(1) Rates established by the department for outpatient services as specified by regulations of the department adopted under Title XIX of the Social Security Act (49 Stat. 620, 42 U.S.C. § 1396 et seq.) consisting of preventive, diagnostic, therapeutic, rehabilitative or palliative services; furnished by or under the direction of a physician, chiropractor or podiatrist, by a hospital or outpatient clinic which qualifies to participate under Title XIX of the Social Security Act, to a patient to whom such hospital or outpatient clinic does not furnish room, board and professional services on a continuous, twenty-four hour a day basis.

(1.1) Rates established by the department for observation services provided by or furnished under the direction of a physician and furnished by a hospital. Payment for observation services shall be made in an amount specified by the department by notice in the Pennsylvania Bulletin and shall be effective for dates of service on or after July 1, 2016. Payment for observation services shall be subject to conditions specified in the department's regulations, including regulations adopted by the department to implement this paragraph. Pending adoption of regulations implementing this paragraph, the conditions for payment of observation services shall be specified in a medical assistance bulletin.

(2) Rates established by the department for (i) other laboratory and X-ray services prescribed by a physician, chiropractor or podiatrist and furnished by a facility other than a hospital which is qualified to participate under Title XIX of the Social Security Act, (ii) physician's services consisting of professional care by a physician, chiropractor or podiatrist in his office, the patient's home, a hospital, a nursing facility or elsewhere, (iii) the first three pints of whole blood, (iv) remedial eye care, as provided in Article VIII¹ consisting of medical or surgical care and aids and services and other vision care provided by a physician skilled in diseases of the eye or by an optometrist which are not otherwise available under this Article, (v) special medical services for school children, as provided in the Public School Code of 1949,² consisting of medical, dental, vision care provided by a physician skilled in diseases of the eye or by an optometrist or surgical care and aids and services which are not otherwise available under this article.

(3) Notwithstanding any other provision of law, for recipients aged twenty-one years or older receiving services under the fee for service delivery system who are eligible for medical assistance under Title XIX of the Social Security Act and for recipients aged twenty-one years or older receiving services under the fee-for-service delivery system who are eligible for general assistance-related categories of medical assistance, the following medically necessary services:

(1) The department determines that the recipient has a serious chronic systemic illness or other serious health condition and denial of the exception will jeopardize the life of or result in the rapid, serious deterioration of the health of the recipient.

(2) The department determines that granting a specific exception to a limit is a cost-effective alternative for the medical assistance program.

(3) The department determines that granting an exception to a limit is necessary in order to comply with Federal law.

(1) Section 205⁵ of the Commonwealth Documents Law.

(2) Section 204(b) of the act of October 15, 1980 (P.L. 950, No. 164),⁶ known as the “Commonwealth Attorneys Act.”

(3) The act of June 25, 1982 (P.L. 633, No. 181),⁷ known as the “Regulatory Review Act.”