KHA submitted comments to the Centers for Medicare & Medicaid Services (CMS) on July 14 in response to the Medicaid Managed Care State Directed Payments (SDPs) and Medicaid Fee-For-Service (FFS) Targeted Medicaid Practitioner Payments Proposed Rule published in the Federal Register on May 22, 2026.
In the letter, KHA expressed deep concern that several provisions in the proposed rule will curtail member hospitals’ ability to care for some of the most vulnerable members of the communities they serve by reducing the financial resources needed to maintain essential services. Notably, the proposed rule would dramatically decrease the federal investment in the health care system by an estimated $510 billion nationally over 10 years. This is a remarkable escalation from the changes to SDPs Congress authorized in P.L. 119-21, which were estimated to result in approximately $149.4 billion less in federal funding over 10 years. Specifically, CMS is proposing to cut 3.4 times more in federal funding for the health care system nationally than Congress intended. Resource reductions of this magnitude could lead to service losses and hospital closures, which would impact everyone in Kentucky, not just those individuals who are served by the Medicaid program.
KHA suggested CMS can mitigate some of the worst consequences of these policy changes, and urged the agency to rescind or reconsider proposals that extend beyond the statutory framework established by Congress.
If you have any questions about the comment letter or the CMS proposed rule, please contact Donna Little (dlittle@kyha.com), Carl Herde (cherde@kyha.com), or Amanda Kinman (akinman@kyha.com) at KHA.
