Transcript PBR-Supervision

Physician Supervision for
Provider-Based Clinics
Sponsored By:
Texas Hospital Association
Presented By:
Duane C. Abbey, Ph.D., CFP
Abbey & Abbey, Consultants, Inc.
[email protected]
http://www.aaciweb.com
http://www.APCNow.com
http://www.HIPAAMaster.com
Version 9.2 – 2010
Notes © 1999-2010, Abbey & Abbey, Consultants, Inc.
CPT® Codes – © 2009-2010 AMA
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 1
Disclaimer
This workshop and other material provided are designed to provide accurate and
authoritative information. The authors, presenters and sponsors have made every
reasonable effort to ensure the accuracy of the information provided in this
workshop material. However, all appropriate sources should be verified for the
correct ICD-9-CM Codes, ICD-10-CM Diagnosis Codes, ICD-10-PCS Procedure
Codes, CPT/HCPCS Codes and Revenue Center Codes. The user is ultimately
responsible for correct coding and billing.
The author and presenters are not liable and make no guarantee or warranty;
either expressed or implied, that the information compiled or presented is errorfree. All users need to verify information with the Fiscal Intermediary, Carriers,
other third party payers, and the various directives and memorandums issued by
CMS, DOJ, OIG and associated state and federal governmental agencies. The
user assumes all risk and liability with the use and/or misuse of this information.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 2
Presentation Faculty
Duane C. Abbey, Ph.D., CFP – Dr. Abbey is a healthcare consultant and educator with
over 20 years of experience. He has worked with hospitals, clinics,
physicians in various specialties, home health agencies and other health care providers.
His primary work is with optimizing reimbursement under various Prospective Payment
Systems. He also works extensively with various compliance issues and performs
chargemaster reviews along with coding and billing audits.
Dr. Abbey is the President of Abbey & Abbey, Consultants, Inc. A wide range of
consulting services is provided across the country including charge master reviews,
APC compliance reviews, in-service training, physician training, and coding and billing
reviews.
Dr. Abbey is the author of eight books on health care, including:
“Non-Physician Providers: Guide to Coding, Billing, and Reimbursement”
“Emergency Department: Coding, Billing and Reimbursement”, and
“Chargemasters: Strategies to Ensure Accurate Reimbursement and Compliance”.
His most recent books, “Compliance for Coding, Billing & Reimbursement A Systematic
Approach to Developing a Comprehensive Program” and “Introduction to Healthcare
Payment Systems” can now be ordered from the Productivity Press, a Division of Francis
& Taylor.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 3
Provider-Based Clinic Supervision
Objectives
 To review the concept of provider-based clinics and the economic
advantage.
 To delineate the various requirements under the Provider-Based Rule (42
CFR §413.65)
 To discuss the basic operational processes for provider-based clinics.
 To understand differing requirements for in-hospital, on-campus and offcampus clinics.
 To review the supervisory requirements for provider-based services.
 To appreciate the subtle changes being made by CMS relative to
supervisory requirements for hospital-based clinics.
 To understand the concept of ‘incident-to’ for both physicians and
hospitals.
 To discuss the difference between ‘clarifying’ guidance and ‘changed’
guidance.
 To discuss possible RAC audit issues for retroactive application.
 To work through several case studies.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 4
Provider-Based Clinic Supervision
Preliminaries
 Provider-Based Rule (PBR)
 Difficult Rule To Interpret and Apply Organizationally
 Almost a Stealth Rule – May Be Overlooked
• Penalties Involve Only Recoupment of Overpayments
 Subtle Organizational Issues
 Correlation to NPIs and CMS-855 Billing Privileges
 Certain PBR Provisions Need Interpretation
 Provider-Based Clinics and Physician Supervision
 Provider-Based Clinics  Off-Campus, On-Campus, In-the-Hospital
 Physician Supervision
• Diagnostic  Comes from MPFS–Mainly Radiology Tests (See
IDTFs)
 General
 Direct
 Personal
• Therapeutic
 Direct
 Indirect
• Who can provide supervision? (Mid-Level Practitioners?)
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 5
Provider-Based Clinic Supervision
Warm-Up Exercises
 The Apex Medical Center owns and operates a family practice clinic that is
located on its campus right across the street. There is a sky-walk and
there is a large parking ramp right next to the clinic. The physicians and all
the staff personnel are employees of the hospital. Due to competitive
pressures, the only billing made is the professional component on a CMS1500. Is this a provider-based clinic?
 Yes?
 No?
 Depends?
 Is the ED at the Apex Medical Center a provider-based department?
 Yes?
 No?
 Depends?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 6
Provider-Based Clinic Supervision
Warm-Up Exercises
 The Therapy Services Department at the Apex Medical Center wants to
establish several clinics within the general area. The clinics will be located
up to 10 miles away. A wide range of services will be provided including
prosthetics, orthotics and provision of DME. The Compliance Office at AMC
has been contacted to see if there are any unusual compliance concerns
that should be addressed.
 Will these PT clinics be provider-based?
 Are there any provider-based issues?
 Coding, billing issues?
 A group of oncologists established an infusion center including medical
offices about twelve year ago. Chemotherapy services along with blood
transfusions and related services are provided. Apex has deferred
providing chemotherapy services and blood transfusions. The group of
physicians now want Apex to contract with the physicians so that the
operation will remain the same, except the hospital will bill for the services
and then pay the physicians the contracted amount for services, staff, etc.
 Exactly how is this going to work?
 Are there provider-based issues involved in this change?
 What is the motivation for such an arrangement?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 7
Provider-Based Clinic Supervision
Provider-Based Status
 What is Provider-Based Status?
 Why Have Provider-Based Status?
 Variable Reasons – Integration of Services
 For Clinics  Generate Additional Income
 CMS Interested In Those “Situations” Where There Is A Payment
Differential  Determination
 Note: Provider-Based Status and the Provider-Based Rule Are Medicare
Concepts  Other Third-Party Payers May or May Not Recognize!
 Be Careful With Terminology
• Provider-Based Clinics
• “Facilities” and “Organizations”  Formally In The PBR
• “Operations” and “Situations”  Informal Use In This Workshop
• Other PBR Aspects (For Example Prohibitions)
 Note: PBR Encompasses More Than Just Outpatient Situations – Also
Covers Inpatient Services/Situations
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 8
Provider-Based Clinic Supervision
Provider-Based Status
 It is 4:45 p.m. A patient is presenting to the Apex Medical Center’s
outpatient service area with a physician’s order in hand. The patient has a
catheter in place. The order indicates that the patient is to be voided. If
there is more than 500 cc., then the catheter is to be left in place, otherwise
the catheter is to be removed. The nurse performs the services and then,
based on the orders, removes the catheter. The patient is then discharged
home.
 How should this be coded and billed?
 Do you have any unusual concerns about this case?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 9
Provider-Based Clinic Supervision
Provider-Based Status
 Provider-Based Rule – Special Situations
 RHCs and FQHCs Are Special and 42 CFR §413.65 Applies To A Certain
Extent (See Also CAHs)
• Still Referred To As ‘Provider-Based’
• Special Rules
• Difficulties With APC Interface
 Freestanding Is The Opposite Of Having PBS
• Freestanding Clinic or Situation Is One In Which There Is No
Integration With A Hospital (Main Provider)
• “Freestanding” Is An Organizational Concept, Not Necessarily a
Physical Concept
• Example – A hospital may own and operate a clinic inside the
hospital itself, but the clinic may operate as a “freestanding” clinic
by filing only a CMS-1500.  See Warm-Up Exercise
• See also, Transmittal 87 to Publication 100-04  Withdrawn(!)
 OIG Concerns – Provider-Based Clinics
• Really Don’t Want PBS Clinics At All!
• Should Be No Payment Differential  See Medicare “Site-ofService” Differential
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 10
Provider-Based Clinic Supervision
Provider-Based Clinics
 Billing For Freestanding Medical Clinics
 Use only the CMS-1500 claim form. Payment is strictly through the
RBRVS system. From a hospital perspective, this is just the same as a
physician owned, freestanding clinic.
 Note: POS coding  Clinic
 Billing For Provider-Based Medical Clinics
 Use the CMS-1500 for the professional component.
 Use UB-04 for the technical component.
 Note: POS coding on the CMS-1500  Hospital Outpatient
 Medicare’s Site-Of-Service Differential
 See November 25, 2009 Federal Register for details.
 The site-of-service differential or reduction is undergoing changes as
CMS works on the RBRVS practice expense component of the RVUs.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 11
Provider-Based Clinic Supervision
Provider-Based Clinics
 The Apex Medical Center has finally decided to start a pain management
program. To start the program, two MDAs (MD Anesthesiologists) will use
examination rooms and special procedure rooms on Mondays and
Thursdays. These rooms are located in a patient care unit. Normal
registration and support services from the patient care unit will be
provided.
 Is this a provider-based clinic?
 Are these provider-based clinical services?
 What should the Apex Medical Center do to establish the billing for
these services?
 The Apex Medical Center has decided to establish a medication
management program (mainly for long-term Coumadin use). A pharmacist
will encounter patients in an examination room next to the pharmacy and
the services will be available on Tuesday, Thursday and Saturday
mornings.
 Is this a provider-based clinic?
 Are these provider-based clinical services?
 What should the Apex Medical Center do to establish the billing for
these services?
 How do we establish these as ‘incident-to’ services? What about
supervision?
• See Veritus FI Document 03-145, December 2, 2003
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 12
Provider-Based Clinic Supervision
Provider-Based Rule - Very Brief History
 The Provider-Based Rule Is Complex and There Is Confusion
 Several Areas Where The Rules Are Not Clear
 Tortuous Development of PBR – Not separately addressed in Federal
Registers.
 Provider-Based Clinics  1980’s
 Additional Income From Both A UB-04 Technical Component and CMS1500 Professional Component
 Very Little Reduction in Payment for Professional Component – Site-OfService Differential Applied To Only A Few Codes
 Savvy Hospitals Started Using This Organizational Concept  See MAP
– Model Ambulatory Practice – Clinics
 Mid-1990’s – CMS (Then HCFA) Became Concerned About Proliferation of
Provider-Based Clinics
 Issued the Infamous PM A-96-7 (Re-Issued As PM A-99-24)
 8-Criteria For Being Provider-Based Clinic
 Not Legislated and Not In Code of Federal Regulations
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 13
Provider-Based Clinic Supervision
Provider-Based Rule - Very Brief History
 April 7, 2000 – Issued New Comprehensive Rule
 Note: Yes, this was issued in the APC FR Entry
 The new Provider-Based Rule went beyond just considering outpatient
situations. Inpatient situations are also included.
 The new PBR formalized the criteria issued in PM A-96-7 and then
some!
 Health Care Community Reaction – Congressional Action
 BIPA 2000 – Grandfathering Until October 1, 2002
 May 9, 2002 Federal Register – Updated Rules – Grandfathering Until 1st
Cost Report On/After July 1, 2003
 August 1, 2002 Federal Register – Further Updates Finalized Except
EMTALA Changes
 May 14, 2005/August 12, 2005 Federal Register
 To Understand PBR – You Must Master and Understand Multiple
References – CFR Sections, Federal Register and Associated Sources
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 14
Provider-Based Clinic Supervision
Provider-Based References/Resources
 Main Federal Register Entries
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April 7, 2000  Original APC FR
November 13, 2000  APC Update FR
November 30, 2001  APC Partial Update FR
May 9, 2002  DRG Update FR (!!)
August 1, 2002  Final DRG Update FR
May 14, 2005  DRG Update FR
August 12, 2005  Final DRG Update FR
Download Instructions
• See www.APCNow.com website.
 Program Memorandum – A-99-24 – “Old” Rules
 CMS PBR FAQ + CMS APC Education – MedLearn Chapter 6
 Code Of Federal Regulations
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42CFR §489.2  Provider Agreement Definitions
42CFR §412.22  Inpatient PPS
42CFR §410.27  Outpatient Services/Supplies
42CFR §489.24  Emergency Requirements
42CFR §413.65  Main PBR Rules
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 15
Provider-Based Clinic Supervision
Provider-Based General Compliance Concerns
 The PBR Is A Strange Rule From CMS
 When CMS developed this rule over more than ten years, we fully
expected significant compliance demands from CMS.
 During the process CMS realized that they, CMS, would be receiving
thousands of requests for determination and/or attestations.
• Thus, as the final rule evolved, the burden of proof has been shifted
from an affirmative process for CMS to a verification process for
the providers. Providers must be able to verify that they, the
providers, are meeting all the requirements, prohibitions and
obligations under this rule.
 Voluntary Attestation Process – See PM A-03-030
 Requests for Formal Determination – Check with FI and RO
 Penalties generally involve recoupment of payment differential.
 How do you verify compliance with the PBR? See PBR Audits.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 16
Provider-Based Clinic Supervision
Provider-Based General Compliance Concerns
 From 42 CFR §413.65(l)(2)
 If CMS determines that a facility or organization that had previously
been determined to be provider-based under this section no longer
qualifies for provider-based status, and if the failure to qualify for
provider-based status resulted from a material change in the
relationship between the provider and the facility or organization that
the provider did not report to CMS under paragraph (c) of this section,
CMS will take the actions with respect to notice to the provider,
adjustment of payments, and continuation of payment described in
paragraphs (j)(3), (j)(4), and (j)(5) of this section, and will recover past
payments to the provider to the extent described in paragraph (j)(1)(ii)
of this section.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 17
Provider-Based Clinic Supervision
Provider-Based Overall Analysis Template
 Qualifying and Application/Attestation
 This Involves Determination of Provider-Based Status Situations Such
As Clinics and Other Activities
 Prohibitions
 Prohibitions Can Apply To Any and All Hospital Activities
• Under Arrangements
• Management Contracts
 Obligations
 Obligations Can Apply To Any and All Hospital Activities
• Special Supervisory Requirements – Off-Campus and now OnCampus, Out-of-Hospital
• Notice of Two Co-Payments – Off-Campus
• EMTALA Policy Coordination – Off-Campus
 Reporting
 Report Any ‘Material Changes’  Relationship to CMS-855 Forms?
 These four items must be considered for a wide range of circumstances.
Auditors need to carefully consider each of these four issues for their
organization.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 18
Provider-Based Clinic Supervision
Reviewing PBR Requirements
 General Criteria to Be Attained
 Geographic Proximity
 Integral and Subordinate Part
 Under Common/Licensure and Accreditation
 Common Ownership and Control
 Day-to-Day Supervision
 Clinical Services Integration
 Held Out To The Public
 Financial Integration
• See, for instance, the applications for formal determination. These
list many specifics relative to the requirements including additional
documentation.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 19
Provider-Based Clinic Supervision
Off-Campus Supervision Obligation
 April 7, 2000 Federal Register, Page 18525 (65 FR 18525)
 “We emphasize that our proposed amendment of § 410.27 to require
direct supervision of hospital services furnished incident to a physician
service to outpatients applies to services furnished at an entity that is
located off the campus of a hospital that we designate as having
provider-based status as a department of a hospital in accordance with
the provisions of § 413.65. Our proposed amendment of § 410.27 to
require direct supervision of hospital services furnished incident to a
physician service to outpatients does not apply to services furnished in
a department of a hospital that is located on the campus of that
hospital.”
• This is the language that CMS claims that healthcare providers have
‘misinterpreted’.
 Other Obligations for Off-Campus
 Notice of Two Co-Payment
 EMTALA Policies & Procedures
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 20
Provider-Based Clinic Supervision
Background for Recent Changes
 Provider-Based Supervisory Guidance
 CMS has made a significant change in their guidance for direct
physician supervision relative to provider-based clinics.
• Note: CMS claims that this is NOT a ‘change’, only a clarification.
 Why would CMS make this claim?
• See Transmittals 82, 101 and the July 18, 2008 and November 28,
2008 Federal Register discussions.
• Clearly, CMS is now stating that for provider-based clinics that are
on-campus, but not inside the hospital, that direct physician
supervision is required.
 Consider an on-campus infusion center.
• The way the change has been worded, it is quite possible that this
direct physician supervision also applies to in-hospital operations.
• Previously, for on-campus (and in-hospital) CMS presumed that
there would be a physician/practitioner close by.
 Note: Read the transmittals carefully. While CMS indicates
added language, deleted language is not indicated.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 21
Provider-Based Clinic Supervision
Background for Recent Changes
 This change or clarification appears to be a technical issue, but this could
become a RAC issue with claims of overpayment.
 Consider the Infusion Center referenced in the previous slide.
 Many hospitals have infusion centers that provide chemotherapy,
infusions, injections, blood transfusions and the like. Sometimes these
operations are on campus but in a different building or in a building
that is attached to the hospital. In these cases the operation is oncampus, but not in the hospital.
 With CMS’s change/clarification, direct physician supervision is not
assumed just because the operation in on the hospital campus or
premises. Thus, an infusion center of the type described above would
have to have a physician or practitioner in the center immediately
available.
 If this is NOT a change, then this interpretation can be applied
retroactively. See MMA Section 912.
 Thus, a RAC could claim that the infusion center services were
provided without proper physician supervision and thus all such
payments are invalid and considered overpayments.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 22
Provider-Based Clinic Supervision
PBR – Physician Supervision
 Well over a hundred pages of discussion was provided by CMS in the
Examination Copy of the November 20, 2009 Federal Register
 In some cases the changes made appear to liberalize the physician
supervision requirement, BUT that may be misleading.
 Read the Preamble language VERY carefully!
 Background
 In the April 7, 2000 Federal Register, CMS indicated that ‘Direct
Physician Supervision’ was required for off-campus provider-based
clinics.
• For in-hospital and/or operations on the hospital campus, the
physician supervision was assumed because physicians would be
nearby.
 Starting in 2008 and continuing into 2009 CMS indicated that ‘Direct
Physician Supervision’ was required for on-campus, but out-of-hospital
operations and that mid-level practitioners could NOT meet the
supervision requirement.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 23
Provider-Based Clinic Supervision
PBR – Physician Supervision
 Direct Physician Supervision – From page 60588 of November 20, 2009
Federal Register:
 “For services furnished on a hospital’s main campus, we are finalizing
a modification of our proposed definition of "direct supervision" in new
paragraph (a)(1)(iv)(A) of §410.27 that allows for the supervisory
physician or nonphysician practitioner to be anywhere on the hospital
campus, including a physician’s office, an on-campus SNF, RHC, or
other nonhospital space. Therefore, direct supervision means that the
supervisory physician or nonphysician practitioner must be present on
the same campus and immediately available to furnish assistance and
direction throughout the performance of the procedure.”
• Of course, the issue then becomes what, exactly, does ‘immediately
available’ mean?
 Distance Metric?
 Time Metric?
 How can we establish that the supervisory physician was
available?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 24
Provider-Based Clinic Supervision
PBR – Physician Supervision
 Note that CMS did give us the following guidance from Page 65080:
 “This means that the physician or nonphysician practitioner must be
prepared to step in and perform the service, not just to respond to an
emergency. This includes the ability to take over performance of a
procedure and, as appropriate to both the supervisory physician or
nonphysician practitioner and the patient, to change a procedure or the
course of treatment being provided to a particular patient.”
 In Hospital Definition – While there were some concerns expressed by
commenters, CMS is basically adopting the proposed definition for in the
hospital:
 “…to mean areas in the main building(s) of a 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 CCN.” (74 FR 60581)
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 25
Provider-Based Clinic Supervision
PBR – Physician Supervision
 Mid-Level Practitioners Meeting Supervisory Requirements – CMS is
proceeding with allowing certain non-physician practitioner meet the
physician supervisory requirement. Clinical Social Workers (CSWs) have
been added to the list.
 “In summary, for CY 2010, nonphysician practitioners who are specified
under §410.27 of the final regulations as clinical psychologists,
licensed clinical social workers, physician assistants, nurse
practitioners, clinical nurse specialists, and certified nurse midwives,
may directly supervise all hospital outpatient therapeutic services that
they may perform themselves within their State scope of practice and
hospital-granted privileges, provided that they meet all additional
requirements, including any collaboration or supervision requirements
as specified in §§410.71, 410.73, 410.74, 410.75, 410.76, and 410.77.” (74
FR 60591)
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 26
Provider-Based Clinic Supervision
PBR – Physician Supervision
 Diagnostic Testing Supervision – CMS has provided clarifying language
relative to diagnostic testing supervision. There do not appear to be any
substantive changes in guidance, per se, but the language is now quite
precise.
 Diagnostic testing supervision involves three levels of supervisions:
• General,
• Direct, and
• Personal.
 “For CY 2010, we are finalizing the proposal to require that all hospital
outpatient diagnostic services provided directly or under arrangement,
whether provided in the hospital, in a PBD of a hospital, or at a
nonhospital location, follow the physician supervision requirements for
individual tests as listed in the MPFS Relative Value File.” (74 FR
60591)
• Note: Mid-levels are not allowed to meet the diagnostic testing
supervisory requirement.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 27
Provider-Based Clinic Supervision
PBR – Physician Supervision
 CY2010 Update – Transmittal 128 to Publication 100-02 – MBPM – May 28,
2010
 Diagnostic Supervision
• “Thus, while physician assistants, nurse practitioners, clinical
nurse specialists, and certified nurse midwives only require
physician supervision included in any collaboration or supervision
requirements particular to that type of practitioner when they
personally perform a diagnostic test, these practitioners are not
permitted to function as supervisory “physicians” for the purposes
of other hospital staff performing diagnostic tests.”
 In other words, these non-physician practitioners can perform
the diagnostic tests, but they can’t supervise others to perform
the tests that
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 28
Provider-Based Clinic Supervision
PBR – Physician Supervision
 CY2010 Update
 Immediate Availability
• “Immediate availability requires the immediate physical presence of
the physician or nonphysician practitioner. CMS has not
specifically defined the word “immediate” in terms of time or
distance; however, an example of a lack of immediate availability
would be situations where the supervisory physician or
nonphysician practitioner is performing another procedure or
service that he or she could not interrupt. Also, for services
furnished on-campus, the supervisory physician or nonphysician
practitioner may not be so physically far away on-campus from the
location where hospital/CAH outpatient services are being
furnished that he or she could not intervene right away.”
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 29
Provider-Based Clinic Supervision
PBR – Physician Supervision
 CY2010 Update
 Capabilities of Supervisory Physician/Practitioner
• The supervisory physician or nonphysician practitioner must have,
within his or her State scope of practice and hospital-granted
privileges, the knowledge, skills, ability, and privileges to perform
the service or procedure. Specially trained ancillary staff and
technicians are the primary operators of some specialized
therapeutic equipment, and while in such cases CMS does not
expect the supervisory physician or nonphysician practitioner to
operate this equipment instead of a technician, CMS does expect
the physician or nonphysician practitioner to be knowledgeable
about the therapeutic service and clinically appropriate to furnish
the service.
 How does this apply to an area like radiation oncology?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 30
Provider-Based Clinic Supervision
PBR – Physician Supervision
 CY2010 Update
 CMS Minimum Supervisory Standard
• Direct supervision is the minimum standard for supervision of all
Medicare hospital outpatient therapeutic services. Considering that
hospitals furnish a wide array of very complex outpatient services
and procedures, including surgical procedures, CMS would expect
that hospitals already have the credentialing procedures, bylaws,
and other policies in place to ensure that hospital outpatient
services furnished to Medicare beneficiaries are being provided
only by qualified practitioners in accordance with all applicable
laws and regulations. For services not furnished directly by a
physician or nonphysician practitioner, CMS would expect that
these hospital bylaws and policies would ensure that the
therapeutic services are being supervised in a manner
commensurate with their complexity, including personal
supervision where appropriate.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 31
Provider-Based Clinic Supervision
PBR – Physician Supervision
 Challenges and Proposed Changes for CY2011
 The changes over the last two years have resulted in a requirement that
there be a qualified physician/practitioner on the hospital campus when
services are provided.
• We can argue what constitutes ‘qualified’ and how close the
practitioner must be, but this new (or newly interpreted)
requirement can create new challenges.
 Example – Critical Access Hospitals – Patient is in observation. CoPs
(Conditions of Participation) only require that a nurse be present at the
hospital and thus the new supervisory requirement may not be met.
• CMS’s ‘Fix’ for This Situation
 Will not enforce this rule for CHAs (March 15, 2010), and
 Create a new service category – ‘nonsurgical extended
duration’ (infusions, injections, observation)
o Does NOT include chemotherapy and blood transfusions.
 Direct supervision is required only for the initiation of the
service, after the patient is stable, general supervision applies.
o Note: This new proposed guidance appears to apply to all
hospitals. See the August 3, 2010 Federal Register.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 32
Provider-Based Clinic Supervision
PBR – Physician Supervision
 Other Questions/Comments
 How will all of this ‘new’ guidance affect the RACs?
 Terminology – Be Careful! CMS is starting to use the phrase, ProviderBased Department (PBD). This language does not appear in the
Provider-Based Rule itself (42 CFR §413.65). The basic terminology is
‘facility’ or ‘organization’. These terms are not further defined in the
PBR.
 What about CR, ICR and PR supervision?
 Additional References  July 18, 2008 Federal Register – Section XII – Page 41518 (73 FR 41518)
 November 18, 2008 Federal Register – Section XII – Page 48702 (73 FR
48702)
 July 20, 2009 Federal Register – Section XII – Page 35358 (74 FR 35358)
 August 3, 2010 Federal Register - Pages 46306-46308 (75 FR 46306)
 To access most, if not all, of the CMS materials on the Provider-Based
Rule, see our website:
 http://www.APCNow.com/PBRInformationToolkit.htm
 Note: At this rate, physician supervision requirement may
become a long-term saga of continuously morphing guidance.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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Provider-Based Clinic Supervision
PBR – Physician Supervision
 Exercise - Infusion Center – The Apex Medical Center has a nice Infusion
Center in a two story building that is attached to the hospital by a skywalk.
On the second floor there are multiple clinic offices for several oncology
physicians and a nurse practitioner. On the bottom floor, various services
are provided including chemotherapy, infusions, and injection services and
blood transfusions.
 Discuss the possible supervisory challenges that might be
encountered.
 How will Apex develop documentation to show who was meeting the
supervisory requirements?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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Provider-Based Clinic Supervision
PBR – Physician Supervision
 Exercise – The Apex Medical Center has established a nice small wound
care center in a separate building right across the parking lot from the
hospital itself. There are two NPs along with PTs and nursing staff
providing specialized wound care. There is a medical director who is at the
clinic once a week.
 Analyze the status of this clinic relative to the changed requirements
that on-campus, but out-of-hospital clinics must have direct physician
supervision.
 Can the Nurse Practitioners qualify to provide ‘direct physician
supervision’?
 In turn, can the Nurse Practitioners direct the services of the PTs and
nursing staff?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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Provider-Based Clinic Supervision
PBR – Physician Supervision
 Exercise - Wound Care Plus Additional Services – AMC has established a
provider based clinic in a separate building on the campus. Wound care,
pain management and radiation oncology services are provided in the
clinic. There is a common reception area and common clerical support
staff. The medical director for wound care is present on Wednesday; the
MDAs (MD Anesthesiologists) are present in the afternoons. The radiation
oncologist is generally in the clinic although there are trips to the main
hospital where the radiation oncology services are actually provided.
 Comment to the physician supervision issues.
 Can physicians of a different specialty meet the supervisory
requirements?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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Provider-Based Clinic Supervision
Incident-To Interpretations
 The “Incident-To” Concept
 This phrase is used in two very different ways in the Social Security Act
(SSA). The SSA is addressing definitions for payment purposes.
 For Physicians - §1861(s)(2)(A) – ‘Incident-To Billing’
• The basic idea is that a physician/practitioner in his/her own clinic can
bill for the services of subordinate personnel as if the physician or
practitioner actually performed the services.
 “(2)(A) services and supplies (including drugs and biologicals
which are not usually self-administered by the patient) furnished as
an incident to a physician's professional service, of kinds which
are commonly furnished in physicians' offices and are commonly
either rendered without charge or included in the physicians'
bills…”
 For Hospitals - §1861(s)(2)(B) – Payment for ‘Incident-To Services’
• A hospital is paid for services that are incident-to those of a physician
(or qualified provider?).
 “(2)(B) hospital services (including drugs and biologicals which are
not usually self-administered by the patient) incident to physicians'
services rendered to outpatients and partial hospitalization
services incident to such services.”
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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Provider-Based Clinic Supervision
Incident-To Interpretations
 The “Incident-To” Concept
 Yes, there is a need to carefully interpret what these two rather brief
phrases are actually supposed to mean.
 Must distinguish freestanding situations from provider-based
situations (i.e., hospital-based).
 The payment systems and directives from the SSA are quite different
between the two situations.
 Note also the language about drugs and biologicals that are not usually
self-administered.
• Because this prohibition is at the SSA level, there is almost no way
to get around billing Medicare beneficiaries for self-administrable
drugs.
 Note that the language at the SSA level refers to ‘physicians’. Recent
interpretations from CMS indicate that this means only MDs or DOs, not
mid-level non-physician practitioners.
• This has arisen due to requirements under the provider-based rule
for physician supervision. Generally practitioners cannot qualify.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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Provider-Based Clinic Supervision
Exercise
 Exercise – Dr. Clark is a dermatologist. He has a specially trained nurse
who performs services under the direct supervision of Dr. Clark. Dr. Clark
will see a patient and then send the nurse in to perform a treatment,
provide education, etc. During this time Dr. Clark then moves on to see
another patient. Dr. Clark’s productivity is thus significantly enhanced.
 Analyze the proper way to code and bill for these services if Dr. Clark is
in a freestanding clinic (e.g., Acme Medical Clinic).
 Analyze the proper way to code and bill for these services if Dr. Clark is
at a hospital provider-based specialty clinic at the Apex Medical Center.
 Would it make a difference if the nurse were a full mid-level, that is, say
a nurse practitioner?
 What does ‘direct supervision’ mean?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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Provider-Based Clinic Supervision
Incident-To Interpretations
 Incident-To Billing
 In a freestanding setting, physicians can bill for the services of
subordinate staff as if he or she, the physician, actually performed the
services.
• There must be direct supervision and employment relationship.
• Likewise, non-physician practitioners who are filing claims
independently can bill for subordinate staff services and/or
• The physician can bill for the practitioners services as if, he or she,
the physician had performed the services.
 Incident-To Services
 Hospitals can only be paid for services that are incident-to those of a
physician.
 Hospitals are paid for all services that are provided incident-to those of
a physician.
• What is the difference between the two above statements?
• Can this create any problems?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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Provider-Based Clinic Supervision
Applying the PBR
 Cool-Down Exercise - The Apex Medical Center has contracted with an
outside company to provide Hyperbaric Oxygen (HBO) services. AMC is
providing space in a building several blocks from the hospital. The outside
company is providing the equipment, supplies, a physician, nursing and
technical staff. Apex is providing clerical staff for registration, billing, etc.
Apex pays the outside company for the services, and then Apex files
claims with third-party payers including Medicare.
How does the Provider-Base Rule come into play in this situation?
Are there any supervisory issues?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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Provider-Based Clinic Supervision
Summary & Conclusion
 The Phrase ‘Incident-To’ Is Used In Two Very Different Ways In The SSA
 Incident-To Billing for Physicians (Freestanding)
 Incident-To Services for Hospitals
 The Provider-Based Rule Is Quite Complicated
 Hospitals Like Provider-Based Clinics Due To Increased Reimbursement
 CMS has recently changed(?) guidance relative to direct physician
supervision for on-campus, but out of hospital provider-based operations.
 An additional question was raised concerning whether mid-level
practitioners could meet the physician supervision standard.
 CMS’s Analysis – No (See ‘incident-to physician’ language in SSA.)
 CMS has now changed the CFR to allow mid-level practitioners to
provide supervision
 Due to the change in guidance concerning on-campus, but out-of-hospital
physician supervision, CMS is now (finally) defining what is meant by ‘inthe-hospital’ or the concept of the four-walls of the hospital.
 Hospitals are placed in a precarious compliance circumstances from this
situation and this may even become a RAC issue.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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Provider-Based Clinic Supervision
Resources For Further Information
The Most Recent Documents  Supervision and In-the-Hospital Definition
 July 18, 2008 Federal Register – Section XII – Page 41518 (73 FR 41518)
 November 18, 2008 Federal Register – Section XII – Page 48702 (73 FR
48702)
 July 20, 2009 Federal Register – Section XII – Page 35358 (74 FR 35358)
 November 20, 2009 Federal Register – Section XII – Page 60315 (74 FR
60315)
 CY2010 Update for Supervision Requirements  Transmittal 128, May 28,
2010 to Publication 100-02, Medicare Benefit Policy Manual
 Related OIG Report – “Prevalence and Qualifications of Nonphysicians
Who Performed Medicare Physician Services” – August 2009 – OEI-09-0600430
 For All The Other Multitudinous Documents See:
 Abbey & Abbey, Consultants, Inc. – APC Website
 PBR Information Toolkit
http://www.APCNow.com/PBRInformationToolkit.htm
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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