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.