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August meeting offers small rural hospitals an opportunity to influence outpatient policy

July 23, 2012

Lee Boyles, administrator of 20-bed Oakes (ND) Community Hospital, plans to take his case for easing the Centers for Medicare & Medicaid Services’ (CMS) outpatient physician supervision requirements to the Aug. 27-29 meeting of the Advisory Panel on Hospital Outpatient Payment (HOP).

The panel advises CMS on appropriate supervision levels for specific hospital outpatient therapeutic services, and will consider rural hospital representatives’ recommendations for changing services from direct to general supervision at next month’s meeting.

Boyles and other small rural hospital administrators want the agency to roll back looming direct supervision requirements for their outpatient therapeutic services – now on hold through 2013 – and view the August meeting as an opportunity to inject what they say is common sense into the outpatient prospective payment system (PPS) regulation.

“I hope the point can be made that the patients are the ones that suffer most in this rule,” says Boyles, who believes the policy will decrease rural residents’ access to outpatient care.

The AHA encourages rural hospital representatives to testify before the HOP panel when it meets in August for the second and final time this year. “The number and variety of services that the HOP panel considers will directly depend on how many hospitals request to testify before the panel and the services they present for evaluation,” the AHA said in a June 27Regulatory Action Alert to members.

Outpatient therapeutic services include services like observation, drug infusions and injections, blood transfusions, wound debridement and chemotherapy.

General supervision would allow the service to be performed under the overall direction and control of a physician or nonphysician practitioner (NPP), without requiring their presence.

Direct supervision requires a physician or NPP to be “immediately available” the entire time the service is provided to the patient.

In an effort to temper rural hospitals’ concerns about its direct supervision policy, CMS last year revised the scope of the HOP panel to include making recommendations to the agency about the appropriate level of supervision required for specific services. Based on recommendations from the panel’s February meeting, CMS reduced the level of supervision for 27 outpatient services from direct to general.

The 19-member panel is made up of health care provider representatives and includes critical access hospital (CAH) representatives like Gale Walker, president and CEO of 25-bed Avera St. Benedict Health Center in Parkston, SD. “The 27 services are a start,” Walker says. He urges small rural hospital administrators, physicians, chief medical officers and chief nursing officers to testify before the panel and raise their concerns about direct supervision.

The August meeting “is the time to express our concerns,” agrees Dan Kelly, CEO of 24-bed McKenzie County Health Care Systems in Watford City, ND.

“Given the hospital testimony that the HOP panel will hear, I am optimistic that common sense will prevail.”

CMS first proposed in 2009 its direct supervision policy for hospital outpatient services provided in the hospital or on its main campus. The agency subsequently decided not to enforce the rules for CAHs (since 2009) and for other rural hospitals withfewer than 100 beds (since 2011).

As part of its calendar year 2013 proposed outpatient PPS rules, CMS earlier this month said it would extend the delay in enforcement for CAHs and other small rural hospitals until 2014 (see story on this page) – a move welcomed by small rural hospitals. Oakes Community Hospital’s Boyles says the delay “is an opportunity for us to make our case” for more general supervision.

The critical access program was created by Congress in 1997, after a wave of rural hospital closures, to make sure Americans in isolated areas would still have access to health care. Hospitals with 25 or fewer beds that are at least 35 miles away from another facility, or 15 miles across secondary roads to account for difficult terrain such as mountains, rivers or snow, can qualify.

CAH administrators say a direct supervision policy would require their hospitals to maintain a physician or NPP on site 24 hours a day, seven days a week. And they take issue with the agency’s claim – first stated in the 2009 outpatient PPS rule – that it is “clarifying” a longstanding outpatient payment policy. They say the “clarification” would impose burdensome levels of supervision never previously required.

“We simply could not comply with this standard,” says Keith Heuser, CEO of 25-bed Mercy Hospital in Valley City, ND.

“There simply are not enough physicians in the country to staff every hospital at the level required.” Besides, he points out that rural doctors want to provide direct patient care and help create healthy communities, rather than supervise a nursing staff to “do something that they are doing now very well every day.”

McKenzie County Health Care Systems’ Kelly believes direct supervision “flat out will cause the elimination of greatly needed outpatient services in our rural hospitals and may lead to those hospitals losing their ability to serve Medicare patients.” He fears more rural hospitals will close.

While CMS’ move to delay direct supervision gives rural hospitals more time to convince the agency that the policy is “too onerous,” Mercy Hospital’s Heuser believes “legislation, in the end, will be our only meaningful recourse.”

The AHA and rural hospital leaders support the “Protecting Access to Rural Therapy Services Act,” S. 778, which was introduced last year by Sen. Jerry Moran, R-KS.

Among other things, the bill would require CMS to allow a default setting of general supervision, rather than direct supervision, for outpatient therapeutic services; create an advisory panel to establish an exemption process for certain outpatient services that require direct supervision; recognize CAHs’ unique size and Medicare conditions of participation; and prevent CMS from enforcing retroactively its interpretation that the direct supervision requirements go back to 2001.