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2018 Final OPPS Rule: Update on Direct Supervision of Hospital Outpatient Therapeutic Services

For several years, there has been a moratorium on the enforcement of the direct supervision requirement for CAHs and small rural hospitals, with the latest moratorium on enforcement expiring on December 31, 2016. In the 2018 hospital outpatient final rule that was published in the Federal Register on November 13, 2017 (2018 Final OPPS Rule), the Centers for Medicare and Medicaid ("CMS") stated that it is reinstating the moratorium on enforcement for outpatient therapeutic services furnished in CAHs and small rural hospitals having 100 or fewer beds for calendar years 2018 and 2019 to give these CAHs and small rural hospitals more time to comply with the supervision requirements for outpatient therapeutic services and to give all parties additional time to submit specific services to be evaluated by the Advisory Panel on Hospital Outpatient Payment for a recommended change in the supervision level.

These hospitals will continue to be subject to the applicable conditions of participation and other Medicare rules regarding supervision. CMS also stated that it anticipated issuing guidance outside of the 2018 Final OPPS Rule to address enforcement policy for the direct supervision requirement for outpatient therapeutic services for calendar year 2017. Please note that all other hospitals subject to OPPS are required to meet the direct supervision requirements for hospital outpatient therapeutic services and that the moratorium is applicable only to CAHs and small rural hospitals.

CMS explained in the commentary to the 2018 Final OPPS Rule, interested persons have stated that small rural hospitals and CAHs have insufficient staff available to furnish direct supervision. The primary reason cited is the difficulty that CAHs and small rural hospitals have in recruiting physicians and nonphysician practitioners to practice in rural areas. CMS noted that it has been advised that it is particularly difficult to furnish direct supervision for critical specialty services, such as radiation oncology services. CMS commented that it was not aware of any quality of care complaints from beneficiaries or providers relating to the enforcement moratorium related to direct physician supervision.

While it is hoped that hospital associations will be successful in influencing CMS to make permanent changes to the direct supervision requirements, it is important to remain aware that planning for compliance with the direct supervision rules is still needed as the moratorium on enforcement expires on December 31, 2019.

Joseph P. "Joe" Loudon

1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500