CMS Changes Physician Supervision Rule, Maintains Drug Payment Formula

Michelle Leppert , November 2, 2009

The 2010 OPPS final rule released on Friday contains few surprises, but does finalize two changes that received considerable attention when CMS proposed them.

"The information CMS has finalized for physician supervision and drug reimbursement are two key areas for hospital review, though for slightly different reasons," says Jugna Shah, MPH, president of Nimett Consulting in Washington, DC.

First, CMS adopted a new standard for supervision in the hospital and for on-campus outpatient departments. The physician must be present on the same campus and "immediately available," rather than in the department. CMS defines "in the hospital" in the new regulations and discusses "immediately available" extensively.

"APC coordinators, your revenue cycle team, and compliance officers need to carefully review this and other discussion items from the final rule," says Shah.

CMS made some important distinctions in the preamble that people will need to pay attention to, says Kimberly Anderwood Hoy, Esq., CPC, director of Medicare and compliance at HCPro, Inc., in Marblehead, MA. CMS specifies that the person must be "immediately available" to step in and take over the procedure. CMS also specified that the person must be close enough to be able to step in, not simply anywhere on the campus.

"They have to be immediately able to drop what they are doing and step and take over the procedure if necessary," Hoy says. "And they have to be close enough that they would be immediately available. They can't be two blocks away."

For example, if the physician is in the hospital cafeteria, he or she would be considered "immediately available," but if the physician is in the middle of providing a procedure to a patient, he or she is unable to stop to provide direct supervision to another patient—so is not immediately available, explains Shah.

CMS also clarified that the person providing supervision would have to be able to perform the procedure under his or her license and within the scope of his or her privileges at the hospital.

CMS made clear through a regulatory change that the direct supervision requirement for off-campus provider-based departments did not change, and still requires the practitioner to be present in the off-campus department, as discussed in the 2009 final rule.

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