What Does “Direct Supervision” Mean in Non-Hospital Diagnostic Testing Facilities?

The Centers for Medicare and Medicaid Services, commonly known as CMS, requires physician supervision of certain services as a condition for reimbursement. The required supervision level depends on the type of service performed, the setting where the service is performed and the physical location of where the service is performed. Adhering to the proper protocol is critical, as services furnished without the required level of physician supervision are not reimbursable by Medicare and may potentially have even more significant consequences, including civil and criminal penalties.

Types of Physician Supervision

Generally, there are three levels of supervision for diagnostic testing in non-hospital facilities:

  • General supervision, which means the procedure is furnished under the supervising physician’s overall direction and control, but the physician’s physical presence is not required during the procedure’s performance.
  • Direct supervision, which means the supervising physician must be present and immediately available to furnish assistance and direction throughout the procedure’s performance. It does not mean the physician must be physically present in the room when the procedure is performed.
  • Personal supervision, which means the physician must be physically present in the room during the procedure’s performance.  

Direct Supervision in Hospital Settings v. Non-Hospital Settings

CMS regulations tell us that the required direct supervision for diagnostic tests performed directly or under arrangement with a hospital or in an on-campus or off-campus outpatient department of the hospital (i.e., hospital settings) differs from the required direct supervision for diagnostic tests performed in a free-standing facility, physician’s office or independent diagnostic testing facility (i.e., non-hospital settings).

For diagnostic tests performed in hospital settings, direct supervision does not require the supervising physician to be present within any physical boundary as long as he or she is immediately available.

In contrast, when services are provided in non-hospital settings or under arrangement with hospitals in non-hospital settings, direct supervision requires the supervising physician to remain present in the “office suite” where the service is being performed and be immediately available to give assistance and direction throughout the performance of the procedure.

What Does Office Suite Mean in Non-Hospital Settings?

While we know that supervising physicians are not physically bound in hospital settings and that they are physically bound in non-hospital settings, a question arises: what are the physical boundaries supervising physicians must comply with in non-hospital settings?

Does office suite mean one space, as identified in a lease, containing a collection of smaller offices or rooms? Does it allow for one primary office suite with sub-suites within? What if two separate office suites have a connecting door in between them?

No CMS regulation, Medicare Benefit Policy Manual provision or any other authority defines “office suite,” nor is there any directive case law or advisement interpreting the meaning of “office suite.” In addition, there is a lack of guidance regarding interest in enforcing the relevant CMS regulations and consequences for failing to comply with the relevant CMS regulations.

Consequences of Failing to Comply with the Required Physician Supervision Requirements

Nevertheless, knowing your options and risks are critical. Should CMS find physician supervision practices noncompliant with CMS regulations, billing entities and supervising physicians may be subject to claims’ denials, be required to reimburse CMS, be subject to whistleblower lawsuits and medical malpractice lawsuits, and potentially face civil and criminal penalties.

Billing for Associates Fraught with Risk

ACO-Payment-300x225You’ve hired a new doctor to join your practice, but it will take several months to get the new doctor on your insurance plans and to add him or her to your group practice.  What do you do?  Can you bill for the new doctor’s services under your own provider name or number?  Can you hold the billing and submit it at a later date?

Billing for the new doctor’s services under the name or provider number of a physician who did not actually perform the service is fraud.  It’s as simple as that.  And it’s a serious offense, punishable as a criminal offence, regardless of the payer involved.  In other words, it’s not true to say “Well, it’s ok to do with HMOs, but not Medicare.”  It’s fraud for every payer.  And, with federal payers, it’s a federal crime!  So what do you do?

Physicians are very limited with respect to Medicare and Medicaid patients.  The new doctor must be added to the practice’s provider number, especially if the practice provides “designated health services” such as PT, rehab, clinical lab and diagnostic imaging.  Most practices time the hiring of the new doctor with adding him or her to the provider number and also ensuring that the new doctor is contracted with various payers, all of which can take several months.

There may be a little more flexibility with respect to PPOs and HMOs, though this is tricky.  These payers are usually adamant about credentialing the new doctor and about having him or her sign a participating provider agreement before providing services to their insureds.  In some very limited circumstances, a payer may expedite the process and may even suggest a billing arrangement that would otherwise constitute insurance fraud, but physicians still need to be careful with these arrangement.  When a payer suggests such an arrangement, it is absolutely essential that the proposal and agreement be in writing and review to ensure regulatory compliance.  Otherwise, the practice and the doctors involved may be subject to fraud based claims—e.g. violations of the state insurance laws and even the federal False Claims Act.

 

Referrals Within Practices for Imaging Regulated

Though most of the conversations concerning healthcare reform focus on payment reform, there are a number of new provisions that affect medical practices in unexpected ways.  One of them is the provision that requires written notice to practice patients receiving CT, MR and PET services furnished by the practice.

Effective January 1, 2010, any medical practice that provides CT, MR or PET to its patients must provide written notice to such patients, in advance, that the patient may obtain the test from another supplier and must further provide the patient a list of suppliers offering the service located in the same area where the patient resides.  The Secretary of DHHS has the power to expand this requirement to other diagnostic imaging procedures provided by medical practices to their own patients.