For three decades, advances in minimally invasive techniques and anesthesia have fueled a steady shift in surgical care from inpatient hospitals to outpatient settings. And it’s been a success story—when the right patient, procedure and facility align.
The Centers for Medicare & Medicaid Services (CMS) is now poised to make a more permanent shift by eliminating the Inpatient Only (IPO) List over the next three years. The question for policymakers and providers is whether this move represents progress—or peril—for the nation’s most vulnerable patients.
The IPO List has long served as a blunt but effective safeguard: For Medicare beneficiaries, certain high-risk surgeries are only covered in hospitals, where immediate intervention is available if something goes wrong.
But, at its core, the IPO List is a somewhat restrictive national coverage decision that is not necessarily aligned with patient-centered care or efficient use of the Medicare trust fund. If physicians and patients truly had the ability to choose surgical sites based on what they agreed would be best for the patient, reimbursing surgery in both inpatient and outpatient settings would be sound policy that aligns traditional Medicare with the innovative care that can occur for Medicare Advantage (MA) and commercial insurance populations.
The question is: If the decisions about where the surgery will be performed are influenced by other factors, is it truly safe to perform these complex surgeries on older Americans?
Though removing the IPO List would give fee-for-service Medicare beneficiaries more flexibility in choosing their site of care—and guarantee hospital payment for admission for a single night stay for a two-year period by excluding these procedures from the two-midnight rule—the CMS has no stated plan to evaluate whether an overnight stay actually results in safer care with fewer complications. Research from Lee Fleisher, M.D., underscores that selecting the right surgical setting is critical to patient safety. While the policy promises innovation, choice and lower costs on paper, in practice it risks shifting more procedures to ambulatory surgery centers (ASCs)—settings with fewer resources to handle high-acuity complications.
That may be fine for a healthy 65-year-old going home to strong family support. But it’s a different story for an 83-year-old with heart failure, discharged to a frail spouse managing multiple chronic conditions of their own. The burden doesn’t just shift to caregivers—it shifts the entire risk equation. Without guardrails, frail, complex patients could face serious harm.
Proponents of phasing out the list rightly note that inpatient care comes with trade-offs: higher costs, greater risk of hospital-acquired infections and more. But hospitals also provide trained staff, continuous monitoring and rapid escalation if a patient deteriorates. For older adults with multiple comorbidities, limited home support or complicated recoveries, that safety net is not optional—it’s essential. Shared decision-making around surgery must take into account more than just location of care.
The proposed rule also lacks a mechanism to track whether eliminating the IPO List leads to higher rates of complications, readmissions or deaths. Importantly, MA must, by law, provide the same standard of care as traditional Medicare. Removing the inpatient coverage requirement shifts site-of-care decisions to a case-by-case—or claim-by-claim—basis by the insurer. We are concerned that, in practice, MA prior authorization could override patient-physician decision-making, an issue already under scrutiny. And, if beneficiaries are steered toward ASCs, they may face higher out-of-pocket costs—raising access and equity concerns.
The CMS has the tools to get this right. Expedient access to claims data, electronic health records and quality reporting can provide better insights into patient outcomes by site of service. A robust monitoring framework would not only protect patients but also provide assurances that the CMS can advance outpatient care safely while staying true to its value-based care goals.
This doesn’t have to be a zero-sum choice between modernization and safety. The CMS could:
• Monitor real-world complication and readmission rates as procedures move off the IPO List.
• Restore procedures if data show unintended harm.
• Develop nuanced coverage policies that account for patient complexity, home support and recovery environment—not just procedure type—to ensure that the patient and physician can appropriately determine the optimal location of care given the information that they have available.
• Require site-of-service flexibility so patients and physicians—not market incentives—drive decisions.
The shift to more efficient, patient-centered care isn’t going away, nor should it. But policy changes of this magnitude must include mechanisms to detect and correct harm in real time. Innovation should not come at the expense of the most vulnerable. Without replacing the IPO List’s protective functions, we risk trading progress for peril.
Lee Fleisher, M.D., is former chief medical officer and director of the Center for Clinical Standards and Quality at the CMS, and a practicing anesthesiologist and emeritus professor at the University of Pennsylvania.
Nancy Foster is former vice president of quality and patient safety policy at the American Hospital Association.