate at which Medicare pays for services in ambulatory surgical centers (ASCs) is lower than at hospital outpatient departments. The inpatient-only list is large, and many procedures have been added and removed over the years.

CMS Removes Inpatient Only List Starting in 2021

Recently, CMS announced the finalization of their rule to end the inpatient-only list. This transition will occur over a three-year period that they will begin by eliminating about 300 services, mostly musculoskeletal-related in nature (including joint replacements). The changes intend to give patients more freedom of choice in their health care options and save them money. They also allow Medicare to pay for inpatient and outpatient services in the case that each is relevant.

Eliminated procedures may be subject to review including the 2-midnight rule. This means the presumption of the need for Part A payment if an inpatient hospital stay lasts two or more midnights post-admission. Yet, CMS is exempting certain 2-minute rule reviews of newly removed procedures for two years.

Services Removed from the Inpatient Only List (IPO) for CY 2021

CMS has provided a table that includes services removed from the inpatient-only list for CY 2021. The list includes long descriptors and CPT/HCPCS codes and status indicators. You can find the list of removed services starting on page 709 of the CMS-1736 PDF.

What is the 340B Program?

In light of a need to help people save on drugs prescribed in hospital outpatient departments, CMS began the 340B program. This program allows specific hospitals to buy outpatient drugs at lower prices. For 2021, CMS’s final rule states that they will maintain their current payment policy for 340B drugs.

CMS Patients Over Paperwork Initiative in 2021

In the Patients Over Paperwork initiative, CMS attempts to lessen regulations that burden patients. The goal is to have providers spend more time with patients.

Starting in the calendar year 2021, CMS is revising its methodology to calculate Overall Hospital Quality Star Rating. These ratings help patients make educated health care decisions and now CMS is simplifying and standardizing them. This action is in response to stakeholder feedback. Calculations will also account for people on Medicare and Medicaid, as well as critical access hospitals and Veterans Health Administration hospitals.

CMS Rethinking Rural Health Initiative in 2021

CMS’s Rethinking Rural Health initiative strives to provide affordable, high-quality healthcare to people living in rural areas. Its payment system, Inpatient Prospective Payment System (IPPS), has increased the wage index for hospitals with low wage indexes.

In 2021, CMS is continuing to adopt the IPPS and will use the system for a minimum total of four years. Disparities in hospital wage indexes will continue to be addressed. Also, CMS estimates payment for outpatient services in rural areas nationwide would increase by 3 percent. This percentage is 0.5 percent above the national average of 2.5 percent.

Lindsay Engle

Lindsay Engle is the Medicare expert for MedicareFAQ. She has been working in the Medicare industry since 2017. She is featured in many publications as well as writes regularly for other expert columns regarding Medicare. You can also find her over on our Medicare Channel on YouTube as well as contributing to our Medicare Community on Facebook.

3 thoughts on “Medicare Inpatient Only List for 2021

  1. So if a procedure taken off the inpatient only list is performed in a hospital is it considered “outpatient” and will it be covered under Medicare Part A.
    If so who is responsible for medications and services formally covered under Part A.
    Also if additional care is needed, there is the 3 day inpatient hospitalization rule that triggers coverage in a skilled nursing facility. But if these procedures are now categorized under “outpatient” what happens?

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