New CMS Rule Would Tighten Medicare-Based Limits on State Directed Payments
Milliman examines CMS's proposed rule implementing a 2025 law that replaces the old "average commercial rate" cap with a new Medicare-based payment limit for Medicaid state-directed payments and targeted fee-for-service practitioner payments. The paper details the technical complexity of building per-service Medicare limit calculations—including provider mappings, fee schedule crosswalks, and a three-tier comparator approach—and urges states to begin preparation now ahead of phased 2027-2029 compliance deadlines. This has major implications for how states and MCOs structure and justify SDP arrangements going forward.</summary> </invoke>
This is outside commentary from Milliman, not part of Medicaid Monitor's independently scored news coverage.