Spending on Medicaid State Directed Payments Before New Limits Take Effect

Article excerpt

States have ramped up spending on Medicaid state-directed payments, arrangements that let them steer federal matching funds to specific providers or facilities, ahead of new restrictions taking effect. The Kaiser Family Foundation analyzed how states are using SDPs, which previously required CMS approval but operated with minimal oversight. The reconciliation law will impose caps on these payments, prompting states to accelerate spending before the limits kick in. The brief examines which states relied most heavily on SDPs and how the money flowed, offering a snapshot of federal-state Medicaid dynamics before a significant policy shift.