By Jeanie Davis

To provide patients with better value and results, CMS has issued a final rule regarding the inpatient-only list of surgical procedures. This list includes procedures that typically are only provided in the inpatient setting and not paid under the Outpatient Prospective Payment System (OPPS).

Criteria for removing procedure from the inpatient-only (IPO) list includes determining that the procedure is performed in numerous hospitals on an outpatient basis, explains Deborah Hale, CCS, CCDS, CEO of Administrative Consultant Service in Shawnee, OK.

For example, total knee arthroplasty (TKA) moved from the IPO list starting in 2018. Total hip arthroplasty is expected to be removed from the list in 2020.

“This does not mean that all procedures described by the code or even a majority of procedures must or should be performed in the outpatient setting, according to CMS,” Hale explains. “Removal of a procedure from the IPO list only means that the procedure is no longer precluded from being paid under the OPPS if it is performed in the outpatient setting.”

The procedure can be provided on an outpatient basis following a thorough preoperative screening, Hale says. “This will apply to some Medicare beneficiaries, but certainly not all total hip patients.”

CMS added another stipulation to the final rule: The procedure must be performed early enough in the day for patients to achieve postoperative goals, allowing home discharge at the end of the day.

“This significantly enhances patient well-being, improves efficiency, and results in cost savings to the Medicare program, including shorter hospital stays, according to CMS,” Hale explains. Research also has documented fewer medical complications, improved results, and enhanced patient satisfaction, she reports.

“We do not expect a significant volume of THA cases currently being performed in the hospital inpatient setting to shift to the hospital outpatient setting as a result of removing this procedure from the IPO list,” Hale explains. “Instead, CMS expects that physicians will continue to exercise their complex medical judgment, based on a number of factors, including the patient’s comorbidities, the expected length of stay in the hospital (in accordance with the Two-Midnight Rule), the patient’s anticipated need for postoperative skilled nursing care, and other factors.”

“Frankly, there are not a lot of Medicare patients who can tolerate that due to comorbidities and home situation,” Hale adds. “It’s important to remember it’s a case-by-case decision. They must have a protocol in place that outlines what patient characteristics would be appropriate for outpatient knee or hip replacement. Also, not all orthopedic surgeons are going to be comfortable moving to the outpatient setting.”

Only a small minority of hospitals are performing most TKAs on outpatient basis, she says. “There must be good medical rationale in place, and the decision must be made before surgery.”

The home environment must be conducive to the patient’s needs. If he or she lives alone, what is the plan for caregiving? Can he or she come in for physical therapy? If not, is home therapy available?

“Also, CMS says it’s not going to audit for medical necessity of admission during the first year,” Hale adds. “But we’ve seen audits by Comprehensive Error Rate Testers showing that inpatient status was denied.”

She advises hospitals to prepare now for the total hip arthroplasty ruling. “I don’t think hospitals should sit back and say ‘We’ve got a year to figure this out.’ They need to get protocols in place by Jan. 1 to be sure they’re doing as good job as possible. It’s important to remember that these don’t all have to be outpatient, but neither should they all be inpatient.”

Partial hip arthroplasty is proposed to remain on IPO for 2020, she adds. “CMS had proposed to take it off, but orthopedic surgeons pushed back, as those patients are not appropriate for a safe outpatient discharge plan.”

The benefits of the outpatient procedure “depend on who you ask and who the surgeon is,” Hale adds. “Those getting robotic-assisted knee arthroplasty procedures generally have an easier recovery and do not require a hospital stay. The patients with traditional procedures might be quite as happy to go home the same day.”

It is a case-by-case decision based on the surgeon, facility, community resources, and the patient’s medical history, she says. “Older patients, in some instances, may be more fragile and less able to manage in an outpatient setting, but there could be some 90-year-olds who can. It’s really not an age issue, but an issue of medical condition.”

CMS is expected to make a decision about total hip arthroplasty in November. As of press time, the issue is in the comment period. “Total hip arthroplasty patients usually have an easier recovery than total knee, so I expect CMS will approve hip for the outpatient list,” says Hale. The change would take effect on Jan. 1, 2020.

Case managers should expect little change on the hospital floor, as most surgeons will continue with inpatient surgery for these procedures, says Patricia Hildebrand, RN, MSN, executive director of Hildebrand Healthcare Consulting in Sugar Land, TX.

“Surgeons will want the safety net,” says Hildebrand. “If the procedure is outpatient, the surgeon has the option to keep the patient overnight for observation. However, utilization review will require evidence of medical necessity for that.”

This new rule will push ambulatory surgery centers to keep patients overnight. “This will lead to mini-centers that perform this procedure on an outpatient basis,” says Elizabeth Lamkin, MHA, CEO and partner of PACE Healthcare Consulting. “But if the patient hasn’t met all discharge criteria, the surgeon may want to keep the patient a few more, or keep them overnight.”

She believes patients would prefer outpatient surgery as an “easy in/easy out center if quality is there. But we still must mandate a safe environment for that patient.”