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December 2016 Texas Medicaid Provider Procedures Manual

Section 2: Texas Medicaid Fee‑for‑Service Reimbursement : 2.2 Fee-for-Service Reimbursement Methodology : 2.2.1 Online Fee Lookup (OFL) and Static Fee Schedules : Non-emergent and Non-urgent Evaluation and Management (E/M) Emergency Department Visits
Section 104 of the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 requires that Medicare and Medicaid limit reimbursement for those physician services furnished in outpatient hospital settings (e.g., clinics and emergency situations) that are ordinarily furnished in physician offices. The limit is 60 percent of the Medicaid rate for the non-emergency service furnished in physician offices.
Reimbursement for non-emergent and non-urgent services that are rendered by the facility during the emergency room visit will be limited to 125 percent of the adult, physician office visit fee for procedure code 99202. Reimbursement will not be reduced for those services that were rendered to address conditions that meet any of the following criteria:
Non-emergent and non-urgent services that are rendered by rural hospitals will be reimbursed at 65 percent of the allowed rates.
Non-rural hospitals will receive a flat rate which is limited to 125 percent of the adult, physician office visit fee for procedure code 99202.
Diagnostic services, such as laboratory and radiology, will not be reduced by 40 percent.
Refer to:
Subsection, “Emergency Department Payment Reductions” in the Inpatient and Outpatient Hospital Services Handbook (Vol. 2, Provider Handbooks) for more information about non-emergent and non-urgent services rendered in the emergency department.
These procedures are designated with note code “1” in the current fee schedule or OFL on the TMHP website at
The following services are excluded from the 60-percent limitation:
Emergency services provided in a hospital emergency room after the sudden onset of a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain), such that the absence of immediate medical attention could reasonably be expected to result in one of the following:

Texas Medicaid & Healthcare Partnership
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