Healthcare Facilities & Managed Care "CMS Releases Medicaid State Directed..."

Research evidence excerpt

Healthcare Facilities & Managed Care "CMS Releases Medicaid State Directed..."

Global Research

21 May 2026ab

Healthcare Facilities & Managed Care Equities

AmericasCMS Releases Medicaid State Directed Payment

Proposed Rule Healthcare Providers

AJ Rice

Analyst

aj.rice@ubs.com

DPP Proposed Rule: Implementing OBBBA Limits, Some Additional Actions +1-212-713 4299

On May 20th after the market close, CMS published a proposed rule regarding Medicaid Joseph Overman

state directed payments (SDPs). The proposed rule is designed to implement provisions Associate Analyst

in the Working Families Tax Cut/One Big Beautiful Bill Act (OBBBA) that limit the use of joseph.overman@ubs.com

state directed payments over time. The proposed rule also extends beyond the +1-212-882 0086

legislation in several areas, including limits on supplemental payments in fee for service James Kurek

Medicaid as well as extending the classes of services subject to the SDP limits in the Analyst

OBBBA. While the press release cites major savings from the proposed rule ($510 bln of james.kurek@ubs.com

federal savings over 10 years), these savings are largely the result of implementing the +1-212-713 3704

SDP limits that were already created in the OBBBA, rather than the introduction of Jonathan Yong

materially new or expanded restrictions. Our initial impression is that the proposed rule Analyst

does not meaningfully change the outlook for existing hospital state directed payment jonathan.yong@ubs.com

programs over the next several years. +1-212-713 6268

Michael Wei

Extending Payment Limit to all Classes of Services: Minor Impact and Already Associate Analyst

Telegraphed michael.wei@ubs.com

CMS is proposing to extend the SDP payment limit to all classes of services beginning +1-212-713 2565

January 1, 2029.