CMS has issued a proposed rule that would restructure Medicaid state directed payments. The change aims to alter how states and hospitals negotiate and distribute supplemental payments. For independent practices with Medicaid contracts, this could affect future reimbursement rates and the stability of supplemental funding streams from hospitals they affiliate with. The rule is in the proposed stage, with a comment period to follow. Billing teams should monitor the Federal Register for the official publication and review how their state's directed payment programs might be reshaped.