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Legislative Update: One-Year Extension of CAH Outpatient Supervision Moratorium

on Thursday, 7 January 2016 in Health Law Advisory: Zachary J. Buxton, Editor

On December 18, 2015, the President signed into law Public Law No. 114-112 which provides a one-year extension, through 2015, of the enforcement moratorium on supervision requirements for outpatient therapeutic procedures at critical access hospitals (CAHs) and small rural hospitals. As a result, the Centers for Medicare and Medicaid Services (CMS) will not enforce the “direct” supervision requirements for 2015.

The existing CMS requirements state that all outpatient therapeutic services must be performed under “direct” supervision. “Direct” supervision means that a physician or non-physician practitioner must be “immediately available” to furnish assistance and direction throughout the performance of the procedure. CMS’ interpretation of “immediately available” has evolved. Under CMS’ current interpretation, “immediately available” means physical presence of the supervisory physician or non-physician practitioner. While CMS does not define “immediate availability” in terms of a specific time or distance, CMS has stated that a supervisor is not available if he or she is performing another procedure or service that he or she could not interrupt. Many CAHs find it difficult, if not impossible, to meet the CMS “direct” supervision requirements, and argue that, if the rules are enforced, many CAHs would be forced to discontinue important therapeutic services.

The recent legislation only extends the enforcement moratorium through 2015. However, another piece of pending legislation called the “Protecting Access to Rural Therapy Services Act of 2015 (PARTS Act) (S.257/H.R.1611) would provide permanent relief to CAHs and small rural hospitals. The PARTS Act (1) provides for a default standard of “general” supervision for outpatient therapeutic procedures; (2) creates an advisory panel which, with provider input, could establish exceptions to the “general” supervision rules and require “direct” supervision for risky and complex procedures; and (3) prohibits retroactive enforcement of CMS’ interpretation of the “direct” supervision rules applied to services furnished since January 2001. We will continue to monitor the status of this legislation.

Michael W. Chase

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