Site-of-care decisions: Navigating safety, access and value

Surgical and interventional procedures are continuing to shift out of the inpatient hospital setting, and from the hospital outpatient departments (HOPDs) to the ambulatory surgical centers (ASCs) and office settings. Driving forces behind this shift include advances in technology; improvements in surgical, anesthesia and recovery techniques; favorable outcomes in appropriately selected patients; a growing emphasis on value-based care; regulatory changes (including the planned sunsetting of the Medicare Inpatient-Only (IPO) list to give providers more flexibility in choosing the most appropriate setting); and, initially, the urgent need to free up inpatient resources during the COVID-19 pandemic. These shifts require physicians to carefully evaluate the most appropriate and safest site of care for each clinical service.

Many procedures have seen steady increases in outpatient volume. For example, an analysis of a large claims dataset showed that between 2017 and 2022 there was an 18% decrease in the number of inpatient spinal fusion procedures, with a rise from 17% to 30% for HOPDs.¹ Further, regulatory shifts have played a key role with the removal of total knee arthroplasty (TKA) and total hip arthroplasty (THA) from the Medicare IPO list (in 2018 and 2020, respectively), as well as the addition of each to the list of the ASC-eligible procedures in 2020 and 2021. From 2020 to 2022, the volume of TKAs performed in ASCs increased by 193.8%, while the volume of THAs performed in ASCs increased by 61.1% from 2021 to 2022.² Rates of 30-day complications following TKA in Medicare patients decreased in 2018 compared with three years prior, while the rate of readmissions and wound complications remained unchanged.³

Key stakeholders stand to benefit from moving a greater proportion of outpatient procedures to ambulatory surgical centers. Providers can experience greater autonomy, enhanced control over their schedules and financial benefits when ASCs are owned fully, or owned in part, by physicians. Medicare and commercial payers typically have lower reimbursement rates for procedures performed in the ASC compared with HOPDs, to account for lower overhead in the former, which leads to net cost savings. Patients can benefit from greater convenience, same-day discharges and lower out-of-pocket costs. An analysis of Medicare claims data found that patient payments were $680 lower for spinal decompression procedures performed in an ASC compared with the same procedure performed in a HOPD, along with a lower total cost.⁴

Migration to outpatient and out-of-hospital procedures has not been without its challenges. Despite over 6,000 free-standing ASCs operating in the United States in 2025, not all are in locations that are uniformly accessible to patients.⁵ In addition to geographic considerations, the ambulatory shift may pose other challenges with equitable access to outpatient surgical care.^6,7 Furthermore, a study examining trends in Medicare payments found that while facility fees for shoulder surgeries performed in ASCs have steadily increased, professional fees have seen a decline after 2018.⁸

Elective surgeries and procedures are a logical focus for continued outpatient migration by their very nature: they are unlikely to be performed in patients whose advanced or uncontrolled comorbidities, or lack of clinical stability, would render a prohibitively high peri-procedural risk. Initially, the shift to the outpatient space happened with procedures that have historically had very low rates of peri-procedural complications, and in younger and healthier patients. Clinical advancements have made it possible for more procedures — and for more than just the healthiest patients — to be considered appropriate for outpatient settings.^9,10 A study examining outcomes of outpatient surgeries found that Medicare patients who had procedures performed in an ASC had lower rates of complications and problem-based visits compared to matched patients who underwent procedures in an HOPD setting, demonstrating the surgeons’ ability to select less risky patients for the ASCs.¹¹

As clinicians, we recognize that appropriate patient selection, as well as consistency and transparency regarding decisions on which site of care is the safest for a given patient, is of paramount importance. ASCs and office settings lack the resources of HOPDs, such as advanced consultative services, intensive care units, laboratory facilities and blood banks needed to deal with serious, albeit rare, complications with elective procedures. In an analysis based on place of service and CPT codes, McKinsey and Company found that the largest category of services took place in the outpatient setting, with the “mixed” category (those performed in both ambulatory and inpatient setting) representing a slightly smaller group, and the inpatient category a distant third.¹² With the focus on patient safety, we interpret the “mixed” category to represent both an area of additional opportunity and a call for continued emphasis on appropriate patient selection.

As the clinical team behind the development of InterQual Criteria, we hear from customers that appropriate site-of-care determination for many elective procedures is a daily challenge. We are committed to delivering content products that optimize safety, effectiveness and efficiency for our ultimate customer — the patients that our users serve. With InterQual® Site of Service, a new functionality available within relevant InterQual content modules, our team is combining evidence-based content with benchmark data to facilitate the selection of the safest and most appropriate setting for a specific procedure based on a patient’s unique clinical scenario.

• The claims-derived benchmark data provide insight into the InterQual Inpatient/Outpatient setting determination coupled with CMS setting policy (Inpatient Only, ASC Eligible etc.) to allow for more transparent internal and peer-to-peer discussions. Ambulatory setting benchmarks (for HOPD, ASC, and Office utilization) allow for organizations to manage the ambulatory shift at the individual patient level or the organizational level.
• The setting look-up functionality provides this information by searching for CPT code or code description for procedures outside of the context of a medical review. This allows for easy access to setting information for procedures that do not require prior authorization.
• The evidence-based exceptions algorithm is designed to complement benchmark data by identifying patients whose comorbid conditions may increase perioperative risks or require more intensive monitoring. It supports informed discussions between providers and payers to determine the optimal site of care for each patient. 

Our new Site of Service offering allows for a more accurate reflection of trends in a continuously shifting landscape of where procedural care is being delivered. This can help lead to optimized outcomes and lower costs for carefully selected patients, while enhancing consistency and transparency. As clinicians, we can engage in data-informed and evidence-based discussions and make decisions to help ensure that patients receive care in the safest and most appropriate setting.