The Centers for Medicare & Medicaid Services (CMS) published a Center for Medicaid and CHIP Services (CMCS) Informational Bulletin on September 10, 2025 regarding state directed payment (SDP) quality evaluations.
The bulletin notes that, despite regulatory requirements and other guidance, many states do not include in their SDP preprints evaluation plans that align with best practice or submit SDP quality evaluation findings for their renewal preprints. CMS announced in the bulletin that it will no longer consider a preprint complete or eligible for federal review unless it includes the following:
- (1) A description of how the SDP explicitly ties to the goals and objectives in the state’s written managed care quality strategy (Table 7 of the preprint);
- (2) An evaluation plan with specific evaluation measures and for each of those measures, baseline statistics, the baseline year, and a measurable performance target for improvement or attainment against the baseline measure (Table 8 of the preprint); and
- (3) For renewals of an existing SDP that has been in place for at least two rating periods, complete evaluation results based on the evaluation plan provided in the prior preprint submission(s). If complete annual evaluation results are not available, interim annual evaluation results should be submitted instead. States can use this optional template to report such results.
These requirements may have implications for grandfathering under H.R. 1, as the law requires submission of a complete preprint by July 4, 2025 to quality for grandfathering. Importantly, CMS also notes that it is reviewing its 2024 final Medicaid managed care rule, which specified requirements for SDP evaluations, and is considering potential revisions to these requirements.