The U.S. House Ways and Means Committee voted June 25 to advance Rep. Cindy Axne’s (D-IA-03) bipartisan legislation to provide relief to rural hospitals.

The legislation, which Axne recently introduced with Rep. Adrian Smith (R-NE-03), will delay enforcement of burdensome regulations that limit the ability of Critical Access Hospitals (CAHs) and rural hospitals to provide quality care.

The legislation postpones implementation of “direct supervision” – or the requirement that a physician or nonphysician practitioner be physically present – for outpatient therapeutic services at rural hospitals until 2021.

Rural hospitals face severe staffing shortages, making the “direct supervision” requirement hugely burdensome. Iowa has 177 rural health care clinics and 82 Critical Access Hospitals, 22 and 10 of which are in the Third District, respectively. If the “direct supervision” requirement is enforced, it would decrease access to care in rural areas and increase the cost of care as rural hospitals across Iowa struggle with workforce shortages.

“I’ve heard from dozens of rural health care providers across Iowa’s Third District who consistently tell me that staffing shortages remain one of the biggest issues they face. If a rural hospital doesn’t have the available staff for direct supervision, it can limit the type of care Iowans are able to receive,” said Rep. Axne. “We need to address staffing shortages in rural areas, but in the meantime, we need to protect patient safety while ensuring that regulations aren’t overly burdensome.”

Prior to 2009, hospitals had flexibility in providing outpatient therapeutic services in a way that protected patient safety, delivered high quality care and did not limit services in rural areas. In 2009, the Center for Medicaid and Medicare Services (CMS) made a policy shift that stated outpatient therapeutic services must be “directly supervised,” which means a physician or nonphysician practitioner must be physically present, or within an immediate distance.

Rural hospitals and CAHs expressed concerns to CMS regarding insufficient staff available to comply with direct supervision requirements, especially for specialty services. In response to these concerns, CMS delayed the requirements until 2013. Congress also extended this delayed enforcement from 2013-2016. CMS has continued nonenforcement in 2018 and 2019. This legislation would again delay the direct supervision enforcement statutorily until 2021.

Axne’s legislation has been endorsed by the Federation of American Hospitals (FAH).

“The FAH strongly supports Section 5 to extend the enforcement instruction on supervision requirements for outpatient services in critical access and small rural hospitals through 2021 and would support a permanent extension as well. Many small rural and critical access hospitals have insufficient staff available to furnish direct supervision, especially due to difficulties in recruiting physician and non-physician practitioners to practice in rural areas. Further, with respect to critical specialty services, direct supervision by a hospital emergency department physician or non-physician practitioner is particularly difficult because of the volume of emergency patients or lack of specialty expertise. Section 5 will provide needed relief to these small rural and critical access hospitals,” said Charles N. Kahn III, FAH President and CEO.

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