News to Note – August 2025

Criticism of Using GMLOS to Guide Discharge Decisions:

A healthcare executive claimed hospitals should follow “recommended” lengths of stay to reduce readmissions, citing risks of extended stays (falls, infections, etc.). The executive was likely referring to Geometric Mean Length of Stay (GMLOS), which should not be used as a recommended discharge target. The correct length of stay is based on ongoing medical necessity, not averages or benchmarks.

Concerns Over CMS Transitioning Short Stay Audits to MACs

CMS released an FAQ about transitioning short-stay audits from Livanta to MACs. MACs claim to use clinical judgment rather than MCG or InterQual guidelines. However, most reviews will be done by RNs, with physician input only for complex cases. Raises legal and scope-of-practice concerns: Can RNs legally make these determinations? Under the new system: there’s no opportunity to discuss potential denials before they're issued (unlike with Livanta). And denials must be formally appealed, even if due to clear factual errors.

We all know that the basis of the CMS rule is the determination that the patient is expected to require two midnight of necessary hospital care, yet the FAQ states they expect documentation to “support the need for services to be provided in an inpatient hospital setting.” There is absolutely no service that “needs the inpatient hospital setting.” Many services must be performed in a hospital for safety and regulatory reasons, but no hospital differentiates the medical care provided to inpatients and outpatients in the hospital. 

CMS plans to restart the phase-out of the IPO list (January), beginning with orthopedic surgeries, as they attempted in 2021.

Generally, agree that the IPO list is outdated, since inpatients and outpatients receive the same care in hospital settings (same ORs, implants, and post-op recovery based on medical need). Here are some things to think about: First, since the list will be around for three years, you still need to screen most surgeries by the planned CPT code in case it still is inpatient only, as the CPT code is crucial for getting that prior approval from the Medicare Advantage plans. 

Then, you must start working with your non-orthopedic surgeons to think about expected length of stay, discharge destination, and any risks that could influence the hospital care. Once every surgery will be subject to the two-midnight rule, you will need to know how long the in-hospital recovery will take, which patients will require SNF care for recovery, and whether any of the surgeries warrant inpatient admission based on the case-by-case exception. For those cases, you want those factors documented pre-operatively to support the inpatient admission decision. 

CMS should address two things- first, describe how to get part A SNF access for post-surgical patients who require that care but cannot qualify if their surgery is performed as outpatient. And second, is to help us understand the applicability of the case-by-case exception for surgeries where the expected length of stay is one midnight but the patient is at higher risk. In this case, stressing that we need such guidance since the exception applies not only to traditional Medicare but also to Medicare Advantage patients where the plans continue to deny admissions that meet the two-midnight rule. 

I prepared a page with the link to submit comments to CMS and even prototype comments that you can use as a guide or even just copy and paste. CMS does allow anonymous comments if you are concerned about having your name posted. Just go to www.ronaldhirsch.com and you will see a button labeled “Comment on Inpatient Only List”. CMS does read every comment. https://tinyurl.com/CMSOPPSComment