Surgery doesn’t come cheap, and you will want to know how (or if) Medicare is going to pay for it long before you go under the knife.
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Preparing for Surgery
There are several things you need to think about before having surgery. The first, of course, is whether or not the procedure is necessary or if there are other treatment alternatives.
After that come the logistics of how and where your surgery will be performed, and how much insurance will pay toward the bill. You should not undergo any elective surgery or procedure without addressing these issues beforehand.
Other surgeries, as long as there are no complications and the person undergoing surgery does not have significant chronic conditions that put them at high risk for complications, default to Medicare Part B. This affects not only how much you will pay, but where your surgery can be performed.
Medicare’s Inpatient Only Surgery List
Every year, CMS releases an updated Inpatient Only (IPO) surgery list.The surgeries on this list are not arbitrarily selected.
These procedures tend to be more complex and have a higher risk for complications. They are also likely to need post-operative monitoring overnight and often have a long recovery time. CMS understands that these surgeries require a high level of care and that these patients are unlikely to go home the same day or even the day after surgery.
Examples of Inpatient Only surgeries include:
You may be surprised to learn that very few spinal procedures are on the list. In fact, most types ofspinal fusionsanddiscectomiesare not on the Inpatient Only list.
Changes to the IPO in 2022Back in 2020, CMS announced that the Inpatient Only list would be phased out over three years. The first group of surgeries—298 musculoskeletal and spinal procedures—were removed from the list in 2021. However, due to concerns from surgeons and medical facilities, CMS has put all but three of those surgeries back on the IPO list as of January 1, 2022.
Changes to the IPO in 2022
Back in 2020, CMS announced that the Inpatient Only list would be phased out over three years. The first group of surgeries—298 musculoskeletal and spinal procedures—were removed from the list in 2021. However, due to concerns from surgeons and medical facilities, CMS has put all but three of those surgeries back on the IPO list as of January 1, 2022.
Surgeries Performed in a Hospital
For the safety of Medicare beneficiaries, Inpatient Only surgeries must be performed in a hospital. Medicare Part A covers the majority of surgical costs, and you will pay a deductible of $1,632 in 2024. You may also need to pay 20% for any Part B-covered services.
That does not mean that other surgeries can’t be performed in a hospital setting. If a surgery is not on the Inpatient Only list and not on Addendum AA (see Ambulatory Surgery Centers below), it must be performed in a hospital.
The Two Midnight Rule
Surgeries Performed in Ambulatory Surgery Centers
Surgeries on the Inpatient Only list cannot be performed in an ambulatory surgery center (ASC). In fact, CMS publishes a specific list of outpatient surgeries that can be performed at an ASC. This list is referred to as Addendum AA.
By definition, an ASC is an outpatient medical facility where surgeries are performed. It may or may not be affiliated with a hospital. You may also hear ASCs referred to as same-day surgery centers.
According to CMS guidelines, “The surgical codes that are included on the ASC list of covered surgical procedures … have been determined to pose no significant safety risk to Medicare beneficiaries when furnished in ASCs, and for which standard medical practice dictated that the beneficiary would not typically be expected to require active medical monitoring and care at midnight following the procedure (overnight stay).”
Simply put, these surgeries are low risk and are not expected to require care and monitoring beyond 24 hours.
Examples of procedures that can be performed in ASC include:
CMS Surgery Lists and Patient Safety
The Inpatient Only surgery list is not only about payment; it is also about safety.
Staffing in a hospital is very different than that in an ASC. Whereas a hospital has 24-hour resources, an ASC may have reduced staff overnight. Most ASCs will not have a physician onsite after hours.
Since care in an ASC is limited to a 24-hour stay, if a patient requires more time for recovery, the patient would also need to be transferred to a hospital.
For these reasons, all procedures on the Inpatient Only list must be performed in a hospital.
Comparing Traditional Medicare to Medicare Advantage
Traditional Medicare (Part A andPart B) andMedicare Advantage (Part C)followed different rules. While traditional Medicare follows all the payment guidelines described above, Medicare Advantage plans did not have to adhere to the Inpatient Only list until January 1, 2024. The Centers for Medicare & Medicaid Services finalized a rule in April 2023 that now requires them to do so.
Medicare Advantage plans often turn to national guidelines such as MCG Health’s Care Guidelines or Change Healthcare’s InterQual Solution to determine whether a surgery is inpatient-appropriate. Insurance companies may also have internal processes that determine how they will cover different surgeries. Now, the Inpatient Only list must also be taken into consideration.
Regardless of the type of Medicare plan you have, a surgery on the Inpatient Only list must be performed in a hospital.
There could be advantages to having a Medicare Advantage plan. Consider rehabilitation care after your surgery. In order for traditional Medicare to pay for a stay in a skilled nursing facility, you need to have been admitted for at least three consecutive days as an inpatient.
Medicare Advantage plans have the option ofwaiving the three-day rule. This could save you considerably in rehabilitation costs if your hospital stay is shorter than that.
Summary
CMS also releases an annual Addendum AA that specifies what outpatient (i.e., not Inpatient Only) procedures can be performed in ambulatory surgery centers. All remaining outpatient surgeries must be performed in a hospital for anyone on Medicare.
Whether Part A or Part B covers your surgery affects how much you will pay out of pocket. Find out what part of Medicare your procedure falls under ahead of time so that you can better plan for it and avoid additional stress.
6 SourcesVerywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Centers for Medicare & Medicaid Services.FY 2024 IPPS final rule home page.Centers for Medicare & Medicaid Services.CY 2022 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule (CMS-1753FC).Centers for Medicare & Medicaid Services.2024 Medicare Parts A & B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts.Centers for Medicare & Medicaid Services.2024 NPRM Addendum AA, BB, DD1, DD2, EE, and FF.Centers for Medicare & Medicaid Services.Medicare claims processing manual. Chapter 14 - ambulatory surgical centers.Medicare Program; Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly. Federal Register. April 12, 2023.
6 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Centers for Medicare & Medicaid Services.FY 2024 IPPS final rule home page.Centers for Medicare & Medicaid Services.CY 2022 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule (CMS-1753FC).Centers for Medicare & Medicaid Services.2024 Medicare Parts A & B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts.Centers for Medicare & Medicaid Services.2024 NPRM Addendum AA, BB, DD1, DD2, EE, and FF.Centers for Medicare & Medicaid Services.Medicare claims processing manual. Chapter 14 - ambulatory surgical centers.Medicare Program; Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly. Federal Register. April 12, 2023.
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
Centers for Medicare & Medicaid Services.FY 2024 IPPS final rule home page.Centers for Medicare & Medicaid Services.CY 2022 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule (CMS-1753FC).Centers for Medicare & Medicaid Services.2024 Medicare Parts A & B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts.Centers for Medicare & Medicaid Services.2024 NPRM Addendum AA, BB, DD1, DD2, EE, and FF.Centers for Medicare & Medicaid Services.Medicare claims processing manual. Chapter 14 - ambulatory surgical centers.Medicare Program; Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly. Federal Register. April 12, 2023.
Centers for Medicare & Medicaid Services.FY 2024 IPPS final rule home page.
Centers for Medicare & Medicaid Services.CY 2022 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule (CMS-1753FC).
Centers for Medicare & Medicaid Services.2024 Medicare Parts A & B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts.
Centers for Medicare & Medicaid Services.2024 NPRM Addendum AA, BB, DD1, DD2, EE, and FF.
Centers for Medicare & Medicaid Services.Medicare claims processing manual. Chapter 14 - ambulatory surgical centers.
Medicare Program; Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly. Federal Register. April 12, 2023.
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