CMS Delays Enforcement of Physician Supervision for Critical Access Hospitals

Michelle A. Leppert, March 18, 2010

Critical access hospitals (CAH) have received a reprieve of sorts from CMS.

CMS will not evaluate or enforce the "direct supervision" requirement for therapeutic services furnished in calendar year 2010 to outpatients in CAHs, according to a March 15 agency notice to Congress.

"This is good news for CAHs in 2010," says Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc. "This has already proven to be a significant challenge for some rural hospitals that do not have the medical staff available to provide a 24/7 level of supervision outside of the ER physicians."

Sometimes a disconnect exists between the reality of on-the-ground operational issues that hospitals face daily and the rules that regulatory agencies believe make sense for all hospitals, says Jugna Shah, MPH, president of Nimitt Consulting, Inc., in Washington, DC.

"A greater understanding of CAH operational and care-delivery issues should have been taken into account from the beginning as CMS was thinking through whether a one-size-fits-all approach to physician supervision would work," Shah adds. "No one argues with the need to have physician supervision, as that is important for patient safety, but the rules around it need to be appropriate for CAHs."

Efforts led at first by a few CAH hospitals, and then many more, resulted in this "vitally important" change, says Shah. During the comment period for the 2010 OPPS proposed rule, some CAHs wrote to CMS that the physician supervision proposal would set out different standards than what they already followed under the Emergency Medical Treatment and Active Labor Act (EMTALA), which would be a problem, says Shah.

After release of the 2010 OPPS final rule, CAHs worried about losing reimbursement because they could not meet the physician supervision requirements, Shah says.

Although lost revenue is a concern for all hospitals, CAHs are paid on a cost-based system rather than by APCs, resulting in higher payments for services like observation, for which it is difficult to ensure supervision at all times. Some CAHs were also concerned that because they were providing services and not billing for them, CMS could view that as an inducement to use the facility.

Staff members at CAHs contacted the American Hospital Association and their congressional representatives. As a result, members of Congress sent letters directly to CMS.

"It really does show that CMS is listening to the provider community," says Kimberly Anderwood Hoy, Esq., CPC, director of Medicare and compliance for HCPro, Inc., in Marblehead, MA. "When CMS goes back to the drawing board for 2011, I think all hospitals should consider submitting comments on the difficulties they had complying with the rules this year."

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