(Medicare Benefit Policy Manual)

For services furnished in CY 2011 and following, a supervisory practitioner may furnish direct supervision from a physician office or other nonhospital space that is not officially part of the hospital or CAH campus where the services are being furnished a s long as he or she remains immediately available.  Similarly, as of CY 2011, an allowed practitioner can furnish direct supervision from any location in or near an off -campus hospital or CAH building that houses multiple hospital provider -based department s where the services are being furnished as long as the supervisory practitioner is immediately available.   The supervisory physician or nonphysician practitioner must have, within his or her State scope of practice and hospital -granted privileges, the knowledge, skills, ability, and privileges to perform the service or procedure.  Specially trained ancillary st aff and technicians are the primary operators of some specialized therapeutic equipment, and while in such cases CMS does not expect the supervisory physician or nonphysician practitioner to operate this equipment instead of technician, CMS does expect the  physician or nonphysician practitioner to be knowledgeable about the therapeutic service and clinically able to furnish the service.   The supervisory responsibility is more than the capacity to respond to an emergency, and includes the ability to take over performance of a procedure or provide additional orders.  CMS would not expect that the supervisory physician or nonphysician practitioner would make all decisions unilaterally without informing or consulting the patients treating physician or nonphysician practitioner.  In summary, the supervisory physician or nonphysician practitioner must be clinically able to supervise the service or procedure.  20.5.3 - Coverage of Outpatient Therapeutic Services Incident to a Physicians Service Furnished on or After January 1, 2020  Changes to Supervision Requirements  (Rev. 10541; Issued: 12-31- 20; Effective: 01 -01-21; Implementation: 01-04-21)  Starting January 1, 2020, CMS requires, as the minimum level of supervision, general supervision by an appropriate physician or non-physician practitioner in the provision of all therapeutic services to hospital outpatients, including CAH outpatients.  General supervision means the definition specified at 42 CFR 410.32(b)(3)(i), that is, the procedure or service is furnished under the physician's overall direction and control, but the physician's presence is not required during the performance of the procedure. CMS may assign certain hospital outpatient therapeutic services either direct supervision or personal supervision.  When such assignment is made, direct supervision means the definition specified at 42 CFR 410.32(b)(3)(ii), that is, the physician must be immediately available to furnish assistance and direction throughout the performance of the procedure. It does not mean that the physician or must be present in the room when the procedure is performed.  Personal supervision means the definition specified at 42 CFR 410.32(b)(3)(iii), that is, the physician must be in attendance in the room during the performance of the service or procedure.   The list of services starting January 1, 2020 and ending December 31, 2020 that are defined as non-surgical extended duration therapeutic services where the initiation of the service must be performed under direct supervision is available on the OPPS Websi te at http://www.cms.gov/Medicare/Medicare- Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. Starting January 1, 2021, the minimum level of supervision for non- surgical extended duration therapeutic services will be general supervision for the entire service including for the initiation of the service.  20.5.4 - Coverage of Outpatient Therapeutic Services Incident to a Physicians Service Furnished on or After January 1, 2024  Changes to Direct Supervision Requirements for Pulmonary, Cardiac and Intensive Cardiac Rehabilitation  (Rev. 12421; Issued: 12-21- 23; Effective: 01 -01-24: Implementation: 01-02-24)  Beginning January 1, 2024, the required direct supervision of pulmonary rehabilitation services, as specified at 42 CFR 410.47, and cardiac rehabilitation and intensive cardiac rehabilitation services, as specified at 42 CFR 410.49, may be furnished by a doctor of medicine, a doctor of osteopathy, a physician assistant, a nurse practitioner, or a clinical nurse specialist.  20.6 - Outpatient Observation Services  (Rev.  215, Issued, 12-18-15, Effective, 01-01-16, Implementation: 01 -04-16)   A.  Outpatient Observation Services Defined   Observation care is a well -defined set of specific, clinically appropriate services, which include ongoing short term treatment, assessment, and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital.  Observation services are commonly ordered for patients who present to the emergency department and who then require a significant period of treatment or monitoring in order to make a decision concerning their admission or discharge.  Observation services are covered only when provided by the order of a physician or another individual authorized by state licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient tests.  In the majority of cases, the decision whether to discharge a patient from the hospital following resolution of the reason for the observation care or to admit the patient as an inpatient can be made in less than 48 hours, usually in less than 24 hours.  In only rare and exceptional c ases do reasonable and necessary outpatient observation services span more than 48 hours.  Hospitals may bill for patients who are directly referred to the hospital for outpatient observation services.  A direct referral occurs when a physician in the community refers a patient to the hospital for outpatient observation, bypassing the clinic or emergency department (ED) visit.  Effective for services furnished on or after January 1, 2003, hospitals may bill for patients directly referred for observation services.  See, Pub. 100-04, Medicare Claims Processing Manual, chapter 4, section 290, at http://www.cms.hhs.gov/manuals/downloads/clm104c04.pdf for billing and payment instructions for outpatient observation services.  Future updates will be issued in a Recurring Update Notification.  B.  Coverage of Outpatient Observation Services   When a physician orders that a patient receive observation care, the patients status is that of an outpatient.  The purpose of observation is to determine the need for further treatment or for inpatient admission.  Thus, a patient receiving observation se rvices may improve and be released, or be admitted as an inpatient (see Pub. 100- 02, Medicare Benefit Policy Manual, Chapter 1, Section 10 Covered Inpatient Hospital Services Covered Under Part A at https://www.cms.gov/Regulations- and-Guidance/Guidance/Manuals/Downloads/bp102c01.pdf ).  For more information on correct reporting of observation services, see Pub. 100- 04, Medicare Claims Processing Manual, chapter 4, section 290.2.2.)   All hospital observation services, regardless of the duration of the observation care, that are medically reasonable and necessary are covered by Medicare.  Observation services are reported using HCPCS code G0378 (Hospital observation service, per hour).  As of January 1, 2008, HCPCS code G0378 for hourly observation services is assigned status indicator N, signifying that its payment is always packaged.  No separate payment is made for observation services reported with HCPCS code G0378.  In most circumst ances, observation services are supportive and ancillary to the other separately payable services provided to a patient.  Beginning January 1, 2016, in certain circumstances when observation care is billed in conjunction with a clinic visit, Type A emergen cy department visit (Level 1 through 5), Type B emergency department visit (Level 1 through 5), critical care services, or direct referral for observation services as an integral part of a patients extended encounter of care, comprehensive payment may be made for all services on the claim including, the entire extended care encounter when certain criteria are met.  For information about billing and payment methodology for observation services in years prior to CY 2008, see Pub. 100- 04, Medicare Claims Processing Manual, Chapter 4, 290.3- 290.4.  For information about payment for extended assessment and management under composite APCs and comprehensive APCs, see 290.5.   Payment for all reasonable and necessary observation services is packaged into the payments for other separately payable services provided to the patient in the same encounter.  Observation services packaged through assignment of status indicator N are covered OPPS services.  Since the payment for these services is included in the AP C payment for other separately payable services on the claim, hospitals must not bill Medicare beneficiaries directly for the packaged services.   C.  Services Not Covered by Medicare and Notification to the Beneficiary   In making the determination whether an ABN can be used to shift liability to a beneficiary for the cost of non- covered items or services related to an encounter that includes observation care, the provider should follow a two step process.  First, the provider must decide whether the item or service meets either the definition of observation care or would be otherwise covered.  If the item or service does not meet the definitional requirements of any Medicare -covered benefit under Part B, then the item or service is not covered by Medicare and an ABN is not required to shift the liability to the beneficiary.  However, the provider may choose to provide voluntary notification for these items or services.   Second, if the item or service meets the definition of observation services or would be otherwise covered, then the provider must decide whether the item or service is reasonable and necessary for the beneficiary on the occasion in question, or if the it em or service exceeds any frequency limitation for the particular benefit or falls outside of a timeframe for receipt of a particular benefit. In these cases, the ABN would be used to shift the liability to the beneficiary (see Pub. 100- 04, Medicare Claims Processing Manual; Chapter 30, Financial Liability Protections, Section 20, at https://www.cms.gov/Regulations- and-Guidance/Guidance/Manuals/Downloads/clm104c30.pdf  for information regarding Limitation On Liability (LOL) Under 1879 Where Medicare Claims Are Disallowed).   If an ABN is not issued to the beneficiary, the provider may be held liable for the cost of the item or service unless the provider/supplier is able to demonstrate that they did not know and could not have reasonably been expected to know that Medicare would not pay for the item or service.      30 - Drugs and Biologicals  (Rev. 1, 10-01-03) A3-3112.4.B, HO-230.4.B  See the Medicare Benefit Policy Manual, Chapter 15,Covered  Medical and Other Health Services, 50 for a description of conditions for coverage for drugs and biologicals.  Notwithstanding the instructions in the Medicare Benefit Policy Manual, Chapter 15, Covered Medical and Other Health Services, drugs and biologicals furnished to hospital or SNF inpatients who have exhausted Part A benefits, or who are not eligible under Part A, are not covered under Part B except the following:   Hemophilia clotting factors (The limitation contained in 42 CFR 410.10(q) states that this applies to hemophilia patients competent to use these factors without supervision);   Immunosuppressive drugs;   Oral anti -cancer drugs;   Oral drug prescribed for use as an acute anti -emetic used as part of an anti -cancer chemotherapeutic regimen; or    Epoetin Alfa (EPO).   Specific coverage for each of the above drugs is found in Medicare Benefit Policy Manual, Chapter 15, Covered Medical and Other Health Services, 50.  In addition pneumococcal pneumonia, influenza virus, and hepatitis B vaccines are covered under Part B.  See the Medicare Claims Processing Manual, Chapter 18, Preventive and Screening Services, and the Medicare Benefit Policy Manual, Chapter 15, for additional information concerning these vaccines.   40 - Other Covered Services and Items  (Rev. 1, 10- 01-03) A3-3112.4.C, HO -230.4.D   Covered services and items provided by the hospital in connection with a clinic visit or a physicians treatment of outpatients include the use of the following:    Hospital facilities, including the use of the emergency room;    Services of nurses, nonphysician anesthetists, psychologists, technicians, therapists, and other aides; and   Medical supplies such as gauze, oxygen, ointments, and other supplies used by physicians or hospital personnel in the treatment of outpatients.  Additional examples of covered items are surgical dressings; splints, casts, and other devices used for reduction of fractures and dislocations; prosthetic devices; leg, arm, back, and neck braces, trusses, and artificial legs, arms, and eyes.   50 - Sleep Disorder Clinics  (Rev. 1, 10- 01-03) A3-3112.5