The Inpatient-Only List & The Role Utilization Review Can Play

By Tiffany Ferguson, LMSW, CMAC, ACM

EDITOR’S NOTE:
While there have been attempts to phase out the IPO List, the reality is that it continues to be a significant factor in healthcare reimbursement. This article will delve into the complexities of the IPO List, its impact on revenue, and the importance of accurate coding and utilization review in ensuring proper billing.

The Inpatient-Only (IPO) List is comprised of services, primarily surgical, that are designated as requiring inpatient care due to the nature of the procedure, the patient’s underlying physical condition, or the need for extended post-operative recovery time.

This designation is critical, as Medicare and other payers reimburse and/or deny these procedures differently, depending on their recognition of the IPO List. Although it is clear where Medicare stands on the subject, it was not until April 2023, when the Centers for Medicare & Medicaid Services (CMS) released CMS 4201-F, commonly known as the “Medicare Advantage (MA) Final Rule,” that MA plans were also required to adhere to the IPO List.

However, this is not necessarily the case for commercial and managed Medicaid plans, which still have autonomy, per their provider guidelines and hospital contracts, to dictate their stance on the IPO List, unless state-mandated otherwise. Regardless of the payers, getting it wrong can be significant to a hospital’s bottom line, as payers will often deny in full an incorrect authorization, such as completing an inpatient-only procedure in an outpatient setting of the hospital and billing the claim under an outpatient designation. This is where utilization review (UR) can collaborate with clinical documentation integrity (CDI), coding, and the rest of the revenue cycle to ensure that the status is correct up front. 

Sometimes this is when fallouts occur because an accountability owner and hardwired process do not exist, as the surgical process passes through so many departments. Regardless of the owner, however, there are some clear steps that need to occur to ensure the successful capture of IPO procedures.

Utilization review should be participating in access management by reviewing scheduled surgeries 2-3 days prior and collaborating with the scheduling and authorization team to make sure that each IPO procedure receives not only a pre-scheduled inpatient-only order in the medical record but also that the payer authorization matches the appropriate level of care.

Understanding that plans change in the operating room, documentation should be reviewed either by UR and/or the CDI team to evaluate for any changes that may have adjusted an outpatient procedure to an inpatient, requiring an updated level-of-care order to be obtained.

Even though education is important, providers should also partner with surgeons’ offices to ensure that they are aware of their potential missed opportunities for accuracy with IPO procedures and the authorization process. It is also important to understand that the pre-authorization function is typically completed by medical assistants and/or surgery schedulers, thus consideration should be given to maximize technology and hardwire the process – such as by adding hard stops in the electronic medical record (EMR) for when a procedural code is entered for surgery, via an alert when the appropriate level of care opens, notifying the user that this is an IPO procedure.

Some hospitals are still using fax and paper to schedule procedures, so consider giving custom forms to your top surgeon offices that identify very clearly which surgeries they perform that appear on the IPO List to avoid confusion leading to denials.

Finally, review your denials data with your revenue cycle and billing team. Which IPO procedures were missed? Break down what happened in each case and determine what procedure it was, along with which group was performing the procedure. This will provide key details in payers practices and lead the team upstream to work out any missteps that occurred in the process.

Accurate coding, diligent utilization review, and a clear understanding of the IPO List are vital components of revenue cycle management for healthcare organizations. The financial implications of IPO procedures are significant, underscoring the importance of precise billing and adherence to regulatory requirements.

Staying informed about the ever-evolving healthcare landscape is crucial, as political and regulatory changes can impact reimbursement policies and ultimately affect a hospital’s bottom line.