May 21 • 2026
Washington, D.C. — In response to yesterday’s proposed rule from the Centers for Medicare & Medicaid Services (CMS) on Medicaid state directed payments, the Modern Medicaid Alliance issued the following statement:
“While we are still reviewing the details of yesterday’s proposal, further restrictions on critical Medicaid financing programs could compound the financial shortfalls facing states, hospitals and community-based providers, putting coverage and access to essential care at risk for the more than 75 million Americans who depend on Medicaid.
“State directed payments are used by 41 states and the District of Columbia, with full federal oversight, to support hospitals, nursing homes, rural health systems and other essential providers. Further restricting these mechanisms could force states to cut additional services, raise other taxes or reduce provider payments — with the heaviest impact falling on rural hospitals, children’s hospitals and safety-net providers already operating on the thinnest margins.
“The Modern Medicaid Alliance urges the Administration and Congress to provide greater flexibility to states as they move forward with implementation of Medicaid program changes so that millions of Americans continue to benefit from a stable, strong Medicaid program.”