Bush Administration Issues Clarification On Medicaid Outpatient Hospital Benefit

Main Category: Medicare / Medicaid / SCHIP
Article Date: 11 Nov 2008 - 6:00 PST

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The Bush administration on Friday issued a clarification on the definition of outpatient hospital care that would reduce the range of medical services offered to low-income patients under the Medicaid outpatient hospital benefit, the New York Times reports. Under the newly revised rule, outpatient hospital services do not include those that could be provided and covered outside a hospital.

The administration said the clarification, published in a Federal Register notice, was necessary because the provision under its current definition was vague and allowed states to overcharge CMS for Medicaid claims. The notice said, "This rule represents a new initiative to preserve the fiscal integrity of the Medicaid program." The rule was proposed last September and is scheduled to be implemented on Dec. 8.

According to the Times, the new rule goes against recent efforts by state governors and lawmakers to increase federal funding for state Medicaid programs under a new economic action plan. President-elect Barack Obama on Friday voiced support of the governors' and lawmakers' efforts, saying that legislation to improve the economy should include "assistance to state and local governments" to avoid work force layoffs or tax increases.

State health and public hospital officials raised concerns with the rule revision, saying it would leave lower Medicaid payments for many hospitals. Richard Pollack, executive vice president of the American Hospital Association, said, "The new regulation will jeopardize important community-based services, including screening, diagnostic and dental services for children, as well as lab and ambulance services." However, Herb Kuhn, deputy CMS administrator, said, "We are not trying to deny services," adding, "We want to pay for them more accurately and appropriately. Payments for some services were way higher than they should be." Larry Gage, president of the National Association of Public Hospitals and Health Systems, said, "We will urge Congress to extend the moratorium to this rule, and we will ask the Obama administration to withdraw it" (Pear, New York Times, 10/8).

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