Federal Medicaid spending would fall by $245.8 billion, and state Medicaid spending by $138.2 billion, over the same period. CMS has proposed the rule and estimated a $246 billion federal reduction over ten years. Frequently Asked QuestionsWhat is a Medicaid provider tax? The impact analysis also projects a $138.2 billion reduction in state Medicaid spending. Keep your contact details current with your state Medicaid agency and respond to renewal notices.