What to Do When Your Surgery Isn’t on the Medicare Inpatient Only List (2024)

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.

Some surgeries will automatically be covered by Medicare Part A but others will be covered by Medicare Part B. The difference could add up to thousands more in out-of-pocket expenses.

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 treatmentalternatives.

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.

Few people are aware that the Centers for Medicare & Medicaid Services (CMS) has established a list of surgeries that will be covered by Medicare Part A.

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:

• Coronary artery bypass grafting (CABG)
• Gastric bypass surgery for obesity
• Heart valve repair or valve replacement

You may be surprised to learn that very few spinal procedures are on the list. In fact, most types of spinal fusions and discectomies are not on the Inpatient Only list.

Other common procedures were once on the list, but have since been removed. As of 2018, total knee replacement (total knee arthroplasty) is no longer automatically covered by Part A. Total hip replacement was taken off the list in 2020. Both are now considered Part B procedures.

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.

These surgeries will be covered by Medicare Part B. In that case, you will be required to pay a 20% coinsurance for your surgery and all aspects of your care from anesthesia to medications to medical supplies to your hospital bed. When it is all added together, it is easy to see you would spend far more than the Part A deductible amount.

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:

• Cataract removal
• Colonoscopy with or without biopsy
• Epidural injection for back pain
• Prostate biopsy

These surgeries will be covered by Medicare Part B at a coinsurance of 20% for each service.

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.

If there is a complication after hours, it is unlikely that an ASC would have the proper resources and personnel available to manage it. This may necessitate transferring a patient to a nearby hospital.

Since care in an ASC is limited to a 24-hour stay, if a patient required 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 and Part B) and Medicare Advantage (Part C) follow different rules. While traditional Medicare follows all the payment guidelines described above, Medicare Advantage plans do not have to. They can choose to pay for surgeries as inpatient or outpatient—that is, pay more or less—regardless of their being on the Inpatient Only list.

Medicare Advantage plans often turn to national guidelines such as MCG Health’s Care Guidelines or McKesson Health Solutions’ InterQual to determine whether a surgery is inpatient-appropriate. Insurance companies may also have internal processes that determine how they will cover different surgeries.

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 of waiving the three-day rule. This could save you considerably in rehabilitation costs if your hospital stay is shorter than that.

Summary

Medicare does not treat all surgeries the same. An Inpatient Only surgery list is released every year by CMS. These procedures are automatically approved for Part A coverage and must be performed in a hospital. All other Medicare-covered surgeries, as long as you are not at high risk and there are no complications, are covered by Part B.

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.