On November 1, 2011, the Centers for Medicare and Medicaid Services (“CMS”) released the 2012 Hospital Outpatient Prospective Payment System Final Rule with comment period (“Final Rule”).  The Final Rule, effective January 1, 2012, addresses the 2012 hospital outpatient prospective payment system including payment policies, the process for physician-owned hospitals seeking an exemption on the prohibition on expansion, and changes to patient notification requirements. 

The Final Rule establishes two new processes.  First, the Final Rules establishes an independent technical review process for assignment of supervision levels to hospital outpatient therapeutic services.  The independent technical review process will be spearheaded by the existing ambulatory payment classification groups (APC Panel), which has been expanded to include critical access and small rural hospitals.  It will be designed to assign supervision levels other than direct supervision to hospital outpatient therapeutic services.   Second, the Final Rule establishes the process for physician owned hospitals seeking an exemption to the prohibition on expansion, which was created through the Affordable Care Act.  The final exemption process establishes that eligibility for an exemption will be based on the most recent year of data available, as well as the applicant’s satisfaction of additional requirements including, for example inpatient admissions and bed capacity.

Finally, the Final Rule modifies the notification requirements that are currently required if a doctor of medicine or osteopathy is not on site 24 hours a day/7 days a week, by reducing the categories of outpatients who must receive this notification to outpatients receiving observation services, surgery, or services involving anesthesia.  Likewise, hospitals must conspicuously post the patient notice if they have dedicated emergency departments at which a doctor of medicine or osteopathy is not present 24 hours a day/7 days a week.

Read the entire final rule here