Dive Brief:

The CMS issued guidance on Tuesday outlining new federal payment limits for state-directed Medicaid payments.

The guidance is the first step toward implementing the cuts laid out in the One Big Beautiful Bill Act , and comes ahead of an anticipated final rule.

Under the new guidelines, state-directed payments for most care settings will be capped at 100% of the Medicare rates in expansion states and 110% in non-expansion states. If Medicare rates are unavailable, payments will be based on state Medicaid rates.

Dive Insight:

Republicans in Congress cut state-directed Medicaid payments as a part of larger efforts to stamp out what they perceive as fraud, waste and abuse in the safety-net insurance program.

The financing mechanisms allow states that contract with priva

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