The IPO List Continues to Disappear

By Tiffany Ferguson, LMSW, CMAC, ACM, FCM

The 2027 Outpatient Prospective Payment System (OPPS) Proposed Rule has listed the intent to remove an additional 637 procedures from the Inpatient-Only (IPO) List as the second phase of its three-year elimination strategy. The Centers for Medicare & Medicaid Services (CMS) stated several times in the ruling that they are leaving only the most clinically complex services for removal in 2028.

If finalized, nearly half of the remaining IPO List procedures will become eligible for either inpatient or outpatient payment, based on medical necessity, rather than a predetermined designation. The proposal includes procedures across multiple clinical families, including digestive, respiratory, urinary, endocrine, maternity, male and female genital, mediastinum and diaphragm, hemic and lymphatic systems, and auditory services. CMS intentionally delayed removal of neurological procedures, cardiovascular procedures, and transplant-related services until 2028, acknowledging their greater clinical complexity and the need for additional evaluation of appropriate Ambulatory Payment Classification (APC) assignments.

CMS explained that the procedures proposed for removal generally require fewer modifications to the existing APC structure than the more complex procedures planned for 2028. According to CMS, many of the services proposed for removal already have clinical characteristics and resource utilization similar to procedures currently paid under the OPPS. In contrast, CMS noted that neurological, cardiovascular, transplant, and other highly specialized procedures will require additional review because of their greater clinical complexity, and may necessitate revisions to existing APC or Comprehensive APC (C-APC) payment methodologies before they can appropriately transition to outpatient payment.

CMS reiterated in the ruling its policy that once a procedure is removed from the IPO List, it becomes eligible for payment in either the inpatient or hospital outpatient setting. The appropriate setting continues to depend on whether the service is reasonable and necessary, based on the individual patient’s clinical circumstances and existing Medicare coverage policies. Thus, while the procedure itself may no longer auto classify as an inpatient admission, physicians must continue to determine the appropriate level of care based on the patient’s overall condition, expected hospital stay, comorbidities, procedural risk, and anticipated postoperative care needs.

For decades, the IPO List served as a safety net. Certain procedures were automatically considered inpatient, eliminating much of the clinical debate surrounding admission status. As this list disappears, hospitals are losing a regulatory shortcut, and must instead rely on physician documentation and strong utilization management processes to support level-of-care decisions.