President Trump Calls To End Medicaid State-Directed Payments, Tells CMS To Ensure That Medicaid Rates Are Below The Medicare Rates

On June 6, 2025, President Donald J. Trump called for an end to Medicaid state-directed payments (SDPs) through his “Eliminating Waste, Fraud, and Abuse in Medicaid” memorandum. The memo directs the Secretary of Health and Human Services (HHS) to “eliminate waste, fraud, and abuse” in Medicaid by ensuring that Medicaid payment rates to provider organizations are not higher than Medicare rates. 

The memo asserts that recent growth in Medicaid SDPs threatens the financial stability of Medicaid and the federal treasury. It also alleges that states utilizing these arrangements pay health care provider organizations almost three times the Medicare amount . . .