On February 17, 2011, the CMS Office of Clinical Standards and Quality/Survey & Certification Group issued letter memorandum S&C-12-17  regarding who may order hospital outpatient services (the “SCG Letter”).  The SCG Letter clarifies CMS’s interpretation of the Medicare Hospital Conditions of Participation (CoPs) for outpatient services set forth in 42 CFR 482.54.  The regulatory language of this CoP is silent on who may order outpatient services.

CMS issued the SCG Letter in response to industry concerns and confusion created by Transmittal 72 previously issued by CMS.  Transmittal 72 described CMS’s interpretation of the hospital CoPs related to ordering rehabilitation and respiratory care services, requiring these services to be ordered by practitioners who have hospital medical staff privileges. 

 CMS issued the SCG letter after receiving industry comments that Transmittal 72 was having the unintended effect of stating that all ordering practitioners had to hold medical staff privileges, even though CMS had intended the transmittal to expand the categories of practitioners who could order rehabilitation and respiratory services beyond just physicians.  The SCG Letter specifically rescinds those portions of Transmittal 72 which conflict with the letter.

The SCG letter clarified CMS’s interpretation of the hospital CoPs for outpatient services to be:  a practitioner who does not hold medical staff privileges at a hospital may order (or make referrals) for hospital outpatient services to the extent that the practitioner is permitted to do so under approved hospital policies for ordering outpatient services.  The SCG letter states that practitioners may order hospital outpatient services if the practitioners are: 

(1) responsible for the care of the patient;

(2) licensed in, or holds a license recognized in the jurisdiction where the practitioner sees the patient (which could be in a different state as the hospital to where the outpatient services are ordered or referred);

(3) acting within their scope of practice under state law; and

(4) authorized by the medical staff to order the outpatient services under a written hospital policy approved by the governing body. 

The SCG letter makes clear that ordering practitioners can include both practitioners who are on the hospital medical staff and who hold medical staff privileges that include ordering services, and other practitioners who are not on the hospital medical staff but who satisfy the hospital’s policies for ordering or referring patients for hospital outpatient services.  Hospital policies authorizing practitioners to order and refer patients for outpatient services should address how the hospital verifies that the referring practitioner is appropriately licensed and acting within his/her scope of practice.  The policies should also make clear whether the policies apply to all hospital outpatient services or whether there are specific services for which orders may only be accepted from practitioners with medical staff privileges.

Based on the SCG Letter, hospitals should adopt policies addressing who may order and refer hospital outpatient services.  The policies should include defining which outpatient services can be ordered by practitioners with hospital medical staff privileges, and which outpatient services can be ordered by practitioners who do not hold medical staff privileges.  Consistent with the requirements described in the SCG Letter, these policies must be approved by the hospital’s governing body.

If you have any questions about the SCG Letter or CMS hospital Conditions of Participation, please contact Lee Kuo.