Feds cut payments for Medicaid outpatient services

The Bush Administration on Friday announced plans to narrow the scope of outpatient hospital services offered under Medicaid (Source: “Medicaid outpatient services tightened,” Columbus Dispatch/New York Times, Nov. 9, 2008).

The move comes at the same time that congressional leaders and governors have been pushing for a stimulus plan that would include, among other items, assistance to states to pay for Medicaid expenses. That plan has been endorsed by President-elect Obama.

The new Medicaid payment rule narrows the definition of outpatient hospital services to exclude those that could be provided and covered outside a hospital. While safety net hospitals argue that the rule change will mean reduced payments at a time when need is escalating, administration officials defended the move as way to stop states from claiming excessive payments.