Medicaid State-Directed Payments: An Update on CBO's Modeling
Presentation
Presentation by Cyrus Ekland, Claire Hou, Aaron Pervin, and Rajan Topiwala, analysts in CBO's Budget Analysis and Health Analysis Divisions, at a meeting of CBO's Panel of Health Advisers.
State-directed payments (SDPs) are payments that states direct to specific providers through Medicaid managed care organizations. SDPs totaled $102 billion in fiscal year 2024, accounting for 21 percent of Medicaid managed care spending.
This presentation describes the basis of CBO's estimate of how the SDP provisions in the 2025 reconciliation act—which lowered the upper limit for SDPs—affect federal direct spending for Medicaid. CBO also poses questions for which the agency seeks the panel members' insights.
