On June 6, President Donald Trump issued a memorandum to Health and Human Services Secretary Robert Kennedy Jr. focused on curbing waste, fraud, and abuse in the Medicaid program. The memo specifically criticizes the use and expansion of state-directed payments (SDPs) and provider taxes as mechanisms to increase federal Medicaid funding. It calls for limiting SDPs—where allowable—to the Medicare rate for a given service.
The president stated, “We will take action to continue to love and cherish the Medicare and Medicaid programs to ensure they are preserved for those who need them most.”
While acknowledging the need for greater transparency, LeadingAge warns that capping SDPs without offering alternative funding sources would significantly harm Medicaid-financed services, including long-term care. As discussions around transparency and sustainability of Medicaid funding evolve, LeadingAge continues to advocate for solutions that strengthen—not weaken—provider resources.
Read the full Presidential memo here.