Medicaid Outpatient Payment Policy

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July 2016

States have broad flexibility to determine payment policies, including payment amounts, for outpatient services. Outpatient hospital services can include preventive, diagnostic, therapeutic, rehabilitative, or palliative services furnished to Medicaid enrollees in hospital outpatient departments. In fiscal year 2014, Medicaid fee-for-service spending on acute outpatient services exceeded $26 billion (excluding managed care).

This issue brief describes the outpatient payment policies used by states’ fee-for-service Medicaid programs to pay for outpatient services, including payment methodology, adjustments, and supplemental payment policies. In addition to this issue brief, MACPAC has documented state-specific methodologies in State Medicaid Payment Policies for Outpatient Hospital Services.

Publication Type: Issue Briefs

Tags: cost-based reimbursement, emergency department services, fee for service, fee schedules, hospital outpatient services, hospitals, payment, supplemental payments, Upper Payment Limit (UPL)