Health Information Management

Treating physicians must render supervision in provider-based departments

APCs Insider, March 28, 2008

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QUESTION: I read in the January 2008 OPPS manualization (Transmittal 82, published on February 8, 2008), that CMS has changed the requirements for physician supervision of provider-based departments such as infusion clinics, diabetic education, and coumadin clinics. Can you verify whether this change is true?

ANSWER: You are correct that CMS clarified language related to supervision in outpatient departments. It states that if the department is a provider-based department, as defined in 42 CFR 413.65, then a treating physician must render supervision.

CMS states that:

    The physician supervision requirement is generally assumed to be met where the services are performed on hospital premises. The hospital medical staff that supervises the services need not be in the same department as the ordering physician. 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. [emphasis added] "Direct supervision" means the physician must be present and on the premises of the location and immediately available to furnish assistance and direction throughout the performance of the procedure. It does not mean that the physician must be present in the room when the procedure is performed.

While the treating physician* language has always existed, CMS had previously followed it with an example of service in a patient's home. This gave the impression that the sentence was referring to a service "outside the hospital" (i.e., in a patient's home) and not simply off the main campus of the hospital or in a provider-based department. Although the example of services in a patient's home is still in the manual, CMS in Transmittal 82 moved it to a separate paragraph. The language in the sentence referencing "treating physician" has been changed to clarify that it applies to provider based locations.

There is some question as to whether this requirement extends to provider based locations on the campus of the hospital. Although the paragraph states that physician supervision is assumed on the hospital premises, some departments on the hospital premises are "provider-based" under 42 C.F.R. 413.65. Therefore, these departments could possibly fall under the guideline requiring supervision by the treating physician. However, the preamble of the April 7, 2000 OPPS final rule, page 18525, states:

    Our proposed amendment of § 410.27 to require direct supervision of hospital services furnished incident to a physician service to outpatients does not apply to services furnished in a department of a hospital that is located on the campus of that hospital. For hospital services furnished incident to a physician service to outpatients in a department of a hospital that is located on the campus of the hospital, we assume the direct supervision requirement to be met as we explain in section 3112.4(A) of the Intermediary Manual.

This language shows that CMS assumed direct supervision for on-campus locations and that physician direct supervision was required for off-campus locations. The language is referencing and interpreting a sentence about assumed supervision, which was in the prior versions of this manual section and remains in the revised version. It seems to imply that hospitals can assume supervision requirements are met in departments-presumably including provider based departments-on the campus of a hospital.

The recent clarification represents a significant change in how many providers understood CMS' policy on supervision in provider-based departments, particularly in light of the very confusing language in the prior manual section. This could impact outpatient hospital Medicare coverage and OPPS payment for services rendered in provider-based departments. Providers should carefully review their provider based locations to ensure they meet the requirements.

Additionally, hospitals may wish to ask their fiscal intermediaries, Medicare administrative contractors, and CMS regional offices for additional guidance. Hospitals may also wish to provide feedback to the CMS Central Office regarding what appears to be a significant policy change in this manual update and whether this was CMS' intention.

* Note: Although CMS does not define "treating physician" in relationship to therapeutic services, they do define "treating physician" related to diagnostic services. CMS defines a "treating physician" in 410.32(a) as

    ...the physician who furnishes a consultation or treats a beneficiary for a specific medical problem and who uses the results in the management of the beneficiary's specific medical problem. Tests not ordered by the physician who is treating the beneficiary are not reasonable and necessary.

Although not directly applicable to therapeutic services, this reference may provide some guidance on who CMS considers the "treating physician" for purposes of providing supervision in provider based departments.

Note: To view Transmittal 82 (January 2008 Update of the Hospital Outpatient Prospective Payment System-Manualization), click here.

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