Revenue Cycle

CMS finalizes physician supervision proposals: Part II

Medicare Update for CAHs, December 14, 2011

When CMS finalized its physician supervision proposals in the 2012 outpatient prospective payment system (OPPS), they dealt a blow to critical access hospitals (CAHs) although the impact will be delayed by another year due to the continued extension of the supervision waiver for CAHs as discussed in the Federal Register, pages 74369-70.

In the final rule, CMS extended the requirements in §410.27 to all outpatient services paid to CAHs on reasonable cost basis. In effect, this creates an inconsistency surrounding the requirements for certain services when they are provided in CAH and non-CAH outpatient departments. For example, physical therapy is paid under the Medicare Physician Fee Schedule (MPFS) for non-CAH facilities; therefore, supervision requirements would not apply. However, physical therapy is paid at reasonable cost basis for CAHs and the supervision requirements would apply, explains Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance at HCPro, Inc.

“This effectively applies a higher level of supervision for these types of services in CAHs as opposed to other hospital outpatient departments, at a time when CAHs are already struggling to meet the requirements,” Hoys says.

 CMS extended the notice of nonenforcement of the supervision requirements for therapeutic services provided in CAHs and small rural hospitals by an additional year through CY 2012 to give these smaller hospitals time to come into compliance.

Many CAHs may have missed this “clarification” and are unaware of the impact that it could have on rehabilitation services at their facility. It appears that CMS has redefined supervision requirements for therapy based on the payment methodology, rather than on quality of care and safety concerns that CMS expects of all providers, regardless of how a facility is reimbursed (i.e. PPS or cost), says Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

“This could create a problem for patients’ access to necessary care in a rural environment if rehabilitation services fall under a higher level of supervision than a patient who is receiving observation services and/or medication administration, which are considered to be non-surgical extended duration services that can move from direct to general supervision.”

Providers—specifically CAH and small rural hospital providers that are affected by this—are encouraged to make comments on the final rule that will be considered for the 2013 OPPS rule, according to Mackaman. Comments will be accepted through January 3, 2012.

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