2022 Healthcare Reimbursement Changes Reinstating Significant Inpatient Coverage

On November 2, 2021, the Centers for Medicare and Medicaid Services (CMS) released the2022 Hospital Outpatient Prospective Payment System (OPPS)final rule, which reversed a three-year phaseout of the Inpatient-Only (IPO) list. This comes only a year after the 2020phaseoutof the IPO list began.

For years CMS has published a list of procedures that providers could only perform and receivereimbursementfor in the hospital inpatient setting. Completing these procedures in a hospital outpatient department or an ambulatory surgical center (ASC) was considered unsafe, according to the rationale behind the IPO list.

CMS每年都会审查IPO名单(超过1700项服务)，并根据特定标准删除或增加程序。For example, ifdata显示一种手术现在可以在门诊安全进行，CMS将其从IPO列表中删除。然而，随着2022年OPPS的最终规则，IPO名单将保持不变，并继续指定哪些程序符合门诊或住院设置。

Healthcare Reimbursement Changes: The Phase-Out of the IPO List and the Two-Midnight Rule

In the2021 OPPS/ASC final rule, CMS announced it was phasing out the IPO list, stating that the physician’s designation of the admission status of all surgeries would be based on theTwo-Midnight rule, adopted in October 2013. CMS created the Two-Midnight rule to address the higher frequency of beneficiaries receiving treatment as hospital outpatients for extended (i.e., longer than reasonable) periods of time.

Compliance issues often arose from patients placed in extended “observation” status, meaning they received outpatient services while the provider determined whether to make an inpatient admission or discharge the patient. Extended observation services impact patient copays as well as a patient’s ability to qualify for skilled nursing facility (SNF) care through theSNF Three-Day IP Stay Rule.

The original Two-Midnight rule stated that inpatient admissions would generally be payable underMedicare Part A如果入院医生预计患者需要住院两个午夜，并在医疗记录中提供支持该预期的文件。CMS认为，在决定是否让患者住院时，医生应考虑计划手术的复杂性、患者的医疗和社会心理史、时间以及预期的围手术期。

最初的Two-Midnight裁决还从IPO名单上取消了近300例手术，其中大多数是大量骨科和脊柱骨科手术。许多利益相关方不同意这一裁决，反对者称，尽管这不是CMS的意图，但从IPO清单中删除程序表明，这些程序不够复杂，不足以保障一般健康的患者住院治疗，医生必须“证明”该程序符合住院治疗的理由。

How Reinstatement of the IPO List Benefits Health Systems

Many stakeholders consider the reversal of the original Two-Midnight ruling in the 2022 OPPS Final Rule a major win for patients, providers, and hospitals in several significant aspects:

1. Improved patient safety: Services on the IPO list are often complex and sometimes invasive procedures that require close care and coordinated services in the hospital inpatient setting. The reinstatement of the IPO list ensures that patients do not return home prematurely and have the opportunity for a successful recovery.

2.Increase in reimbursement and/or case mix for some hospitals: Diagnosis-Related Group payment for inpatient procedures is often comparatively more than Ambulatory Payment Classification payment for the same procedure performed in the outpatient setting. Hospitals with high volumes of procedures eliminated from the IPO list saw a decline in both reimbursement and case mix index. This decline coupled with the financial impact of theCOVID-19pandemic presented some hospitals with a real financial threat to their security. Reinstated procedures on the IPO list mean an increase in reimbursement for many facilities.

3.Decrease in billing denials: Many stakeholders felt that commercialpayersinterpreted the Two-Midnight ruling as a restriction to appropriate care settings based on the cost alone. They worried the ruling promoted procedures in outpatient settings or ASCs, even in cases where outpatient care wasn’t appropriate. As a result, hospitals have had to devote time and resources to appealing these denials and have often had to accept lower payment even though the provider believes the patient was appropriately admitted as inpatients. With CMS regulating that the procedures on the IPO list should be performed in the inpatient setting, insurance companies are less likely to deny these cases based on patient status. The intended result is a decrease in denials and ultimately more timely and appropriate payment to the facility.

4.Reduced burden on physicians: IPO名单的恢复意味着该程序不再受Two-Midnight规则的要求。尽管病例管理人员协助医生决定住院治疗还是门诊治疗，但最终还是由医生来决定并有义务安排正确的状态。医生不再需要担心住院病人的住院时间是否合理，或者门诊病人的住院时间意外地超过了适当的时间，这可能会导致影响病人护理的更多问题。

Preparing for Reinstatement of the IPO List

Hospitals can prepare for the reinstatement of the IPO list as of January 1, 2022. For some health systems, inpatient volumes will increase at a time when many hospitals are already at inpatient capacity due to the pandemic, and some hospitals may see increased need for inpatient coders.

Cross-training between inpatient and outpatient coders can take some time and effort, but such preparation will support shifts in patient volumes anticipated with reinstatement of the IPO list. Case managers and physicians should be up to date on the reinstatement to avoid unnecessary work determining the correct setting for a procedure and/or denials for IPO procedures performed as an outpatient procedure.

In addition,revenue cycleteams may find it helpful to put an account check in place to hold accounts with IPO codes. This way, they can review the patient status before dropping the claim. Some systems may be sophisticated enough to hold a claim if an IPO procedure code is detected with any status other than inpatient.

Avoiding Denials and Payment Delays

Even healthcare reimbursement changes designed to improve the delivery of care for patients and experience for providers requires adjustment and adaptation that, without preparation, can interrupt operations and the revenue cycle. Therefore, understanding the updated rules and following the above preparation measures will help facilities code and bill in a timely manner and avoid denials and delays in payment.

Additional Reading

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• Surprise Billing in Healthcare: The No Surprises Act Takes a Stand for Patients
• Accelerate Charge Capture Improvement with Health Catalyst VitalIntegrity™
• Own Your Value-Based Care Future with the Health Catalyst Value Optimizer™ Solution
• Healthcare Financial Recovery: A Guide to the COVID-19 Add-On Payment

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