CMS Proposes Elimination of Inpatient-Only List

EDITOR’S NOTE:

This story was previously posted as a special bulletin on Wednesday, July 16, 2025.

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.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 the CMS 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.”

The Proposed Rule’s language outlined the rationale behind the decision to do away with the IPO.

“While we agreed with commenters in previous rulemakings that the IPO list was necessary, and that it would be inappropriate for us to establish payment rates for those services under the OPPS … we have reconsidered the various comments from interested parties requesting that we eliminate the IPO list, and reevaluated the need for CMS to restrict payment for certain procedures in the hospital outpatient setting,” it read. “As a result of that reconsideration, we no longer believe there is a need for the IPO list to identify services that require inpatient care. We agree with past commenters that the physician should use clinical knowledge and judgment, together with consideration of the beneficiary’s specific needs, to determine whether a procedure can be performed appropriately in a hospital outpatient setting or whether inpatient care is required for the beneficiary, subject to the general coverage rules requiring that any procedure be reasonable and necessary. We believe that this change would ensure maximum availability of services to beneficiaries in the outpatient setting.”

A primary reason, the Proposed Rule indicated, was medical and technological advancements made in the quarter-century since the IPO was introduced.

The proposed rule will be open for public comment for 60 days following its publication in the Federal Register and can be viewed online at https://www.federalregister.gov/d/2025-13360. CMS encourages patients, providers, and stakeholders to review and submit feedback.

A fact sheet with additional information is available at https://www.cms.gov/newsroom/fact-sheets/calendar-year-2026-hospital-outpatient-prospective-payment-system-opps-and-ambulatory-surgical.