California Can Opt Out of Physician Supervision of CRNAs as Prerequisite to Medicare/Medicaid Reimbursement

A decision by the Governor of California to opt out of three provisions of Medicare and Medicaid regulations, requiring certified registered nurse anesthetists (CRNA) to be supervised by physicians as a prerequisite to reimbursement, was upheld by the appellate court.


In order for hospitals, ambulatory surgical centers, and critical access hospitals to receive reimbursement under Medicare when a CRNA administers anesthesia, federal regulations require that the CRNA be supervised by a physician. However, other federal regulations provide that a state's governor has the discretion to make a request on behalf of the state to opt out of the physician supervision requirement after concluding, among other things, that the opt-out is “consistent with state law.” In 2009, former Governor Arnold Schwarzenegger exercised his discretion opted California out of the federal physician supervision Medicare reimbursement requirement.


The California Society of Anesthesiologists and the California Medical Association filed for a writ of mandate ordering the Governor to withdraw the opt-out request, and a declaratory judgment that the request was inconsistent with state law, followed by a motion for summary judgment on both issues. The trial court denied the requested relief and summary judgment, holding that the opt-out request was consistent with California law. On appeal, the ruling was affirmed.


The appellate court noted that it evaluated only whether the Governor abused his discretion in determining the opt-out was consistent with state law. The Governor’s decision was entitled to great deference, requiring reversal only upon a finding that he acted “in a palpably unreasonable and arbitrary manner as to indicate an abuse of discretion as a matter of law.”


The court further noted the opt-out would not prevent hospitals and surgical centers from independently requiring physician supervision of CRNAs, but merely allows Medicare/Medicaid reimbursement whether or not there is supervision.


See: California Soc. of Anesthesiologists v. Superior Court, 2012 WL 860314, (Cal.App. 1 Dist. Mar 15, 2012) (not designated for publication).