On October 30, 2009, CMS released a display copy of the 2010 final Hospital Outpatient Prospective Payment System rule (HOPPS Rule). Among other things, and following many clarifications, the rule clarifies the requirements for physician supervision of hospital outpatient department therapeutic and diagnostic services. The final rule will be published in the Federal Register on November 20, 2009.

The 2010 HOPPS Rule provides that therapeutic outpatient hospital services furnished incident to a physician or non-physician provider (NPP) must be furnished in the hospital or its provider-based department, on the order and under the direct supervision of a physician or one of the permitted NPPs. NPPs may directly supervise services they are permitted to provide themselves within the scope of their licensure and hospital-granted privileges. This change, however, does not apply to cardiac rehabilitation, pulmonary rehabilitation and intensive rehabilitation services, which continue to require supervision by a doctor of medicine or osteopathy.

CMS further clarified the “direct supervision” requirement for services provided in a hospital or its on-campus provider-based department. “Direct supervision” for services furnished on a hospital’s main campus means that the supervisory physician or NPP must be present on the same campus, or in the hospital or its on-campus provider-based department, and immediately available to furnish assistance and direction throughout the performance of the procedure. In fact, a physician or NPP located anywhere on the hospital campus, including non-hospital areas such as independent diagnostic testing facilities or physician offices, would satisfy the “direct supervision” requirement. CMS additionally notes that this does not mean that the physician or NPP must be present in the room in which the procedure is performed.

Contrary to the on-campus requirements, the “direct supervision” of the hospital’s off-campus provider-based department requires that the supervisory physician or NPP must be in each provider-based department of a particular off-campus outpatient location. However, the HOPPS Rule does not require the physician or NPP to be in the room where the procedure is performed. By removing the “present and on the premises of the location” language and replacing it with “present in the off-campus provider-based department,” CMS re-emphasizes that the physician or NPP must be located directly in each provider-based department. CMS also indicates the parameters in an off-campus building housing multiple departments. In these situations, it would be inappropriate to have only one physician or NPP supervising all department services. Instead, CMS would require that a physician or NPP be located in each individual department to ensure that that he or she is immediately available at all times that services are being rendered. 

Lastly, CMS finalizes two important proposals. The “direct supervision” and “incident to a physician” or NPP service requirements also apply to critical access hospitals. Furthermore, all hospital outpatient diagnostic services provided directly or under arrangement — whether provided in the hospital, in a provider-based department of a hospital, or at a non-hospital location — must follow the physician supervision requirements for individual tests as listed in the Medicare Physician Fee Schedule (MPFS) Relative Value File. The MPFS Relative Value File lists the requirements for each level of supervision (i.e., personal , direct or general) for each diagnostic test.

The HOPPS Rule will become effective on January 1, 2010. Providers are advised to review these updates to assure that their policies and procedures are compliant.

For further information, please contact your regular Hinshaw Attorney.

This alert has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.

Hinshaw & Culbertson LLP is Pleased to Announce its 2009 Health Care Conference

Friday, November 13, 2009
9:00 a.m. to 4:00 p.m.

Hilton Lisle/Naperville
3003 Corporate West Drive
Lisle, Illinois

Now in its fifth year, the conference will offer both plenary and breakout sessions. Join Senior Management, Board Members and In-House Counsel of Hospitals and Health Systems as our presenters examine and analyze current issues and strategies affecting the health care industry.

Plenary Sessions

• Health Care Reform
• Self-Disclosure

Breakout Sessions

• The Impact of Stark on Hospital/Physician Relations
• Managed Care Law
• The Medicare Provider-Based Rules and the Illinois Medicaid Dilemma
• Electronic Medical Record Stimulus Opportunities
• Updating Hospital and Physician Compliance Plans
• Hot Topics

Hinshaw & Culbertson LLP is an accredited CLE provider in Illinois. Illinois attorneys can earn 4.25 general CLE credit hours for attending the conference.

There will be a $95 non-refundable fee to attend this conference.

Register online by clicking on the following link: https://www.regonline.com/hinshawhcconference