CMS issues updated guidance on state-directed payment provision

The Centers for Medicare & Medicaid Services Feb. 2 updated guidance originally issued in September on a budget reconciliation bill provision establishing new limits on Medicaid state‑directed payments. As part of the update, CMS revised its approach to determining grandfathering eligibility by redefining the 180‑day window around July 4, 2025, to be calculated using business days. CMS plans to issue a notice of proposed rulemaking and include final policies on grandfathering, including the implementation of the phase-down, and may include changes to the total payment rate limit for SDPs for additional services, among other regulatory changes required by the statute.