CMS recently released the CY 2010 Outpatient Prospective Payment System Final Rule.  The Final Rule finalized, among many other items, several provisions concerning physician supervision of hospital outpatient therapeutic and diagnostic services which CMS had previously proposed.  The physician supervision provisions finalized for CY 2010 were in response to industry concerns raised regarding the “clarifications” to the physician supervision requirements issued in CMS’s CY 2009 OPPS Final Rule.  The new physician supervision requirements for hospital outpatient therapeutic and diagnostic services include the following:

• CMS expanded the direct supervision of hospital outpatient therapeutic services to licensed clinical social workers, physician assistants, nurse practitioners, clinical nurse specialists, and certified nurse-midwives.  These non-physician practitioners may directly supervise all hospital outpatient therapeutic services that they may perform themselves within their scope of practice under State law and hospital privileges, provided that they meet all additional requirements, including any other collaboration or supervision requirements.  However, CMS did not extend the direct supervision by non-physician practitioners to pulmonary rehabilitation, cardiac rehabilitation, or intensive cardiac rehabilitation.  Direct physician supervision for these services must be furnished by a doctor of medicine or osteopathy.  CMS also did not extend direct supervision by non-physician practitioners to hospital outpatient diagnostic services – only physicians may directly supervise these services, when required. 
• All hospital outpatient diagnostic services provided directly or under arrangement, whether provided in the main hospital buildings, in a provider-based department, or other nonhospital location, must follow the physician supervision requirements for the individual tests as listed in the Medicare Physician Fee Schedule (MPFS) Relative Value File.
• For services furnished on a hospital’s main campus (i.e., in the hospital or in an on-campus outpatient department), the supervising physician or non-physician practitioner may be located anywhere on the hospital campus, including a physician’s office or other nonhospital space, so long as he/she is on the same campus and immediately available to furnish assistance and direction throughout the procedure.  This standard applies to all hospital outpatient therapeutic services, and to the subset of hospital outpatient diagnostic services requiring direct physician supervision as specified in the MPFS Relative Value File.
• For services furnished in off-campus provider based departments of hospitals, the physician or non-physician practitioner must be physically present in the off-campus provider-based department (versus the previous requirement to be “present and on the premises of the location”) and be immediately available to furnish assistance and direction throughout the procedure.  Again, this standard applies to all hospital outpatient therapeutic services, and to the subset of hospital outpatient diagnostic services requiring direct physician supervision as specified in the MPFS Relative Value File.

The Final Rule also made “technical corrections” to the regulation concerning therapeutic services to clarify that the supervision (and other) requirements required for payment of outpatient therapeutic services applies to both hospitals and critical access hospitals (CAHs).  CMS explained that the prior absence of specific reference to CAHs was simply a drafting oversight, but that it has always applied the requirements to CAHs.

The Final Rules offer increased flexibility to hospitals in meeting the physician supervision requirements for hospital outpatient therapeutic and diagnostic services, and are applicable to services furnished on or after January 1, 2010.  A full copy of the CY 2010 OPPS Final Rule is available here.  (For a PDF version, click here (this will take awhile to download).)