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Medical Coding News Archives

Medicaid Outpatient Rules Rescinded

July 28, 2009:

The Department of Health and Human Services (HHS) has rescinded three Medicaid regulations that limited outpatient hospital and clinic benefits and restricted access to case management services.

The rules would have affected payment not only for outpatient hospital and case management services, but also for school-based administration and transportation claims. Health care providers and state governments objected to the regulations, claiming implementation would shift significant Medicaid spending costs from the federal government to the state governments.

These regulations include a final rule published November 7, 2008, that limited the outpatient hospital and clinic service benefit for Medicaid beneficiaries and certain provisions of an interim final rule published December 4, 2007, which restricted beneficiary access to case management services. The Centers for Medicare & Medicaid Services (CMS) said the provisions would have restricted beneficiary access to covered case management services and limited state flexibility in determining efficient and effective delivery systems for case management services.

HHS is also delaying enforcement of a Medicaid provider tax rule on health care-related tax programs until June 30, 2010. During this time, CMS can evaluate the need for additional clarification or guidance. Each of these rules was subject to a congressional moratorium that expired on July 1, 2009. One of the regulations had been partially implemented; however, two had not been implemented yet.

These actions were taken because CMS believed the rules would have potentially adverse consequences for Medicaid beneficiaries. According to Department of Health and Human Services Secretary Kathleen Sebelius, HHS expects that with the rules rescinded, beneficiaries will be able to access all available case management resources and that outpatient hospital and clinic services can continue to be covered. Secretary Sebelius further stated that these rescissions are “necessary to ensure that the states have the flexibility they need to fully serve Medicaid-eligible individuals.”  

The notice published in the Federal Register cites the adverse effects the regulations could have on beneficiaries and states.

Sarah A. Serling, CPC, CPC-H, CPC-I, CCS-P, CCS
Clinical/Technical Editor


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