CMS Proposes Medicare-Based Caps on Medicaid State-Directed Payments (CMS-2449-P) — Comments Close July 21

CMS's proposed rule on Medicaid managed-care state-directed payments and fee-for-service targeted Medicaid practitioner payments (CMS-2449-P, published in the Federal Register May 22, 2026; FR doc 2026-10292) implements Section 71116 of H.R. 1, proposing to cap total payment rates for targeted services at 100% of the published Medicare rate in expansion states and 110% in non-expansion states.

Compliance would begin January 1, 2029, with grandfathered state-directed payments phasing down 10 percentage points a year starting January 1, 2028; CMS projects roughly $775 billion in total savings over ten years (~$510B federal). The Association of Clinicians for the Underserved flags the stakes for safety-net providers, noting Medicaid payment 'is already often below the cost of providing care.'

Comments are due July 21, 2026 (docket CMS-2026-1916) — the near-term action item for state PCAs and health-center advocates in states that use directed payments to lift Medicaid rates.