How State Directed Payment Changes Will Affect Hospitals

Healthcare Policy attorney Robert Bradner was featured on an episode of HIMSSCast, aired by Healthcare Finance News, about changes to State Directed Payment (SDP) programs enacted under the One Big Beautiful Bill Act. SDP programs offer supplemental payments that channel money to institutions that serve high-Medicaid populations and that want a better reimbursement rate than those currently offered under Medicaid. These payments function separately from provider taxes that states use to finance their Medicaid programs. The One Big Beautiful Bill Act, also known as H.R. 1, capped payment rates near Medicare levels. Taking effect January 1, 2028, the new rates are lower than commercial reimbursement, although many states will be grandfathered in through gradual reductions. Regardless, Robert said, the development will hit hospitals hard, considering SDP payments in some cases make up 20 percent of a provider's revenue. He also reported concerns about financial viability, reporting and implementation amid an expected increase in uncompensated care, although the midterm elections could shift what's adjusted and when.

Duration: 11:38