Articles on Compliance Strategies

Featured Health Business Daily Story Nov. 16, 2009

CMS: Supervising Physicians Can Be Anywhere on a Hospital’s Campus Under the Outpatient Prospective Payment System 

Reprinted from REPORT ON MEDICARE COMPLIANCE, the nation's leading source of news and strategic information on false claims, overpayments, compliance programs, billing errors and other Medicare compliance issues.

By Nina Youngstrom, Managing Editor, (nyoungstrom@aispub.com)

CMS has given hospitals more breathing room in terms of physician supervision of outpatient therapeutic services provided on hospital grounds. According to the final outpatient prospective payment system (OPPS) regulation released on Oct. 30, CMS says that physicians supervising therapeutic services merely have to be somewhere on the hospital campus, though immediately available. The new rule is more liberal than the current policy, which requires hospitals to station supervising physicians in every outpatient therapeutic department whenever services are underway, and gives more leeway than the proposed rule, which would have restricted “direct supervision” locations to facilities under hospital control.

“This is a big change and a good change,” says Boston attorney Larry Vernaglia. “It shows CMS is listening to the provider community when something doesn’t make sense.”

When the OPPS rule takes effect Jan. 1, CMS also will allow nonphysician practitioners (NPPs), such as physician assistants and nurse practitioners, to directly supervise outpatient therapeutic services they can personally perform according to their state scope of practice and hospital privileges. The final rule added licensed clinical social workers to the mix. However, only a doctor of medicine or osteopathy can provide direct supervision of pulmonary, cardiac and intensive cardiac rehabilitation.

Hospitals have been agonizing for more than a year about a CMS crackdown on physician supervision in hospital outpatient departments, both on and off campus. In Medicare Transmittal 82, CMS said that outpatient therapeutic services furnished in provider-based departments require direct physician supervision by the treating physician. That meant outpatient infusion or diabetes management clinics, for example, which are often located far from hospitals, could not provide routine services without physicians on site who have treatment relationships with patients.

CMS reversed that position in July 2008, only to announce a new restriction. In the 2009 final OPPS regulation, CMS said it required direct supervision of therapeutic services provided in the hospital or at on-campus provider-based departments of the hospital. The agency said it would not simply “assume” the direct supervision standard had been met. This stunned hospitals, which assumed direct supervision was implicit for services provided at the hospital because typically doctors are ever-present.

CMS backed off somewhat in the proposed OPPS rule for 2010 by stating that supervision of outpatient therapeutic services on the hospital’s main campus requires the physician’s presence on “the same campus, in the hospital or [critical access hospital] or on-campus provider-based departments of the hospital or CAH, but the definition of “in the hospital” meant that an on-campus physician office, for example, did not meet the requirements.

The Change Is a Big Relief for Hospitals

Now CMS has relaxed the provision even more and in the final rule states that “direct supervision means that the supervisory physician or nonphysician practitioner must be present on the same campus and immediately available to furnish assistance and direction through the performance of the procedure.” Unlike the proposed rule, the hospital “campus” can be a physician’s office, an on-campus skilled nursing facility, a rural health clinic or another hospital space, as long as the supervisor is immediately available.

It’s a big relief for hospitals. Without this change, “hospitals would have had to pay doctors to sit around each department and play Nintendo DS,” says Vernaglia, with Foley & Lardner.

CMS is sticking to its requirement that physicians or NPPs must directly supervise all off-campus provider-based departments. However, they don’t have to be in the room where the service is being performed. That can be a compliance challenge for off-campus facilities with more than one provider-based department. “You have to have more than one practitioner supervising, which is a little excessive,” Vernaglia says. However, “hospitals that are thoughtful with their planning might be able to avoid problems with this through the attestation process,” he says.

The final OPPS 2010 regulation is expected to be published in the Nov. 20 Federal Register. View the OPPS rule on the CMS Web site at www.cms.hhs.gov/HospitalOutpatientPPS/

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