Comments on the State Directed Payments Proposed Rule

On July 21^st, the MLTSS Association submitted comments on CMS’s proposed rule on lowering Medicaid State-Directed Payment (SDP) limits for certain services beginning July 4, 2025, and extending those limits to all SDPs by January 1, 2029.

SDPs have been a foundational feature of Medicaid managed care financing, permitting states to direct Medicaid managed care plans to make targeted provider payments that support state Medicaid goals and supplement reimbursement rates. In our comments, we express concern that reduced Medicaid funding could lead states to scale back optional benefits such as HCBS, affecting provider participation and access to care. We also offer recommendations on the scope and implementation of the proposed SDP limits, as well as rate-setting methodology, network adequacy and access, and actuarial soundness.

Read our full comments here