States would face Medicaid payment caps and detailed reporting rules

Health and Human Services would set the payment-rate cap and phase down qualifying earlier payments. The rules would cover certain payments that states direct Medicaid managed-care plans to make for services. The cap would be 200% of the specified published Medicare rate. If no such rate exists, the cap would instead be the state's average commercial rate. Phase-down eligibility would require either prior written approval—or a good-faith effort to obtain it, as HHS determines—before July 1, 2028, for the first rating period after that date, or a completed preprint filed before enactment for that period. The cap and yearly phase-down would start with rating periods beginning on or after January 1, 2030. Each phase-down would equal 10% of the prior rating period's payment until the rate reached the cap. From enactment through January 1, 2030, HHS would use the federal rule in effect just before Public Law 119–21 was enacted.

HHS would revise federal rules to let states use service history from outside a rating period and reserve parts of health-plan payment rates. These options would cover certain state-directed payments made through Medicaid managed-care organizations and prepaid health plans. A state could require payments to be matched later to service use during the rating period. A state could withhold part of a plan's final payment rate or require the plan to hold part separately for the state-directed payment. These options would apply to services furnished during rating periods beginning on or after January 1, 2028.

States would send HHS detailed data through the federal Medicaid data system. The requirement would apply to a state Medicaid plan or amendment that would provide a state-directed payment. Reports would cover total and provider-level payments, enrollee and plan identifiers, amounts states collect to fund their share, service codes, and billed, allowed, and paid amounts. Beginning January 1, 2027, each report would be due no later than one year after the rating period ends.

Federal law would apply the Social Security Act's provider-tax rule as if two specified sections had not been enacted. This provision concerns sections 71115 and 71117 of Public Law 119–21. Money set aside under section 71115(c) of Public Law 119–21 would be canceled.