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Six Actions for Providers After the “One Big Beautiful Bill” Passed
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August 01, 2025
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The recently passed One Big Beautiful Bill (“OBBB”) Act represents a sweeping overhaul to healthcare financing. With more than $1 trillion in cuts to Medicaid and safety-net programs — including new eligibility rules, provider tax limits and cost-sharing mandates — alongside $50 billion earmarked for rural transformation, the operational impact on hospitals will be significant.1
Recent reporting suggests that Medicaid cuts could put more than 25% of hospitals at risk of closure in many states, with 11 states potentially seeing risk levels of 50% or more.2 Rural hospitals, children’s hospitals and nursing homes are often especially vulnerable due to their higher reliance on Medicaid reimbursement.3,4
Although major Medicaid provisions won’t be fully enforced until 2027, systems that act early will be better positioned to navigate the shift.5 To start, systems can draw on what they learned as they addressed the Medicaid enrollment losses during the unwinding of the Public Health Emergency. In addition to Medicaid changes, hospitals should also prepare for shorter-term disruption in the Affordable Care Act (“ACA”) Marketplace. Enhanced subsidies, known as Advance Premium Tax Credits (“APTCs”), are set to expire at the end of 2025 unless extended by Congress.6 This could leave more than four million people without coverage, affecting patient volumes, payer mix, levels of uncompensated care and more.7
With workforce strain, shifts in reimbursement sources and rural market instability, disruption is coming. To get ahead of it, healthcare operators should begin preparing now. Below are six actions hospitals and health systems should take:
Map Medicaid and ACA Marketplace Exposure Risk
- Assess Financial Impact – Medicaid:
Now is the time to evaluate how the new eligibility redeterminations, work requirements and reimbursement changes will affect your organization’s Medicaid patient base and revenue. Flag high-risk markets and facilities. Once impact is determined and high-risk areas are flagged, updates should be made to the system’s near-term forecasting, budgeting and cash flow planning. - State Directed Payments:
Currently, Medicaid programs can make state-directed payments (“SDPs”) to providers that exceed the Medicare fee schedule. Under the OBBB, these payments will be capped at 100% of Medicare rates in Medicaid expansion states and 110% in non-expansion states. The phase-down of existing SDP programs begins in 2028.8 Systems should identify where they rely heavily on SDPs to support margins — particularly in states with large existing programs — and adjust forecasting, budgeting and contract strategies accordingly.9 - Assess Financial Impact – ACA Marketplace:
The expiration of the enhanced Advance Premium Tax Credit (“eAPTC”) at the end of 2025 will have an immediate impact on some insured patients and a short-term impact to a system’s level of uncompensated care. This shift will provide a foreshadowing of things to come when the Medicaid six-month redeterminations begin in 2027. Providers should model the reduction in eAPTC eligibility, project coverage loss or shifts from marketplace to Medicaid, employer plans or uninsured. Payer mix assumptions should also be updated in financial models—anticipating increased self-pay and uninsured volumes, decreased commercial volumes and increases in charity care and bad debt.10
Reassess Workforce and Staffing Models
While the bill delays implementation of CMS’s long-term care staffing mandates until 2034, it is essential for organizations to reassess staffing models now.11 Providers should assess current staffing ratios, job classifications and documentation practices to ensure they are prepared for potential shifts that may be necessary realign with future needs. For example, facilities can begin tracking nurse and aide coverage by shift to identify units that may eventually require staffing increases. Revenue cycle leaders may need to shift staff to realign with payer mix changes. HR, legal and compliance teams should coordinate to evaluate exposure and address potential risks proactively.
In parallel, the OBBB’s changes to student loan programs, including the elimination of Grad PLUS loans and caps on federal borrowing, may affect medical education funding and enrollment.12 To stay ahead, providers should focus on retention, financial planning and strategic messaging. That means strengthening recruitment pipelines, preparing for long-term workforce gaps and clearly communicating with internal stakeholders and policymakers about the impacts of the OBBB on staffing and access to care.
Prepare Revenue Cycle Operations for Eligibility Volatility
The new rules may increase patient churn and complicate eligibility verification.13 Provide regular and updated training to staff as issues are uncovered and rework processes to reduce denials, rebills and bad debt. Prioritize automation, where possible — especially for eligibility checks, pre-authorizations and patient access. In addition, communication and education for impacted patients and the community regarding what actions will be taken to maintain on-going eligibility within the new requirements will be necessary.
Develop a Plan to Access Rural Transformation Funding
If you operate in or serve rural markets, start preparing a strategy to tap into the $50 billion rural fund; specifically, develop and submit a plan to secure approval for funding from CMS. Requirements for submission include redesigning service models, improving outcomes, expanding partnerships and applying technology, AI and data-insights solutions. Don't wait — CMS must approve or deny all applications no later than December 31, 2025.14
Align Executive Teams and Investors Around Strategic Implications
Whether you’re part of a larger health system or PE-backed platform, leadership teams should align now on how this legislation may alter near-term growth plans, service line strategies, M&A assumptions and operating models. Consider how value creation strategies need to evolve under the new reimbursement and regulatory environment. Develop operational models and plans now to respond to the impacts identified in your organization, whether those require staffing, service or technology changes necessary to operate under the new reimbursement funding expectations.
Plan for Provider Tax Changes and Long-Term Funding Shifts
One of the bill’s less visible but impactful provisions is a cap on provider tax rates, which are used by states to shore up the provider infrastructure. In Medicaid expansion states, these tax rates will be reduced to 3.5% by 2032, significantly altering the funding landscape for providers.15 Providers should take early steps to forecast Medicaid revenue impacts and collaborate with hospital associations to influence provider tax policy and identify potential funding offsets.
Footnotes:
1: Phil Galewitz et. al., “Republican Megabill Will Mean Higher Health Costs for Many,” KFF Health News (July 2, 2025)
2: Gabriella Cruz-Martinez, “What to Know About New Medicaid Cuts: Is Your Local Hospital Closing Soon?”, Kiplinger (July 11, 2025),
3: Ron Southwick, “Children’s hospitals brace for overcrowding and staff cuts due to tax package,” Chief Healthcare Executive (July 3, 2025)
4: Fenit Nirappil, “Nursing home and elder-care residents could be hit hard by potential Medicaid cuts,” The Washington Post (May 12, 2025)
5: Louise Norris, “One Big Beautiful Bill Act Brings Sweeping Changes to Health Coverage,” HealthInsurance.org (blog), July 18, 2025, accessed July 25, 2025
6: Matt McGough et. al., “Early Indications of the Impact of the Enhanced Premium Tax Credit Expiration on 2026 Marketplace Premiums,” Kaiser Family Foundation (June 3, 2025)
7: Ibid.
8: Scott Hulver et. al., “Reconciliation Language Could Lead To Cuts in Medicaid State-Directed Payments to Hospitals and Nursing Facilities,” Kaiser Family Foundation (June 27, 2025)
9: Ibid.
10: Matt McGough et. al., “Early Indications of the Impact of the Enhanced Premium Tax Credit Expiration on 2026 Marketplace Premiums,” Kaiser Family Foundation (June 3, 2025)
11: Lisa Hawke and Sarah Starling Crossan, “One Big Beautiful Bill Act Includes $50 Billion Rural Health Transformation Program,” Holland & Knight (July 11, 2025)
12: Shannon Pettypiece and Rebecca Shabad, “Medical students fret over the new student loan cap in the ‘big, beautiful bill,’” NBC News (July 8, 2025),
13: Arielle Trzcinski, “The Big Bill Is Now Law: What Healthcare Leaders Need To Know,” Forrester (July 4, 2025)
14: Lisa Hawke and Sarah Starling Crossan, “One Big Beautiful Bill Act Includes $50 Billion Rural Health Transformation Program,” Holland & Knight (July 11, 2025)
15: Alice Burns and Robin Rudowitz, “Which States Might have to Reduce Provider Taxes Under the Senate Reconciliation Bill?”, Kaiser Family Foundation (June 18, 2025)
Datum
August 01, 2025
Ansprechpartner
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Senior Managing Director, Head of Americas Healthcare & Life Sciences