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Note from Hugh

Medicare Weekly Update, April 15, 2008

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CMS only issued one transmittal last week relating to coverage, billing and payment for hospital services. However, that transmittal addresses several significant OPPS policy changes.  Hospitals should review the transmittal carefully to make sure that the changes are properly operationalized.

I suspect that the light week for CMS guidance may be due to the fact that many of the key people from CMS were attending the American Health Lawyers Association’s annual Institute on Medicare and Medicaid Payment Issues held in Baltimore last week. I also attended the Payment Institute. Between sessions, I had a chance to talk informally with Heather Hostetler. Heather is a lawyer who works as a Policy Analyst in CMS’s Hospital and Ambulatory Policy Group. She tells me that CMS has received numerous inquiries relating to the changes CMS announced in February to the Medicare Benefit Policy Manual section on “incident to” coverage in a hospital outpatient setting (see Medicare Benefit Policy Manual, Transmittal 82). Heather has taken over from Joan Sanow, who has left CMS, as the point of contact on hospital “incident to” coverage issues.

According to Heather, many of the recent inquiries have related to the following sentence from the Medicare Benefit Policy Manual:

However, if the services are furnished at a department of the hospital which has provider-based status in relation to the hospital under 42 CFR 413.65 of the Code of Federal Regulations, the services must be rendered under the direct supervision of a physician who is treating the patient.

As I discussed in the March 4, 2008 issue of Medicare Weekly Update, the requirement that physician supervision be provided by “a physician who is treating the patient” could be problematic for many hospitals. In many cases, the supervising physician in a provider-based clinic often does not have a physician-patient relationship with the patients seen in the clinic.

Heather has an interesting interpretation of this requirement that could be helpful to many hospitals. In essence, she feels that the treating physician language merely requires that the supervising physician be capable of treating the patient if the need arises. She does not feel that the supervising physician needs to have a pre-existing physician-patient relationship with the patient in order to provide the required direct supervision.

While helpful, hospitals should not rely on Heather’s informal comments to me as representing definitive CMS policy. However, Heather tells me that CMS will be issuing additional written guidance on the hospital “incident to” requirements in the near future. Stay tuned.

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