CMS Pub. 100-02, ch. 6, § 20.4.4

After January 1, 2010

(Rev. 152, Issued: 12-29-11, Effective: 01-01-12, Implementation: 01-03-12)

Covered diagnostic services to outpatients include the services of nurses, psychologists,

technicians, drugs and biologicals necessary for diagnostic study, and the use of supplies

and equipment. When a hospital sends hospital personnel and hospital equipment to a

patient’s home to furnish a diagnostic service, Medicare covers the service as if the

patient had received the service in the hospital outpatient department.

As specified at 42 CFR 410.28(a), for services furnished on or after January 1, 2010,

Medicare Part B makes payment for hospital or CAH diagnostic services furnished to

outpatients, including drugs and biologicals required in the performance of the services

(even if those drugs or biologicals are self-administered), if those services meet the

following conditions:

1. They are furnished by the hospital or under arrangements made by the hospital or CAH

with another entity (see section 20.1 of this chapter);

2. They are ordinarily furnished by, or under arrangements made by the hospital or CAH

to its outpatients for the purpose of diagnostic study; and

3. They would be covered as inpatient hospital services if furnished to an inpatient.

As specified at 42 CFR 410.28(e), payment is allowed under the hospital outpatient

prospective payment system for diagnostic services only when those services are

furnished under the appropriate level of supervision specified in accordance with the

definitions in this manual and at 42 CFR 410.32(b)(3)(i), (b)(3)(ii), and (b)(3)(iii) of

general, direct and personal supervision.

Physician assistants, nurse practitioners, clinical nurse specialists, and certified nurse

midwives who operate within their scope of practice under State law may order and

perform diagnostic tests, as discussed in 42 CFR 410.32(a)(2) and corresponding

guidance in chapter 15, section 80 of this manual. However, this guidance and the long

established regulation at 42 CFR 410.32(b)(1) also state that diagnostic x-ray and other

diagnostic tests must be furnished under the appropriate level of supervision by a

physician as defined in section 1861(r) of the Act and may not be supervised by

nonphysician practitioners. Sections 410.32(b)(2) and (3) provide certain exceptions that

allow some diagnostic tests furnished by certain non-physician practitioners to be

furnished without physician supervision. While these nonphysician practitioners

including physician assistants, nurse practitioners, clinical nurse specialists, and certified

nurse midwives cannot provide the required physician supervision when other hospital

staff are performing diagnostic tests, when these nonphysician practitioners personally

perform a diagnostic service they must meet only the physician supervision requirements

that are prescribed under the Medicare coverage rules at 42 CFR Part 410 for that type of

practitioner when they directly provide a service. For example, under section 410.75

nurse practitioners must work in collaboration with a physician, and under section 410.74

physician assistants must practice under the general supervision of a physician.

With respect to individual diagnostic tests, the supervision levels listed in the quarterly

updated Medicare Physician Fee Schedule (PFS) Relative Value File apply. For

diagnostic services not listed in the PFS, Medicare contractors, in consultation with their

medical directors, define appropriate supervision levels in order to determine whether

claims for these services are reasonable and necessary. Updates to the PFS Relative

Value Files will be issued in future Recurring Update Notifications. For guidance

regarding the numeric levels assigned to each CPT or HCPCS code in the PFS Relative

Value File, see Chapter 15 of this manual, Section 80, “Requirements for Diagnostic X-ray, Diagnostic Laboratory, and Other Diagnostic Tests.”

For diagnostic services furnished during calendar year (CY) 2010 whether directly or

under arrangement in the hospital or in an on-campus outpatient department of the

hospital, as defined at 42 CFR 413.65, “direct supervision” means that the physician must

be present on the same campus where the services are being furnished. For services

furnished in an off-campus provider based department as defined at 42 CFR 413.65, he or

she must be present within the off-campus provider based department. The physician

must be immediately available to furnish assistance and direction throughout the

performance of the procedure. The physician does not have to be present in the room

when the procedure is performed. “In the hospital” means the definition specified in

42CFR 410.27(g), which is areas in the main building(s) of the hospital or CAH that are

under the ownership, financial, and administrative control of the hospital or CAH; that

are operated as part of the hospital or CAH; and for which the hospital or CAH bills the

services furnished under the hospital’s or CAH’s CMS Certification Number.

For diagnostic services furnished during CY 2011 and following, whether directly or

under arrangement in the hospital or in an on-campus or off-campus outpatient

department of the hospital as defined at 42 CFR 413.65, “direct supervision” means that

the physician must be immediately available to furnish assistance and direction

throughout the performance of the procedure. As discussed below, the physician is not

required to be present in the room where the procedure is being performed or within any

other physical boundary as long as he or she is immediately available.

For services furnished during CY 2010 and following under arrangement in nonhospital

locations, “direct supervision” means the definition specified in the PFS at 42 CFR

410.32(b)(3)(ii). The supervisory physician must remain present within the office suite

where the service is being furnished and must be immediately available to furnish

assistance and direction throughout the performance of the procedure. The supervisory

physician is not required to be present in the room where the procedure is being

performed.

Immediate availability requires the immediate physical presence of the supervisory

physician. CMS has not specifically defined the word “immediate” in terms of time or

distance; however, an example of a lack of immediate availability would be situations

where the supervisory physician is performing another procedure or service that he or she

could not interrupt. Also, for services furnished on-campus, the supervisory physician

may not be so physically distant on-campus from the location where hospital outpatient

services are being furnished that he or she could not intervene right away. The hospital

or supervisory physician must judge the supervisory physician’s relative location to

ensure that he or she is immediately available.

For services furnished in CY 2011 and following, which require direct supervision, the

supervisory practitioner may be present in locations such as physician offices that are

close to the hospital or provider based department of a hospital where the services are

being furnished but are not located in actual hospital space, as long as the supervisory

physician remains immediately available. Similarly, as of CY 2011 for services requiring

direct supervision, the supervisory practitioner may be present in a location in or near an

off-campus hospital building that houses multiple hospital provider based departments

where the services are being furnished as long as the supervisory physician is

immediately available.

The supervisory physician 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 staff and technicians are the primary

operators of some specialized diagnostic testing equipment, and while in such cases CMS

does not expect the supervisory physician to operate this equipment instead of a

technician, the physician that supervises the provision of the diagnostic service must be

knowledgeable about the test and clinically able to furnish the test.

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 would make all decisions

unilaterally without informing or consulting the patient’s treating physician or

nonphysician practitioner. In summary, the supervisory physician must be clinically

appropriate to supervise the service or procedure.

As specified at 42 CFR 410.28(f), for services furnished on or after February 21, 2002,

the provisions of paragraphs (a) and (d)(2) through (d)(4), inclusive, of 42 CFR 410.32

apply to all diagnostic laboratory tests furnished by hospitals and CAHs to outpatients.