What Opt-out Is and Is Not

By on Mar 7, 2014 in Board Updates, Uncategorized | 4 comments

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In 1982 the Health Care Financing Administration (HCFA) that later became know as the Centers for Medicare and Medicaid (CMS) revised the conditions of participation for ambulatory surgical centers (ASCs) to require physician supervision of CRNAs and in 1986 revised the conditions of particiaption for hospitals to require supervision of CRNAs.

What are “Conditions of Participation”?  These are the conditions that ASCs and hospitals must meet for reimbursement for providing services and care to Medicare patients under Part A of Medicare.

As you know there are three parts to Medicare.

1)    Part A is for facilities such as ASCs, hospitals and critical access hospitals.

2)    Part B is for providers such as physicians, CRNAs and other providers that are allowed to bill Medicare directly.

3)    Part D which is prescription drugs.

There are no supervision requirements for physician supervision under Part B of Medicare.

In 1990, the President of a state nurse anesthetist association wrote a letter to HCFA regarding concerns about the federal supervision requirement and requested a definition of the term “supervision”.  HCFA responded with a general definition of supervision and a policy interpertation.  This lead to many meetings between HCFA and the AANA in which AANA requested that the physician supervison requirement be dropped, and that the federal government defer to the states.

In 1994, legislation was introduced in both the House and Senate providing for fair anesthesia payment and defferal to state law on the issue of physician supervison.  Also in the fall of that year, HCFA issued draft regulation in the Medicare Conditions of Participation for Hospitals which includes the removal of physician supervision of nurse anesthetists.

During 1995, AANA continued to inquire of HCFA when the regulations would be released and members continued to lobby Congress for direct reimbursement and removal of the supervision requirement.  Bills were introduced for removal of the supervision requirement, and direct reimbursement for CRNAs, but were not included in the final Medicare package.  In 1995, direct reimbursement was passed to become effective in 1998, but the supervision issue remained unresolved.

In December 1997, HCFA issued a proposed rule deferring to the states on the supervison issue.  A comment period was held, and AANA members continued to lobby Congress during the Mid Year Assemblies.

On January 18, 2001, two days before President Clinton was to leave office, HCFA  and HHS published the rule to defer to the states in the Federal Register.  The rule was to go into effect March 18, 2001.

March 18, 2001, President Bush freezes the rule for 60 days pending further review.  May 18. 2001, the Bush Administration freezes the final rule for 180 days and suggested a new rule be issued that would permit state governors to request a waiver from the Secretary of HHS and require a study of anesthesia outcomes.  There was a 60 day comment period and the final rule on Opt Out was final on November 13, 2001.

OPT-OUT Essentials for Each State

For a state to opt out of the federal requirement for supervision of CRNAs, the state’s governor must send a letter to the Secretary of HHS requesting that the state opt out of the supervision requirement.  The letter must attest:

1. The state’s governor has consulted with the state boards of medicine and nursing about issues related to the access to and the quality of anesthesia services in the state; and,

2. That it is in the best interest of the state’s citizens to opt-out of the current federal physician requirement; and.

3. That the opt-out is consistent with state law.

The consultation with the boards of medicine and nursing is not defined by CMS and gives the governor flexibility and the boards do not have to submit comments.  CMS believes that the governors are best suited to make the determination for an opt-out.  Governors can at any time request that a previous opt-out be withdrawn as well.  This happened in one state, where the governor later after a period of time, decided to continue the opt-out.

When a state has opted out of the federal requirement, it does not necessarily change the practice of CRNAs in the state.  The facilities may still require physician supervison of the CRNAs in the bylaws of the facility.  The opt- out would not permit a CRNA to practice outside the scope authority granted by state law.

A state opt-out takes a great deal of planning and each state needs to prepare for the battles to follow. It should be noted that lawsuits are most likely going to be filed, and legislation be introduced for strict supervision.  Having a relationship with the Governor’s office is essential to the opt-out process.

There are those that would have facilities and others providers to believe that the requirement for physician supervision is a practice requirement, but it is not a practice issue, it is a reimbursement issue for the facility to be reimbursed for those services rendered to medicare patients.

To date, 17 states have opted out of the supervision requirement.  Some of the states have been faced with lawsuits being filed to reverse the opt-out but the outcomes have been positive.

Iowa 2001

Nebraska 2002

Idaho 2002

Minnesota 2002

New Hampshire  2002

New Mexico 2002

Kansas  2003

North Dakota 2003

Washington 2003

Alaske 2003

Oregon 2003

Montana 2004  A new Governor reversed the opt-out but after understanding the opt-out better restored it.

South dakota 2005

Wisconsin 2005

California 2009

Colorado 2010  The opt-out is for Critical Access Hospitals and specified rural hospitals

Kentucky 2012


Thank you,

Patty Cornwell, CRNA












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