The federal government approved $60 billion worth of extra Medicaid funds for hospitals, doctors, nursing homes, and other medical providers in the closing months of 2025 — money that will gradually get cut under Republicans’ tax law.
The new approvals lock in Medicaid payment rates that are on par with the lofty prices paid by commercial insurers until 2028, when the funds will start to dissipate. That means in the near term, for many hospitals across the country, Medicaid will still not always be the dismal payer that they say it is.
STAT has been tracking these supplemental Medicaid funds, known as state directed payment programs, previously reporting that the Centers for Medicare and Medicaid Services approved tranches of state applications totaling $9 billion and $4 billion last year. In September, CMS projected state directed payment programs would cost $124 billion in 2025 and $145 billion this year.
