Corporate Compliance

Note from Hugh

Medicare Weekly Update, July 1, 2008

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In last week’s issue of the Medicare Weekly Update, I discussed a recent CMS transmittal (Change Request 6094) that modified the “incident to” coverage requirements (as set forth in the Medicare Benefit Policy Manual) to remove the requirement that “direct physician supervision” must be provided by a “treating physician.” Presumably, based on this modification, any qualified physician may provide “direct supervision” regardless of whether or not the physician has a pre-existing physician-patient relationship with the patient.

In follow-up to last week’s issue, we received the following question from a reader:

Regarding "incident to”, we have an outpatient facility that offers radiology and lab services and they are provider based (billed under the hospital tax ID/provider #), but NOT on the physical hospital campus, do they also have to have a physician "on the premises”? Or do these OP services NOT require physician supervision? (Note this question has been edited to remove the reference to rehab services.)
It is important to recognize that hospitals do not have to meet the “incident to” coverage criteria if some other basis of Medicare coverage applies. For example, the Social Security Act (the federal law governing the Medicare program) provides that Medicare covers “diagnostic X-ray tests . . ., diagnostic laboratory tests, and other diagnostic tests” subject to certain conditions. Consequently, hospitals do not have to meet the “incident to” coverage requirements for diagnostic tests.

While hospitals do not have to meet the “incident to” coverage requirements for diagnostic tests, they do; however, have to meet the specific conditions of coverage applicable to diagnostic tests as set forth in the Medicare Benefit Policy Manual, chapter 6, section 20.4.4. Those conditions of coverage include, among other requirements, a physician supervision requirements (which is, again, separate from the physician supervision requirement applicable to “incident to” coverage). The physician supervision requirement for diagnostic tests is as follows:

Payment is allowed under the hospital outpatient prospective payment system for diagnostic services furnished at a facility that is designated as provider-based only when those services are furnished under the appropriate level of supervision specified in accordance with the definitions in 42 CFR 410.32(b)(3)(i), (b)(3)(ii), and (b)(3)(iii), and as described in chapter 15 of this manual, Section 80 “Requirements for Diagnostic X-ray, Diagnostic Laboratory, and Other Diagnostic Tests,” as though they are being furnished in a physician office or clinic setting.
To summarize, the level of physician supervision required for diagnostic tests is specified by CMS on a test-by-test (i.e., code-by-code) basis and is either “general,” “direct” or “personal” supervision. These three levels of physician supervision are defined in 42 CFR 410.32.


 

 



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