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CMS Final Rules Show Positive Gains for Pulmonary Rehab

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November 11, 2010 

The Centers for Medicare and Medicaid Services (CMS) recently announced its final rules for the Calendar Year 2011 payment updates for the physician fee schedule and the hospital outpatient prospective payment system.

There are several pieces of good news for pulmonary rehab (PR) programs as a result of these updates.

  • Payment for PR in the hospital outpatient setting will see a payment increase from $50.44 last year to around $62 beginning next year.
  • CMS increased the work units for HCPCS Code G0424 as well the clinical labor time for the respiratory therapist in calculating the physician fee schedule (PFS) for CY 2011. However, because physicians are due to take a significant reduction under the sustainable growth rate formula if Congress doesn’t act quickly to prevent it, it is unclear at this time what the physicians will actually end up getting paid for PR next year.
  • In response to questions, CMS has confirmed that a Critical Access Hospital (CAH) is considered a covered setting for PR services; cardiac rehab is also included.
  • CMS will postpone for another year enforcing the requirement that CAHs provide direct supervision for all outpatient therapeutic services, including PR. According to CMS, this applies to hospitals geographically located in a rural area or designated to be in a rural area under the hospital wage index that have 100 or fewer beds.
  • CMS is revising its definition of “direct supervision” of all outpatient therapeutic services, including PR, to require the physician (or non-physician practitioner for services other than PR and cardiac rehab) to simply be “immediately available to furnish assistance and direction throughout the performance of the procedure.” This applies to the hospital or CAH, or in an outpatient department of the hospital or CAH, both on and off-campus and means the definition is no longer tied to a particular physical location, such as the provider-based department. This change responds in part to comments and meetings held over time with the hospital industry and other interested parties. The revision could provide patients easier access to PR programs where requiring a physician to be in the provider-based department under the previous ruling posed a problem in terms of compliance.

The final regulations are on display now at the Federal Register. The hospital outpatient PPS final rule will be published on November 24; the physician fee schedule final rule will be published on November 29.

Hospital Outpatient PPS
Payment Discussion: pages 167–172
CAHs as Covered PR/CR Setting: pages 876–877
Physician Supervision/Outpatient Therapeutic Services: pages 789–801
Physician Supervision/Alternatives Considered: 1265–1269
Regulatory Text/Direct Supervision: page 1791

Physician Fee Schedule
Payment Discussion: pages 441–445