Physician Supervision Requirements Outpatient Services

Physician Supervision Requirements For Hospital Outpatient Services

Health Care Compliance Association Upper North Central Regional Annual Conference

Columbus, Ohio May 11, 2012 Claire Turcotte Partner

Bricker & Eckler LLP 9277 Centre Pointe Drive, Suite 100

West Chester, Ohio 45069 (513) 870-6700

cturcotte@

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Presentation Overview

I. Background and History of Physician Supervision Rules

II. Current Physician Supervision Requirements

III. CAHs and Small Rural Hospitals IV. Enforcement V. Compliance Concerns

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I. Background and History of Physician Supervision Rules

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Outpatient Diagnostic vs Therapeutic Services

? 42 CFR 410.27 - Therapeutic services are covered in hospital outpatient departments only when

? furnished incident to the services of physicians in treatment

? in the hospital or a provider based department (PBD) ? on physician's order and under supervision

? 42 CFR 410.28 - Diagnostic services (e.g., MRI) are covered directly (not incident to)

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Supervision Requirement Not In Statute for Medicare Coverage of Hospital Outpatient

Services

? 42 USC 1395x(s) ? Medicare Part B covers medical and other services, including: ? Hospital services incident to physicians' services for outpatients (therapeutic services) ? Diagnostic services furnished to outpatients and ordinarily furnished for purposes of diagnostic study ? SILENT about physician supervision

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Where does it come from?

? Historically, direct physician supervision of outpatient therapeutic services was "assumed" in on campus locations

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Where does it come from?

? Medicare Intermediary Manual stated: "The physician supervision requirement is generally assumed to be met where the services are performed on hospital premises; the hospital medical staff that supervises the services need not be in the same department as the ordering physician. However, if the services are furnished outside the hospital, they must be rendered under the direct personal supervision of a physician who is treating the patient." (emphasis added)

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Where does it come from?

? In 2000 when CMS finalized the provider- based rule (42 CFR 413.65), it also changed the physician supervision rules for hospital outpatient services to require physician supervision for both therapeutic and diagnostic services

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Provider-Based Department

? CMS published Final Rule in 2000 (See 42 CFR 413.65) ? Department that is part of a hospital provider and meets

specific requirements

? Same license as hospital (unless state requires a separate license, such as ASF)

? Clinical Services and financial operations integrated with main provider (same monitoring and reporting structure)

? Unified medical record retrieval system ? Location is held out to public as part of main provider (signage,

website, bills, brochures, etc.) ? Services billed as hospital services and subject to PPS window

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Provider Based Department (cont'd)

? Special Rules for Off Campus Locations

? On campus is 250 yard of main building ? Off campus is anywhere else ? Additional ownership and control and

administration and supervision requirements ? Located within 35 mile radius of main provider ? Special rules for management contracts and joint

ventures

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2000 OPPS Final Rule

Amended Regulations

? 410.27 to require therapeutic services to be provided in the hospital or a department of a provider (designated under 413.65) under direct supervision of a physician

? direct supervision = present and on the premises of the location and immediately available to furnish assistance and direction throughout the performance of the procedure)

? BUT does not apply to services furnished in a department of a provider located on campus 65 Fed Reg 18,525

? 410.28 to cover diagnostic services at a provider-based location only if furnished under the appropriate level of supervision specified by HCFA. See 410.32 (general, direct, personal)

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2000 OPPS Final Rule

? Preamble emphasized that direct supervision requirements for therapeutic services applied only when services are furnished off campus, because: "we assume the direct supervision requirement to be met as we explain" in the Intermediary Manual.

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2009 OPPS Final Rule "Clarification"

? "some stakeholders may have misunderstood our use of the term `assume' in the [2000 rulemaking] believing that our statement meant that we do not require any supervision in the hospital or in an on-campus provider-based department for therapeutic OPPS services or that we only require general supervision for those services. This is not the case. It is our expectation that hospital outpatient therapeutic services are provided under the direct supervision of physicians in the hospital and in all provider-based departments of the hospital, specifically both on-campus and off campus departments of the hospital."

? BUT NO CHANGE TO REGULATIONS

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2009 Changes

? Transmittal 101 1/16/09

? Amends Section 20.5.1 Medicare Benefits Policy Manual for therapeutic services furnished 8/1/00- 12/31/09 to require direct supervision of therapeutic services regardless of their location

? Amends Section 20.4.4. for diagnostic services to apply supervision levels in Medicare Physician Fee Schedule (MPFS) Relative Value File

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MPFS Supervision Levels

? 42 CFR 410.32

? Personal means the physician must be in attendance in the room during the procedure

? Direct means same as 410.27 direct supervision for therapeutic services

? General means the procedure is furnished under the physician's overall direction and control, but not be present during the performance of the procedure

? See MPFS Relative Value File

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2010 OPPS Changes Regulations to Clarify/Loosen Location

? 2010 OPPS Final Rule amends 410.27 direct supervision for outpatient therapeutic services furnished in the hospital/CAH or on campus to require the physician or non-physician practitioner to be present on the same campus and immediately available to furnish assistance and direction throughout the procedure [NOTE: "on the same campus" is more flexible than "on the premises of the location"]

? For off campus outpatient PBDs, direct supervision requires the physician or NPP to be present in the off campus PBD and immediately available

? Industry, in particular CAHs and small rural hospitals object to staffing supervision on campus or in PBD

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