SMDL: Phase-out of expenditure authority for Designated State Health Programs in Section 1115 Demonstrations

Today the Centers for Medicare & Medicaid Services (CMS) released a letter to states announcing that CMS will no longer be accepting state proposals to finance Medicaid 1115 demonstrations by drawing down federal funds for programs that have historically been paid for by states outside of Medicaid. These time-limited arrangements, know as Designated State Health Programs (DSHP), effectively allow states to bypass paying their usual share of Medicaid expenses for demonstration programs. Authority for DSHP in current demonstrations will continue until the end of the state's current demonstration period but will not be extended or renewed.

The letter is available on Medicaid.gov at https://www.medicaid.gov/federal-policy-guidance/federal-policy-guidance.html