SEC. 2. REQUIREMENTS FOR PHYSICIAN SUPERVISION OF 
THERAPEUTIC HOSPITAL OUTPATIENT SERV-
ICES. 
(a) THERAPEUTIC HOSPITAL OUTPATIENT SERV-
ICES.— 
(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 para-
graph (2), insofar as the Secretary requires the su-
pervision by a physician or a non-physician practi-
tioner for payment for therapeutic hospital out-
patient 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 A DIRECT 
LEVEL OF SUPERVISION.— 
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‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this paragraph, the Sec-
retary shall establish a process for the designa-
tion of therapeutic hospital outpatient services 
furnished under this part that, by reason of 
complexity or high risk, require— 
‘‘(i) direct supervision (as defined in 
paragraph (5)(C)) for the entire service; or 
‘‘(ii) direct supervision during the ini-
tiation of the service followed by general 
supervision for the remainder of the serv-
ice. 
‘‘(B) CONSULTATION WITH CLINICAL EX-
PERTS.— 
‘‘(i) IN GENERAL.—Under the process 
established under subparagraph (A), before 
the designation of any therapeutic hospital 
outpatient service for which direct super-
vision may be required under this part, the 
Secretary shall consult with a panel of out-
side experts described in clause (ii) to ad-
vise the Secretary with respect to each 
such designation. 
‘‘(ii) ADVISORY
PANEL
ON
SUPER-
VISION OF THERAPEUTIC HOSPITAL OUT-
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PATIENT
SERVICES.—For 
purposes 
of 
clause (i), a panel of outside experts de-
scribed in this clause is a panel appointed 
by the Secretary, based on nominations 
submitted by hospital, rural health, and 
medical organizations representing physi-
cians, non-physician practitioners, and hos-
pital administrators, as the case may be, 
that meets the following requirements: 
‘‘(I) COMPOSITION.—The panel 
shall be composed of at least 15 phy-
sicians 
and 
non-physician 
practi-
tioners who furnish therapeutic hos-
pital outpatient services for which 
payment is made under this part and 
who collectively represent the medical 
specialties that furnish such services, 
and of 4 hospital administrators of 
hospitals located in rural areas (as de-
fined in section 1886(d)(2)(D)) or 
critical access hospitals. 
‘‘(II) PRACTICAL
EXPERIENCE 
REQUIRED FOR PHYSICIANS AND NON- 
PHYSICIAN
PRACTITIONERS.—During 
the 12-month period preceding ap-
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pointment to the panel by the Sec-
retary, each physician or non-physi-
cian practitioner described in sub-
clause (I) shall have furnished thera-
peutic hospital outpatient services for 
which payment was made under this 
part. 
‘‘(III) MINIMUM
RURAL
REP-
RESENTATION
REQUIREMENT
FOR 
PHYSICIANS
AND
NON-PHYSICIAN 
PRACTITIONERS.—Not less than 50 
percent of the membership of the 
panel that is comprised of physicians 
and non-physician practitioners shall 
be physicians or non-physician practi-
tioners 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 hos-
pitals. 
‘‘(iii) APPLICATION
OF
FACA.—The 
Federal Advisory Committee Act (5 U.S.C. 
2 App.), other than section 14 of such Act, 
shall apply to the panel of outside experts 
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appointed by the Secretary under clause 
(ii). 
‘‘(C) SPECIAL
RULE
FOR
OUTPATIENT 
CRITICAL
ACCESS
HOSPITAL
SERVICES.—Inso-
far as a therapeutic outpatient hospital service 
that is an outpatient critical access hospital 
service is designated as requiring direct super-
vision under the process established under sub-
paragraph (A), the Secretary shall deem the 
critical access hospital furnishing that service 
as having met the requirement for direct super-
vision 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 ef-
fect on the date of the enactment of this sub-
section). 
‘‘(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 re-
quirements for direct supervision in the fur-
nishing of therapeutic hospital outpatient serv-
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ices, including hospital resources, availability of 
hospital-privileged physicians, specialty physi-
cians, and non-physician practitioners, and ad-
ministrative burdens. 
‘‘(E) REQUIREMENT
FOR
NOTICE
AND 
COMMENT
RULEMAKING.—Under the process 
established under subparagraph (A), the Sec-
retary 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. 
‘‘(F) RULE OF CONSTRUCTION.—Nothing 
in this subsection shall be construed as author-
izing the Secretary to apply or require any level 
of supervision other than general or direct su-
pervision with respect to the furnishing of 
therapeutic hospital outpatient services. 
‘‘(3) INITIAL LIST OF DESIGNATED SERVICES.— 
The Secretary shall include in the proposed and final 
regulation for payment for hospital outpatient serv-
ices for 2015 under this part a list of initial thera-
peutic hospital outpatient services, if any, designated 
under the process established under paragraph 
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in paragraphs (1) and (4), respectively, of sub-
section (eee) of such section); or 
(C) pulmonary rehabilitation services (as 
defined in subsection (fff)(1) of such section). 
Æ 
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