On November 2, the Centers for Medicare & Medicaid Services (CMS) extended virtual direct supervision—i.e., the ability to provide direct supervision through real-time, audio-visual technology (rather than in-person presence) under 42 C.F.R. §§ 410.26, 410.32—through December 31, 2024. Part of the CY 2024 Medicare Physician Fee Schedule (MPFS) final rule, this extension will allow practitioners to continue using virtual direct supervision while CMS considers the future of virtual direct supervision, a task it frames as balancing patient safety, quality, and program integrity concerns with the interest of supporting expanded access to care and preserving workforce capacity for medical professionals.

Virtual Direct Supervision

Medicare payment rules require physicians and nonphysician practitioners to provide direct supervision for certain items and services, including some diagnostic tests and so-called incident-to services—i.e., services and supplies furnished incident to a physician’s or nonphysician practitioner’s professional services.

Traditionally, at least in the physician office setting, “direct supervision” meant the supervising practitioner had to be physically present in the office suite (though not necessarily in the same room) and immediately available to direct and assist the supervised service. Concerned that requiring physical presence could impede access to care during the COVID-19 public health emergency (PHE), CMS temporarily revised “direct supervision” to allow supervision through real-time audio-visual technology rather than in-person presence.

Just as in-person direct supervision does not require presence in the same room as the personnel performing the service, virtual direct supervision does not require the real-time observation of the supervised service. Instead, it requires the supervising practitioner to be immediately available to engage via audio-visual technology to assist and direct the service. With this flexibility, physicians and nonphysician practitioners have been able to remotely supervise services furnished in places where in-person supervision may not be feasible, such as patients’ homes and satellite locations.

Intersection with Incident-To Requirements

Medicare covers not only the services of physicians and certain nonphysician practitioners but also services and supplies incident to their professional services. Aside from limited exceptions—such as designated care management services and, recently, behavioral health services—Medicare generally requires physicians and nonphysician practitioners to provide direct supervision for incident-to services.To understand the broader context, it is helpful to highlight two commonplace incident-to scenarios. The first is when practitioners bill for items or services—such as drugs that are not ordinarily self-administered—that, absent the incident-to benefit, would otherwise not be payable under Medicare Part B. The second is when a practitioner bills for items or services performed by auxiliary personnel (such as nurses) in the practitioner’s own name as if they were furnished personally by the practitioner.

Even if state law, standards of care, and other third-party payors would allow the services to be furnished without supervision or with a lower level of supervision, Medicare payment rules for incident-to services still generally require direct supervision—which before the PHE meant in-person presence. An in-person direct supervision requirement naturally limits incident-to services to circumstances where a supervising practitioner can always be physically present. Virtual direct supervision, on the other hand, allows practitioners to furnish services in settings that may otherwise not be feasible, such as patients’ homes.

Documenting Virtual Direct Supervision and Incident-To Requirements

Although neither this final rule nor any of the earlier rulemakings offer specific guidance on documenting virtual direct supervision, the familiar principles apply. Documentation should clearly provide evidence that the supervising practitioner is immediately available via real-time, audio-visual technology during the auxiliary personnel’s performance of the service. Consider memorializing compliance through both contemporaneous documentation and a written policy for virtual direct supervision.

For incident-to services furnished in non-institutional settings, in particular, the requirements are numerous and complex (as we have covered elsewhere), and documenting compliance with all requirements is necessary to avoid severe penalties. Although Chapter 15 of the Medicare Benefit Policy Manual offers guidance on the incident-to rules, it has not been updated to account for virtual direct supervision. Likewise, although Medicare Administrative Contractors (MACs) have long offered useful guidance on documenting incident-to compliance, the MACs have generally not updated their guidance to reflect the virtual direct supervision rule (apart from limited PHE-specific guidance). Still, just as guidance suggests that auxiliary personnel can note the identity and credentials of the supervising practitioner who is physically present in the office suite and immediately available to assist, they can do the same for supervising practitioners who are immediately available via real-time, audio-visual technology.

The Future of Virtual Direct Supervision

By the time the rulemaking season rolls around next year, we will have the benefit of several years of lived experience with virtual direct supervision. CMS, as indicated in the CY 2024 MPFS final rule, will continue to evaluate whether to make virtual direct supervision a permanent policy under §§ 410.26 and 410.32 and, if so, how best to balance the patient safety, quality, and program integrity concerns against the benefits that flow from expanded access to care and preserving the workforce capacity of medical professionals.

Many stakeholders—including those who commented in support of the proposal to extend virtual direct supervision through the end of 2024—tout its ability to enhance patient access to quality care, particularly in underserved areas and for high-risk populations. Ultimately, CMS will need to weigh the favorable aspects of virtual direct supervision against the safety, quality, and program integrity concerns. Another year of virtual direct supervision will not only give CMS more data but will also give stakeholders more evidence to marshal in favor of their positions.

For more information on virtual direct supervision, please contact the authors.