Herring Quoted in Healthcare Dive on Impact of Cuts to Medicaid State-Directed Payments

Manatt Health Managing Director was quoted in Healthcare Dive on how funding cuts under the H.R. 1 reconciliation bill, particularly for Medicaid state-directed payments (SDPs), will impact states, providers and their patients.

Health care providers are expecting strong financial pressures as a result of the bill, which restricts new SDPs, harming this critical revenue source as hospitals anticipate having to contend with a rise in the uninsured population resulting from the legislation. States will likely need to make tough choices, including cutting provider payment rates, eliminating optional benefits or limiting Medicaid eligibility, Herring noted. “In the short term, providers are working in collaboration with states to ensure CMS will grandfather their SDPs under the law,” he added. “In the medium-to-long term, providers are concerned that the impact of the SDP reductions — along with other provisions like work requirements and reductions to the allowable provider tax threshold — will make it much more difficult for them to sustainably serve Medicaid enrollees.”

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