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Congress Extends Moratorium on Enforcement of Supervision Requirements for CAHs (Again)

on Friday, 13 January 2017 in Health Law Advisory: Zachary J. Buxton, Editor

It’s déjà vu all over again. For the third time in as many years, Congress passed an enforcement moratorium on physician supervision requirements for critical access and small rural hospitals. Section 16004 of the 21st Century Cures Act—signed by outgoing President Barack Obama on December 13, 2016—extends the Centers for Medicare & Medicaid’s (CMS) instruction to its Administrative Contractors (MAC) to not enforce the physician supervision requirements for outpatient therapeutic services.

In 2009, CMS announced a policy requiring “direct supervision” for outpatient therapeutic services furnished at hospitals, including critical access and small rural hospitals with fewer than 100 beds. For services requiring “direct supervision,” a physician must be physically present when outpatient therapeutic services are furnished to Medicare patients.

CMS’s 2009 announcement put a strain on rural providers because of the lack of available physicians to fulfill the “direct supervision” requirement. In response, CMS instructed MACs to not enforce the supervision requirements for CY 2010 and again for CY 2011. It eventually extended the instruction two more times for CY 2012 and CY 2013. CMS stated that CY 2013 was the final year of the extension.

CMS made good on its promise and Congress passed legislation in December 2014 (Pub. L. 113-198) and December 2015 (Pub. L. 114-112), which extended the enforcement moratorium through CY 2014 and CY 2015, respectively. Both pieces of legislation were retroactive so as to remove any uncertainty with respect to repayment obligations for critical access hospitals that furnished services and received payment for services provided without direct supervision during 2014 and 2015.

Section 16004 of the 21st Century Cures Act functions in much the same way. Critical access and small rural hospitals will no longer be potentially subject to repayment for services provided during CY 2016 that were provided without direct supervision. But as of January 1, 2017, providers subject to the 2009 “direct supervision” mandate will be in the same position as much of 2014, 2015, and 2016 waiting for Congress to intervene.

Given Congress’ pattern of passing last-minute legislation in December 2014, 2015, and 2016, there is a real possibility that delaying enforcement of the “direct supervision” instruction discussed herein will become Congress’ new annual vote now that its annual vote to delay Medicare cuts under the SGR is now a thing of the past.

Until next time, stay tuned for December 2017.

Zachary J. Buxton

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