CurrentProvidence Health PlanPolicy 395

Inpatient Surgical Site of Service

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Medicare-only policy governing when selected surgical procedures (not on the CMS Inpatient Only list) require inpatient admission versus outpatient/ASC setting; applies to Providence Medicare lines and affects providers requesting inpatient admission for covered surgical procedures.

Policy Summary

PayerProvidence Health Plan

PolicyInpatient Surgical Site of Service

Policy CodePolicy 395

Change TypeNo material change

Effective DateJul 1, 2026

Last ReviewJul 1, 2026

Next Review DateJul 1, 2026

Key ActionIf inpatient admission is anticipated for a procedure not on the CMS Inpatient Only list, submit clinical documentation (history, exam including weight and comorbidities, surgical plan, ASA-PS score) and obtain prior authorization when required to support medical necessity.

SourceLink

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CurrentProvidence Health PlanPolicy 395

Inpatient Surgical Site of Service

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Policy Summary

PayerProvidence Health Plan

PolicyInpatient Surgical Site of Service

Policy CodePolicy 395

Change TypeNo material change

Effective DateJul 1, 2026

Last ReviewJul 1, 2026

Next Review DateJul 1, 2026

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

Documentation: history, exam, ASA-PSrequired clinical documentation elements

Medicare onlyproduct and benefit application

POS-dependentprior auth varies by POS

multiple groupsprocedure code groups listed

through 7/2026revision history present

Inpatient Admission and Site‑of‑Service Appropriateness

Inpatient admission / site-of-service appropriateness

Covered inpatient admission when ALL of the following are met or applicable:

Medicare statutory requirement: Service must be medically reasonable and necessary under §1862(a)(1)(A) of the Social Security Act

Medicare requirement

Procedure on CMS Inpatient Only list: If the surgical procedure is found on the CMS Inpatient Only (IPO) list, inpatient admission is considered medically appropriate without further review

CMS IPO governs; policy does not apply to IPO services

For non-IPO procedures: If procedure is not on the IPO list (including procedures on the CMS ASC-covered list or not listed), inpatient admission is covered only when clinical documentation supports the need for an inpatient level of care

Documentation must justify inpatient setting; the Plan will review medical records

Two‑midnight benchmark consideration: Expectation that the patient will require a hospital stay crossing two midnights must be reasonable based on clinical information at time of admission and supports inpatient status when applicabletwo midnights expectation

Plan will review records to determine reasonableness

Clinical judgment and optional tools: Clinical judgment is required for each case; screening instruments (e.g., InterQual® or MCG™) may be used but are not required

Plan may apply its objective, evidence-based criteria consistent with Medicare guidance

This policy does not apply to services on the CMS Inpatient Only (IPO) list. Procedures on the IPO list are governed by CMS inpatient‑only rules (Addendum E) and, when listed, are generally considered medically appropriate for inpatient admission without additional Plan review. For the most current IPO listings and guidance, refer to the CMS Hospital Outpatient Prospective Payment System Addendum E resources noted by CMS.

All unlisted codes submitted for services addressed in this policy are reviewed at the claim level. If an unlisted code is submitted for a service that is not covered by this policy, the claim will be denied as not covered. To avoid post‑service denial, providers should prior authorize unlisted codes when the service might be covered.

When a procedure appears on the CMS ASC‑covered procedures list or is not found on either the CMS IPO or ASC lists, inpatient admission is not presumed. For procedures on the ASC list, CMS has determined they generally do not require routine overnight monitoring; therefore an inpatient stay must be supported by clear clinical documentation demonstrating the need for inpatient level of care. Similarly, for procedures not listed on either CMS list, the medical record must document the clinical rationale for inpatient admission. Lack of documentation supporting inpatient level of care may render the admission not medically necessary.

Codes, Lists, and Benchmarks in Scope

Currently scoped procedure groupsmixed

No codes listed

CMS Inpatient Only list (reference)HCPCS

No codes listed

CMS ASC-covered procedures list (reference)HCPCS

No codes listed

Elbow, Wrist, and Hand Arthroplasty CodesCPT

21243	Arthroplasty, temporomandibular joint, with prosthetic joint replacement.
24360	Arthroplasty, elbow; with membrane (eg, fascial).
24366	Arthroplasty, radial head; with implant.
25332	Arthroplasty, wrist, with or without interposition, with or without external or internal fixation.
25442	Arthroplasty with prosthetic replacement; distal ulna.
25446	Arthroplasty with prosthetic replacement; distal radius and partial or entire carpus (total wrist).
25447	Arthroplasty, intercarpal or carpometacarpal joints; interposition.
25448	Arthroplasty, intercarpal or carpometacarpal joints; suspension, including transfer.
26531	Arthroplasty, metacarpophalangeal joint; with prosthetic implant, each joint.
26535	Arthroplasty, interphalangeal joint; each joint.

1–10 of 12

1/2

Shoulder, Hip, Knee, Ankle Arthroplasty CodesCPT

23470	Arthroplasty, glenohumeral joint; hemiarthroplasty.
23472	Arthroplasty, glenohumeral joint; total shoulder (glenoid and proximal humeral replacement).
27130	Arthroplasty, acetabular and proximal femoral prosthetic replacement (total hip arthroplasty), with or without autograft or allograft.
27447	Arthroplasty, knee, condyle and plateau; medial AND lateral compartments with or without patella resurfacing (total knee arthroplasty).
27702	Arthroplasty, ankle; with implant (total ankle).

Spinal Procedure and Disc Arthroplasty CodesCPT

22532	Arthrodesis, lateral extracavitary technique, including minimal discectomy to prepare interspace (other than for decompression); thoracic.
22533	Arthrodesis, lateral extracavitary technique, including minimal discectomy to prepare interspace (other than for decompression); lumbar.
22548	Arthrodesis, anterior transoral or extraoral technique, clivus-C1-C2 (atlas-axis), with or without excision of odontoid process.
22554	Arthrodesis, anterior interbody technique, including minimal discectomy to prepare interspace (other than for decompression); cervical below C2.
22556	Arthrodesis, anterior interbody technique, including minimal discectomy to prepare interspace (other than for decompression); thoracic.
22558	Arthrodesis, anterior interbody technique, including minimal discectomy to prepare interspace (other than for decompression); lumbar.
22612	Arthrodesis, posterior or posterolateral technique, single interspace; lumbar (with lateral transverse technique, when performed).
22857	Total disc arthroplasty (artificial disc), anterior approach, including discectomy with end plate preparation (includes osteophytectomy for nerve root or spinal cord decompression and microdissection); single interspace, cervical.
22858	Total disc arthroplasty (artificial disc), anterior approach, including discectomy to prepare interspace (other than for decompression), single interspace, lumbar.
22861	Revision including replacement of total disc arthroplasty (artificial disc), anterior approach, single interspace; cervical.

Two‑midnight benchmark — expectation that stay crossing two midnights supports inpatient admission when clinically reasonable

ExpectationA reasonable expectation by the admitting physician that the hospital stay will cross two midnights supports inpatient admission; the Plan will review medical records to determine if the two‑midnight expectation is reasonable based on clinical information at time of admission.

ApplicationApplies to services eligible to be performed outpatient (i.e., not on the CMS Inpatient Only list); clinical documentation must justify inpatient level of care.

Clinical judgmentMedicare allows use of screening tools (InterQual® or MCG™) but does not require them; objective clinical judgment is mandatory for each case.

Review processThe Plan will review the medical record and consider factors from the Medicare Benefit Policy Manual when assessing two‑midnight rationale (patient history, current needs, available facilities, hospital policies).

Prior Authorization, Documentation, and Denial Risk

Prior Authorization

Prior authorization / medical necessity review when inpatient admission is anticipated

For services that are eligible to be performed outpatient (i.e., not on the CMS Inpatient Only list), if an inpatient admission is anticipated the Plan will review the clinical documentation to support the medical need for inpatient place of service; the review will consider Medicare factors including the two‑midnight benchmark and may reference screening instruments (InterQual®/MCG™) though their use is not required.

Clinical documentation must justify inpatient level of care when procedure is not on the CMS IPO list.
Expectations about crossing two midnights will be evaluated based on clinical information at time of admission.
Screening tools (InterQual®/MCG™) may be used but are not required; clinical judgment is mandatory.

Prior Authorization

Prior authorization required for select procedures (POS 21) and some procedures regardless of POS

Certain procedures require prior authorization when billed with place of service code 21 (inpatient); other procedures may require prior authorization regardless of place of service to review general medical necessity and inpatient appropriateness. See the Providence Health Plan Combined Prior Authorization List for specifics.

Policy Background and Scope

CMS maintains the Inpatient Only (IPO) list to identify HCPCS/CPT procedures that typically require inpatient care because of safety concerns, the typical condition of patients, or the need for at least 24 hours of postoperative monitoring. In contrast, procedures on the CMS ASC‑covered surgical procedures list have been determined by CMS to pose no significant safety risk when performed in Ambulatory Surgical Centers and generally do not require an overnight stay. Because IPO procedures are deemed to pose greater safety risk, they are eligible for Medicare coverage only when rendered in an inpatient setting; ASC procedures are generally outpatient‑appropriate unless the medical record documents otherwise. The Plan therefore uses these CMS lists, along with Medicare medical necessity principles (including the two‑midnight benchmark), to guide site‑of‑service determinations for the procedures in scope.

Key Definitions and External Lists

Definition/description of Inpatient Only (IPO) list — CMS designated HCPCS codes generally requiring inpatient care

DefinitionCMS 'Inpatient Only' (IPO) list is Addendum E: HCPCS codes designated to be paid only as inpatient procedures because they generally require inpatient care or pose significant safety risk.

RationaleServices on the IPO list are typically surgical procedures that pose significant safety risk or require at least 24 hours of postoperative recovery/monitoring before safe discharge.

AccessThe most current IPO lists are published as Addendum E on the CMS Hospital Outpatient Prospective Payment System (OPPS) NFRM webpages (downloadable Excel preferred).

Payment implicationThere is generally no OPPS payment for services designated as inpatient only; Medicare does not pay for an inpatient only service provided to an individual registered as an outpatient, with limited exceptions.

Definition/description of ASC-covered surgical procedures list — CMS list of procedures safe for ASC without routine overnight stay

Policy Summary

PayerProvidence Health Plan

PolicyInpatient Surgical Site of Service

Policy CodePolicy 395

Change TypeNo material change

Effective DateJul 1, 2026

Last ReviewJul 1, 2026

Next Review DateJul 1, 2026

SourceLink

On This Page

Place of Service (POS) guidance — POS 21 (inpatient) may trigger prior authorization for listed codes

POS triggerPlace of Service (POS) code 21 (inpatient hospital) may trigger prior authorization for certain procedures listed in this policy; those same codes may not require prior authorization when billed to other POS codes.

ScopeSome procedures require prior authorization regardless of place of service to review general medical necessity and appropriateness of inpatient stay.

Where to checkRefer to the Providence Health Plan Combined Prior Authorization List for specific prior authorization requirements by procedure and POS.

Codes that only require prior authorization when billed POS 21 will not require prior authorization at other places of service.
Some procedures require prior authorization at any POS to evaluate medical necessity and inpatient appropriateness.

Step Therapy

Step therapy not applicable

No step therapy requirements are stated in this portion of the document.

Documentation Required

Required documentation for medical necessity review

Submit complete medical records to support inpatient medical necessity reviews, including history; physical examination (including patient weight and co-morbidities); surgical plan; and the American Society of Anesthesiologists Physical Classification (ASA-PS) score. Missing items may delay review or affect the decision outcome.

History
Physical exam including patient weight and co-morbidities
Surgical plan
ASA-PS score

Documentation Required

Documentation & prior authorization guidance (POS 21 and unlisted codes)

Reiterate: certain procedures only require prior authorization when billed POS 21 (inpatient); other procedures may require prior authorization regardless of POS. Unlisted codes that may be covered should be prior authorized to avoid post-service denial; consult the Providence Health Plan Combined Prior Authorization List.

Codes billed POS 21 may trigger prior authorization even if same code at other POS does not.
All unlisted codes are reviewed for medical necessity; prior authorization is recommended for potentially covered unlisted codes to avoid post-service denial.

Denial Risk

Denial risk for unsupported inpatient admissions

Inpatient admission requests for procedures not on the CMS Inpatient Only list will be reviewed for medical necessity; if clinical documentation does not support the need for inpatient setting the request may be denied.

Inpatient admission for procedures on the ASC list or not on either list will be considered not medically necessary if documentation does not justify inpatient care.

Denial Risk

Denial risk for unlisted codes submitted for non-covered services

If an unlisted code is submitted for non-covered services addressed in this policy it will be denied as not covered; unlisted codes for potentially covered services should be prior authorized to avoid post-service denial.

All unlisted codes are reviewed for medical necessity, correct coding, and pricing at the claim level.
Prior authorization is recommended for unlisted codes that may be covered.

DefinitionThe ASC-covered surgical procedures list is a CMS-reviewed set of procedures determined to pose no significant safety risk when furnished in Ambulatory Surgical Centers and for which patients would not typically require active medical monitoring at midnight following the procedure (no routine overnight stay).

Contrast with IPOProcedures on the CMS Inpatient Only list are considered to pose significant safety risk in ASCs and are therefore not eligible for ASC coverage designation.

GuidanceFor more information on ASCs and payment, see the Plan's Ambulatory Surgical Center (ASC) Payment Structure reimbursement policy (RP3).