Revenue Cycle

Physician supervision requirements for critical access hospitals

Medicare Update for CAHs, July 27, 2011

While the 2012 outpatient prospective payment system (OPPS) proposed rule may not contain many significant operational changes, it did touch on some hot topic areas, one of which is the policy of physician supervision under “incident to” rules. Let’s recap some of the important changes from the past, as well as highlight the proposed changes in the 2012 OPPS rule.

Physician supervision changes in recent years

Major changes have occurred in physician supervision guidance in the past two years. In 2009, CMS clarified that nonphysician practitioners such as nurse practitioners and physician assistants are not considered “physicians” for purposes of the direct physician supervision requirements in outpatient departments. Then, in 2010, CMS loosened their stance in response to comments, and made an amendment to the definition of “physician” for purposes of direct supervision in outpatient departments. As of January 1, 2010, nurse practitioners, physician assistants, clinical nurse specialists and licensed clinical social workers could provide “direct supervision.”

CMS also stated that for services provided in the hospital or in on-campus provider-based departments, the practitioner, for purpose of direct supervision, need only be on the same campus as the area where the services are rendered.

Location of the practitioner also became an issue. CMS said in 2010 that a physician could not be so physically distant from the department providing the service that he or she could not immediately step in and take over the procedure if needed. Then in 2011, CMS got rid of the boundary designation for on and off campus, so supervision applies equally in all settings, and is up to the facility to determine if the provider is “immediately available.”

CAH impact

It is still unclear what the long-term implications for CAHs may be regarding supervision. The staffing requirements are more lenient for CAHs based on the Medicare Conditions of Participation, (CoPs) and CAHs have been vocal to CMS that they did not/could not meet the 2010 physician supervision regulations for non-diagnostic services based on the CoPs, according to Debbie Mackaman RHIA, CHCO, regulatory specialist for HCPro, Inc.

“Although CMS was clear that the CoPs are for licensure and do not govern payment rules, they did reconsider the rules after a rural health open door forum call in March 2010, which gave CAHs a waiver for meeting the nondiagnostic physician supervision requirements under “incident to” billing for 2010.”

She continues, “CMS did say they would evaluate [supervision requirements] further since supervision is not only a payment issue but also a quality of care issue, and Medicare beneficiaries should expect the same level of care regardless of the type of payment a hospital receives.” In the 2011 final rule, CMS once again gave the CAHs a waiver and also added rural hospitals with 100 beds or less to the mix.

Other relevant updates in the 2011 rule included the relaxation of the on/off campus definition in regards to location and immediate availability guidance and the creation of the category of “non-surgical extended duration hours” – which included 16 HCPCS codes that would allow the procedure to move to general supervision as long as it is initiated with direct supervision.

CMS surprised many in the proposed rule by giving CAHs another “waiver” for 2012. There is a change however, as CAH representatives will be added to the “independent advisory review entity,” which helps to review the supervision level for a given service.  This expert panel, which may be composed of up to 15 representatives of providers (currently employed full-time, not as consultants, in their respective areas of expertise) subject to the OPPS, reviews clinical data and advises CMS about the clinical integrity of the APC groups and their payment weights, according to CMS.

This is being done by CMS so that all hospitals subject to the supervision rules for payment will have representation since CAHs would not normally participate in deliberations about APC (ambulatory payment classification) assignments under the OPPS, as these assignments do not affect CAHs.

“This additional year of a waiver came as a surprise to me because CMS has been very clear about the quality of care issue for all Medicare beneficiaries, regardless of the payment methodology,” says Mackaman. “It is certainly to the CAH’s advantage to be represented in the decision-making process for identifying levels of supervision necessary for quality care, safety and staffing variables.”

Comment on the proposed rule.

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