States use a number of different reimbursement methods for different types of services provided in outpatient hospital departments and clinics. The Proposed Rule on Outpatient Hospital Services Under Medicaid

The proposed rule (72 Federal Register 55158, September 28, 2007) would limit the definition and scope of Medicaid outpatient services in a hospital clinic, hospital facility, or rural health clinic. In light of these views, and given this moratorium, CMS elected to exclude from its final OPH rule the proposed regulatory language delineating methods for demonstrating compliance with the Medicaid upper payment limit on outpatient hospital and clinic services provided in privately operated facilities. CMS did adopt the proposed outpatient hospital service definition effective December 8, 2008. As of January 26, 2009, 12 states have submitted pending state plan amendments to comply with the new final regulation. The American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ) prohibits 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. On May 6, 2009, CMS issued a proposed rule (74 Federal Register 21292) that would rescind the Medicaid outpatient services rule in its entirety, among other actions. Public comments on this proposed rule will be accepted until June 1, 2009.
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 demonstrating compliance with the upper payment limit on outpatient hospital services provided in private outpatient facilities. The effective date of the regulation had been December 8, 2008. As of January 26, 2009, 12 states have submitted state plan amendments in response to the regulation. The American Recovery and Reinvestment Act of 2009 (P.L. 111-5) prohibits 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. On May 6, 2009, CMS issued a proposed rule that, among other actions, rescinded the final Medicaid rule defining outpatient services. Public comments on this proposal will be accepted until June 1, 2009.