CMS Proposes Changes to Direct Supervision Rules of Counselors and Other Behavioral Health Providers

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July 14, 2022

The Centers for Medicare & Medicaid Services (CMS) issued its 2023 Physician Fee Schedule Proposed Rule seeking public comment on various policy changes impacting payment and process under Medicare Part B.  The proposed rules were published on July 7, 2022.  A large part of the focus of the proposed rule changes involves the expansion of behavioral health though other issues are covered as well.  In the behavioral health area, CMS proposes several changes to make behavioral health and substance abuse treatment services more available to Medicare beneficiaries including:

  • Relaxing some of the supervision requirements that currently limit the volume of behavioral health services that can be delivered by providers;
  • Proposing new general behavioral health integration services;
  • Proposing several improvements to the delivery of substance abuse treatment programs, including opioid treatment; and
  • Extending some of the flexibility to deliver services by telehealth that were initiated in response to the COVID-19 public health emergency surrounding the pandemic.

These proposed changes recognize the dire need in the country for increased access to behavioral health services.  The need is particularly obvious as a result of the COVID-19 pandemic.  In addition to the usual flow of behavioral health issues, the pandemic itself has brought an acceleration in need with many more people seeking behavioral health services because of the isolation and financial issues the pandemic caused.   At the same time, the numbers of professionals available to meet this need did not increase.  The shortage of behavioral health providers has been historically amplified due to stringent supervision requirements which make it more difficult to allocate the level of care medically appropriate given the severity of a patient’s symptoms and diagnosis.

CMS proposes to add flexibility by relaxing some of the supervision requirements currently limiting the ability of auxiliary personnel such as professional counselors, marriage therapists, and family therapists to provide service where medically appropriate.  Current Medicare rules only permit the services of these auxiliary providers to be billed if they are provided as “incident to” the services of a physician.  In order to be covered as “incident to” the physician’s services, the physician needs to directly supervise the provider.  To meet this requirement, the physician must be in the same office suite as the auxiliary provider while the service is being provided.  If the physician leaves the office, everything stops.

The CMS proposal would loosen the supervision requirement to “general” rather than “direct” supervision which only requires the physician to maintain “overall direction and control” of the services from the auxiliary provider.  Physical presence in the same office suite would no longer be required to meet the supervision standard.  Relaxing the supervision requirement would make behavioral health services more available to patients when the services of the qualified, yet lower-level provider’s services are medically appropriate.  In effect, the CMS proposal permits easier access to the level of care the patient requires given their diagnosis and the severity of their condition.

Although this new proposed standard does not completely take the physician out of the supervisory loop, it does make care more readily available and permits providers to allocate their treatment resources in a more efficient manner by taking the direct supervision requirement off of the back of the physician.  There are still ongoing obligations the physician would have to meet, but the physician could serve multiple locations.  Care can be continued through hours when the physician is not physically present in the same office as the counselor or other appropriately licensed personnel.

CMS will be reviewing comments to the proposal and will likely issue final regulations over the next several months.  Stay tuned as we monitor the proposed regulations as they become finalized.  CMS sometimes makes modifications to proposed rules when they issue final rules.  But at this point it appears likely there will be some sort of change to the supervision requirements which will be a welcome change to providers and patients alike.

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