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Felhaber, Larson, Fenlon & Vogt
Felhaber, Larson, Fenlon & VogtFelhaber, Larson, Fenlon & Vogt

March 16, 2010

Articles

Hospital Outpatient Departments
CMS relaxes supervision requirements

Hospital administrators take note: CMS has released its 2010 Outpatient Prospective Payment System final rule, which should provide some relief from strict requirements regarding hospital outpatient departments. The final rule, which was officially released on Oct. 30, 2009, addresses concerns over supervision requirements for outpatient services. It also covers all the usual changes for hospital outpatient and ambulatory surgery center payments. The final rule went into effect Jan. 1, 2010.

Responding to criticism
Hospital organizations nationwide had expressed concerns regarding the supervision requirements that arose from prior regulatory and subregulatory guidance. In that earlier guidance CMS stated that a physician must provide direct supervision in the actual provider-based department (PBD) for all outpatient therapeutic services billed to Medicare by the hospital.

In responding to widespread criticism of this requirement, CMS stated in the final rule that it’s balancing beneficiary access and appropriate supervision by qualified practitioners and thus proposes to “revise or further define” its current policies for supervision of outpatient services. The final rule includes several significant changes for calendar year 2010.

NPPs allowed to supervise
Certain nonphysician practitioners (NPPs) can provide direct supervision for all hospital outpatient therapeutic services that they’re authorized to perform according to their state’s scope of practice rules and hospital-granted privileges. NPPs include physician assistants, nurse practitioners, clinical nurse specialists, certified nurse-midwives, and licensed clinical social workers. Under previous CMS policy, only physicians could provide the direct supervision for those services.

CMS didn’t remove the on-site supervision requirement entirely — even for critical access hospitals — because the agency believes that permitting NPPs to provide the supervision should relieve the burden that providers face when trying to arrange for physician supervision.

This raises a potential issue: Hospitals should ensure that only appropriate NPPs supervise outpatient services. For example, licensed clinical social workers will be limited in their supervision more than physician assistants or nurse practitioners. Moreover, the expansion of supervision to certain NPPs doesn’t apply to pulmonary, cardiac and intensive cardiac rehabilitation services, because these services must be supervised by a doctor of medicine or osteopathy.

“Presence” redefined
CMS has redefined “direct supervision” of an on-campus hospital outpatient therapeutic service to mean the presence of either a physician or NPP “anywhere on the hospital campus” immediately available to furnish assistance and direction throughout the procedure.

This change is much more relaxed than the previous interpretation, which required “presence” in one of the hospital’s on-campus outpatient departments — and possibly within each specific outpatient department. The final rule also permits the supervising physician (or NPP) to be in an on-campus location that’s not a PBD, such as a physician office, an oncampus skilled nursing facility, a rural health clinic or another nonhospital space.

With respect to off-campus hospital outpatient departments, the final rule expands a compliance restriction. The rule provides that the supervising physician “must be in each PBD of a particular offcampus outpatient location, but that does not mean that the physician must be in the room when the procedure is performed.”

This means that, if one off-campus facility has multiple PBDs, there would need to be multiple supervising physicians or NPPs. Thoughtful planning in the provider-based site design and attestation process can help mitigate the potential undue burdens that may flow from this requirement.

Supervision levels
Finally, CMS finalized its earlier proposal that supervision levels under the Medicare Physician Fee Schedule would apply for all hospital outpatient diagnostic services that are provided directly or under arrangement, whether in a hospital’s main buildings, in a PBD or at a nonhospital location.

Final rule provides relief
These changes to CMS policy regarding supervision in hospital outpatient departments provide welcome relief from requirements that many hospitals found impractical and unnecessary.

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