Rural Hospital Regulatory Policy

Regulatory Policy Priorities

Direct supervision. For the past four years, CMS has modified its policies related to the "direct supervision" of outpatient therapeutic services, threatening to magnify physician shortage problems. For 2013, at the AHA's urging, CMS adopted several positive changes to the regulations. Specifically, the agency:

• Allowed non-physician practitioners authorized to furnish direct supervision to also provide general or personal supervision for certain services;
• Modified the definition of direct supervision to remove all references to the physical boundaries within which the supervising practitioner must be located as long as he or she is "immediately available to furnish assistance and direction throughout the performance of the procedure;"
• Established a process for independent review of alternate supervision levels using the Advisory Panel on Hospital Outpatient Payments; and
• Delayed enforcement of the direct supervision policy through calendar year (CY) 2013 for CAHs and small and rural hospitals with fewer than 100 beds.
  

While we are pleased with this increased flexibility, the AHA remains concerned that hospitals and CAHs will have difficulty implementing these requirements. We continue to disagree with CMS's repeated assertion that it has required direct supervision of outpatient therapeutic services since 2001. The AHA continues to work with CMS and Congress to make additional fundamental changes to the supervision policy. Specifically, we urge the agency to adopt a default standard of "general supervision" for outpatient therapeutic services, indicating that these procedures should be performed under the physician's overall direction and control, but the physician's presence should not be required during the performance of the procedure. In addition, we urge CMS to develop a reasonable exceptions process with provider input to identify those specific procedures that require direct supervision levels.

Conditions of Participation (CoP). In May of 2012, CMS updated a number of CoPs for hospitals and CAHs. AHA welcomed many of the changes, which will allow for more streamlined management and efficiency in the delivery of care. For example, under the revised CoPs, multi-hospital systems may operate with a single governing board. In addition, CAHs may provide certain services, such as diagnostic, therapeutic, laboratory, radiology and emergency services under service arrangements. However, AHA and other stakeholders objected to a provision in the final rule that would have required hospitals to include a member of the medical staff on their governing boards, since it would be difficult for some hospitals and systems (such as those with elected or appointed boards) to comply. As a result, CMS says it will not survey hospitals on that provision at this time. Additionally, AHA will continue to work with CMS on other issues of concern, such as ensuring that hospitals have flexibility in how medical staffs may be structured. Further changes to the CoPs are expected to be proposed this spring.

Electronic Health Records (EHRs) and Meaningful Use. CMS has established confusing meaningful use rules complicated by voluminous additional guidance, as well as a challenging operational structure. In addition, the final Stage 2 rules raise the bar even higher. For PPS hospitals, CMS will assess penalties beginning in FY 2015 based on whether a hospital met meaningful use in an earlier time period. For CAHs, the penalties will be based on same-year performance. The AHA continues to work with CMS to clarify requirements and reduce the burden of registering and attesting to meaningful use. We are especially pleased that CMS has announced a reversal of its policy and will now allow CAHs to include capital leases as allowable costs in determining their meaningful use incentive payment. CMS also will allow providers additional time in 2014 to upgrade their EHRs and transition to Stage 2. However, we continue to be concerned about the impact of the program on small and rural providers, and believe that the EHR incentives program should close, not widen, the existing digital divide. Only a small share of hospitals have met the meaningful use requirements for Stage 1 to date - about 30 percent of all hospitals, and only 15 percent of CAHs. Only CAHs that successfully attested to meaningful use in FY 2011 or FY 2012 will benefit fully from the incentives; the vast majority will come on board later and receive incentives for fewer years.