Directed Payments Interest Group

Association advocacy for SDPs

The association has long advocated for the Centers for Medicare & Medicaid Services (CMS) to provide flexibility for states to make additional payments to providers for services provided through managed care. In 2016, these advocacy efforts resulted in the creation of the SDP option for states to require Medicaid managed care plans to pay providers according to specific rates or methods.

Now that directed payments have become such an important revenue source for many essential hospitals, the association has led advocacy efforts to highlight the benefits of SDPs and protect this critical funding. We successfully lobbied for CMS to codify the average commercial rate benchmark in its 2024 Medicaid managed care rule and have been working with CMS to ensure that implementation of these rules does not cause undue burdens on essential hospitals.

Below are links to some of the association’s most recent SDP advocacy. Feedback from SDP interest group members helps inform the association’s advocacy work in this area.

• Behind the Numbers: How State Directed Payments Support Essential Hospitals Policy Brief
• Medicaid State Directed Payments: Closing the Payment Gap for Essential Hospitals Policy Brief
• Letter to CMS on barriers on directed payments in the final managed care rule
• Partnership for Medicaid letter to CMS on workforce investments
• Comments on the Medicaid and Chip Payment and Access Commission’s (MACPAC’s) Medicaid directed payments discussion