49–010 

Calendar No. 188 

114TH CONGRESS REPORT " ! SENATE 1st Session 114–109 

A BILL TO PROVIDE FOR THE EXTENSION OF THE ENFORCEMENT INSTRUCTION ON SUPERVISION REQUIREMENTS FOR OUTPATIENT 

THERAPEUTIC SERVICES IN CRITICAL ACCESS AND SMALL RURAL HOSPITALS THROUGH 2015 

JULY 30, 2015.—Ordered to be printed 

Mr. HATCH, from the Committee on Finance, 

submitted the following 

R E P O R T 

[To accompany S. 1461] 

The Committee on Finance, to which was referred the bill (S. 

1461) to provide for the extension of the enforcement instruction on 

supervision requirements for outpatient therapeutic services in 

critical access and small rural hospitals through 2015, having considered the same, reports favorably thereon with an amendment 

and recommends that the bill, as amended, do pass. 

I. LEGISLATIVE BACKGROUND 

The Committee on Finance, to which was referred (S. 1461), to 

provide for the extension of the enforcement instruction on supervision requirements for outpatient therapeutic services in critical 

access and small rural hospitals through 2015, reports favorably 

thereon with an amendment and recommends the bill, as amended, 

do pass. 

Background and need for legislative action 

In the calendar year (CY) 2009 Medicare hospital outpatient prospective payment system (OPPS) final rule, the Centers for Medicare and Medicaid Services (CMS) restated and clarified a 2001 

policy that required direct physician supervision for outpatient 

therapeutic services furnished in a hospital outpatient department 

unless another supervision level is specified for the service. The 

final rule discussed that direct supervision means a physician or a 

non-physician practitioner must be immediately available to furnish assistance and direction throughout a procedure in the hospital outpatient department. CAHs and small rural hospitals raised 

concerns that the policy increased confusion about the types of 


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therapeutic services that would fall under the supervision requirements. While CMS currently does not enforce federal requirements 

related to direct supervision for certain outpatient therapeutic services in CAHs and small rural hospitals, providers advocate that lingering confusion could lead to health care access issues for Medicare patients. 

II. EXPLANATION OF THE BILL 

A. Extension of Medicare enforcement instruction on supervision 

requirements for outpatient therapeutic services in CAHs and 

small rural hospitals through 2015. 

PRESENT LAW

In the calendar year (CY) 2009 Medicare hospital outpatient prospective payment system (OPPS) final rule, the Centers for Medicare and Medicaid Services (CMS) restated and clarified a 2001 

policy that required direct physician supervision for outpatient 

therapeutic services furnished in a hospital outpatient department 

unless another supervision level is specified for the service. The 

final rule discussed that direct supervision means a physician or a 

non-physician practitioner must be immediately available to furnish assistance and direction throughout a procedure in the hospital outpatient department. Critical access hospitals (CAHs) and 

small rural hospitals raised concerns that the policy increased confusion about the types of therapeutic services that would fall under 

the supervision requirements. 

In 2010, CMS instructed its Medicare contractors not to evaluate 

or enforce the supervision requirements for therapeutic services 

furnished to individuals in CAHs for all of CY 2010. As CMS continued to refine its direct supervision policy, the agency extended 

its non-enforcement instruction through CY 2011 and expanded it 

to include both CAHs and small rural hospitals (defined as having 

100 or fewer beds, being geographically located in a rural area, or 

are paid under the hospital outpatient PPS using a rural wage 

index). 

Meanwhile, in 2012, CMS established an independent review 

process that allows the Advisory Panel on Hospital Outpatient Payment (HOP Panel) to advise CMS regarding stakeholder requests 

for changes in the required supervision level for a specific hospital 

outpatient therapeutic service. As the HOP Panel conducted its review, in CY 2012 CMS again delayed enforcement of the direct supervision policy for CAHs and small rural hospitals through CY 

2013. CMS noted, however, that CY 2013 would be the final year 

the agency would extend the non-enforcement instruction. In December 2014, Congress passed, and the President signed, P.L. 113– 

198 which required CMS to continue through CY 2014 the instruction to not enforce Medicare’s direct supervision requirement for 

outpatient therapeutic services furnished at critical access hospitals and small rural hospitals. 

EXPLANATION OF PROVISION

S. 1461, as modified, would extend, through December 31, 2015, 

the instruction to not enforce Medicare’s direct supervision requireVerDate Sep 11 2014 04:38 Jul 31, 2015 Jkt 049010 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\SR109.XXX SR109

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ments for outpatient therapeutic services furnished at critical access hospitals and small rural hospitals. 

EFFECTIVE DATE

The provision applies to months beginning after December 31, 

2014 and expires after December 31, 2015. 

III. BUDGET EFFECTS OF THE BILL 

A. COMMITTEE ESTIMATES

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

B. BUDGET AUTHORITY

In compliance with section 308(a)(1) of the Congressional Budget 

and Impoundment Control Act of 1974 (P.L. 93–344), the Committee states that no provisions of the bill as reported involve new 

or increased budget authority. 

C. CONSULTATION WITH CONGRESSIONAL BUDGET OFFICE

In accordance with section 403 of the Congressional Budget and 

Impoundment Control Act of 1974 (P.L. 93–344), the Committee 

advises that the Congressional Budget Office has submitted a 

statement on the bill. The following is the cost estimate provided 

by the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974. 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, July 9, 2015. 

Hon. ORRIN G. HATCH, 

Chairman, Committee on Finance, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1461, a bill to provide for 

the extension of the enforcement instruction on supervision requirements for outpatient therapeutic services in critical access and 

small rural hospitals through 2015. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Lori Housman, who can 

be reached at 226–9010. 

Sincerely, 

KEITH HALL. 

Enclosure. 

S. 1461—A bill to provide for the extension of the enforcement instruction on supervision requirements for outpatient therapeutic 

services in critical access and small rural hospitals through 

2015 

S. 1461 would require the Secretary of Health and Human Services to continue to apply, through calendar year 2015, an exception 

to requirements that certain outpatient therapeutic services furVerDate Sep 11 2014 04:38 Jul 31, 2015 Jkt 049010 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\SR109.XXX SR109

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nished in critical access and small rural hospitals need to be provided under the direct supervision of physicians in the hospital. 

The Centers for Medicare and Medicaid Services (CMS) currently 

do not enforce federal requirements related to direct supervision for 

those services, and CBO anticipates that CMS would not initiate 

enforcement of such requirements in the near future under current 

law. (Those services are subject to supervision requirements established under state laws.) 

Because CBO expects that S. 1461 would not change how CMS 

enforces the direct supervision requirement, we estimate that enacting the bill would have no significant effect on the federal budget. Enacting S. 1461 would not affect direct spending or revenues; 

therefore, pay-as-you-go procedures do not apply. 

The bill would not impose intergovernmental or private-sector 

mandates as defined in the Unfunded Mandates Reform Act and 

would impose no costs on state, local, or tribal governments. 

The CBO staff contact for this estimate is Lori Housman. The estimate was approved by Holly Harvey, Deputy Assistant Director 

for Budget Analysis. 

IV. VOTES OF THE COMMITTEE 

In compliance with paragraph 7(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee states that, with a majority 

present, the one year extension of the enforcement instructions on 

supervision requirements of outpatient therapeutic services in Critical Access Hospitals (CAHs) and small rural hospitals, as modified, was ordered favorably reported by voice vote on June 24, 

2015. 

V. REGULATORY IMPACT AND OTHER MATTERS 

A. REGULATORY IMPACT

Pursuant to paragraph 11(b) of rule XXVI of the Standing Rules 

of the Senate, the Committee makes the following statement concerning the regulatory impact that might be incurred in carrying 

out the provisions of the bill. 

Impact on individuals and businesses, personal privacy and paperwork 

In carrying out the provisions of the bill, there is no expected imposition of additional administrative requirements or regulatory 

burdens on individuals or businesses. The provisions of the bill do 

not impact personal privacy. 

B. UNFUNDED MANDATES STATEMENT

The Committee adopts as its own the estimate of federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act of 

1995 (P.L. 104–4). The Congressional Budget Office estimates the 

bill would not impose intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 


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VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS 

REPORTED 

In the opinion of the Committee, it is necessary in order to expedite the business of the Senate, to dispense with the requirements 

of paragraph 12 of Rule XXVI of the Standing Rules of the Senate 

(relating to the showing of changes in existing law made by the bill 

as reported by the Committee). 

Æ 


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