CMS Pub. 100-01, ch. 5, § 10.3

A provider may have others furnish certain covered items and services to their patients

through arrangements under which receipt of payment by the provider for the services

discharges the liability of the beneficiary or any other person to pay for the service. In

permitting providers to furnish services under arrangements, it was not intended that the

provider merely serve as a billing mechanism for the other party. Accordingly, for

services provided under arrangements to be covered, the provider must exercise

professional responsibility over the arranged-for services.

The provider's professional supervision over arranged-for services requires application of

many of the same quality controls as are applied to services furnished by salaried

employees. The provider must accept the patient for treatment in accordance with its

admission policies, and maintain a complete and timely clinical record on the patient,

which includes diagnoses, medical history, physician's orders, and progress NOTEs

relating to all services received, and must maintain liaison with the attending physician

regarding the progress of the patient and the need for revised orders. In the case of home

health services and outpatient physical therapy or speech-language pathology services,

the provider must ensure that the required plan of treatment is periodically reviewed by

the physician and secure from the physician the required certifications and

recertifications. Additionally, the provider (other than a SNF) must ensure that the

medical necessity of such services is reviewed on a sample basis by the utilization review

(UR) committee if one is in place, the facility's health professional staff, or an outside UR

group. (Effective October 1, 1990, a SNF is no longer required to have a plan for UR.)

The provider, including a SNF that conducts optional UR services, is responsible for

medical necessity decisions made under arrangement by an outside group.