We previously reported in the June 12, 2008, issue of our Health Law Update that the Department of Health and Human Services (HHS) had temporarily backed away from its plan to move forward with Medicaid spending cuts which were predicted to reduce funding for public hospitals by $5 billion over five years. The proposed rule would (1) limit the payments public providers receive to the cost of treating Medicaid patients; (2) narrow the definition of a public provider; and (3) restrict the use of intergovernmental transfers. After HHS proposed the rule in January 2007, Congress passed a one year moratorium on the proposed Medicaid rule. The moratorium enacted by Congress expired on May 25, 2008. However, HHS voluntarily extended the moratorium to August 1, 2008, giving Congress additional time to extend the moratorium. On June 30, 2008, President Bush signed into law the Supplemental Appropriations Act of 2008. This law extends the moratorium on implementation of these Medicaid spending cuts until April 1, 2009. We will continue to monitor this issue and will provide updates as warranted.