In December 2017, the Medicare Payment Advisory Commission (MedPAC) issued a report to Congress analyzing the impact of physician supervision requirements in critical access hospitals (CAHs) and small rural hospitals.  Ultimately, MedPAC found that the direct supervision requirements did not create a significant economic burden or limit the types of outpatient therapeutic services that CAHs provide. This recommendation may prompt CMS to revise its continued moratorium on enforcement of these requirements on CAHs and small rural hospitals.

In 2009, Medicare clarified that outpatient therapeutic services must be directly supervised by an appropriate physician who is immediately available to furnish assistance and direction. Industry groups expressed concerns that CAHs and small rural hospitals have insufficient staff to comply with the supervision requirement, and thus the requirement would limit beneficiary access to care. As such, for multiple years, the supervision requirement has been unenforced.

MedPAC conducted interviews to assess whether the direct supervision requirements have an economic impact on hospitals and their staffing needs, and affect Medicare beneficiaries’ access to and quality of care.  MedPAC stated that the hospital representatives indicated that direct supervision requirements did not create a significant economic burden. Further, based on their interviews, MedPAC determined that CAHs have implemented processes to offer what they believe to be appropriate supervision, although they are unclear whether these practices satisfy Medicare requirements. Further, although the CAHs indicated that they face physician recruitment challenges, the direct supervision requirements for outpatient therapeutic services are not limiting the types of services they provide.

MedPAC also made recommendations to CMS, including to consider whether using telehealth during the delivery of therapeutic services is clinically appropriate for specific services. Further, MedPAC urged CMS to clarify how the agency defines certain concepts relevant to the direct supervision requirement for outpatient therapeutic services.

The full MedPAC report is available here.