• CMS Proposes Changes to Medicare Rules on Physician Supervision Requirements for Hospital Outpatient Services
  • July 30, 2009
  • Law Firm: King & Spalding LLP - Atlanta Office
  • On July 1, 2009, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule containing changes to the hospital outpatient prospective payment system (OPPS) for calendar year (CY) 2010. The proposed rule addresses, in part, physician supervision requirements for hospital outpatient services. In a 2000 rule, CMS had been clear that its requirement for a supervising physician to be physically located in a provider-based department did not apply to on-campus sites. In the OPPS rulemaking for CY 2009 , however, CMS reversed itself by “clarifying and restating” its policy, and asserting that a supervising physician had to be present in all outpatient provider-based departments, on-campus or not. CMS’ new policy provoked a storm of protest from hospitals and their trade associations. CMS has addressed those comments and largely reverted to what was generally understood to be its policy from 2000 forward, although CMS insists that the changes it is making, if finalized, will be new policy that will apply prospectively only from the effective date of the rule on January 1, 2010.

    Under current policy, CMS's view is that a hospital may not properly bill Medicare for a facility charge for outpatient services furnished by a mid-level practitioner if there is no supervising physician in the department. CMS proposes to reverse this policy and to allow non-physician practitioners (including physician assistants, clinical psychologists, nurse practitioners, clinical nurse specialists, and certified nurse-midwives) to directly supervise all hospital outpatient services furnished in connection with the practitioner’s personally furnished services provided that the practitioner is acting within his or her licensure under state law and the clinical privileges granted by the hospital. As revised, 42 C.F.R. § 410.27 would continue to require non-physician practitioners to follow requirements for collaboration and supervision by physicians. This change relates solely to hospital visit charges for mid-level practitioner visits; it does not extend to permit mid-level practitioners to act as supervising physicians for services ordered by other practitioners or physicians.

    CMS further proposes to change the definition of “direct supervision” for hospital outpatient therapeutic services furnished in a hospital and in an on-campus provider-based department. Under the proposed definition, to be redesignated as § 410.27(a)(1)(iv), direct supervision means that the “supervisory physician must be present on the same campus, in the hospital or the on-campus provider-based department, and immediately available to furnish assistance and direction throughout the performance of the procedure.” Under this standard, the physician would be required to be physically present in the hospital, and available to step in and perform the service (i.e. not performing another service which could not be interrupted). For off-campus provider-based departments, the direct supervision standard will require the physician to be physically present in the off-campus provider-based department and immediately available.

    Finally, for hospital outpatient diagnostic services provided directly or under arrangements, CMS proposes to require that providers follow the physician supervision requirements for individual tests as listed in the Medicare Physician Fee Schedule Relative Value File. The definition of direct supervision for diagnostic services performed in a hospital, an on-campus provider-based department, or an off-campus provider-based department would be the same as for hospital outpatient therapeutic services performed in those locations. Non-physicians practitioners would not be allowed to provide supervision for diagnostic tests provided to hospital outpatients, even if within the scope of their practice under state law, under section 1861(r) of the Social Security Act. CMS proposes that, for hospital outpatient diagnostic services provided under arrangement in non-hospital locations, such as independent diagnostic testing facilities or physicians’ offices, physician supervision requirements be those already found at § 410.32(b)(3).

    These proposals to the OPPS rule, if finalized, will likely take effect for services furnished on or after January 1, 2010. The proposed rule was published in the July 20 Federal Register. Comments to the proposed rule are due by August 31.