December 13, 2019

On November 1, 2019, the Centers for Medicare and Medicaid Services (“CMS”) published the 2020 Outpatient Prospective Payment System Final Rule (“Final Rule”). The Final Rule changes the level of physician supervision required for hospital and critical access hospital (“CAH”) outpatient therapeutic services from direct supervision to general supervision. The purpose of this change is to increase flexibility for providers rendering medical care by relieving the burden associated with the direct supervision requirements. While general supervision will become the new default standard, it is important to note certain outpatient therapeutic services may still be required to have direct or personal supervision requirements. 

Since 2009, CMS has required “direct supervision” of outpatient therapeutic hospital services. CMS defines “direct supervision” to mean that “the physician or nonphysician practitioner must be immediately available to furnish assistance and direction throughout the performance of the procedure.” Effective January 1, 2020, the default supervision requirement for outpatient therapeutic hospital services will change from direct to general supervision. General supervision requires procedures to be furnished under a supervising physician’s “overall direction and control,” but the physician is not required to be present during a procedure. In its response to a comment, CMS expanded on this definition further stating that general supervision “means the medical personnel performing the procedure are being monitored and receiving guidance from a qualified physician even if the physician is not physically present.” In the past, CMS has interpreted this more relaxed standard to allow a supervising physician to be available to supervise and direct medical personnel performing a service by telephone or other electronic device.

This finalized rule will create a more uniform approach to the level of supervision for outpatient therapeutic services required among CAHs, small rural hospitals, and hospitals. Previously, CMS enforced a “two-tiered system” regarding enforcement of the physician supervision requirement for outpatient therapeutic services. Although Medicare required therapeutic outpatient hospital services to be provided under the direct supervision of a physician in both the hospital and CAH setting, CMS has historically instructed all Medicare Administrative Contractors to not enforce the direct supervision requirement in CAHs. Upon implementation of the Final Rule, all hospitals may generally provide outpatient therapeutic services under general supervision without risk of non-compliance.

While the new general level of supervision is more relaxed than direct supervision, CMS noted safeguards are still in place to ensure patient safety and quality of service. One of these protections previously mentioned is CMS’s ability to choose a higher level of supervision for specific outpatient therapeutic services. Additionally, CMS “does not       preclude. . .hospitals from providing direct supervision for outpatient therapeutic services when the physicians administering the medical procedures decide that it is appropriate to do so.” Other protections include the hospital and CAH conditions of participation, state and federal laws, and scope of practice laws. Lastly, the Advisory Panel on Hospital Outpatient Payment will remain available to provide guidance on the appropriate level of supervision for individual hospital outpatient services.

If you have any questions about the Final Rule regarding outpatient therapeutic services or need assistance implementing changes to your organization’s policies and procedures, please contact a member of Hancock Daniel’s Reimbursement or Compliance Teams.  

The information contained in this advisory is for general educational purposes only. It is presented with the understanding that neither the author nor Hancock, Daniel & Johnson, P.C., is offering any legal or other professional services. Since the law in many areas is complex and can change rapidly, this information may not apply to a given factual situation and can become outdated. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice. Under no circumstances will the author or Hancock, Daniel & Johnson, P.C. be liable for any direct, indirect, or consequential damages resulting from the use of this material.

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