CMS Issues Preliminary Guidance For Medicaid Managed Care State-Directed Payments

On September 9, 2025, the Centers for Medicare & Medicaid Services (CMS) issued preliminary guidance to states on implementing new federal payment limits for state-directed payments (SDPs) in Medicaid managed care. SDPs enable states to direct Medicaid managed care organizations (MCOs) and other managed care entities to pay higher reimbursement rates to some provider organization types to support quality-of-care improvements and value-based payment reforms, according to the CMS guidance and to earlier guidance issued in January 2021. For federal fiscal year (FFY) 2025, SDP expenditures are projected at $124.3 billion, and at $144.6 billion . . .