General Information

CMS Notice on Supervision Requirements for Outpatient Therapeutic Services in CAHs

The Centers for Medicare & Medicaid Services (CMS) Office of Legislation released the following statement to members of Congress on March 14:

CMS will instruct all of its Medicare contractors not to evaluate or enforce the supervision requirements for therapeutic services provided to outpatients in Critical Access Hospitals (CAHs) for the duration of calendar year (CY) 2010. The final 2010 hospital outpatient prospective payment system rule had specified that a “direct supervision” standard is required for therapeutic services furnished in hospital outpatient departments. CMS believed this requirement to be a clarification of longstanding policy, but the rule has generated concern among some rural providers who had previously interpreted the CMS policy to require only “general supervision” and who believe that it may be difficult to meet this requirement.

CMS plans to revisit the issue of supervision for therapeutic services provided to hospital outpatients in CAHs through the annual rulemaking cycle for CY 2011. CMS continues to expect CAHs to fulfill all other Medicare program requirements when providing services to Medicare beneficiaries and when billing Medicare for those services. While CMS is instructing contractors not to enforce the supervision requirements in CAHs for CY 2010, we continue to emphasize quality and safety for services provided to all patients in CAHs.

CHA is pleased that CMS has responded to our advocacy efforts on this matter by agreeing to not conduct evaluation or enforcement of the direct supervision rules for CAH outpatient therapeutic services furnished in CY 2010. However, CHA remains concerned that the enforcement moratorium does not go far enough, and may leave CAHs vulnerable to enforcement and qui tam lawsuits for services furnished between CYs 2001 and 2009.

CHA and the American Hospital Association have contacted CMS to determine what services CMS intends to shield from enforcement. CHA will communicate these findings to CHA members when they are available.

If you have questions, please contact me at (202) 488-4688 or