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Diagnosing Medicaid Cuts To Hospitals In The One, Big, Beautiful Bill
Since the pandemic struck the U.S., most Americans have developed a keen appreciation of their hospitals and an equal awareness of how fragile these hospital systems really are. Which is why it’s critical to understand the role that Medicaid and Medicaid State-directed payments (SDPs) play in the survival of what are known as Safety Net Hospitals. And what’s even more important is how the passage of the One Big, Beautiful Bill Act will now affect Medicaid and those SDPs, supporting these hospitals.So, what are Safety Net Hospitals and what do they do? As the name implies, these hospitals play a critical role in the U.S. Healthcare system, they are literally the lifeline for vulnerable populations, including those who are uninsured or have Medicaid.
Medigy Insights
The Act does acknowledge the fragility of rural hospitals and has an initiative called The Rural Health Transformation Program which will appropriate $10 billion per fiscal year to Centers for Medicare & Medicaid Services (CMS) for fiscal years 2026-2030, for a total of $50 billion over five years to help them. But this deficit math simply doesn’t add up and even the details of their administration are vague. Adding to the problem, the The Act makes it more difficult for states to close payment shortfalls by restricting their ability to use provider taxes to boost Medicaid payments. This further limits resources for hospitals and increases financial pressure, especially in states that have used these mechanisms to support rural and Safety Net Hospitals.
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