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Changes Proposed to Hospital Outpatient Physician Supervision Regulations

August 11, 2009:

Hospital outpatient departments, particularly those providing diagnostic and therapeutic services, would be significantly affected if proposed changes to the physician supervision regulations become final. The Centers for Medicare and Medicaid Services (CMS) proposed these changes in the 2010 hospital outpatient prospective payment system (HOPPS) proposed rule that updates policies and payment rates for hospital outpatient departments and ambulatory surgery centers for calendar year (CY) 2010.

The requirements for physician supervision of diagnostic testing and the level of supervision required for each test were established to ensure the safety and effectiveness of the testing. In the physician supervision requirements for diagnostic tests, CMS designated the level of supervision (i.e., general, direct, or personal) required for each diagnostic test subject to the physician supervision requirements. Federal regulations define three levels of supervision as:

  • General supervision—The procedure is furnished under the physician’s overall direction, but the physician’s presence in the room during the procedure is not required.
  • Direct supervision—The physician must be present in the office suite or on the hospital premises and immediately available to furnish assistance and direction throughout the procedure; the physician’s presence in the room during the procedure is not required.
  • Personal supervision—The physician must be physically present in the room during the performance of the procedure.

The physician supervision requirements for therapeutic services provided to hospital outpatients are somewhat different from the diagnostic test requirements. Physician supervision regulations (42 C.F.R. § 410.27) currently require direct physician supervision for outpatient therapeutic services provided in the hospital, on the hospital campus, or in a provider-based department of the hospital. Direct supervision requires the supervising physician to be immediately available to furnish assistance and direction. The physician must also be present on the premises when the procedure is performed but not necessarily present in the room. “Immediately available” means the supervising physician cannot be too far away on the hospital campus to be able to intervene “without interval of time” nor can he or she be involved in another procedure that cannot be interrupted.

Under current physician supervision regulations, only a doctor of medicine or osteopathy may provide direct supervision. Even though Medicare regulations permit nurse practitioners and physician assistants to perform services in hospital outpatient departments, these nonphysician practitioners (NPPs) are not allowed to supervise others. According to the proposed rule, CMS will allow nonphysician practitioners, such as physician assistants, nurse practitioners, clinical nurse specialists, clinical psychologists, and certified nurse midwives, to supervise hospital outpatient therapeutic services. This proposed change to allow NPPs to directly supervise hospital outpatient services would be a significant advantage to hospitals. However, the proposed rule also requires that the supervising physician or NPP must be able to perform the procedure being supervised in accordance with state law, scope of practice, and hospital privileges. Although the supervising physician does not need to be of the same specialty as the supervised service, the physician must have privileges at the hospital to perform the service, which could have a considerable impact on hospital privileging.

CMS also clarified that direct supervision for therapeutic services requires the supervising physician or nonphysician practitioner to be present on the hospital campus or in the hospital or the on-campus provider-based department, and be immediately available to furnish assistance and direction throughout the procedure. For services furnished in an off-campus provider-based department, the physician or NPP must be present.

These new physician supervision requirements would take effect January 1, 2010, if the changes are finalized. Additional information on the 2010 proposed rule can be found at http://www.cms.hhs.gov/HospitalOutpatientPPS/.


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