CMS Eliminates Direct Supervision Requirement for Hospitals

This rule places decisions about supervision in the control of hospitals and physicians involved in patient care and will make the delivery of hospital outpatient services more efficient.

This article appears in the November/December 2019 edition of HealthLeaders magazine.

The level of supervision required in hospital outpatient departments has long been a vexing compliance issue for hospitals, with recent hospital settlements in the millions of dollars for violating CMS' direct supervision rule. But beginning January 1, 2020, CMS is eliminating the direct supervision requirement.

For the last 10 years, CMS has required direct supervision of hospital outpatient therapeutic services such as chemotherapy, radiation therapy, and wound care. Direct supervision requires a physician to be "immediately available" when these services are being provided to Medicare beneficiaries.

These rules have had a large impact on the development and planning of hospital outpatient services.  Hospitals have had to consider how services would be supervised, impacting the budget and location of some departments. If the supervision issue could not be addressed, hospitals have been forced to either provide the service only to non-Medicare beneficiaries or eliminate the service altogether, affecting access to care for Medicare beneficiaries.

Eliminating access-to-care issues

CMS recognized these requirements might be most difficult for critical access hospitals (CAH) and small (100 beds or less) rural hospitals and might create access-to-care issues for rural beneficiaries. Because of this, CMS issued a "non-enforcement" direction regarding direct supervision at CAHs and small rural hospitals that has been in place since 2010 and is set to expire at the end of this year.

Rather than continue that non-enforcement, CMS is eliminating the direct supervision requirement altogether, for all hospitals, beginning January 1. They cited the lack of supervision-related complaints from beneficiaries and the fact there has been no data showing quality was adversely affected at CAHs and small rural hospitals that have only been required to maintain general supervision.

The CY 2020 OPPS final rule amends regulations at 42 CFR 410.27 to lower the required level of supervision for all hospital outpatient therapeutic services to general supervision. General supervision requires the service be provided under the overall direction and control of the physician, but his or her presence isn't required, allowing for telephone or telehealth direction of services. 

CMS maintained the advisory capacity of the Hospital Outpatient Payment panel for future supervision recommendations, leaving the door open to higher levels of supervision for some services in the future. 

They also reiterated several times applicable Conditions of Participation requirements, including that patients be under the care of a physician. They noted that failure to adhere to these requirements could trigger a corrective action plan, although it would not cause denial of payment for the individual service. 

CMS repeatedly stated that hospitals may choose to adopt higher levels of supervision for more complex services at their discretion. This places decisions about supervision in the hands of the hospitals and physicians involved in the care and will undoubtedly make the delivery of hospital outpatient services easier and more efficient, while maintaining quality of care and access for patients.