CMS revises “incident to” rules relating to hospital diagnostic services

During the past several years, CMS has been revising and refining the “incident to” rules that apply to hospital therapeutic services.  These rules provide the threshold coverage criteria that must be met in order for hospital therapeutic services to be covered under the Medicare program.  In the CY 2010 OPPS final rule, CMS also revised the “incident to” rules relating to hospital diagnostic services.  In order for hospital diagnostic services to be covered, they must meet the following requirements:

• Be furnished directly or under arrangements by a hospital in the hospital, a provider based department or in a non-hospital setting;
• Be ordinarily furnished by, or under arrangements made by, the hospital to its outpatients for diagnostic study;
• Would be covered as inpatient hospital services if provided to an inpatient;
• Be provided on the order of a physician who is treating the patient; and
• Be furnished under the appropriate level of physician supervision.

With respect to the order by a treating physician requirement, the following exceptions apply:

• A physician who meets the qualification requirements for an interpreting physician may order a diagnostic mammogram based on the findings of a screening mammogram, even though he or she does not treat the patient; and
• Certain non-physician practitioners (nurse practitioners [NPs], clinical nurse specialists [CNSs], physician assistants [PAs], clinical nurse social workers, certified nurse midwives, and clinical psychologists) may meet the order requirement if they are acting within their scope of licensure and hospital privileges.

The physician supervision requirement is the most complex and underwent significant revisions in the CY 2010 OPPS final rule.  First of all, the following diagnostic tests are not subject to any otherwise applicable physician supervision requirement:

• Certain specific diagnostic tests
  • Diagnostic mammography procedures;
  • Certain designated diagnostic tests performed by specific qualified practitioners [e.g., clinical psychologists, audiologists, physical therapists] within their areas of expertise; and
  • Pathology and clinical diagnostic laboratory procedures in the 80000 series of the CPT; and
• Diagnostic tests performed by NPs or CNSs, acting within their scope of licensure.

Unless otherwise excepted, as noted above, all diagnostic tests must be furnished under at least a general level of physician supervision, as defined below.  In addition, some tests will also require either direct or personal supervision, as defined below.  When direct or personal supervision is required, such supervision is required throughout the performance of the test.  The three levels of supervision are defined, as follows:

• General supervision means the procedure is performed under the physician’s overall direction and control, but the physician need not be present during the performance of the procedure.
• Direct supervision generally parallels the requirements for direct supervision of therapeutic services:
  • If furnished in the hospital or in on-campus provider based departments, the physician must be present on the same campus and immediately available to furnish assistance and direction throughout the performance of the procedure;
  • If furnished in off-campus provider based departments, the physician must be present in the provider based department and immediately available to furnish assistance and direction throughout the performance of the procedure; and
  • If furnished under arrangement in non-hospital locations, the physician generally must be in the same office suite and immediately available to furnish assistance and direction throughout the performance of the procedure.
• Personal supervision means the physician must be in attendance in the room during the performance of the procedure.

If, however, a diagnostic test that would otherwise require either a direct or personal level of supervision is performed by a PA, acting within his or her scope of licensure, only a general level of supervision will be required.

Hospitals are encouraged to closely review the diagnostic “incident to” rules and to check in the Medicare Physician Fee Schedule to determine whether physician supervision is required for specific diagnostic tests, and, if so, what level of supervision is required.  There is a physician supervision field in the MPFS in which such information will be reported.  For example, a “1” indicates that general supervision is required; a “2” indicates that direct supervision is required; and a “3” indicates that personal supervision is required.

MedicareFind subscribers can also access the Diagnostic Services Physician Supervision Addendum B/MPFS Crosswalk for this information.