Medicare Proposed Hospital Outpatient Payment Rule May Impact Post-Acute Care
(Aug. 26, 2025) A provision in the proposed Medicare Hospital Outpatient Prospective Payment System (OPPS) rule for Calendar Year (CY) 2026 may have significant implications for Medicare coverage and reimbursement of post-acute care provided by skilled nursing facilities (SNFs) and home health agencies. The proposed rule seeks to phase out the list of "inpatient only" (IPO) surgical procedures that are eligible for fee-for-service (FFS) Medicare coverage only if they are performed on an inpatient basis. The phase-out of this "IPO list" would occur over three years beginning in CY 2026. It would initially eliminate 285 “mostly musculoskeletal” surgical procedures from the list and allow them to be performed on an outpatient basis. Physicians would determine the clinical appropriateness of whether these procedures could be delivered safely in an outpatient setting.
While this proposal seeks to expand Medicare-covered outpatient options, it could also affect Medicare coverage and reimbursement of post-acute care. Without a three-day inpatient hospital stay, Medicare FFS beneficiaries would no longer qualify for Medicare-covered post-acute SNF services. In addition, as a result of this change, home health admissions after these outpatient surgical procedures would be considered community admissions and would be reimbursed at a lower rate than admissions after an inpatient stay.
LeadingAge National is reviewing the rule and the list of procedures to evaluate the extent of its impact on post-acute Medicare admissions and revenues. Comments on the rule are due to the Centers for Medicare and Medicaid Services (CMS) by Sept. 15th.
The proposed rule is available here.
Contact: Karen Lipson, klipson@leadingageny.org