Effective as of January 1, 2026, the Centers for Medicare & Medicaid Services (CMS) has finalized permanent changes to the definition of physician direct supervision under Medicare.
These changes were adopted in the Calendar Year (CY) 2026 Medicare Physician Fee Schedule (MPFS) Final Rule.[1] The revisions build on temporary flexibilities introduced during the COVID-19 Public Health Emergency (PHE) and reflect the broader effort by CMS to modernize supervision requirements, improve access to care, and address workforce constraints while maintaining patient safety.
Prior to the PHE, Medicare generally required that, for services requiring direct supervision, the supervising physician or other qualified practitioner be (i) physically present in the office suite or facility (though not necessarily in the same room) and (ii) immediately available to furnish assistance and direction throughout the performance of the service.
Virtual or remote availability did not satisfy the direct supervision requirement.
CMS has now permanently expanded the definition of direct supervision to allow for virtual presence in certain circumstances. Under the revised definition, direct supervision may be satisfied when the supervising physician or practitioner is (i) immediately available to furnish assistance and direction and (ii) available through real-time, two-way audio and visual interactive telecommunications technology, instead of being physically present on site.
CMS has emphasized that audio-only communication does not meet the standard. The supervising practitioner must be able to see and hear the service being furnished in real time and intervene immediately if necessary.
The permanent definition applies broadly to Medicare Part B services that require direct supervision, including but not limited to:
- "Incident to" services furnished by auxiliary personnel (42 C.F.R. §410.26)
- Diagnostic tests subject to direct supervision (42 C.F.R. §410.32)
- Pulmonary rehabilitation services (42 C.F.R. §410.47)
- Cardiac rehabilitation and intensive cardiac rehabilitation services (42 C.F.R. §410.49)
However, higher-risk surgeries with global surgery indicators 010 or 090 (major, 90-day global) still require the physical, on-site presence of a physician to ensure patient safety and the ability for rapid on-site intervention. CMS will also allow direct supervision through audio/video real-time communications technology (excluding audio-only) for Rural Health Clinics and Federally Qualified Health Centers.
CMS advised that this flexibility is intended to support care delivery in physician offices, outpatient settings, and other non-facility environments. Accordingly, virtual direct supervision cannot be used to satisfy Medicare requirements for most surgical procedures subject to global surgical packages.
By permanently expanding the definition of direct supervision to include real-time audio-visual telecommunication, CMS has provided long-term regulatory certainty and flexibility for Medicare providers. These changes are expected to improve access to care, support evolving care delivery models, and reduce operational burdens, while preserving patient safety through immediate supervisory availability.
Please let us know if you would like further analysis of how these changes affect specific service lines, billing practices, or compliance programs. Venable's Healthcare and Healthcare Policy teams are ready to provide support and counsel when you need it.
[1] Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program, CMS-1832-F, 90 FR 49266-50481 (Nov. 5, 2025).