Medicare Advisers, Hospitals at Odds on Supervision Requirements

By Mike Stankiewicz

Supervision requirements do not harm rural and critical access hospitals, the Medicare advisers to Congress found.

Staff at critical access hospitals say direct supervision requirements do not put a significant economic burden on hospitals or limit health services, the Medicare Payment Advisory Commission (MedPAC) said in its mandated December report to Congress. The findings contrast with concerns expressed by hospital associations, including the American Hospital Association and Federation of American Hospitals.

Outpatient therapeutic services must be “directly supervised” by an appropriate physician who is “immediately available to furnish assistance and direction,” the Medicare agency clarified in 2009. Hospital groups have stressed that critical access and small rural hospitals have insufficient staff to properly comply with the policy,

In contrast to hospital association statements, MedPAC said: “The representatives we spoke with indicated that [critical access hospitals] face challenges recruiting physicians to staff their hospitals, but they said that the direct supervision requirements for outpatient therapeutic services are not limiting the types of services they provide.”

For several years the requirement was unenforced, with the latest moratorium on enforcement expiring in 2016. In November 2017, the Centers for Medicare & Medicaid Services again placed a two-year moratorium on enforcement of the requirement.

Continued Disagreements

Audrey Smith, executive director of the Critical Access Hospital Coalition in Washington, said she disagrees with the commission’s findings and added that proper physicians may not always be available.

“Many critical access hospitals have doctors who come in from out of town once a week or so,” she told Bloomberg Law Dec. 5. “Some hospitals might be able to meet these qualifications but many cannot, especially those in rural areas.”

The American Hospital Association stressed that some hospitals have already been forced to discontinue important services or limit the days or hours services are offered in order to comply with the requirements. At least 82 rural hospitals have closed since 2010, according to the the University of North Carolina at Chapel Hill. There are about 1,800 rural hospitals operating in the U.S., according to the American Hospital Association.

“A physician does not need to be ‘immediately available’ at all times for hospital staff to provide safe and high-quality outpatient care,” Roslyne Schulman, direct of policy at the AHA, told Bloomberg Law in a Dec. 5 email. “Nonphysician hospital staff are professionally competent, licensed health care professionals who provide services that fall within their scope of practice in accordance with state law.” She added that nonphysician staff can contact a physician by phone, radio, or other means if needed for routine consultation.

Telehealth Considerations

MedPAC also said the agency should consider whether using telehealth services during the delivery of therapeutic services is appropriate for certain services.

Telehealth use has increased in recent years, and in October and November MedPAC members discussed the idea of expanding Medicare and commercial plan coverage for telehealth services. The commission found that patient telehealth visits jumped from 5.3 to 9.5 per 1,000 beneficiaries from 2014 to 2016 and that spending for these services went from $16 million to $27 million.

However, the use of telehealth services has been low, and industry representatives have said reform of how Medicare and commercial plans pay for telehealth visits is needed. The commission also noted that the CMS may need to seek statutory changes to more broadly implement telehealth.

Request for Clarification

MedPAC also urged the CMS to clarify how the agency defines “immediately available” and “interruption.” The agency previously provided flexibility to the definition of direct supervision. Some physicians can provide direct supervision if they are “interruptible,” but industry has asked for further clarity.

“The biggest problem we have is that providers are still stressed about being hit during an audit for not meeting the defined requirements,” Brock Slabach, senior vice president at the National Rural Health Association in Leawood, Kan., told Bloomberg Law Dec. 4. “The lack of clarity increases the potential of mistakes being made.”

Slabach also said the “devil is in the details” and that asking the CMS for clarity is a high-risk move.

“Historically, ‘clarity’ from the agency has made things worse,” he said. “But, with the Rural Health Council at CMS and their hopeful significant input into any process to define these two issues, there would be a reasonable expectation to see this matter resolved for the long term.”

No Database

The commission said there currently is no database to indicate whether hospitals are meeting supervision requirements. Michael Abrams, co-founder and managing partner at Numerof & Associates, a health-care consulting firm based in St. Louis, said a lack of data means a lack of accountability for outpatient hospitals.

“If there is no accountability, hospitals have no incentive to ensure proper quality of care,” he told Bloomberg Law Dec. 5.

MedPAC based their analysis on interviews, which Abrams said makes the report mostly anecdotal.

“There really is no information on how many interviews they did or who the ‘representatives’ were.” he added. “They could have been HR officials who know nothing about patient care.”

To contact the reporter on this story: Mike Stankiewicz in Washington at

To contact the editor responsible for this story: Brian Broderick at

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