07/23/2025

CMS Proposes Elimination of Inpatient-Only List in Sweeping OPPS/ASC Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) issued its Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Proposed Rule for the 2026 fiscal year this week, and in doing so said that the Inpatient-Only List (IPO) should be phased out over the course of the next three years.

The move will reportedly begin with the removal of 285 mostly musculoskeletal procedures in 2026. It drew immediate industry reaction, along with another proposal that payment for drug administration services in grandfathered outpatient departments be made at just 40 percent of the OPPS rate.

“We oppose the proposal to expand ‘site-neutral’ cuts and eliminate the inpatient-only list, as both policies fail to account for the real and crucial differences between hospital outpatient departments and other sites of care,” American Hospital Association (AHA) Senior Vice President of Public Policy Analysis and Development Ashley Thompson said in a statement. “Studies show hospital outpatient departments are more likely to serve Medicare patients who are sicker, more clinically complex, and more likely to be disabled or living in poorer, rural communities than patients treated in independent physician offices.”

The IPO, created by CMS in 2000, features a fluctuating number of 1,700 to 1,800 procedures deemed too serious and complex to perform on an outpatient basis, owing to the risk for complications, infection, and other issues. Medicare only reimburses providers for the procedures on the List when they are performed on an inpatient basis.

The proposed IPO elimination sat in the middle of CMS’s press release on the rulemaking, and was outlined in pages 450-463 of the 913-page Proposed Rule. The press release said the Rule’s proposals were meant to “modernize hospital payments, strengthen transparency, and put patients back in control.”

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