RS22852
Medicaid and Outpatient Hospital Services
February 17, 2009

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Summary:

*On September 28, 2007, a proposed Medicaid rule was published that would (1) change the definition of outpatient hospital and rural health clinic services and (2) change the methods states must use to demonstrate compliance with the federal upper payment limit on outpatient hospital services provided in private outpatient facilities. A number of groups have expressed concern that this rule will have a significant negative impact on coverage of certain services, which may harm Medicaid beneficiaries. On November 7, 2008, the Centers for Medicare and Medicaid Services (CMS) issued a final Medicaid rule on outpatient hospital services that excluded the proposed regulatory language delineating methods for demontrating compliance with the upper payment limit on outpatient hospital services provided in private outpatient facilities. The effective date of the regulation is December 8, 2008. As of January 26, 2009, 12 states have submitted state plan amendments in response to the regulation. *Currently, there is no congressional moratorium on this final rule. The Conference Agreement on the American Recovery and Reinvestment Act of 2009 (H.R. 1) includes such a moratorium. That moratorium would prohibit the Secretary of Health and Human Services from taking any action until after June 30, 2009 (through regulation, regulatory guidance, use of federal payment audit procedures, or other administrative action, policy, or practice, including a Medical Assistance Manual transmittal or state Medicaid director letter), to implement the final regulation covering outpatient hospital facility services.