Medicare and Medicaid Extension Act of 2008

Medicare and Medicaid Extension Act of 2008 - Amends title XVIII (Medicare) of the Social Security Act (SSA) to extend: (1) the physician payment update; (2) the floor on the work geographic adjustment under the Medicare physician fee schedule; (3) the treatment of certain physician pathology services; (4) the exceptions process for therapy caps; (5) the payment rule for brachytherapy and therapeutic radiopharmaceuticals; and (6) the accommodation of physicians ordered to active duty in the Armed Services.

Delays generally until after 2011 full implementation of the Medicare competitive acquisition program for the purchase of durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS).

Revises such program, dividing its implementation into two rounds, and specifying covered item updates for 2009-2014.

Prescribes requirements for application of accreditation in implementing quality standards.

Requires suppliers to disclose subcontractors.

Directs the Secretary of Health and Human Services to provide for a competitive acquisition ombudsman within the Centers for Medicare & Medicaid Services to respond to complaints and inquiries by suppliers and individuals.

Specifies topics for the Comptroller General's required study and report to Congress on the impact of competitive acquisition of DME on suppliers, manufacturers, and patients.

Sets forth a special rule for the competitive acquisition program for diabetic testing strips.

Amends SSA title XIX (Medicaid) to extend the qualifying individual (QI), transitional medical assistance (TMA), abstinence education, and Medicaid disproportionate share hospital (DSH) programs.