Hospitals Prepare for $149B Cut to Medicaid State-Directed Payments

The recently enacted “One Big Beautiful Bill” imposes significant limits on Medicaid state-directed payments—capping them at 100% of Medicare rates in expansion states and 110% in non-expansion states, with reductions starting in 2028—resulting in an estimated $149 billion cut to Medicaid state-directed payments over the next decade. Hospitals, especially safety-net and rural providers, are already re-evaluating planned expansions and preparing for steep increases in uninsured patients and uncompensated care, projected at 10 million and $433 billion, respectively, between 2025 and 2034. With state budgets constrained, many hospitals will likely revisit provider payment strategies, implications for Medicaid eligibility, and reliance on alternative funding streams—all amid mounting pressure on the billing and reimbursement landscape.

Source: https://www.healthcaredive.com/news/hospitals-prepare-for-149b-cut-to-medicaid-state-directed-payments/757309/