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                                                      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 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 requirements 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 furnished 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.

       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).

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