Health Information Management

Hospital outpatient departments need to know who is supervising

JustCoding News: Outpatient, November 4, 2009

Want to receive articles like this one in your inbox? Subscribe to JustCoding News: Outpatient!

Editor’s note: This second article of a two-part series examines strategies for provider-based departments to deal with physician supervision requirements. Part one introduced the physician supervision requirements for diagnostic services and examined the effect on freestanding clinics.

Please note that since this story was originally published, CMS has released the 2010 outpatient prospective payment system final rule. Access HCPro’s e-blast about this recent development.

Hospital outpatient departments can’t simply rely on the rest of the hospital staff members to provide supervision of diagnostic tests.

Staff members are going to have to be more in tune to which physician is providing direct supervision, says Sheryl Spohn, RHIA, CHC, executive director of coding assurance at WellStar Health System in Atlanta. The department and physician leadership are responsible for knowing who is supervising that particular area every day they are open for business.

Diagnostic vs. therapeutic services
Staff members need to have a clear understanding of which procedures are diagnostic and which are therapeutic, says Spohn. Some procedures are diagnostic but are considered therapeutic for the purpose of supervision. For those types of procedures, the physician often provides the required level of supervision by being in the surgical suite, Spohn says.

Any procedures that involve injection of contrast or other type of radiological substance clearly require direct supervision, she says. “So if something does occur during that procedure, you have that coverage,” Spohn says. “It’s common sense when you really drill down to it.”

Your organization and staff members need to know how services are classified so they can ensure the proper level of supervision. Spohn suggests checking the Medicare Physician Fee Schedule (MPFS) and looking at codes by level to verify supervision requirements for each test.

Supervision requirements
Unless the department provides a reference list of requirements for each test, staff members have to know what is in the MPFS under diagnostic supervision for each test. This can lead to improper supervision, says Jill M. Young, CPC, CEDC, CIMC, president of Young Medical Consulting, LLC, in East Lansing, MI.

“In other words, you’re asking them to know, test to test, ‘What do I need?’ ” Young says. “Their challenge is, how do they enforce it?”

If the test requires direct physician supervision and the physician is not yet present, staff members must decide whether to delay the test until the physician arrives or begin the test at the scheduled time.

“It’s not like surgery where they can’t start the surgery until the doctor is there,” Young says. “They can start this test. The question is, should they?”

Departmental protocols
Your organization can assist staff members by creating department protocols for each direct supervision test and setting a protocol for having a physician on campus. For facilities with multiple campuses, that means determining that the supervising physician must be on the campus where the procedure takes place.

“I think the difficulty is defining what the level of supervision is for a given test, keeping track of it, and then having a protocol on how to enforce it,” Young says.

In some situations, a physician may be involved in another procedure or be en route to the department when a test is scheduled to begin. Having a protocol for enforcing the supervision requirements is important for department staff members, who may be asked to start the procedure without the physician present.

Even the best protocol won’t do much good unless the administration is on board as well. That way, when a problem does arise, staff members can be confident in following the protocol, Young says.

“You need to have buy-in from the hospital about the protocol and then have steps to take so the technician knows what he is supposed to do and what he can do,” she says.

Once the protocols are in place, the facility must communicate that information to each physician. Having protocols and enforcement will help staff members work with physicians to ensure that they provide the appropriate level of supervision. However, don’t expect perfect compliance immediately, even with the appropriate, established protocols.

“There will be a learning curve if we start to enforce things the way we’re supposed to,” Young says.

Financial incentive
For hospitals, improper supervision can result in a loss of revenue. The physician’s name is on the claim, so he or she will receive payment, Young says. But the hospital has some of what Young calls “insurance liability” for when the physician is not present to supervise.
“The difficulty is that billings can be incorrectly submitted though ignorance of the rules and still be paid,” Young says.

If an audit uncovers notes showing that the physician didn’t arrive until after the test started, payers could penalize the hospital by taking back reimbursement.

“Just because you got paid doesn’t mean you did it right, and it doesn’t mean [the payers] can’t take it away from you,” Young says.

Creative solutions
Spohn advises facilities to look for creative solutions. For example, if your facility has a large hospitalist group you could consider making supervision a responsibility of that department. Facilities can also hire a retired physician who has a current license to provide that supervision as a paid employee.

In the 2009 Outpatient Prospective Payment System (OPPS) final rule, CMS clarified that the supervising physician does not have to be of the same specialty, which gives facilities some additional leeway, says Spohn.

For example, if a facility has an infusion clinic and physician offices across the hall from each other, physicians from the office can provide supervision for the clinic as long as a physician is immediately available and the hours match, Spohn says.

Hospitals should also look at the changes CMS is considering, Young says. For example, in the 2010 OPPS proposed rule, CMS proposes permitting nonphysician practitioners (NPP)—nurse practitioners, physician assistants, clinical psychologists, certified nurse midwives, and clinical nurse specialists—to directly supervise all hospital outpatient therapeutic services that they may perform themselves in accordance with their state law, scope of practice, and hospital-granted privileges.

Hospitals can look at that proposed change in two ways, Young says. First, they can flip the proposed change around to state that NPPs should not currently provide that supervision. Second, they can look at the way CMS defines that supervision to understand what physicians should be doing, too.

Provider-based departments
Facilities should also take a look at the requirements for a provider-based outpatient department, Spohn says. The guidelines for setting up a provider-based outpatient department include the direct supervision requirements as well as other elements. View those requirements on the CMS Web site.

“I don’t think that hospitals should only focus on the direct supervision, but also on meeting the rest of the requirements for being an outpatient department,” Spohn says.

In other words, during the natural process of reviewing the criteria for provider-based outpatient departments, facilities can address the requirements for direct supervision.

In many cases, you can address this concern by creating a schedule of coverage. This should go beyond just a general awareness of who the medical director is, Spohn says.

Each day of the week that the facility is open, staff members must know who their covering supervising physician is. This can be accomplished simply by posting a schedule of supervising physicians.

“If the OIG walks in, they’re going to walk into that particular department and say, ‘Who is the supervising physician providing direct supervision?’—and they need to be able to rattle that off,” Spohn says.

Levels of supervision
Chapter 15, section 80 of the Medicare Benefit Policy Manual sets out the following levels of physician supervision for diagnostic tests:

  • General supervision means the procedure is furnished under the physician’s overall direction and control, but the physician does not have to be present during the procedure.
  • Direct supervision in the office setting means the physician must be present in the office suite and immediately available to furnish assistance and direction throughout the procedure. The physician does not have to be present in the room during the procedure.
  • Personal supervision means a physician must be in attendance (present in the room) during the procedure.

Editor’s note: E-mail Spohn at

E-mail Young at

This story was published in the November issue of Briefings on APCs.

Want to receive articles like this one in your inbox? Subscribe to JustCoding News: Outpatient!

Most Popular