Release of 2021 Outpatient Prospective Payment System (OPPS) Final Rule Begins Elimination of IPO List

Release of 2021 Outpatient Prospective Payment System (OPPS) Final Rule Begins Elimination of IPO List


The Final Rule for Hospital Outpatient Prospective Payment System (OPPS), which takes effect on January 1, 2021, was released on December 2, 2020 (CMS, 2020). The 2021 OPPS Final Rule includes updates to payment rates and changes to the APCs, including two new Comprehensive APCs (C-APCs). OPPS rates for hospitals that meet applicable quality reporting requirements will increase by 2.4%.

Notable changes for 2021 include the phased-in elimination of the Inpatient Only list (IPO) over a three years with the removal of close to 300 services this year. The current IPO list includes procedures for which payment is not made under the OPPS as they are typically performed in the inpatient setting because of the nature of the procedure and the need for at least 24 hours of postoperative recovery time or monitoring. There are approximately 1,700 procedures on the list.

CMS is eliminating this list to increase choices for the setting of these procedures. By CY 2024, the list will be completely phased out with all procedures eligible for Medicare payment in the hospital outpatient setting when this outpatient care is appropriate as determined by the physician.

The procedures eliminated for 2021 include predominantly musculoskeletal procedures, including services such as closed treatment of proximal femur fracture with manipulation, reinsertion of a spinal fixation device, and radical resection of a tumor of the clavicle. The complete list of procedures eliminated for CY 2021 is available in Addendum B to the Rule (CMS, 2020).

The policy for payment of 340B Purchased drugs at the Average Sale Price (ASP) minus 22.5% was continued. This policy has been involved in ongoing lawsuits, but was upheld by the US Court of Appeals in the D.C. Circuit Court in July 2020.

The Rule also includes approval for five device pass-through applications: the BAROSTIM NEO™ System, Hemospray® Endoscopic Hemostat, the SpineJack® Expansion Kit, CUSTOMFLEX® ARTIFICIALIRIS, and EXALT™ Model D Single-Use Duodenoscope. Two categories of service will be subject to the prior authorization process of hospital outpatient departments beginning with dates of service on July 1, 2021: cervical fusion with disc removal and implanted spinal neurostimulators.

More details on the Rule’s provisions are available in the draft copy, CMS-1736 (CMS, 2020). The Final Rule’s official copy will be published in the Federal Register in the coming weeks, and will be featured on the YES Blog.

For the changes enacted by the 2021 IPPS Final Rule, review our YES Blog article. Corporate coding teams that need guidance interpreting these OPPS updates should contact YES HIM Consulting’s team of credentialed coding and auditing experts to discuss YES’ tailored coding support and education options.

Ann Zeisset, RHIT, CCS, CCS-P, co-authored this article with Teri Jorwic, MPH, RHIA, CCS, CCS-P, FAHIMA. 

Teri Jorwic

Contract Educator, MPH, RHIA, CCS, CCS-P, FAHIMA
outpatient prospective payment system

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