The 2026 Hospital Outpatient Prospective Payment System (OPPS) Proposed Rule picks up where the first Trump administration left off, proposing to eliminate over three years Medicare’s Inpatient Only (IPO) List, which identifies procedures that Medicare only reimburses in the hospital inpatient setting. The proposed rule is very similar to the 2021 OPPS Final Rule, which was promulgated under Trump but implemented under Biden. The rule initiated a three-year phase-out of the IPO List, only for the Biden administration to reverse course and restore the IPO List in 2022. If this year’s rule is finalized, almost 300 procedures, mostly musculoskeletal, will move off the IPO List in 2026, and over 500 procedures, about half of which were on the IPO List, will be added to the Ambulatory Surgery Center Covered Procedures List (ASC CPL). 
 
Departing from precedent, the Trump administration is indicating that it no longer recognizes a patient-safety distinction between the inpatient and outpatient procedures, and that it will be far more permissive toward procedures performed at ASCs. This has huge implications for hospitals because, as evidenced by knee and hip replacements, procedures tend to migrate quickly to their lowest-cost allowable settings. And once Medicare covers something on an outpatient basis, commercial payers are quick to follow. Many health systems are still holding onto inpatient procedural revenues as an important cross subsidy, but the march toward site neutrality feels inevitable. The transition can be slowed down or sped up, but it’s going in only one direction.