On February 19, 2026,  the Centers for Medicare and Medicaid Services (CMS) updated to their rate setting guide for states, which governs how states must set rates and submit data to CMS regarding the rate setting process for Medicaid Managed Care programs. This year’s updates carry forward polices from prior guides though will require more intensive analysis and documentation for how rates are set for managed long term services and supports programs. Similarly, states will need to pay more attention to segments of the rate attributable to in lieu of services (ILOS).

Both of these changes are likely a result of CMS’ interest in better understanding data consistency where service definitions and coverage vary widely. These changes aren’t likely to have a direct impact on providers, though understanding the rate setting processes for Managed Care programs with which providers may contract can be valuable.

The 2026-2027 Medicaid Managed Care Rate Development Guide is available here.