Revenue Cycle

Physician supervision enforcement for CAHs: Part 2

Medicare Update for CAHs, August 8, 2012

In addition to proposing to extend the non-enforcement of supervision rules for critical access hospitals (CAH) and small rural hospitals for another year, the 2013 OPPS proposed rule also attempts to clarify the language and guidance surrounding payment for physical therapy, speech-language pathology, and occupational therapy services in hospitals and CAHs.

The original guidance on payment of these services was seemingly misinterpreted and CMS is aiming to rectify this issue in the latest proposed rule. In the CY 2012 OPPS rule, CMS clarified that hospital outpatient therapeutic services and supplies are subject to the conditions of payment in 42 CFR 410.27 when they are paid under the OPPS or paid to CAHs under section 1834(g) of the Act. This was issued in response to inquiries concerning the application of these conditions of payment to radiation therapy services that are described under section 1861(s)(4) of the Act when these services are furnished to hospital outpatients, according to the rule. In addition, the 2012 rule indicated that the supervision and other requirements of § 410.27 do not apply to professional services or to services that are paid under other fee schedules such as the Clinical Laboratory Fee Schedule (CLFS).

CMS continued to receive questions about the applicability of the regulations to physical therapy (PT), speech-language pathology (SLP), and occupational therapy (OT) services furnished in CAHs, and it was evident that stakeholders were concerned that OPPS hospitals—which are paid for outpatient therapy services at the applicable amount based on the Medicare Physician Fee Schedule (MPFS—would not be subject to the regulations but that CAHs—which are paid on a reasonable cost basis—would be subject to them.

With the latest OPPS proposed rule, CMS clarifies that it was not their intent in the previous final rule to establish different requirements for CAHs and for OPPS hospitals for the same services. CMS states:

The supervision and other requirements of § 410.27 apply to facility services that are paid to hospitals under the OPPS and to these same services when they are furnished in CAHs and paid on a reasonable cost basis. In OPPS hospitals, these requirements do not apply to professional services that are separately billed under the MPFS or to PT, SLP, and OT services that are billed by the hospital as therapy services and are paid at the applicable amount based on the MPFS. The payment rules under § 410.27 also do not apply to these same services when they are furnished in CAHs.

CMS goes on to clarify that in OPPS hospitals, there is a group of “something therapy” PT, SLP, or OT services that are paid under the OPPS when they are not furnished as therapy, meaning not under a certified therapy plan of care. Since the supervision and other conditions of payments under § 410.27 apply to this subset of “sometimes therapy” services when they are furnished in OPPS hospitals as nontherapy services, those conditions of payment also apply to this subset of “sometimes therapy” services when they are furnished as nontherapy in CAHs. The proposed rule states that, “When OPPS hospitals and CAHs furnish these services as therapy services (under a therapy plan of care by a qualified therapist), the conditions of payment under § 410.27 do not apply because OPPS hospitals are paid for these services based on the MPFS and not under the OPPS. CMS has published a list of these “sometimes therapy” services in table 35 of the OPPS rule.

This clarification in the proposed rule serves as good news for CAHs, says Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

“It seemed rather odd that CMS would have two different ways to approach the supervision requirements for outpatient therapy when the service that is provided is the same regardless of what type of hospital it was performed in – if paid under the MPFS, you didn’t have to meet supervision rules, but if paid under cost, you did,” she says. “Unfortunately, many CAHs were not aware of the implications of this interpretation for 2012 because they were still in the extended non-enforcement period and with the proposed non-enforcement extension for one more year in 2013, the issue may not have risen to the top yet.”

She continued, “I’m glad to see that CMS reevaluated their language and its interpretation by providers so that all hospital outpatient therapy will be treated the same for supervisions purposes,” she says. “There are PPS hospitals that own CAHs and this division of the supervision requirement could have created a problem for Medicare patients’ access to this type of care in the rural communities.”


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