Rural Texas hospitals have unique needs and challenges. They cover 85 percent of the state’s geography and provide access to routine and emergency health care for 15 percent of the state’s population. Compared with their urban counterparts, they serve a larger proportion of older and uninsured and publicly insured patients.

Protecting the Medicare program is particularly important for rural hospitals. Among the Medicare priorities:

  1. Eliminating the requirement for direct physician supervision of hospital outpatient therapeutic services – physicians and hospitals maintain the intensified supervision is not medically necessary and imposes an increased financial and staffing burden. Physicians are not always on site in many rural hospitals and are not immediately available to perform added direct supervision.
    *The requirement for direct physician supervision of hospital outpatient therapeutic services should be eliminated.
  2. Eliminating the 96-hour stay requirement for CAHs – Federal law requires that patients in CAHs on average must be released or transferred to a larger hospital within 96 hours of admission. The law also makes Medicare reimbursement contingent upon a physician certifying that each individual patient will be released or transferred within 96 hours. Historically, CMS focused on the 96-hour average and not on the individual patient certification requirement. However,
    starting in FY 2014, CMS rules emphasize the need for a physician certification for each patient.
    *The requirement for a 96-hour inpatient stay maximum at CAHs should be eliminated.

S257 Protecting Access to Rural Therapy Services (PARTS) Act

  • Requires CMS to allow a default setting of general supervision, rather than direct supervision, for outpatient therapeutic services;
  • Creates an advisory panel to establish an exceptions process for risky and complex outpatient services;
  • Creates a special rule for Critical Access Hospitals that recognizes their unique size and Medicare conditions of participation; and
  • Holds hospitals and CAHs harmless from civil or criminal action for failing to meet CMS’ current direct supervision policy from 2001 through 2016.

HR 169/S 258 Critical Access Hospital Relief Act of 2015

  • Repeals the 96-hour physician certification requirement for inpatient CAH services.
None at this time.


John Hawkins, senior vice president, advocacy and public policy, 512/465-1505

2017 Texas Hospitals’ Policy Priorities
Download an overview of the 2017 Texas Hospitals’ Policy Priorities