Medicaid cuts would threaten billions in hospital revenue

Read Article: Modern Healthcare

Article Summary: Proposed Medicaid cuts could cost hospitals up to $32 billion in 2026, increasing uncompensated care and threatening safety-net providers. Rural hospitals and those serving Medicaid patients face the highest risk of service cuts or closures. Additionally, physicians, home health providers, and long-term care facilities could lose over $27 billion, compounding financial strain across the healthcare system. Even if not all states roll back expansion, the uncertainty poses major financial and strategic challenges for healthcare leaders.

The Risk:

  1. Loss of Medicaid Expansion Funding: Reduced federal Medicaid reimbursements could lead to $32B in lost hospital revenue and force states to end or reduce Medicaid coverage, cutting off millions of patients. (Area: Regulatory) (Category: Federal Regulations)

  2. Increase in Uncompensated Care Costs: As Medicaid coverage decreases, more uninsured patients will delay care, leading to sicker patients, increased ER visits, and higher uncompensated care costs. Safety-net hospitals will be most impacted. (Area: Revenue and Reimbursement) (Category: Federal Regulations)

  3. Financial Pressure on Physicians & Post-Acute Providers: If Medicaid expansion rolls back, physicians could lose $6.4B in revenue, and home health/dental providers could lose $20.7B. This could lead to staffing reductions and service cutbacks. (Area: Revenue and Reimbursement) (Category: Federal Regulations)

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