To amend title XVIII of the Social Security Act with respect to physician supervision of therapeutic hospital outpatient services.

SECTION 1. REQUIREMENTS FOR PHYSICIAN SUPERVISION OF THERAPEUTIC 
              HOSPITAL OUTPATIENT SERVICES.

    (a) Therapeutic Hospital Outpatient Services.--
            (1) Supervision requirements.--Section 1833 of the Social 
        Security Act (42 U.S.C. 1395l) is amended by adding at the end 
        the following new subsection:
    ``(z) Physician Supervision Requirements for Therapeutic Hospital 
Outpatient Services.--
            ``(1) General supervision for therapeutic services.--Except 
        as may be provided under paragraph (2), insofar as the 
        Secretary requires the supervision by a physician or a non-
        physician practitioner for payment for therapeutic hospital 
        outpatient services (as defined in paragraph (5)(A)) furnished 
        under this part, such requirement shall be met if such services 
        are furnished under the general supervision (as defined in 
        paragraph (5)(B)) of the physician or non-physician 
        practitioner, as the case may be.
            ``(2) Exceptions process for high-risk or complex medical 
        services requiring higher levels of supervision.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this paragraph, the Secretary shall 
                establish a process for the designation of therapeutic 
                hospital outpatient services furnished under this part 
                that, by reason of complexity or high risk, require 
                direct supervision (as defined in paragraph (5)(A)).
                    ``(B) Consultation with clinical experts.--
                            ``(i) In general.--Under the process 
                        established under subparagraph (A), before the 
                        designation of any therapeutic hospital 
                        outpatient service for which direct supervision 
                        may be required under this part, the Secretary 
                        shall consult with a panel of outside experts 
                        described in clause (ii) to advise the 
                        Secretary with respect to each such 
                        designation.
                            ``(ii) Advisory panel on supervision of 
                        therapeutic hospital outpatient services 
                        comprised of physicians and non-physician 
                        practitioners serving rural and other areas.--
                        For purposes of clause (i), a panel of outside 
                        experts described in this clause is a panel 
                        appointed by the Secretary, based on 
                        nominations submitted by hospital, rural 
                        health, and medical organizations representing 
                        physicians or non-physician practitioners, as 
                        the case may be, that meets the following 
                        requirements:
                                    ``(I) Composition.--The panel shall 
                                be composed of at least 15 physicians 
                                and non-physician practitioners who 
                                furnish therapeutic hospital outpatient 
                                services for which payment is made 
                                under this part and who collectively 
                                represent the medical specialties that 
                                furnish such services.
                                    ``(II) Practical experience.--
                                During the 12-month period preceding 
                                appointment to the panel by the 
                                Secretary, each physician or non-
                                physician practitioner described in 
                                subclause (I) shall have furnished 
                                therapeutic hospital outpatient 
                                services for which payment was made 
                                under this part.
                                    ``(III) Minimum rural 
                                representation requirement.--Not less 
                                than 50 percent of the membership of 
                                the panel shall be physicians or non-
                                physician practitioners described in 
                                subclause (I) who practice in rural 
                                areas (as defined in section 
                                1886(d)(2)(D)) or who furnish such 
                                services in critical access hospitals.
                    ``(C) Special rule for outpatient critical access 
                hospital services.--Insofar as a therapeutic outpatient 
                hospital service that is an outpatient critical access 
                hospital service is designated as requiring direct 
                supervision under the process established under 
                subparagraph (A), the Secretary shall deem the critical 
                access hospital furnishing that service as having met 
                the requirement for direct supervision for that service 
                if, when furnishing such service, the critical access 
                hospital meets the standard for personnel required as a 
                condition of participation under section 485.618(d) of 
                title 42, Code of Federal Regulations (as in effect on 
                January 1, 2010).
                    ``(D) Consideration of compliance burdens.--Under 
                the process established under subparagraph (A), the 
                Secretary shall take into account the impact on 
                hospitals and critical access hospitals in complying 
                with requirements for direct supervision in the 
                furnishing of therapeutic hospital outpatient services, 
                including hospital resources, availability of hospital-
                privileged physicians, specialty physicians, and non-
                physician practitioners, and administrative burdens.
                    ``(E) Requirement for notice and comment 
                rulemaking.--Under the process established under 
                subparagraph (A), the Secretary shall only designate 
                therapeutic hospital outpatient services requiring 
                direct supervision under this part through proposed and 
                final rulemaking that provides for public notice and 
                opportunity for comment.
            ``(3) Initial list of designated services.--The Secretary 
        shall include in the proposed and final regulation for payment 
        for hospital outpatient services for 2012 under this part a 
        list of initial therapeutic hospital outpatient services, if 
        any, designated under the process established under paragraph 
        (2)(A) as requiring direct supervision under such part.
            ``(4) Direct supervision by non-physician practitioners for 
        certain hospital outpatient services permitted.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this subsection, a non-physician 
                practitioner may directly supervise the furnishing of--
                            ``(i) therapeutic hospital outpatient 
                        services under this part, including cardiac 
                        rehabilitation services (under section 
                        1861(eee)(1)), intensive cardiac rehabilitation 
                        services (under section 1861(eee)(4)), and 
                        pulmonary rehabilitation services (under 
                        section 1861(fff)(1)); and
                            ``(ii) those hospital outpatient diagnostic 
                        services (described in section 1861(s)(2)(C)) 
                        that require direct supervision under the fee 
                        schedule established under section 1848.
                    ``(B) Requirements.--Subparagraph (A) shall apply 
                insofar as the non-physician practitioner involved 
                meets the following requirements:
                            ``(i) Scope of practice.--The non-physician 
                        practitioner is acting within the scope of 
                        practice under State law applicable to the 
                        practitioner.
                            ``(ii) Additional requirements.--The non-
                        physician practitioner meets such requirements 
                        as the Secretary may specify.
            ``(5) Definitions.--In this subsection:
                    ``(A) Therapeutic hospital outpatient services.--
                The term `therapeutic hospital outpatient services' 
                means hospital services described in section 
                1861(s)(2)(B) furnished by a hospital or critical 
                access hospital and includes--
                            ``(i) cardiac rehabilitation services and 
                        intensive cardiac rehabilitation services (as 
                        defined in paragraphs (1) and (4), 
                        respectively, of section 1861(eee)); and
                            ``(ii) pulmonary rehabilitation services 
                        (as defined in section 1861(fff)(1)).
                    ``(B) General supervision.--
                            ``(i) Overall direction and control of 
                        physician.--Subject to clause (ii), with 
                        respect to the furnishing of therapeutic 
                        hospital outpatient services for which payment 
                        may be made under this part, the term `general 
                        supervision' means such services are furnished 
                        under the overall direction and control of a 
                        physician or non-physician practitioner, as the 
                        case may be.
                            ``(ii) Presence not required.--For purposes 
                        of clause (i), the presence of a physician or 
                        non-physician practitioner is not required 
                        during the performance of the procedure 
                        involved.
                    ``(C) Direct supervision.--
                            ``(i) Provision of assistance and 
                        direction.--Subject to clause (ii), with 
                        respect to the furnishing of therapeutic 
                        hospital outpatient services for which payment 
                        may be made under this part, the term `direct 
                        supervision' means that a physician or non-
                        physician practitioner, as the case may be, is 
                        able to furnish assistance and direction 
                        throughout the furnishing of such services and, 
                        in accordance with the policies, procedures, 
                        guidelines or bylaws of the hospital--
                                    ``(I) with respect to such services 
                                furnished in the hospital, or in an on-
                                campus department of such hospital, is 
                                present and on the same campus and 
                                immediately available (including by 
                                telephone or other means) to furnish 
                                such assistance and direction; or
                                    ``(II) with respect to such 
                                services furnished in an off-campus 
                                provider-based department of such 
                                hospital, is present in or in close 
                                proximity to such department and is 
                                immediately available (including by 
                                telephone or other means) to furnish 
                                such assistance and direction.
                            ``(ii) Presence in room not required.--For 
                        purposes of clause (i), a physician or non-
                        physician practitioner, as the case may be, is 
                        not required to be present in the room during 
                        the performance of the procedure involved.
                    ``(D) Non-physician practitioner defined.--The term 
                `non-physician practitioner' means an individual who--
                            ``(i) is a physician assistant, a nurse 
                        practitioner, a clinical nurse specialist, a 
                        clinical social worker, a clinical 
                        psychologist, a certified nurse midwife, or a 
                        certified registered nurse anesthetist, and 
                        includes such other practitioners as the 
                        Secretary may specify; and
                            ``(ii) with respect to the furnishing of 
                        therapeutic outpatient hospital services, meets 
                        the requirements of paragraph (4)(B).''.
            (2) Conforming amendment.--Section 1861(eee)(2)(B) of the 
        Social Security Act (42 U.S.C. 1395x(eee)(2)(B)) is amended by 
        inserting ``, and a non-physician practitioner (as defined in 
        section 1833(z)(5)(D)) may supervise the furnishing of such 
        items and services in the hospital'' after ``in the case of 
        items and services furnished under such a program in a 
        hospital, such availability shall be presumed''.
    (b) Prohibition on Retroactive Enforcement of Revised 
Interpretation.--
            (1) Repeal of regulatory clarification.--The restatement 
        and clarification under the final rule making changes to the 
        Medicare hospital outpatient prospective payment system and 
        calendar year 2009 payment rates (published in the Federal 
        Register on November 18, 2008, 73 Fed. Reg. 68702 through 
        68704) with respect to requirements for direct supervision by 
        physicians for therapeutic hospital outpatient services (as 
        defined in paragraph (3)) for purposes of payment for such 
        services under the Medicare program shall have no force or 
        effect in law.
            (2) Hold harmless.--A hospital or critical access hospital 
        that furnishes therapeutic hospital outpatient services during 
        the period beginning on January 1, 2001, and ending on December 
        31, 2011, for which a claim for payment is made under part B of 
        title XVIII of the Social Security Act shall not be subject to 
        any civil or criminal action or penalty under Federal law for 
        failure to meet supervision requirements under the regulation 
        described in paragraph (1), under program manuals, or 
        otherwise.
            (3) Therapeutic hospital outpatient services defined.--In 
        this subsection, the term ``therapeutic hospital outpatient 
        services'' means medical and other health services furnished by 
        a hospital or critical access hospital that are--
                    (A) hospital services described in subsection 
                (s)(2)(B) of section 1861 of the Social Security Act 
                (42 U.S.C. 1395x);
                    (B) cardiac rehabilitation services or intensive 
                cardiac rehabilitation services (as defined in 
                paragraphs (1) and (4), respectively, of subsection 
                (eee) of such section); or
                    (C) pulmonary rehabilitation services (as defined 
                in subsection (fff)(1) of such section).

Summary: Amends title XVIII (Medicare) of the Social Security Act to state that, except with respect to high-risk or complex medical services requiring direct levels of supervision, if the Secretary of Health and Human Services (HHS) requires supervision by a physician or non-physician practitioner for Medicare payment for therapeutic hospital outpatient services, that requirement is met if such services are furnished under the physician's or non-physician practitioner's general supervision. Directs the Secretary of HHS to establish a process for designating therapeutic hospital outpatient services for which direct supervision may be required. Declares without force or effect in law regarding Medicare requirements for direct supervision by physicians for therapeutic hospital outpatient services a specified restatement and clarification under the final rule making changes to the Medicare hospital outpatient prospective payment system and calendar year 2009 payment rates, which was published in the Federal Register on November 18, 2008.