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CMS Inpatient-Only List: Preparing for Critical Changes in 2018

Optum, January 30, 2018

Identifying and addressing common misunderstandings

Each year CMS revises its inpatient-only list of approximately 1,700 procedures. The most notable changes to the list that went into effect January 1, 2018 include the addition of coronary revascularization during an acute myocardial infarction and the removal of total knee arthroplasty. Knee replacements, according to CMS, now may be performed on either an inpatient or an outpatient basis.

These list revisions are vital for hospitals to track and take into account. For example, “removing knee replacement surgery from the inpatient-only list is going to cause major changes for hospitals and physicians who do these procedures,” says Kurt Hopfensperger, MD, JD, vice president of compliance and physician education at Optum Executive Health Resources. Moving forward, they will have to apply utilization review processes more rigorously.

Keeping pace with change

Hospitals that closely follow and interpret the CMS inpatient-only list benefit in several ways. The list follows evidence-based medicine and looks at the average length of stay, as well as typical risks and comorbidities, for each procedure. Thus, correctly placing a patient in inpatient status is a clinically good decision, and it helps organizations stay in compliance with Medicare rules.

Hospitals also protect revenue by making sure every patient undergoing a procedure on the inpatient-only list has a correct status determination, says Hopfensperger. As procedures drop off of the list, hospitals must do the same to avoid potential revenue integrity issues. “You want to make sure you are appropriately compensated for those patients who are high risk or who require a longer stay in the hospital,” he notes.

Overcoming common challenges

Hopfensperger says there are a couple of basic misunderstandings related to the inpatient-only list. First, all procedures from the list must be justified in the medical record. “A lot of times hospitals lose sight of that,” he says. “It’s important that the physician document clearly why a patient needs that particular surgery, keeping in mind there might be specific documentation and coverage requirements for these procedures that the list doesn’t address.”

Also, it’s important to note length of stay does not determine if inpatient-only list procedures should be performed with inpatient status. CMS has repeatedly stated that a patient undergoing an inpatient-only list procedure should be admitted as an inpatient regardless of the expected or actual length of stay. “CMS also mentions that the inpatient-only list is an exception to the CMS two-midnight rule,” says Hopfensperger.

Another area of confusion centers on how to make patient status determinations for procedures not on the inpatient-only list. “If a procedure is not on the inpatient-only list, there may be a misunderstanding that it is somehow an outpatient procedure,” says Hopfensperger. In fact, procedures that are not on the list may still be performed on patients with inpatient status. Absence from the list alone does not justify an outpatient status determination. “CMS specifies that procedures not on the inpatient-only list can be and very often are performed on individuals who are inpatients or outpatient and ambulatory surgery center patients,” he says.

For example, the removal of total knee arthroplasty from the inpatient-only list means that the procedure no longer defines the status as inpatient. “Rather, it is the assessment of the individual patient that determines whether it will be done on either an inpatient or an outpatient basis,” says Hopfensperger.

Key actions hospitals can take today

It’s important to stay on top of the yearly updates to the inpatient-only list and create a strategy for adjusting patient status determinations accordingly, says Hopfensperger. Start by identifying procedures removed from the list and making patient status determinations that reflect the actual acuity of care. For instance, now that knee replacement surgeries are no longer on the inpatient-only list, hospitals should apply their full utilization review process to every patient scheduled for one of these procedures, with the understanding that some will now be done on an outpatient basis.

This process includes making sure documentation supports the need for the procedure in the first place, says Hopfensperger. The hospital’s utilization review team, including case managers, should review all scheduled procedures and ensure each medical record contains an expected length of stay as well as justification and a statement for inpatient status. “Many of these cases will now require a physician advisor review,” he notes. While knee replacements are indeed a big change for 2018, the good news is that many joint procedures still remain on the inpatient-only list, says Hopfensperger. “Those organizations that apply a thorough utilization review process will be more successful.”

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