For the third time in the past three years, the Centers for Medicare & Medicaid Services (CMS) has decided to tinker with the physician supervision requirements for hospital outpatient therapeutic services. In the 2011 Hospital Outpatient Prospective Payment System Payment Rates final rule (2011 OPPS Final Rule), to be published in the November 24, 2010, Federal Register, CMS has provided some relief to providers by relaxing its stringent interpretation of "direct supervision" for hospital outpatient therapeutic services.

In the 2011 OPPS Final Rule, CMS modified the definition of "immediately available" for all hospital outpatient services so that it does not reference boundaries of a physical location. This is a significant change from the position CMS "clarified" in the 2009 OPPS Final Rule and upheld in a 2010 transmittal. Previously, for physicians to be immediately available in off-campus provider-based sites, CMS required that the physicians be physically located in the department. CMS interpreted the rule to preclude physician supervision from adjacent nonhospital space, such as physician offices. Under the new definition, for services furnished in a hospital or outpatient department, including both on- and off-campus sites, direct supervision will simply require immediate availability, meaning physically present, interruptible and able to furnish assistance and direction throughout the performance of the procedure but without reference to any particular physical boundary. The modified definition reads:

"For services furnished in the hospital or CAH or in an outpatient department of the hospital or CAH, both on- and off-campus . . . 'direct supervision' means that the physician or nonphysician practitioner must be immediately available to furnish assistance and direction throughout the performance of the procedure. It does not mean that the physician or nonphysician practitioner must be present in the room when the procedure is performed."

2011 OPPS Final Rule, to be codified at 42 C.F.R. § 410.27(a)(1)(iv).

The 2011 OPPS Final Rule also delayed enforcement of the direct supervision requirement for critical access hospitals (CAHs) and small rural hospitals.