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Permanent Relief or the New SGR? Proposed Legislation Would Permanently Extend Enforcement Instruction For Outpatient Therapeutic Services in Cahs

on Friday, 3 May 2019 in Health Law Advisory: Zachary J. Buxton, Editor

In late March, South Dakota Republican Senator John Thune introduced S. 895 that would permanently extend the Centers for Medicare & Medicaid Services’ enforcement instruction to its contractors that Critical Access Hospitals do not need to provide direct supervision for outpatient therapeutic services furnished in its facilities.

In general, CMS requires that outpatient therapeutic services furnished at hospitals must be performed under the “direct supervision” of a physician or non-physician practitioner. That is—a physician or non-physician practitioner must be properly qualified to supervise the service and must also be “immediately available” to intervene in the procedure, if necessary.

Since 2010, however, CMS has instructed all of its Medicare Administrative Contractors not to enforce the “direct supervision” requirement for services performed in Critical Access Hospitals and small rural hospitals with 100 or fewer beds. This enforcement instruction is largely the result of the difficulty of providing sufficient practitioner coverage in rural locations.

CMS has repeatedly extended the enforcement moratorium in November 2012 (“Enforcement Instruction on Supervision Requirements for Outpatient Therapeutic Services in Critical Access and Small Rural Hospitals for CY 2013”), in December 2014 (Pub. L. 113-198), December 2015 (Pub. L. 114-112), December 2016 (21st Century Cures Act; Sec. 16004), February 2018 (Bipartisan Budget Act of 2018; Sec. 51007), and again in November 2017 (82 FR 52356, 52530–52531). The November 2017 extension pushed CMS’s non-enforcement instruction through CY 2019.

Senator Thune’s proposed legislation—titled the Rural Hospital Regulatory Relief Act of 2019—would eliminate the need to continue to pass last-minute legislation or subregulatory guidance and would bring more certainty to rural providers. Baird Holm will continue to monitor this legislation and any future legislation in this area.

Zachary J. Buxton

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