New Rule Pares Outpatient Medicaid Services

Yesterday the Bush administration acted to narrow services which can be provided under Medicaid, amidst protests from public hospitals and state officials. It would reduce payments to hospitals in a time of growing need amidst layoffs and unemployment. This action conflicts with congressional efforts to increase federal aid under a new economic plan.

In a notice published Friday in the Federal Register, the Bush administration said it had to clarify the definition of outpatient hospital services because the current ambiguity had allowed states to claim excessive payments.

“This rule represents a new initiative to preserve the fiscal integrity of the Medicaid program,” the notice said.

But John W. Bluford III, the president of Truman Medical Centers in Kansas City, Mo., said: “This is a disaster for safety-net institutions like ours. The change in the outpatient rule will mean a $5 million hit to us. Medicaid accounts for about 55 percent of our business.”

Others say it will force them to possibly reduce outpatient services like dental and vision care in the midst of anticipating cuts at the state level due to the economy.

Carol H. Steckel, the commissioner of the Alabama Medicaid Agency, said the rule would reduce federal payments for outpatient services at two large children’s hospitals, in Birmingham and Mobile.

Richard J. Pollack, the executive vice president of the American Hospital Association, said these concerns were valid.

“The new regulation,” Mr. Pollack said, “will jeopardize important community-based services, including screening, diagnostic and dental services for children, as well as lab and ambulance services.”
via NYTimes.com

Congress issued a moratorium on six other rules affecting Medicaid over the past year and a half. The rule takes effect December 8, six weeks before Bush leaves office.

Larry S. Gage, the president of the National Association of Public Hospitals, said, “We will urge Congress to extend the moratorium to this rule, and we will ask the Obama administration to withdraw it.”