CMS issues 2010 final rule for ambulatory surgery centers and most hospital outpatient departments

CMS has released a display copy of the outpatient prospective payment system (OPPS) final rule for 2010, which also includes the 2010 changes to the rules for ambulatory surgery centers (ASCs).  This final rule will be published in the Federal Register on November 20.  In terms of reimbursement, OPPS hospitals that meet quality indicator reporting requirements for 2010 are entitled to the “full update,” which will result in a 2.1% increase in their payments for 2010.  Those OPPS hospitals that do not meet their quality indicator reporting requirements will be subject to a reduced update of 0.1% in 2010.  ASCs, on the other hand, will receive a 1.2% inflation update beginning January 1, 2010.

Among the most anticipated changes in the OPPS final rule are the so-called “incident to” a physician’s services requirements.  Most nonphysician outpatient therapeutic services that are provided by hospitals or critical access hospitals (CAHs) are only covered if they are provided “incident to” the services of a physician or another specified nonphysician practitioner.

During the last few years, CMS has made several changes to the “incident to” rules.  Prior to 2009, for example, such services had to be provided on the order of a physician.  In 2009, CMS expanded the practitioners qualified to meet the order requirement to include clinical psychologists, licensed clinical social workers, physician assistants, nurse practitioners, clinical nurse specialists and certified nurse-midwives (the “NPPs”).  In that same year, however, CMS clarified that, in order to be covered, such services must be provided under the supervision of a physician or clinical psychologist who is “on the premises” and immediately available.  On the premises was defined as “present in the provider-based department.”

The latter revision prompted considerable response from the hospital community, which ultimately resulted in the following changes to the therapeutic “incident to” rules.  These changes were announced in the OPPS 2010 final rule and will become effective for services provided on and after January 1, 2010.

In order to be covered, most therapeutic outpatient hospital and CAH services furnished incident to a physician or nonphysician practitioner must be furnished

1. By or under arrangements made by the hospital or CAH;
2. On the order of a physician or one of the specified NPPs;
3. As an integral though incidental part of a physician’s or nonphysician practitioner’s services;
4. In the hospital or CAH or in a provider-based department of the hospital or CAH; and
5. Under the direct supervision of a physician or one of the specified NPPs (which includes the same nonphysician practitioners as those permitted to order such services); nonphysician practitioners may directly supervise services they are permitted to provide themselves within the scope of their licensure and hospital-granted privileges, assuming they otherwise meet all Medicare conditions of participation and related requirements.

In general, for services furnished in the hospital or CAH or in an on-campus provider-based department of the hospital or CAH, “direct supervision” means that the physician or nonphysician practitioner must be present on the same campus and must be immediately available to furnish assistance and direction throughout the procedure.  It does not mean that he or she must be present in the room where the procedure is performed.  “In the hospital or CAH” means areas in the main buildings of the hospital or CAH that are under the ownership, financial and administrative control of the hospital or CAH; that are operated as part of the hospital or CAH; and for which the hospital or CAH bills the services furnished under the hospital’s or CAH’s CMS Certification Number.

For services furnished in an off-campus provider-based department of the hospital or CAH, “direct supervision” means the physician or nonphysician practitioner must be present in the off-campus provider-based department and must be immediately available to furnish assistance and direction throughout the procedure.  It does not mean that he or she must be present in the room where the procedure is performed.

Please note, however, there is an exception for pulmonary rehabilitation, cardiac rehabilitation and intensive rehabilitation services, wherever these services are provided.  For these services, direct supervision must be furnished by a doctor of medicine or osteopathy, whether provided in the hospital or CAH or in an on- or off-campus provider-based department of the hospital or CAH.

Please also note that these most recent revisions do not become effective until January 1, 2010.  Prior existing rules will be effective through December 31, 2009.  Hospitals and CAHs are advised to review these updated “incident-to” rules, and to make such modifications to existing policies and procedures as necessary to assure that they are in compliance with these changes, effective for dates of service on and after January 1, 2010.