June/July 2001


Regulatory Report

By Stuart S. Kurlander, JD, MHA

More Highlights From HCFA

Supervision, students, and SNFs are all affected by new memorandums.

Do you perform tasks under the supervision of a physician? If so, then you need to pay particular attention to Program Memorandum B-01-28, which was issued after the Health Care Financing Administration (HCFA) became aware of the confusion surrounding the physician supervision requirements for diagnostic tests. Program Memorandum B-01-28 comes with a complete list of all diagnostic tests and the specific levels of supervision required for each test and definitions of the three levels of supervision:

General supervision—the physician provides overall direction and control, but is not required to be present during the procedure;

Direct supervision—the physician must be present in the office suite and immediately available to furnish assistance and directions during the procedure; andPersonal supervision—the physician must be in the room during the procedure.

Physical therapists will be happy to note that, effective July 1, 2001, the current procedural technology (CPT) codes in the range of 95860 through 95937 will have new supervision levels, making it possible for physical therapists to acquire certification required to perform certain services without supervision. Following is a summary of the codes listed in Program Memorandum B-01-28 that are specific to physical therapists:

  • The following procedures can be performed by a physician or a physical therapist who is certified by the American Board of Physical Therapy Specialties (ABPTS) as a qualified electrophysiologic clinical specialist and is permitted to provide the service under state law. In addition, a physical therapist with ABPTS certification may personally supervise another physical therapist, but only the certified physical therapist may bill: 95860, 95861, 95863, 95864, 95867, 95868, 95869, 95870.
  • The following procedure can be performed only by a physical therapist with ABPTS certification and certification in this specific procedure, or performed personally by a physician: 95872.
  • A physical therapist with ABPTS certification or the direct supervision of a physician or a technician with certification and general supervision of a physician may perform this procedure. In addition, a physical therapist with ABPTS certification may personally supervise another physical therapist, but only the certified physical therapist may bill: 95900, 95903, 95904, 95933, 95934, 95936, 59937.


Under Medicare Part B, the time of a therapy student is not paid. However, under the Medicare Part A skilled nursing facility (SNF) benefit, the SNF prospective payment system (PPS) allows the minutes of therapy performed by the student to be counted toward rehabilitation minutes if provided when the student is under direct line of sight supervision.

Further clarifying Medicare billing is HCFA Transmittal 1828. This is an update to the intermediary manual and Program Memorandum AB-01-68. This document incorporates the changes of several past program memorandums and provides current instructions to bill for outpatient rehabilitation services. All information regarding group code 97150 has been removed. SNF operators will need to obtain this memorandum for a current list of HCFA Common Procedure Coding System (HCPCS) codes that the SNF is required to bill under Part B. This memorandum also contains billing clarification, which should be carefully reviewed with the SNF’s own health care counsel. For outpatient rehabilitation claims with dates of service from January 1, 2000, through December 31, 2001, the following are reminders of changes to financial limitations, as enacted by the Balanced Budget Refinement Act (BBRA) of 1999:
  • Financial limitations for claims for outpatient rehabilitation services are under a 2-year moratorium with dates of service of January 1, 2000, through December 21, 2001.
  • During the above-referenced 2-year moratorium, the Secretary will conduct a review of outpatient rehabilitation services with an emphasis on the services of SNFs.


On May 10, 2001, HCFA published a proposed rule that would update the payment rates used under the SNF PPS for fiscal year 2002. In the same proposed rule, HCFA also proposes to revise the regulations so that payments under the SNF PPS are made to swing-bed hospitals for cost report periods, beginning on or after October 2001.

Stuart S. Kurlander, JD, MHA, is a health care partner at Latham & Watkins, Washington, DC.

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