CMS issued updated guidance on State Directed Payments (SDPs) under Section 71116 of the Working Families Tax Cuts Legislation through a February 2, 2026 Dear Colleague letter, replacing its September 9, 2025 guidance. The updated guidance focuses on SDP grandfathering and applies to SDPs subject to the statutory payment limits, including those tied to inpatient and outpatient hospital services, nursing facility services, and qualified practitioner services at academic medical centers.
Sellers Dorsey summarized the updated guidance highlighting key changes including the revised interpretation of the grandfathering window, unaffected provisions, and more. View our summary below.
Previous summaries from Sellers Dorsey regarding the SDP guidance issued by CMS in September 2025 can be found below.
